Good morning, ladies and gentlemen, an d welcome to today's conference. My name is Jim, and I will be your conference operator. At this time, I would like to welcome everyone to the Corus Entertainment Q2 2023 Analyst and Investor Conference Call. All lines have been placed on mute to prevent any background noise. After the presenters prepared remarks rather, excuse me, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star and the number one on your telephone keypad. If you would like to withdraw your question, simply press star and then the number two on your telephone keypad. Thank you. As a reminder, today's session is being recorded, and it is now my pleasure to turn the floor over to Mr. Doug Murphy, President and CEO of Corus Entertainment. Please go ahead, sir. Thank you, operator. Good morning, everyone. Welcome to Corus Entertainment's fiscal 2023 second quarter earnings call. I'm Doug Murphy. Joining me this morning is John Gossling, Executive Vice President and Chief Financial Officer. Before I read the cautionary statement, I'd like to remind everyone that we have slides to accompany today's call. You can find them on our website at www.corusent.com under the Investor Relations, Events and Presentation section. Let's move to the standard cautionary statement found on slide two. We note that forward-looking statements may be made during this call. Actual results could differ materially from forecasts, projections, or conclusions in these statements. We'd like to remind those on our call today, in addition to disclosing results in accordance with IFRS, Corus also provides supplementary non-IFRS or non-GAAP measures as a method of evaluating the company's performance and to provide a better understanding of how management views the company's performance. Today, we'll be referring to certain non-GAAP measures in our remarks. Additional information on these non-GAAP financial measures, the company's reported results, and factors and assumptions related to forward-looking information can be found in Corus' second quarter 2023 report to shareholders and the 2022 annual report, which can be found on SEDAR or in the Investor Relations Financial Reports section of our website. I will now start on slide three and provide our latest observations on the macroeconomic environment and its impact on Corus, as well as a few financial highlights from the second quarter results. Our results this quarter reinforce that we are in an advertising recession. We are not alone, as evidenced by recent comments from media and entertainment companies that rolled over, experiencing weak advertising demand and revenues. There remains limited visibility and much volatility across all advertising categories, some of which we believe remain pandemic-related, while other emerging trends could portend a larger macroeconomic contraction, given restrictive monetary policy from central banks to combat inflationary pressures in goods and services. Let me provide some further color for you. Similar to last quarter, almost all product and service categories showed declines as advertisers continued to hold, reduce or cut spending compared to the year prior. There were some exceptions, however, with ongoing advertising strength in iGaming, gambling, some strength in consumer packaged goods advertising, as well as recent improvements in travel-related advertising. Households who are facing higher food and mortgage costs are pulling back on discretionary spending at home, with notable declines in durable goods such as furniture and electronics, as well as reductions in home renovations, all of which are impacting those advertising categories. Some supply chains are opening up, such as automotive, with U.S. advertising forecasts from media intelligence firm MAGNA, highlighting an expected 10% increase in car sales for calendar 2023, as the benefits of more inventory flow to more auto dealer marketing investments. Finally, we are all aware of the persistent desire of workers for remote and flexible working arrangements, meaning that days in the office remain well below pre-pandemic levels, which has affected certain categories such as beauty and fashion, with retailers witnessing the closure of Nordstrom in Canada. As expected, we experienced sequential improvement in Q2 with a decline of 8% in television advertising revenue compared to an 11% decrease in Q1 and a 14% decrease in Q4. Currently, the company expects its year-over-year television advertising revenue in the third quarter will be relatively consistent with the year-over-year performance in the first quarter of fiscal 2023. Our consolidated revenue of CAD 344 million was down 5% for the second quarter, resulting from lower television advertising and subscriber revenues. These revenue declines, when combined with higher amortization of program rights, resulted in lower total segment profit of CAD 59 million for the quarter, with free cash flow of CAD 28 million. Over to slide four. This is a particularly challenging year for our business as we are contending with declines in advertising revenues, while at the same time experiencing an increase in programming costs. We are investing to ensure the long-term viability of our traditional channels business while simultaneously pursuing streaming opportunities in the growing premium digital video marketplace. The successful renewal, extension, and broadening of the rights acquired through our content supply agreements are foundational to this growth strategy. We are working our way through the additional CAD 50 million in mandated Canadian programming expenditures, which was originally delayed by public health measures that resulted in COVID-19-related production shutdowns in 2020. This unfortunate decision by our regulator is having a significant impact on our financial performance this year and last. As we turn the corner on fiscal 2023 this summer and enter into fiscal 2024, we will begin to put this additional annual CAD 20 million expense behind us. Our enterprise-wide cost review is in motion, the goal of which is to streamline our operating model and attain lasting run rate cost savings beyond our programming investments, while balancing our near term realities with long-term value creation as we execute our strategic plan. Each and every expense line item is under scrutiny as we seek to improve our operating margins and/or redirect those savings to marketing investments to support our streaming portfolio platforms and channel networks. Advertising is a cyclical business. At some point in the quarters ahead, we expect a rebound in advertising demand and revenue, and we will enter this rebound with a streamlined cost structure and significant reductions in our CPE spending. Moving to slide five. I want to take a moment and share with you what I believe is the go forward business model for the big U.S. studio majors who provide Corus