Versant Media Group, Inc. ($VSNT)

Good morning, everybody. My name is Kutgun Maral. I'm the Media, Cable and Telecom Analyst at Evercore ISI, and it's our pleasure to welcome today Anand Kini with Versant Media Group to our conference. Anand, thanks for being here.

Yes, thank you for including me.

Yes, absolutely. So maybe to kick it off, Versant is now roughly 5 months into its life as an independent public company following the separation from Comcast. For me, having spent some time with the management team and at the Investor Day, one thing that stood out was that Versant seems to have a real sense of energy and urgency, an entrepreneurial or start-up feel inside a scaled cash-generative media company. That's not necessarily the culture that I've observed with some of your peers. So maybe to start, how would you describe the internal mindset after the separation? And how is that showing up in the way that the company is making decisions, allocating capital and pursuing growth?

Sure. So I think you got the characterization exactly right. There's a scrappiness that we have, very kind of an entrepreneurial spirit. I think a lot of it was as a spin, we were attracting people, and we had people with that mindset that joined us. As a team, we're aware of, obviously, the secular changes happening in the industry, but we're also very much appreciative of the assets we have, the audience reach the opportunity we have. And I think this organization individually and collectively, we knew to kind of take advantage of the opportunity. We wanted to do things differently than they were -- the way they were done before. And that meant, again, having a different mentality. And it then shows up in terms of things you mentioned like speed and decision-making. And again, to maybe take that from abstract to kind of more concrete, we're still very data-driven, very analytical. But if you look at, for example, the number of growth initiatives that we have out right now, whether it's a couple of D2C products with MS NOW and CNBC or we've done some kind of bolt-on M&A like INDY Cinema, which we now call Fandango1 and a whole host of others. We've only been in existence for 6 months, and I'm proud of the fact that we've been able to, with discipline, execute these and kind of recognize there's a great opportunity to grow the business. And so I think it's kind of emblematic of who we are and that kind of spirit of, let's drive shareholder value in an efficient, disciplined way, but with an emphasis on speed and urgency.

Perfect. And next investor understanding, I think investors broadly speaking understand the high-level objective of diversifying the company beyond the traditional pay TV ecosystem. Everything I'm about to say is very interconnected. But from your seat as the CFO and COO, what's the internal scoreboard that you use to judge whether that transition is working? Is it mix of revenue outside of pay TV, the growth of platforms, EBITDA and free cash flow the penetration within specific business like GolfNow, Fandango, CNBC, MS NOW or anything else?

Sure. So it's pretty multifaceted. I'll start with we're very proud of our Pay TV business. Like I mentioned before, we're aware of the secular changes happening. But in terms of like a scorecard, again, this is a very good business for us. It's going to be a very good business for a long, long time. So we spend a lot of time making sure are we delivering great premium content that audiences love. That is still a foremost job. And so we're obviously looking at ratings and audience engagement and monetization. Then in addition, as we talked, a big plank of ours is to evolve the business. Pay TV is going to be important, but we also want to take these brands and these verticals and expand into platforms and other ways for consumers to experience them. And so there, again, we'll look at metrics such as how much of our business mix is coming from nonpay TV. How is our audience engagement outside of pay TV? And importantly, how is our monetization? Or are we actually monetizing these audiences? And then kind of underpinning all of that across both look at a lot about the overall kind of financial performance in terms of EBITDA and free cash flow, we are a very cash-generative business. And as we evolve this, we're going to continue to be and then that then translates, of course, to kind of driving returns for shareholders over the long and short term. So we kind of look at every one of those components as we kind of manage this portfolio.

Perfect. Let's talk a little bit more about the platforms business. And platforms grew high single digits in the first quarter, led by GolfNow and Fandango. How would you rank order the drivers of that growth? And how much of it do you view as structural versus more dependent on things like the film slate, consumer activity or timing?

