Yeah In the grand scheme of things. Right on. Okay. Right on time. We're gonna get started. Good morning. For important disclosures, please see the Morgan Stanley research disclosure website. It's morganstanley@morganstanley.com. If you have any questions, please reach out to your Morgan Stanley sales representative. Really excited to kick off TMT day four, at least on our end, with Lachlan Murdoch, Chairman and CEO of Fox Corporation. Lachlan, thanks for coming back. Thank you. Good morning, Ben. Good to see you. Good to be here. Look, it's been a year since we were here last, I just wanna say thank you. I'm very appreciative to have the opportunity to talk to everyone. Thank you. Absolutely. I wanna start with some higher level strategic questions. You know, as most people are aware, Fox, you know, made a decision years ago to really not kinda chase the streaming prize. All this week we've been talking about streaming with a lot of your peers or competitors who are now, I think, revisiting a lot of those strategies. Obviously there are also, you know, known challenges to the paid TV landscape. When you think about the biggest opportunities for growth for Fox, you know, what are you most excited about? Well, Ben, you're exactly right. We've taken at Fox a contrarian strategy when it comes to streaming and the how we monetize our brands and our content. I think sitting here, I assume it was almost exactly a year ago, I alluded to this bloodshed in this sort of gladiatorial battle that was happening in streaming, particularly obviously in subscription video-on-demand. As, you know, the years passed, the analogy, you know, comes back and refreshes in my mind all the time. We see ourselves like, it's, I think I alluded to this before. Wherer it's like the Monty Python's Life of Brian scene in the Colosseum, where, you know, the gladiators are chopping each other's arms off, and there's blood splaying everywhere. It's the poor little guy, the smallest guy, who runs away from them all and runs away from the bloodshed, that ends up surviving and winning the day. I feel like we're the little guy. We're gonna be the ones that survive because we haven't had our arms or our legs cut off and bled out. We think it's a good strategy. We're not gonna go up against Disney or Netflix or Prime in terms of trying to launch a entertainment subscription business. In fact, the whole thesis behind our sale of our entertainment assets to Disney, you know, now sort of almost four years ago, was based on this. We could give our entertainment assets to Disney and really create a winner in the SVOD space, while simultaneously focusing ourselves on our core brands, which are really focused on live news and live sports. That comes back to your question in terms of what are the big opportunities for us. Because we're so focused on live news and live sports, because that's where audiences are pivoting to and advertisers are pivoting to, that gives us tremendous comfort in our ability to drive pricing, both from a distribution platforms with cable operators and retransmission, but also in advertising. We see our core business as very robust and importantly, very resilient, particularly through the last couple of, you know, tough years for the industry. We also see the future of those businesses around. I know we're gonna talk a lot about Tubi coming up, but we have a great digital strategy in advertising video-on-demand. We're not chasing subscribers, but we're very focused on advertising, and we love the position that Tubi's in, which is free. For 99% of America between the coasts, you know, free is a great proposition and a great place to be, to be operating in. Lachlan, you mentioned, you know, the strength of your networks and the ability to drive pricing. You know, we had Comcast and Charter here yesterday, and a lot of the pay TV providers, you know, they're sort of de-emphasizing video to some extent strategically. How are you feeling about the opportunity? Because you're now entering, I figure, the beginning of a renewal cycle, for your networks, on the distribution side. How are you feeling about the opportunity to drive price right now in this environment? Any comparison to how you felt when you went through the last one, which I think was maybe three or so years ago? Yep. We're at the beginning of an important cycle for us. I think this coming year we have about a third of our distribution volume sort of up for negotiation. If we look at the past couple years, particularly in the past year, you know, we feel incredibly confident about our ability to drive pricing going forward. The reason we feel that way, you know, we combine in our negotiations our cable distribution deals and with retransmission for our broadcast stations with cable. We sort of combine. We separate them when we report, but we combine effectively broadcast retransmission and cable distribution together in those negotiations. In our spin in 2019, we committed in our first investor day, we committed to $1 billion of incremental retransmission revenue as part of that spin. We're very happy to have achieved that billion-dollar target of incremental revenue last year. That really goes to and illustrates the strengths of our brand, and I think the prudence of our strategy. In the smaller specific deals we've done in recent history, in the past year, I think we really have industry-leading pricing and industry-leading terms. That goes to the, you know, again, the power of live news, live sports, and also our great entertainment that we produce. That's great. Just going back to your Monty Python anecdote the little guy, reminds me, y ou always get asked about scale at Fox and sort of the need for scale. I did think, a little bit on the last earnings call it came up, and, the Fox and the now abandoned but proposed, idea of considering merging Fox with News Corp, I thought reflected, you know, an interest in more scale. Feel free to push back on that. I guess the question is: do you think Fox has enough scale to maximize the opportunities in front of it? You know, for example, sports betting is an area you guys are excited about. How could scale help you in an area like that? I should know this and I apologize, but was it your question on the last earnings call? It was not. Or someone else's? Okay. 