with our leading supply of content. Our partners, as you are all aware, are also streamlining and reinventing their operating models. What is emerging is what I refer to as the four corners of the box model, a smart, sustainable strategy for our U.S. studio majors that gives us confidence in Corus's strategic plan and long-term business model. Allow me to explain. The first quarter is investing in more content, more television, more films, more franchises. Content production budgets at these U.S. studio majors are at record levels as everyone actively engages in the content arms race. Second, they recognize the importance of protecting their core channels businesses. All the U.S. studio majors have massive owned and operated linear channel businesses around the world that generate significant revenue, earnings, and free cash flow. Third, they have built streaming products that are distinct but also similar to their channels businesses, such that linear subscribers can stack the direct to consumer product on top of their channel subscriptions while also providing a compelling worldwide streaming value proposition. As an important side note, I'm certain you have all noticed that the U.S. studio majors now have a shared recent focus on the profitability of these streaming services as opposed to a subscriber growth at all costs mindset. The fourth corner is that the U.S. studio majors want to support their very profitable content licensing businesses around the world. The success that Corus has had in recent years to extend the term and simultaneously broaden the rights grants from our U.S. studio majors to enable our pursuit of premium digital video opportunities underscores the content supply remains secure. As I've said before, it is not a winner take all model. It is not either/or, it's and. The smart management of the four corners is now the consensus winning approach of our U.S. studio major partners and proof of the long-term sustainability of our business model in Canada. Over to slide six. We see significant opportunity ahead with a large and growing total addressable premium video advertising market. We are expanding our premium digital video business with additional platforms and content offerings as we, in parallel, invest in cross-platform monetization capabilities and marketing. Corus is pursuing a partner-led capital-light streaming strategy. We do not need to invest billions of dollars in the production of content. Rather, we can access what we need from the content licensing market as described a moment ago in the four corners model. Our leading portfolio of streaming platforms in Canada includes STACKTV, the Global TV App, our Global News over-the-top apps, TELETOON+, and now Pluto TV. This highly complimentary portfolio addresses SVOD, AVOD, and FAST channel market segments and appeals to premium video subscribers, cord cutters, cord nevers, and advertisers that want to reach them. We are actively pursuing new distribution partners to support the continued growth of these services. Let me spotlight a few notable recent developments. We have taken a significant recent step to optimize our kids portfolio. Our long-lived heritage network, Teletoon, was rebranded as Cartoon Network on linear channels platforms, and STACKTV. As part of an additional channel rebrand, Corus introduced a new kids television channel from our partners at Warner Bros. Discovery with the debut of Boomerang. The Teletoon brand remains alive and well as TELETOON+, available on Amazon Prime Video and Bell platforms, and is now Canada's leading kids SVOD streaming service. Made possible by our multi-year all rights deal with Warner Bros. and Cartoon Network, viewers can stream popular series like Teen Titans Go!, Looney Tunes cartoons, Scooby-Doo, Batwheels, and Bugs Bunny Builders. A year and a half ago, STACKTV launched dynamic ad insertion on video on demand in partnership with Amazon Prime Video. This popular offering for advertisers has become a significant revenue contributor to our digital advertising portfolio and has really taken off in fiscal 23. The Global TV App is a first of its kind TV everywhere product designed to amplify the viewing experience for cable subscribers with live and on-demand access to our most popular networks and brands anytime, anywhere, in one app. With the recent additions of Magnolia Network Canada, also from Warner Bros. Discovery, and Lifetime from our partners, A+E Networks, the Global TV App now provides 11 channels for authenticated subscribers in Canada. For those who like free, we introduced an all-new free play section featuring free 24/7 access to fan favorite series and movies such as Big Brother Canada, Rookie Blue, and The Good Witch, which has meaningfully improved the value proposition. Finally, Pluto TV, now available in Canada with the most robust content launch from Paramount Global and a channel lineup that pairs us with content from Corus Entertainment's original Canadian content, Pluto TV is off to a great start. Pluto TV advertising inventory is now broadly available to all advertisers following an exclusive and successful launch window with select advertising partners. Moving to slide seven. We have been priming the pump at Nelvana, and this is evident in our second quarter as deliveries ramp up. Our strong partnerships and investments in co-production frameworks highlight the international appeal of Nelvana's creative capabilities. In 2021, green lights for two exciting properties were announced as part of Nelvana's co-production framework with Nickelodeon, Hamsters of Hamsterdale and Zokie of Planet Ruby. These shows are now in the delivery stage, contributing significantly to our results this quarter and expected to premiere on Treehouse and globally on Nick later this year. We have deepened our co-production partnership with Mattel following the successful debut of Thomas & Friends, an animated kid series based on the beloved Thomas the Tank Engine brand. Production is now in progress on subsequent seasons of this popular show. In addition, in February, Mattel announced it will relaunch the iconic Barney franchise with a brand new 3D animated series co-produced with Nelvana. At Corus, we are also focused on leveraging our owned IP through the Corus advantage, where we use our Canadian programming expenditures to create content for our networks and for sale internationally. This past January, Nelvana announced the green light and start of production on its new 3D animated series, Millie Magnificent, inspired by the best-selling Kids Can Press book by Ashley Spires and Nelvana's award-winning short film, The Most Magnificent Thing. Corus Studios continues to grow its distribution output, with over 200 hours of content sold during the second quarter. Inclusive of 18 titles across the lifestyle, factual, and scripted space, Corus Studios' recent sales reflect the appeal of