Yes. So I think the biggest driver kind of in the quarter as well as, I think long term,is just overall transaction volume. And that is the total number of golf rounds that are booked in GolfNow. The total number of courses that we're in, who are using our software or in Fandango, it would be kind of ticketing volume, home entertainment, kind of purchases at home. So this transaction volume is really about more and more people engaging with these platforms. And it's a great thing. It's exactly what we want to see because as you have more and more folks engaged, there's more ways that we can obviously share new services with them. We can monetize them more broadly. And that's been the fundamental driver. Now in terms of kind of the -- as you mentioned, whether there's a cyclical component or it's kind of like, I almost call it more foundational. There's going to be certain elements, yes, where there's a cyclical component, but it's really focused perhaps mostly on Fandango, where there's the theatrical slate, which obviously is a theatrical slate. Some years are kind of bigger, broader and some years are not. And there's a little bit of like quarter-to-quarter volatility and sometimes a little year-to-year. But I think the key, though, is that, a, in golf we're really -- it's a different story, where golf is -- doesn't really have that. We've developed this multifaceted business model where there's key times, there's software, there's subscription services. And in that, it's kind of more of a player in the overall golf ecosystem. There's not one thing that's really driving it in isolation. And in Fandango as well, well, yes, there is an element which has this impact on the slate. We're broadening that too. We've extended into software for cinema operators. We're launching an AVOD service. So again, those are not dependent on the slate. So I think the key here is it's foundational kind of what's driving it. And while there may be a little bit of quarter-to-quarter volatility because of some of the cyclicality over time, the long-term growth is foundational in nature. And I think even over time, you'll see even that cyclical nature start to diminish where the dependency say on Fandango and the slate becomes less because we're developing these other revenue streams.

That makes sense. And let's unpack golf a little bit more because that seems to me as one of the clear proof points of the broader vertical strategy. So maybe you could talk a little bit about what needs to happen for golf now to materially increase penetration from here?

Sure. So I think there's really 2 big things on golf now. First, just to put the context, market leader -- we're very proud of our golf performance, but we still represent less than 10% of all tee times booked. So one is like that is a metric that we think there's a ton of room to grow, and that's probably like in many ways, like the most important one. And who we compete with is we don't really compete with other digital competitors. We're competing with the telephone. So we have an advantaged way for consumers to book their tee times. And so this is all about driving that higher. And then that's also related to the second component, which is how many golf courses are we in? We're in about 25% of golf courses. So again, there's an opportunity for that number to be a lot higher. And importantly, that's 25% of kind of golf courses -- traditional golf courses you play, we kind of call on grass. There's a lot of now kind of off grass. So this would be kind of the simulator experiences that are really popping up in a lot of environments where, again, our service is very relevant. So again, it's kind of getting our service into those areas, into those venues to a greater and greater extent. So I think those 2 work hand-in-hand as we are in more and more kind of venues, you'll see us get more and more rounds. And then within each venue, we can increase the share. And we're going to do that fundamentally by investing in some sales efforts. This is an area pre-spin. We -- again, as part of a bigger company with other priorities, we didn't really have as much of some of the resources, which we're now investing in because it's very much about working with the golf operators, working with the courses to get into them and also to have a greater share of their tee time, which is really beneficial for us and beneficial for the course operator.

Yes. Perfect. And maybe switching gears a little bit to Fandango. It seems like there's a lot going on over there because you have ticketing, home entertainment, Fandango1 software, Rotten Tomatoes and as you alluded to, the upcoming AVOD service. What's the long-term financial model that you're trying to build around that brand? And how much of that opportunity can become recurring software or ad-supported versus purely transactional?