'Cause you know, you're having a second bite of the apple. No, no. I must have not answered it. This is the first time I'm asking this question. U ltimately enough. It's the first time. All right. I think so. thanks for the question. Look, I think, you know, scale for scale's sake is often a mistake, right? If you can have strategic scale and scale that really informs and reinforces your existing businesses, I think, you know, makes an incredible amount of industrial logic. If I look at our businesses today though, we are, you know, incredibly pleased where we are. I think we have an industry leading balance sheet. Our core brands, again, being focused on live news and live sports, which is where audiences are highly engaged, our core brands are doing incredibly well, even through, you know, again, sort of difficult couple of years for the industry. We're very, very pleased about where we sit and the way our businesses are performing today. You know, having said that, and when we look at capital allocation, you know, we're clearly looking at, you know, how to drive, you know, accretive shareholder returns, and part of that will always be sort of inorganic growth, right? You know, through sort of mergers and acquisitions. We'll continue to look at, you know, accretive growth, you know, utilizing our full tool set of sort of strategic options. The proposed merger, which wasn't really a proposed merger 'cause there was never a proposal that eventuated. Yeah. It was a, you know, a suggestion that this could be something that's worth looking at. That suggestion for a merger with News Corp was really based on driving accretive value and driving shareholder returns in the long term. When we looked at that, it was really about combining, you know, tremendously strong content verticals in news and entertainment, in sports, across multiple geographies that we thought made tremendous logic. Now we've moved on from that, I think both companies are focused on their own things and we've dropped that as a concept. Whatever we do, we'll be focused on those core things of driving accretive value and driving long-term shareholder returns. Okay. Makes sense. Let's talk about some of those core brands you were just mentioning. I wanna start with sports. You know, sort of the, the debate around sports is it's obviously attractive, giving you have a passionate audience that you can monetize. It's driving the television industry, to put it mildly. But obviously you're also not the owner of those rights, you're a renter, so you always have to go back and pay more. You know, Fox and News Corp have navigated that for decades around the world. How would you describe Fox's sports portfolio? Why do you have the sports you have? Why does it strategically fit with what you and Eric have put together, and how does it position the company for growth? We have a, you know, leading sports portfolio, obviously. If you look at the way we look at it, we look at the core sports that are fundamental to driving our business, both our ability to drive pricing in cable distribution deals, so driving pricing in sports is very important, you know, particularly the NFL, Major League Baseball, Big Ten Network, and also driving premium advertising revenue in those, you know, big, you know, scaled, you know, hugely popular sports. Those are the critical ones. We've just renewed, I think, Major League Baseball, our Major League Baseball deals. Our Big Ten Network deal goes out, you know, to the end of the decade. Our NFL deal, the latest renewal, takes us to 2033. We feel very, we feel like we're in a very strong position and good place with those core sports that really drive the underlying, you know, value of the Fox Sports business. We now have, you know, multi-year, you know, long multi-year, contracts. That ensures, you know, our ability again to drive pricing both in distribution, and in advertising. How are you thinking about distribution of your sports IP, both your ability to and also desire to outside of the bundle? I mean, Cord cutting means that there's more and more homes in the United States who can't access a lot of your sports content. A lot of other media companies and our competitors and colleagues at other companies have moved sports into their SVOD services. We don't think this is a good strategy, certainly not good for us. Don't wanna talk for others. I think the impetus for that has often been to drive subscribers in those SVOD services, right? Where content's hasn't been enough, but entertainment content hasn't been enough, they put sports in to continue to drive subscribers into those services. We don't have a general entertainment underperforming SVOD service. We don't need to put sports in, right? The value for us, right, is to keep those sports exclusive to our broadcast signal and our broadcast partners and affiliates, and to, importantly, to our MVPD, our cable and satellite, and digital MVPD partners. Because that, by keeping our sports exclusive to those platforms, it's what really drives us to increase pricing and sort of industry-leading terms as we renew those deals. As long as those sports drive that value and ultimately drive the value for our partners, our distribution partners, we're gonna keep our sports exclusive on those platforms. Okay. That makes sense. You have a partnership with WWE. They've been on Fox Friday nights on broadcast for some number of years now. They've announced a plan to sort of a strategic review of the company, which could lead to a sale. What are your thoughts on the evolution of your partnership with WWE, and how does that fit into your broader sports entertainment offering? I don't think there's an evolution of the partnership. I think they're being great partners throughout our partnership, our relationship. You know, if I if they ultimately sell the business, I hope the acquirer or as I'm sure the acquirer will be as good a partner as they have been. I hope, like, the management team stays intact there 'cause they've done a tremendous job. From a rights point of view, we're focused on their rights renewal. We're ready, we haven't engaged with them on the rights yet. We're ready to engage with them when they ask, when they're ready. Ultimately, our appetite for a renewal depends on what happens with the rest of our sports portfolio. Okay. Speaking of sports, how should we think about