the breadth and multi-season depth of our production slate and catalog. We are especially excited about the sale of The Love Club to Hallmark in the U.S., opening the door to an expanded two-way strategic content partnership for both Canadian and worldwide audiences. Corus Studios looks ahead to Q3, we're excited to bring new and highly anticipated titles to buyers, including Pamela Anderson's new food-focused series, Pamela's Cooking With Love, the competition renovation series, Renovation Resort, starring both Bryan Baeumler and Scott McGillivray, and Bryan Baeumler's new series, Bryan's All In. Operators of streaming platforms look to balance their production investments with more cost-effective content acquisitions, this is a perfect setup for our owned content ambitions at Corus. Our growing slate of content in production and for sale will benefit from this demand in the international marketplace. I will now turn over to John to discuss our Q2 results. Thanks, Doug. Good morning, everyone. I'm starting on slide eight. We experienced a sequential improvement in the rate of TV advertising revenue decline within the challenging advertising environment that Doug described, as well as lower subscriber revenue. That was partially offset by positive results from our content business, which contributed to consolidated revenue of CAD 344 million in our 2Q, that represents a 5% decrease from the prior year. Consolidated segment profit was CAD 59 million for the quarter, that reflects the lower TV advertising and subscriber revenues, coupled with increased programming costs and marketing investments for our streaming services. Consolidated segment profit margins were 17% for the quarter. Consolidated net loss attributable to shareholders for the quarter was CAD 0.08 per share, we delivered free cash flow of CAD 28 million in the quarter. Net debt to segment profit was 3.59x at February 28, 2023, compared to 3.02x at the end of the last fiscal year, and that reflects the impact of our lower segment profit. Now let's turn to our TV results for the second quarter, and that's on slide nine. TV advertising revenue declined 8% in the quarter. Subscriber revenue was 7% lower compared to last year. As a reminder, in Q2 of last year, we did benefit from approximately CAD 6 million of retroactive adjustments from the renewal of distribution agreements. When you adjust for this, subscriber revenue would have been down 2% with streaming subscriber growth from expanded distribution partially acting to offset declines within the traditional linear distribution system. Should also highlight that in our third quarter last year, we had a retroactive adjustment of approximately CAD 2.5 million from the renewal of a distribution agreement. Distribution production in other revenue delivered an impressive growth of 28% for the quarter and t hat was driven by content deliveries at both Nelvana and Corus Studios, as well as the addition of Aircraft Pictures in February of last year. The positive momentum we have in new platform revenue, increased adoption of optimized advertising, and sales of our slate of original content underscores the progress we are making to diversify our revenue and position Corus for longer-term growth opportunities. Direct cost of sales was up 8% for the quarter. That was driven mainly by a 7% increase in amortization of program rights, which resulted from the investments in U.S. studio output deals, an increase in original programming deliveries, which compared to last year, which was an Olympic quarter and higher Canadian spend this quarter. On a full year basis, we continue to anticipate that programming costs will grow mid-single digits with approximately 1/3 of this driven by the CRTC's catch-up decision. TV G&A expenses were consistent with the prior year quarter. In the current quarter, G&A mainly reflects an increase in marketing investments to promote our streaming services and higher development costs in our content business. That was offset by lower compensation costs. General and admin costs are down across categories, all categories other than investments we are making in marketing and content development. If we exclude these two items, TV G&A costs are down approximately 5% in Q2. Overall, TV segment profit was down significantly in the second quarter, primarily as a result of the contraction in advertising demand and the reduced subscriber revenue, as well as the higher amortization of program rights and film investments. TV segment profit margins were 20% in the current year quarter, and that compares to 27% last year. Moving on to slide 10. Despite the impact of the challenging advertising environment, we continue to see encouraging growth in our new platform and optimized advertising revenues. New platform revenue was CAD 34 million, or 12% of total TV advertising and subscriber revenue in the second quarter, and that was up 4% from the prior year quarter. The continued growth reflects the disciplined execution of our strategic plan as we benefit from expanded content rights deployed across our streaming services to drive audiences and incremental advertising impressions. As a reminder, this metric demonstrates some seasonality from quarter to quarter due to the higher linear advertising revenue mix in Q1 and Q3 compared to the lower demand quarters of Q2 and Q4. Optimized advertising revenue was up significantly in Q2 at 52% or CAD 88 million of total television advertising revenue for the quarter. This is an increase of 14% or CAD 10 million from the prior year quarter as more advertisers explore the benefits of our targeted and automated advertising solutions. Let's turn to our radio results, which are outlined on slide 11. Radio did benefit from resiliency in key advertising categories in the quarter, including travel and entertainment, but was offset by softness in professional services, communications and home products. Radio segment revenue increased 1% for the quarter as a result of stronger local and podcasting revenues. That was partially offset by the impact of broader macroeconomic conditions on national sales. Radio segment profit increased slightly in the quarter, benefiting from this revenue growth. All right, over to slide 12. We exited the second quarter with CAD 58 million of cash and cash equivalents and CAD 241 million available to be drawn under our revolving credit facility. In the second quarter, we renegotiated the covenants under our bank credit facility to address the persistent headwinds in the current economic environment. We made a prudent decision to take proactive steps which provide additional flexibility under our credit facility. We also reduced our dividend in March, recognizing that an attractive dividend remains important to our shareholders. As we continue to make strategic investments in the business to drive future growth, the redeployment of capital from