Sure. So the overall framework for Fandango is where we really want to take it and we are taking it from a business that was movie ticketing and that was the origins of Fandango. And then maybe 5, 6 years ago, as part of Comcast, we added on home entertainment where you could kind of buy and rent movies and television series at home. And our strategy is to make it a broader kind of general entertainment platform. And that means the AVOD service that I mentioned before in terms of enabling customers to have now watch things at no cost for ads. And then in addition, as again, as part of its entertainment platform, we have a business-to-business component with Fandango, we call now Fandango1, which was in the cinema previously. And that's an opportunity for us to service exhibitors and really service them and have a -- we have a cloud software solution that helps them run their business. And you'll see even more opportunities with Fandango, again, now looking at it from a consumer lens to watch everything they want. And again, if you think about it with Fandango, one of the reasons we're so excited about this evolution is we're the only company that can offer a consumer. Do you want to watch a first-run film in the theater? We got you. You can buy tickets to us. Do you want to watch something at home that may have just been in the theater just a few weeks ago, you can do that and well -- and it could be a TV series or a film for a fee without ads? Or do you want to watch something at home with a few ads that may be a different type of title may have been released a little longer ago. And we're giving consumers full choice and they can access content however they want. Nobody else can do that. And we think, again, in terms of creating this broader entertainment platform for consumers on various different types of content with a tremendous brand that they love and along with Rotten Tomatoes, which gives you perspective on what do other people think about what you're watching and gives you -- helps you discover great content. It's a very unique value proposition that we're very excited about.

Is there anything more you could share about the AVOD platform and just how you're thinking about its competitive positioning with some pretty meaningful operators out?

Sure. So we have a lot of respect for some of the competitors. They've done very well. We think that also, a validates the opportunity. This is one thing broadly structurally. AVOD is growing. There is clearly some wallet fatigue that's with consumers between the various SVOD services and pay TV. So this notion of watching content, good content for free with some ads, consumers have accepted. So it's a growing market. In terms of our positioning with it, we think we have some notable advantages. First, we're ubiquitously already distributed on connected TVs, and that's a big deal because that's obviously how consumers want to access it. B, we have a brand that consumers know and love. I already mentioned Rotten Tomatoes kind of from a discovery perspective, another brand, they know and love and trust. We also then have relationships with studios to kind of secure programming that's not our own. And then again, we're starting with a great base of programming that we're going to harness on the platform, great library content and kind of new content that we develop, that gives us a window to establish it and again, give consumers a window to access it. So if you look at that, and I already mentioned kind of the use case in a way from a consumer where we're going to have the AVOD as part of a broader ecosystem that really nobody else has. So you kind of put all that together. And I will say, finally, we're not going to just be a me-too service. We're going to have representing genres that we are particularly strong at. And so we're going to have a point of view and kind of a curated approach that will be a little different than other or, frankly, very different than others. So I think you put all of that together, it's a very unique value proposition that we would argue really nobody else kind of has in a market that's growing. And also finally, I'll just wrap up by saying this is foundationally done by a lot of our own research with our own customers. We have a ton of Fandango customers. We've asked and they've told us they want this service. So we know there's kind of rock solid consumer demand that we're not kind of guessing on that it's proven.

Yes. And personally, I think almost all my theatrical decision-making is tied to Rotten Tomatoes.

Great. I love to hear. I'm glad you're a customer.

Yes. Maybe switching over to the CNBC side. I want to ask about StockStory. And maybe you could talk a little bit about how it helps to expand the direct-to-consumer opportunity beyond what CNBC could build organically? And what financial lever matters most to you in terms of higher paid conversion, higher ARPU, better retention, deeper engagement? Or is this really about reaching a broader retail investor audience?

Sure. So StockStory was fundamentally about not changing what CNBC and particularly the CNBC D2C is going to be, but accelerating the development of it. So just if you're not familiar what StockStory is, it's a service that leverages AI to kind of develop investor tools, some stock recommendations, really be able to provide the wealth of financial information in a way that's easy for consumers to access it at their fingertips. And those capabilities as we're building the D2C service for CNBC are obviously kind of front and center of what we want to do. And again, this accelerated the development of it. And importantly, it's not only about the feature sets that StockStory has today. We've been -- we have a team now on board that is very familiar with using AI and using technology to kind of create these consumer experiences. And so as you can imagine, AI is evolving so rapidly. We are going to continue to develop more and more ways for consumers to subscribe to our service to be able to get tremendous amounts of information in ways that they can digest and very importantly, also personalized for them, which I think is a big feature -- big benefit of AI. Now as you were asking, I guess the other part of this was, well, how do we look at what's most important as we build the D2C. And kind of one answer is well, all of the things you mentioned are obviously important, whether it's audience or engagement or monetization. I think in the early days, we're very focused though on audience conversion and engagement because I think once we kind of have folks and we know there's, again, a big population that really loves our brand and wants this service, our ability to bring them in for them to use the platform significantly, that's then going to lead to audience scale and then financial scale. So that's probably -- those are the metrics. And part of that is bringing them in and then retaining them. And again, the service like StockStory is a big part of it because it both gives them an ability to kind of access a ton of information in ways they want, and it keeps the daily habit of them using the service that kind of reinforces that. So if I was to pick 3 in the early days, number of kind of converting audience to bringing them on board, how much they're watching and then how well we're doing retaining them.

Perfect. And maybe just sticking with direct-to-consumer and maybe roping in MS NOW, you said previously that investments here are not substantial. And maybe from a CFO standpoint, where are the major spend buckets between products, technology, content, marketing or anything else that you'd call out? And what milestones would cause you to maybe step up or moderate those investments? And kind of as part of this direct-to-consumer conversation, how do you make sure that the product is additive to the ecosystem rather than cannibalistic to the linear networks that you have?

Sure. So I'll kind of take them in pieces. So first is kind of the economics. So the -- we're starting off where we have a lot of the infrastructure in place. So that's just like from a technology perspective. We have a like video services existing, with CNBC has CNBC, Pro and Plus. We have some big digital publishing businesses in MS NOW and CNBC. And we have Fandango, which we just talked about, which has a big video infrastructure. So we're harnessing what we already have. So the -- and then we also obviously have a lot of our own programming and talent that we will harness for these that kind of our cost that we've already incurred. There's not really that much incremental cost. So where we will spend and that's one of the reasons why the total investment is not huge where we will spend and where we spend some is, a, on kind of product and design. We want to create an interface and a way for consumers to interact, which is bespoke to the needs of this product and then also on marketing and kind of acquiring customers. So -- but a lot of where I think you typically see a ton of the money spent, we already have those capabilities kind of in-house. So that's what makes it inherently a very kind of efficient model. And what was the second part of that?

Second part was about how do you make sure that it's additive to the ecosystem as opposed to cannibalistic to the linear network?

Sure. So I think the key here is that we're not replicating the linear bundle and just moving it online. It's not what we want to do. It's not, frankly, what we think consumers want. These are going to be bespoke experiences that are attracting customers with a value proposition that's different than again, that's true to the brand. So let's take CNBC just to start there. It is a service targeted to the retail investor. Will it have some of our programming that CNBC has? Sure, it'll have some, but it's not just going to be that. It's going to be tools and kind of recommendations and unique editorial that's going to help investors make smarter and smarter decisions with the brand they trust, with talent that they know. So -- and we talked about StockStory, that's some AI capability. So as you can imagine, that inherently because it's a different experience complementary to what they can in this case, see on CNBC, our television network, but it's not the same. And with that, it almost internally is not going to be cannibalistic. And it's very similar to MS too, with MS NOW, it fundamentally is a service that's going to be built around community. It's about community of currently loyal MS NOW viewers and even nonviewers who really love the brand. Again, a brand and talent that really resonate with people. And the thing we've heard from our customers is they want ways to interact with one another, and they also want ways to have experiences with the talent. That could be like a virtual lunch where they get to ask a question. So as you can imagine, if I talk about that, that's -- those are not capabilities that you would get watching MS NOW on TV. So it's a unique experience. And we've seen this already. If you think about other ways of products we've built like on MS NOW, we have podcasts on MS NOW, like Rachel Maddow has a highly successful podcast, for example. That provides a different experience than what you're going to get watching Rachel on MS NOW in the network. So we've seen every time we develop these, we were able to kind of take our loyal viewers and give them more and capture new customers, and that's exactly what we're going to do with the DTC.

Yes. It'd be interesting to use AI and offer consumers ability to argue with [indiscernible] I'm sure we'll get there eventually. Let's switch gears to the linear side, even though I know that you're trying to diversify and grow outside the linear ecosystem. But for investors, I think Pay TV headwinds remain a big concern. You've talked about before planning conservatively around those headwinds. And what does conservative mean in practice to your distribution revenue assumptions, programming commitments, SG&A structure and free cash flow planning?