dividends is expected to be redirected to debt repayment. We declared a quarterly dividend of CAD 0.03 per Class B share, which was paid on March 31st, 2023, and took the opportunity to realign the dividend payment schedule to reduce the gap between the declaration and payment dates. Fourth quarter dividend is scheduled for its regular review in conjunction with the release of our Q3 results and, subject to board approval, would be payable in August. As Doug noted, we have and continue to take serious cost reduction measures which will be captured over the next several quarters. While we navigate the ebbs and flows of this low visibility environment, our foremost priority is to advance our strategic plan and priorities as well, sorry, as we aim to maximize our revenues and carefully manage our expenses and cash. We are very confident in our team's ability to streamline our costs and optimize our assets while sorry, delevering our balance sheet and providing an attractive return to our shareholders. With that, I'll turn it back to Doug. Thank you, John. Moving on to slide 13. While we do not know the depth nor the duration of this advertising recession and/or whether a larger macroeconomic contraction awaits the Canadian economy, we are confident in our company and in our plan. This team has successfully managed through a pandemic, keeping our people safe, laddering out our balance sheet, revising our capital allocation priorities, launching our streaming portfolio, and building our cross-platform monetization capabilities as we advance our strategic plan and its priorities. Fiscal 2023 is an especially challenging year for Corus as we contend with the double whammy of an advertising recession and the unexpected decision by the CRTC requiring us to catch up the production spending in a hiatus during the COVID induced shutdowns. As I've said many times, both of these pressures will pass. What are headwinds today will become tailwinds in time. We are, as noted, conducting a thorough review of our operating model, asset base and cost structure, and once complete, this will result in a streamlined operating model, well positioned for the years ahead. What we are doing to navigate the current environment is not at the expense of our strategic plan. We are making smart decisions as an independent company with a clear direction. We know exactly where we are going with a well-articulated plan, expansive relationships with all the U.S. studio majors and the best talent in the business. We are also, at long last, on the cusp of some much needed regulatory changes in our industry. Bill C-11 gets the big things right and has reached the final stages of the legislative process. While we do not know all the details of future broadcasting regulations, we know this bill will make modern and equitable rules more attainable. We urge the CRTC to move very quickly to implement the new legislation after it passes, including by revisiting obligations on Canadian licensees. Establishing new rules for foreign players and recalibrating existing rules on Canadian players will be necessary to truly level the playing field, the outcome which is at the heart of this legislation. While we await the new regulatory regime, we are being very prudent stewards of capital. We are prioritizing paying down our debt while investing in the business to create future growth opportunities even during this downturn. We are purposely moving from being a television broadcaster to a multi-platform video aggregator, delivering content everywhere our audiences are, and standing up the ability to monetize our inventory of advertising impressions across all platforms. We are building an affiliated studio business through which we will direct future required Canadian content spending to serve our networks and platforms in Canada and grow our content licensing revenues the world over. I'd like to take a moment and thank our team across Corus and the country. With that, I'll turn it back to you, operator. Gentlemen, thank you. To our phone audience, at this time, if you would like to ask a question, please press star and one on your telephone keypad. Pressing star and one will place your line into a queue. We ask that you're joining today on a speaker phone. Please return to your handset prior to pressing star and one to be certain that your signal does reach our equipment. Once again, ladies and gentlemen, that is star and one if you would like to ask a question. If you find your question has been asked, you can remove yourself from the queue with star and two. We'll move forward and we'll hear first from Vince Valentini at TD Securities. Thanks very much. One first question is on these content deals that you've extended with many of your partners. Do you have visibility and certainty on inflation in what you are going to have to pay for that content in years two, three or beyond for any multi-year deals? I'm just wondering, is this like a one-time step up and then you flat line? Or do you know that, you know, next year and the year after, it's actually going to be even more expensive because of all the new digital rights and safe security you have? Thanks, Vince. Yeah, we have visibility on all of the years, and they kind of all vary. You know, in certain instances there was a kind of a year one increase and then flat line for the subsequent years. In other cases, they're the same increase year-over-year. The pricing is kind of a deal-by-deal negotiation. We've got very good visibility to it. That's, that's helpful. Accordingly, we are able to then plan for, you know, the premium digital video revenues that would, you know, attach to those new rights we're acquiring. Less visibility was according to the CPE decision, of course. That came out of left field and we had to kind of recalibrate to accommodate that. Yeah, no, for sure. I understand that one, Doug, thanks. Yeah. I wanted to ask that first because I know hopefully this isn't that tricky of a question, John, that you can try to give us some framework on? What I'm thinking of is here is if we take the uncertainty in predicting revenues totally out of the equation, just assume one year from now in the second quarter of 2024, your TV segment revenue is exactly the same as it was this quarter. What would EBITDA look like given the cost cutting you're already doing on your own G&A, the better flow through on the CRTC catch up stuff, offset maybe slightly by second year inflators on the U.S. content deals? I mean, your segment profits, you know, way down this quarter. Your margins are way below what we normally would see. I'm just wondering, you know, how much visibility you have that take revenue out of the equation. I mean, do you see segment profit up 10% or 15% in this quarter next year if you can keep revenue flat? I don't have enough visibility. I think you know, there's quite a few variables in Q1, although I