Sure. So when we say conservative, we're not assuming that there is a like a Pay TV industry recovery. Like what we're assuming is the trends that we've seen and which have been pretty consistent over the last several years continue. We think that's a safe bet. I mean, there's -- you could make arguments that, that is -- that it could be better than that. We've seen some signs of some folks some distributors are seeing some more favorable and positive subscriber momentum. But we think the better way for us to run our business is to assume that it continues. It's possible that just in reality does. And frankly, we want to manage our cost base, assuming that it's kind of the continued trends are that they don't change. And what that means maybe more specifically is that like on distribution revenue -- linear distribution revenue, you'd have the subscriber kind of the cord cutting that we've been seeing, and then it would be partially offset by some rate changes on our wholesale deals with our pay TV partners. But that's exactly what you've seen over the last several years in our financials. And then we're managing the cost base in response to that. So on programming costs, the key there is, yes, sports rights are more fixed, but everything else is pretty flexible, and we will modify programming costs in response to the overall revenue outlook. SG&A, again, also, we recognize the realities of the secular changes impacting pay TV. So we're very focused on efficiency. And we've set up the company on day 1 to be very shared services focused, not a lot of resources at each brand other than editorial. And then we're leveraging technology and automation to continue to drive as much efficiency out of the cost base as possible. So that's how we're kind of running it and the focus as you put all of that together, is this is a very cash-generative business, and we're running it to continue to be very cash generating for a long time. And I think that shows up in our numbers, and we think that's the best way to drive long-term shareholder value.

Absolutely. Before we get to capital allocation and M&A, just 2 more on linear Pay TV. A meaningful portion of your subscriber base is covered by distribution agreements extending into 2028 and beyond, which is very encouraging. I guess, how should investors think about the renewal cadence between now and then, especially as skinny bundles and VMVPD packages continue to evolve?

Sure. So just to put the numbers out there, we have about 16% of our subscriber base is up in this year. And then we got roughly about a quarter up next year, and then the balance is '28 and beyond. So the fact that we have such a large percentage secured '28 beyond, obviously, gives us a lot of confidence in the business. And one important point is many of those deals in '28 and beyond were secured after the spin was announced, so it kind of highlights that the counterparties knew we were spinning. And with that, our brands and our networks are powerful, and we were able to secure terms we're very pleased with. And it kind of leads into the second part of that, which is the skinny bundle. I think as you go forward in these negotiations, that will be -- we've seen it, like in the old days, primary,the negotiating points were, okay, I have this big, big bundle and we'll negotiate kind of terms around that, what kind of the rate side is, what the duration is. Increasingly, it's more about these other packages. And I think in those other packages, you want to be heavy on news and sports. It's what audiences love. It's what distributors love, it's what advertisers love. And 60% of our total ratings are news and sports. And our biggest networks are in news and sports, MS NOW, CNBC, USA, Golf. So we're very well positioned for this environment. And you've seen it in reality, like those deals that we did, say, on YouTube and some of the different packaging contracts they have, our biggest networks are within them. So we're very confident about our portfolio and as we go into these negotiations in the quarters and years to come.

Perfect. And you mentioned advertising, so that's a good segue. Maybe you could talk a little bit about what you're seeing in the underlying ad market today across Versant's portfolio. And what gives you confidence that the company can grow its share of advertiser budgets over time?

So I think the ad market right now is solid. It is -- we're seeing strong demand kind of -- and if you look at it, again, strong demand in news and sports, and we've got great ratings there kind of across the portfolio as well, and we're monetizing those ratings like just to pick on one, like MS NOW ratings are way up. Year-over-year, we're very pleased by that, and we're able to monetize it. And as you look again, if you're an advertiser, you want to be on MS NOW. You want to be on CNBC. It is the place for business. You want golf, we're synonymous with golf and our sports, you can't get anywhere else. And then -- and again, premium entertainment as well, we've seen strength across the portfolio. So we feel very good about kind of where things are at on advertising. I think for us, too, as we kind of go forward, it's not just about kind of television, it's also about digital, and we're creating new inventory in digital. I'd mentioned going forward, the AVOD, for example, will produce some inventory, we have free TV networks, which is not digital per se, but it's a different type of inventory that we have. The DTC services will have new digital inventory. So I think, again, we feel good on where the ad market is now. And then as you kind of look at the evolution of the business going forward, we think we're going to continue to be a must-buy for advertisers, both in the traditional network world and increasingly in the digital and platform world as well.

And you're presumably fairly well positioned into year-end with political. And then as I think about it now, and we look at some of the capital markets activity that seems to be coming in the tape in the coming months, a lot of retail heavy deals. So all that bodes well for ratings and monetization?

Yes, particularly, you're right. I mean in both like on the political side, that will really help MS NOW ratings. We'll get some political advertising. To be fair, political advertising, a lot is kind of local station driven, which we don't have. We'll get some on the network but a lot of it is just kind of gives us overall ratings kind of more ratings to sell, and we're seeing a lot of demand for that rating, and you're 100% right on CNBC. I mean the kind of the retail investor orientation, some of the IPOs will drive ratings. And if you just look also at CNBC, just to maybe to our own horn for a bit like some of the access we've had where we just interviewed People Administration, President Trump was on. We've interviewed obviously Jeff Bezos. We interviewed Warren Buffett just over the last several months. And that access is kind of really showing up in terms of people are watching. Brands also love the ability to kind of say, this is the kind of content I want to be associated with. So it helps with ratings also kind of really drives advertiser demand.

Perfect. I want to hit on capital allocation and M&A because I think that's certainly an interesting and important part of the story. You initiated a dividend. You completed a $100 million buyback in Q1 and announced a $100 million ASR what should investors infer from this cadence? And how do you decide the pace of repurchases versus preserving flexibility for organic investments and M&A?

Sure. So I'm going to start with saying we've had a consistent and disciplined kind of capital allocation methodology of strategy. And that's been from the day we were formed even before it's what we will, what we have and it's what I think always going to be. So 3 prongs to that. First, where we want a conservative and great balance sheet. And I say first just not, but they're not in order. We're going to do all 3 of them, and we have been doing all 3 concurrently. Second, we're going to invest behind growth and really evolving the business model. And then third, we're going to return capital to shareholders. and that's exactly what we've done. And I think one of the key parts of Versant is that those are not ores between those 3 statements, they're and. And I think what you've seen, for example, in the share buyback in Q1 or the ASR or the dividend as well as the investments I talked -- we talked about earlier in terms of the organic growth and some of the bolt-on M&A they represent that, that's our ability to do that, and that's what we're going to do going forward as well. And then your question about kind of share buybacks our methodology is it's not mechanical when we look at share buybacks, we look at a whole host of factors. We looked at the overall market environment. We looked at kind of -- we'll look at growth opportunities for us and kind of what's the best way to drive long-term value for shareholders. And kind of we consider all that when we make those decisions. But I think the biggest thing is -- those 3 principles I mentioned upfront, we're firmly committed to.

Perfect. Two on M&A. Maybe first, you've talked about bolt-ons that strengthen the existing verticals and potentially more transformational moves that could diversify your revenue base? How do the return thresholds differ between those 2 types of deals? And what financial discipline should investors expect you to apply?

Sure. So I think I know, I mean we will be and we are very disciplined and really 2 factors in first, on any M&A. A, it has to be strategically aligned with kind of what we just talked about in terms of our strategies. Just to reiterate, we're focused on the 4 core markets we're in. And again, just to repeat them, personal finance business news, political news and opinion, golf and then genre entertainment and sports. We have big brands, really success and market leadership in them. So that prism is -- we think there's a lot more opportunity there. So we'll look M&A in those areas. And again, within those areas, we want to extend our audience reach and evolve our business model. So that's prism one strategy-wise. And then financially, can hit all those boxes, but it also has to generate very strong returns for us and with a high degree of confidence, needs to really be able to drive. We need to be confident in the synergies we're going to be realizing through cost and revenue. And it also needs to kind of fit within that capital allocation criteria that I mentioned. One of the plans is for us to maintain a conservative and very strong balance sheet. So that's going to be, frankly, the discipline, whether it's a small deal or a larger deal. So we don't really modulate that -- and I think the M&A that we've done today, which is not the really big ones that you refer to are smaller, but they all go through that exact same methodology. And I think you'll see kind of basically every single box that I just articulated it checked and if it happened to be a bigger deal, we'd have the same kind of approach and the same discipline that would be applied.