think as you're getting at it'll be an easier comp, clearly, given that, you know, this is our third quarter of a pretty tough outcome. I think there's a couple of things that are hard to predict. One is the sort of cadence of deliveries of especially prime time programming in the fall. That's completely unknown at this point. That particular buy activity will be happening in the next month, so we'll have a better view of that coming up. You know, I'd say, you know, beyond advertising revenue, subscriber and the content business are pretty big contributors, and I don't know that we have a good handle on timing of content deliveries at this point for Q1. I mean, we would have certainly a view, but it can change quite a bit between now and then. I guess a short way or short answer is I'm not really that certain right now. There's just a lot of moving pieces. Yeah, we would certainly think that, you know, ad revenue should be able to be stable. There's a lot to happen between now and then, including the fall schedule. I'd answer this similar, but maybe a little different. I think we can expect Canadian programming to obviously with the CPE catch up, you know, behind us, that's a tailwind which we valued at, you know, in nearing CAD 20 million the last couple of years. You know, the foreign programming, you know, we have a very clear line of sight. To the extent to which the revenue remains same, you know, you can, you can intuit through there that we're trying to get to a spot with streamlined margins given our cost activity, both on working through the CPE piece and our non-U.S. programming line items. Okay, fair enough. One last one for me, I'll pass the line, is just the subscriber revenue. Two questions, I guess. One, I get you on the Q3 retro item from last year that we need to make sure we factor into our models. Is there anything coming this year on the positive side of that? I know it's lumpy. It happens from time to time. Are there any renewals that could hit in Q3 or Q4? Maybe just unpack the -2% a bit more. Is that just simply what it is of linear declines are accelerating a little bit, so the revenue you're getting from STACKTV and other streaming sources is not quite offsetting the decline rate anymore? I think that's right, Vince. The linear decline isn't accelerating, but the, you know, the STACKTV and other streaming subscriber revenues has flattened quite a bit just given that the growth flattened, you know, going back now into Q3 of last year. I think you got that right. In terms of anything in the pipeline, look, there's always renewals in the pipeline. There's a potential for some big ones in the back half of the year, but they're very hard to predict exactly when they're gonna happen. You know, as much as we'd like to see those done for certainty and other reasons, they may or may not happen in the back half. if they didn't happen- Go ahead. Sorry. If they didn't happen in the back half, then John, it happened at some point. It's just timing or maybe it slips into next year? Yeah. Okay. Gotcha. Yeah. Yeah. Just some more color on STACKTV. STACKTV, as you know, the last few quarters has kind of sort of its trajectory has kind of flattened out. The year-over-year comps, as John rightly notes, is less meaningful as a contributor to the overall sum of traditional pay TV subs and STACKTV subs. That said, you know, we still have our target of 1 million subs on STACKTV. We've greatly improved the value proposition with the addition of the Disney channels and Lifetime in recent months. Most recently, we have had a very aggressive marketing campaign in market, and we've seen some renewed positive momentum with a, obviously a modest trend change back up to the right in a good direction with our STACKTV marketing campaign and the launch of that campaign with the spring schedule with shows like Survivor, which has been another great season. Big Brother Canada and Bel-Air has been helpful. There, you know, we have 400 hours of Peacock programming that lives on STACKTV, and that continues to distinguish and differentiate that service. So we're still really working hard on getting that business back to a more steady growing profile. Thank you. You're welcome. Thanks, Vince. Our next question today comes from Scotiabank and the line of Maher Yaghi. Please go ahead. Yes, thank you for taking my question, guys. Doug, I wanted to ask you know, you indicated today for Q3 that you expect the year-on-year growth to be similar to Q1. Are there any signs that you're seeing that we could, you know, begin to see improvement in the year-on-year growth, you know, decline, let's say, in Q4 or early next year? Just trying to see, you know, we're kind of hitting this low -10% year-on-year, but are there signals that give you hope that the declines of -10% might get better for Q4? This is something hard for us to get a view on, and maybe you can help us. You know, of the 10% decline in advertising that you expect in Q3 approximately, how much of it is related directly to general ad spending decline versus maybe market share shifts that are happening between broadcasters getting different allocations of the dollars that are in the market for advertising? I have a follow-up question, but I'll leave it there for now. Those are two very good questions. Let me take the second one first, and I'll try to give you some color. Yeah, the media mix question, like what, you know, what's happening in terms of the share of TV versus share of digital versus share of outdoor, that remains, you know, still very much a sort of very fluid, dynamic based on, you know, campaign ROI calculations. I am of the view, and will remain to be seen in the coming quarters, but I'm of the view that with the advent of ad layers on premium video platforms, not just, you know, Pluto or Global TV, but also Disney+, Netflix, Discovery, that we are gonna see a shift of dollars out of other digital user-generated platforms back onto tried and trusted long-term premium video content. Advertisers have been asking us for more impressions a la typical linear television for years now, and it's only been the last 18-24 months that all of us, and that's why I took particular time today to describe my four corners model and our shared alignment with U.S. Studio majors as to how they're pursuing monetizing their video now. It's that we think that should bode well in the coming years for a reallocation of the digital media mix back to premium long-form video away from social, away from user-generated content. That's just one thematic personal perspective. As regards to the visibility, I'm, you know, as I say, it's very limited. If you think about it's very logical. I mentioned that, you know, we're all dealing with, you know, younger generation wanting to work from home. You know, the health and beauty category is down massive, you know, year-over-year. There's a bit of an