Perfect. And the last one on M&A. I think the question I keep getting is around horizontal. And I think maybe pre-spin the expectations or the thought process from outside was a little bit different. And now it seems as though you guys have been very consistent and very clear that you're very focused on vertical M&A and kind of strengthening the verticals that the different brands that you have as opposed to cobbling up more cable networks and growing that way. Maybe talk a little bit about that approach and why is that the right approach and any interest in some of these linear assets?

So I'll start with -- we feel very confident about our strategy on kind of, as you said, verticals are looking at the 4 core markets we're in. We think, again, each of those markets is really large in terms of the total available market. We have great brands within them. We have established huge audiences and leadership. And we've demonstrated our success or our ability to be very successful with golf. So it's not just academic. There's a reality of what we've done. So I want to start with that, that we think there's a ton of value to be generated there. And again, with the proof point that we just talked about in Gulf. Now I think as you then go to how do you compare that to horizontal M&A and our own dealings there. So one, I think sometimes some may overestimate in my opinion, maybe some of the synergy potential A lot of the synergies are talked about in terms of big time cost savings. I know how we have run our portfolio when we were part of Comcast, we run it today. And we've been very disciplined and focused on costs for years and will continue to be that way. I would presume a lot of the other linear portfolios have similarly kind of managed their business that way. Again, not being there, I can only speak from what I can observe or based on our own experience. So I'm not sure then as you look at that, there's maybe that much cost opportunity that is really remaining as you maybe try to combine portfolios. The other aspect, which may be just more unique to us is, we talked a lot earlier about distribution and how we're positioned or ad market as well. And however you want to look at it, sports and news kind of orientation, we think is really beneficial and it serves us well. And there's obviously a competitor -- one of our competitors whose results speak for themselves with a heavy sports and use focus. I think anything as you look at kind of M&A that dilutes from that is something that we'd have to be pretty careful about. Like we're not -- we don't really want to dilute from that. We think that mix serves us well. And I think that's another kind of consideration that has to be in the mix as you think about original M&A.

Makes perfect sense. And maybe just to slowly wrap up, if we look out 12 months from now, what are the 2 or 3 proof points that you want investors to point to and say that this vertical platform thesis has worked?

Sure. So maybe I'll just mention 3. So I think first, and we've talked a lot about the evolution of the business model. And I think we'll see that in terms of the percentage of our total revenues that come from outside of Pay TV. We've talked about that metric and it's 19% for 2025. And we've put out there that we want that to be 33% over 3 to 5 years and long term 50-50. So over like a 12-month horizon, seeing continued progress on that and kind of within the same category, I think that will show up in terms of platform revenue growth and kind of seeing continued, you mentioned earlier that we saw a very strong performance in Q1, and we're very bullish here and continued kind of strong performance in that area. So those are kind of one category. Two may be related to that, but also now thinking more audience, really about customer engagement, both on Pay TV, but also outside of Pay TV. We've talked a lot about extending our reach and extending engagement. And so another thing, say, over 12 months is that we're successfully reaching people and people are engaging across all these platforms. They're listening to more podcasts. We've launched the DDC services, and they're engaging there. They're continuing to watch good amounts of television, and we're delivering great content there. So that's another to me, on the evolution to get to see that audience reach extension and the CV multi-platform engagement. And then the third component is you kind of bring those first 2 things together in some ways is to kind of demonstrate that we have a very cash-generating kind of very resilient business model and to kind of show in and that means EBITDA, free cash flow and to show very strong results there. And that's exactly how we're running the business is to kind of do all 3 of those things. And I think that's how I'll be looking at it.

Perfect. Well, Anand, this was very insightful. I really appreciate it. Thank you so much.

Thank you very much.