uptick last year in advertising 'cause folks are coming back, but now people have realized that they'd rather stay at their home. You know, retail is also down, certainly in Canada, and that's showing up in our category. Given the 450 basis points increase in interest rates, financial services and mortgage advertising is down. You know, that's another category. Government is down. You know, we're just in a situation where, as I said, we think it is still primarily pandemic-related, either behavioral or supply chain affected. And the question that we worry about, and hence the limited visibility comment is whether there's a further macroeconomic speed bump to hit the Canadian economy. The Canadian economy seems to be holding in there pretty well thus far. Labor market's good, but that could, you know, be covering up some changes and things going on beneath the surface. We're purposely not being very predictive on the outlook other than to say, you know, it's kind of quarter to quarter with limited visibility and, you know, we're managing our expenses to offset the advertising to clients to the best of our ability, but not at the expense of. We continue to push hard on our strategic plan. Okay. Okay. That's fair. You know, my last question is on the subscriber revenue, and this also has very little visibility for us here to get info on. You know, as the BDU operators continue to, you know, struggle with declining video subscriptions on their end, are you seeing any pressure on the rate cards that, you know, could be coming up for renewal, with some of these BDUs, that could add pressure on your subscription revenues going forward? Yeah. I think that's normal course, Maher. That's not a new thing. That's, that's what our content distribution team deals with all the time. You know, I think if you look at the track record, we've been pretty successful in, you know, in those negotiations. Yes, there's definitely a decline happening. As I said to Vince, it's not accelerating at this point. You know, what we need to do is we need to get, you know, STACKTV and our other streaming products kinda reinvigorated to provide some growth to offset that. Yeah, just I'll add some more color. Yeah. The truth of it is that, you know, we've been working hard ever since we bought Shaw Media to optimize our channel portfolio with strong brands. We just upgraded, for example, with the swap, you know, Teletoon rebrand, Cartoon Network, and the old Cartoon Network rebrand to Boomerang. We continue to improve the value proposition that we bring to the BDUs. We're, you know, we're very clever and work hard to ensure that our services that get all the audiences are getting appropriate share of subscriber revenue. In most of the cases, the share of audience we get is not the share of overall countrywide revenue, and that we look to correct that imbalance. Of course, sports is over-delivering in terms of its cost in the system, so we work hard at that. We're generally able to get, you know, inflation on all renegotiations. We usually have to, you know, do some portfolio negotiations, i.e., reducing services. We've gone from at the time of acquisition to 45 channels now down to 33, I believe is the current count. I think we've done probably eight or 10 rebrands in that time. So we appreciate that we're in the business with our partners and distributors to provide compelling entertainment to our subscribers. We work hard to make sure we, you know, attract the appropriate audiences and then in turn, that we negotiate the appropriate wholesale revenues. Okay, thank you. Thank you. Our next question today comes from Adam Shine at National Bank Financial. Please go ahead, sir. Your line is open. Thanks a lot. Good morning. John, first question for you and then one for Doug. John, just, you know, you highlighted again the mid-single digit increase in the context of program spend. Could you just highlight again, you know, the sort of H1 versus H2, just to emphasize again? I think that, you know, the spending has incrementally skewed to the first half of the year. Could you give any incremental color around that? Yeah. No, you're right. We're running a little hotter than that through the first half, there's no question. I think, you know, that probably caught some a little short, with their Q2 estimates. I would say, you know, the back half, to achieve that mid-single digit type of number, the back half, has to be lower. There's a couple competing things there. One is Canadian tends to be higher in the back half, and it will be. You know, we've talked about the CAD 20 million and the CAD 50 million catch up. The first half has been a little lighter on Canadian, so the second half is gonna be heavier. Of course, that means that the, what we call foreign or the U.S. programming should be lighter, particularly in the back half of the second half. Q4, we would think that the U.S. would be lower. We're still okay with that. That's why I repeated it. It is going to skew a little lighter towards the end of the second half. Okay. Just for Doug, you know, this is a more difficult question. We're two weeks away from the writers' deadline in terms of their contract with the U.S. studios. You know, the venom is starting to percolate and prospect of a strike, you know, hopefully gets, you know, averted. There is that prospect that it could arise and then it's a subject of, you know, duration in terms of implications for deliveries going into, you know, I guess, the fall. Anything that you can talk around this issue? Obviously, you know, scripts are being stockpiled, you know, to allow for some production activity heading into the spring and summer. You know, any way you characterize what could happen? Well, it's a good question. We, you know, it looks like I would've said a couple months ago, 50/50. It looks like there might be higher odds of something happening. Obviously, there needs to be for the creators, there needs to be an appropriate economic model for how they participate in streaming economics. There is a problem to be solved there between, you know, the various stakeholder groups, which we acknowledge. You're right, the studios have been proactive, 'cause it's not our collective first rodeo here and doing things like, you know, quarters ago, early renewals on multi-season shows that are working and funding writers rooms in advance, stockpiling unscripted content. That was one of my comments, you know, our unscripted content continues to be extremely well-received. It rolled over. It's very likely not dissimilar to what happened during the pandemic when people couldn't get content. We had a nice uptick in our sales of Corus Studios product. We'll be in a good spot to take advantage of any demand changes in that regard. The other piece out is people are sort of delaying their first-run originals, and they're looking to use more repeats. Because the ad economy is kind of soft right now, you know, you don't have to use your first-run content because the demand for your supply of inventory is not as much. I think we've all been adjusting the last number of quarters for the potentiality of some interruption. I think the general consensus is that, you know, there should be a resolution in relatively short order. It's in everybody's self-interest. We don't want a protracted writers' strike. It's not good for people viewing television. The other comment I would make is we're kind of now all in the same boat with the streaming businesses and the broadcasters, if you wanna delineate it that way. There's, I think, pretty good alignment around the fact that a protracted shutdown is not helpful for anybody. If that helps you. Right. Yeah. Okay. We'll leave it at that. I guess the context would be, in the context of a low advertising environment, there is the prospect that lighter deliveries and/or cheaper deliveries could help some of the costs, at least in Q1, debatably. Beyond that, it's more of a wait and see. As you said, hopefully it's not a repeat of the 100-day strike of a decade plus ago. Right? The other more recent example we had of that, Adam, was our Q1 2021, which was the fall... Pandemic. fall of COVID, right? That's right. We got very few deliveries on Global that quarter. Perfect. Okay. Thanks for that. You're welcome. Thank you. Moving on, we'll hear next from Aravinda Galappatthige at Canaccord Genuity. Morning. Thanks for taking my question. I just wanted to go back to sort of the programming inflation, John, that you were kinda talking about, to maybe attack the cost side more holistically on the television segment. I mean, obviously you saw the programming inflation for television and kind of that mid-to-high single-digit growth that I think it was in the first half, but your TV OpEx was up roughly 5% or C one to C two. Given some of the moving parts you've talked about, do you see the prospect of that 5% potentially being flat if you consider some of your cost reduction initiatives and obviously the lower U.S. spend? Is that something that I think is achievable given those moving parts? Sorry, Aravinda, it was pretty hard to follow you there. You were kind of breaking up. When you're saying to be flat, you're talking about the G&A costs? Yeah, total TV OpEx, right? 'Cause, what I'm referring to is total TV OpEx was 5%, inflation in both Q1 and Q2. I'm just wondering whether with the step down or the moderation in programming inflation and some of your cost reduction initiatives, whether that 5% can potentially go to zero in the second half. I'd say, again, given the comments on the programming kind of, you know, the flattening out being towards the back half of the second quarter, I think that would then translate into what you're suggesting. As well, I think we'll have better momentum on other G&A in the fourth quarter. You know, some for sure in Q3 and then more in Q4. I think it's going to be a little bit more back-end loaded on that total concept. Q3, we should, you know, we're working hard for Q3 to be down as well. Okay. In the coming years to have a sustainable improvement in the basic cost structure. That's the key piece here. Is that we're making smart and necessary investments in U.S. programming. Some of that's front-end loaded for the question from Vince over the multi-year deals that stabilizes. We're making marketing investments which are key to getting to revenue growth on STACKTV with our 1 million sub targets still within reach. That's key to get, you know, the revenue picture. You know, Pluto is sort of a rev share model and looks very promising, and, you know, we're just early days there as we kinda scale the impressions. It's really over-delivered on, you know, on impressions. Then you add to that, you know, the CPE piece which in your modeling is relatively straightforward when you think about what we've now shared with you in terms of 20, 10 over, you know, last year, this year and next. Then you work through the, you know, the revenue declines of this year, which is gonna take pressure off of the spending next year. The, you know, what is acutely painful this year becomes relatively helpful next on the CPE pro-profile. The sum of the parts is continue to push on the digital video growth opportunity whilst at the same time managing through the Canadian programming spending, accepting modest investment increases in U.S., and then looking for ways to take costs out of the non-programming and non-marketing parts of the business. That's while we also ensure across platform monetization momentum because that's critical, right? You see it in our metrics, 52% on optimized advertising revenues. You know, it's essential that we're able to monetize every impression, whether that's linear or nonlinear on demand streaming seamlessly, and that's part of the bigger longer-term picture. Sorry, just to come back to your questions. The, I think the challenge of that total TV spend in Q3 is going to be the Canadian that Doug just talked about, right. There's a big slug of Canadian in Q3 that's gonna push the programming costs higher. Certainly we're aiming for G&A to be down across the board in total for the back half. Once we get to Q4 with some of that Canadian pressure not with us, then I can see what you're suggesting. Okay. Okay. That's helpful. Then John, just connected to that, you know, I know it's different this year in terms of the actual cash spend on programming is that, you know, last year in the first half, you know, [amort] was running ahead of the cash. This time obviously it's the opposite. You know, to what extent should we expect that to perhaps offset in the back half of the year? just to kinda make sure that we're kind of generally landing in the right zone with respect to free cash flow. Yeah. Look, it's certainly been a big change in that relationship in the first half. The cash is up a lot more than normal. I think that's, you know, again, a function of what happened last year where things were quite slow out of the gate. I think we're through that now. I think there was a lot of catch-up that was happening on late billings. We talked about this in the last call. The back half of the year should return to normal, would be what I would expect. Okay. Okay. Thank you. I'll pass the line. Thanks. Thanks. Once again to our phone audience joining today, that is star one. If you would like to ask a question, please go ahead. Next, we'll hear from Drew McReynolds at RBC Capital Markets. Yeah, thanks very much. Good morning. First for you, John. My apologies, I think this was probably answered, but just in terms of modeling kind of the content delivery side within TV for the back half of 2023, presumably you're still expecting some decent year-over-year growth, although, you know, versus our forecast, Q2 certainly was quite strong. Just wondering how we model that one. Yeah. Good question, Drew. Yes, we see a very strong back half. Nelvana's got a lot in the pipeline. Corus Studios is comping against some pretty big numbers last year with the Hulu deal, but I think Nelvana will more than compensate for that in the back half. Okay, super. Just one follow-up for me. It's more of a bigger picture one, maybe start with you, Doug, on the upfront market in Canada. Like, obviously not ideal timing here given all the uncertainty out there. Just what are your thoughts in terms of, like, number one, how important are the upfronts for Corus, you know, relative to, you know, what it's previously been? Second, you know, is that a concern that all of these kind of commitments are being done at a point in time where there's probably going to be the least visibility here in the cycle? Well, you know, I'd prefer to be going into the upfronts with a more robust economic backdrop, obviously. Yet, you know, our team right now is in L.A., and we're, you know, in deep discussions with our content partners as to what the premium schedule is gonna look like in the fall and in mid-season and through to the spring. We really like our key partnerships on conventional. You know, we continue to have more of the top shows in the top 20 in both specialty and unconventional than any other broadcaster, when you exclude sports. And that lifestyle entertainment positioning is attractive to a lot of advertisers, especially when you look at the CPMs compared to what sports is extracting, which is, you know, relatively expensive by comparison. I like our competitive shape. you know, if we start seeing some categories coming back, I mean, I did mention the report by MAGNA in the U.S., which is and I was reading somewhere that the average person's car is almost 13 years of age. Yes, you know, leasing costs are up, you know, people are. That's a huge category. Automotive is one of the biggest categories out there, and we'd like to see something come back in the coming future. Maybe that category steps up as part of their relationship with their advertising agency for the upfront. Interestingly, you're probably noting that the entertainment category, I'm talking the box office. Yesterday, you might have saw, you know, Warner Bros. Discovery was announcing their new streaming product. Their CEO is very specific about the importance of box office results, you know. That and that's, by the way, a signal to the writers' strike discussion I just had with Adam, is that, you know, the economics, you know, this is like people are realizing that the windowing strategy is fundamental to running a smart studio major company. You're seeing that across all of this, the windows, you know, linear streaming, in theater, et cetera. That category I expect to see coming back. I think the way I'm thinking about it is, and our sales team, is, you know, we're working the categories hard and then understanding how the categories fit within the five major advertising holding companies. We don't do an upfront like the way the U.S. does. You know, we have corporate deals we do with the major agency groups, and those, you know, are kicked off at the upfront, but typically are concluded by the end of our fiscal. The setup is a little bit different. Yeah, it's a softer environment to go into an upfront, but, you know, it's not our first time. We've gone through this before. We're, you know, we have a game plan that we're gonna execute. The good news is we have a lot of premium video digital inventory now that we didn't have only a couple years ago, so we can offer more impressions going into the selling season. That's great. Great color. Thank you. Thank you, Drew. Scott Fletcher at CIBC, please go ahead. Your question is next. Good morning, thanks for taking the question. I wanted to ask a question about the sales and marketing spending and how you're looking at that strategically, because obviously so much of your strategy depends on driving more eyeballs to the streaming platform, the digital platforms. When you're talking about increasing that sales and marketing spend, is there a different strategic approach to how you're allocating that dollars, or is it sort of a matter more of putting more money into what you've already been doing in the past? Just curious on the strategic approach on sales and marketing. The first thing we're trying to do our principal focus right now is trying to be sort of strategically ambidextrous. We're looking at cost everywhere, and we're hoping to in the net of it, take out as much cost as we can, redirect some of those savings to marketing, but be net to the good while we're going through this soft revenue environment. That's sort of like the quarter-to-quarter approach. We are spending quite a bit of time, Scott, trying to understand what's the optimal intersection of marketing investment and return. This is the classic attribution model that all of our advertisers speak to us about. How much advertising do we want to invest beyond our own network footprint? We are getting smarter and smarter as each quarter goes by. I reference the recent STACKTV advertising campaign. If you haven't seen it, you can find it out there. It's very compelling. Really speaks to the features and benefits of the service. The fact that, you know, it's got 16 linear channels, full on-demand STACKTV and a better value than what is being paid for, you know, typically within the Corus channels packaging bundles in Canada. I think that's a winning offering. As we continue to get smarter about the cost of acquisition and the ROI on these investments, we'll get more comfortable with the ramping up the spend, especially if we're gonna try to time that with the debut of fresh content, which is kind of a key part of the acquisition math. We're not forgetting about the need to continue to be very diligent on expense control. We're playing that game at the moment. Once we begin to see either more demonstrable, you know, effect of our investments that drives definitive growth, we'll probably amp that up and/or when the outlook begins to firm, that'll give us some more conviction to invest more on the, on the STACKTV marketing, if that helps. Okay, thanks. Okay. I'll pass along with that. Got it. Ladies and gentlemen, that was our final question for the conference today. Mr. Murphy, I'll turn it back over to you for any additional or closing remarks that you have. Thank you, Jim, and thank you, everyone. I see we're right on the hour. That was a 60 minutes well spent. We're always available for any follow-up questions. Please feel free to reach out and thank you for your time and have a great day. Enjoy the beautiful weather. Take care. Ladies and gentlemen, this does conclude today's teleconference, and we thank you all for your participation. You may now disconnect, and as Doug had said, we hope you enjoy your day.