the USFL opportunity at Fox, which some of may not realize you own? The USFL is a spring American Football League, which we resurrected like a phoenix and is doing very well. It's only had one season last year. We're incredibly pleased with how that season performed. We had, you know, tremendous ratings. We broadcasted not just on Fox, but NBC broadcast as well. We give it the maximum possible reach. I think the ratings really go to illustrating the appetite for spring football in this country. We're incredibly pleased with it. We rolled it out in a with a view to long-term in sort of incremental manner, with, you know, originally with one central hub where the games were played. This year, we're moving to four central hubs. You know, we're gaining a lot of very blue chip kind of corporate sponsors in the advertising and the partnerships with the league. We're excited for the second year. Okay. Maybe just one last one, on the FOX broadcast side. And on the entertainment front, you know, that's been an area where, you know, you guys continue to invest. But how do we think about the strategy for FOX Entertainment and whether you need to continue to grow your content spend to sustain a healthy network? It depends on how you define a healthy network. Profitable I define a healthy network as profitable. Yeah, thank you. We're on the same page there. You know, Rob Wade is our new CEO of FOX Entertainment. He came from the reality side, the unscripted side of the business. He's newly installed in the chair, and he's doing a tremendous job, and his team around him is doing a tremendous job. The business will continue to invest in both scripted and unscripted programming. When you look at t hat will mean we'll take creative risks, but always on an eye to be prudent and to drive profitability in that business. Having said that, when we look at FOX Entertainment, which is the broadcast network, it really provides the glue, the bonding agent between the entertainment network, our stations, you know, highly profitable television stations, Tubi, drives value into Tubi. It also, you know, works very closely, you know, with sports and news. The smaller, more focused Fox, we see a lot more marketing and advertising sales synergies through all these businesses. Then the entertainment network is something that sits across them all. Okay. Well, let's shift gears to Fox News. I wanna ask you about about the business. How would you describe the sort of strength, relative strength of the brand and the business today, particularly relative to CNN and MSNBC? This is the softball question. So, it's doing very well. You know, Fox News, the position of Fox News, and if you research or you talk to the focus groups, you know, with any of our viewers, they see Fox News as not just a news channel, but really a channel that speaks to sort of Middle America and respects the values of Middle America as a media business that is most relevant to them as opposed to simply a news channel. The brand is incredibly strong, and that's why we've launched new businesses off of Fox News. Under the Fox News Media umbrella, we've launched FOX Weather, which is doing incredibly well as a FAST channel, advertising-focused channel. And Fox Nation, which is a small SVOD, a description video on demand service, you know, for Fox News. That sits alongside as sort of a complementary programming to Fox News. Those businesses have done incredibly well. Obviously, that's really because the core business is incredibly strong. If I look at just February, you know, a few days ago, the end of February, you know, we finished February not only beating MSNBC, this specifically to your point of your question, MSNBC and CNN combined, but we finished February as the highest-rating, you know, channel, not just news channel, but channel in all of cable television in the United States. This has really led off the strength of our programming, the strength of shows like The Five. You know, people will be surprised, but the number one news show in America is The Five, right? It's a great energetic show, panel show that has opinions from all sides of politics. It's probably one of the reasons why Fox News has the best demographics and the best diversity of any news channel. You know, we have more Democrats and independents watching Fox News than watch CNN or watch MSNBC. More Democrats watch Fox News than watch CNN or MSNBC. We have more Hispanics watching Fox News. We have more Asians watching Fox News than watch CNN or MSNBC. The position of the channel is very strong and doing very well, and this is really important that it's a credit to Suzanne Scott and all of her team there. They've done a tremendous job at running this business and building this business. I think you might have asked me in the past, what's the moat around Fox News? How easy or hard it is to sort of maintain this leadership. The truth is, you know, I can talk about it. You might agree with it or not, if you look at CNN, it's widely known, like CNN sort of struggles at the moment. You know, CNN has a terrific management team as well. They have a great owner. They have deep pockets, yet it's hard for them to get traction. This is a hard business to run, I think, you know, Suzanne Scott's just done a tremendous job. I wanted to ask you about the Dominion lawsuit that's obviously been in the press a lot, especially lately. Is there anything that you can share, you know, with the, with the audience on that situation? Well, I think the update is, the short update is that it goes to court in April, so we'll all be waiting for that. I think, fundamentally what I'll just say about it is that a news organization has an obligation, and it is an obligation, to report news, fulsomely, wholesomely, and without fear or favor. That's what Fox News has always done, and that's what Fox News will always do. I think a lot of the noise that you hear about this case is actually not about the law, and it's not about journalism, and it's really about the politics, right? That's unfortunately more reflective of just the sort of polarized society that we live in today. Anything else on the timeline? I think you mentioned April, but is there any other dates we should be keeping in mind or? it starts in April, and then. Sure It'll go several weeks, so. Okay. You mentioned a couple of times Tubi, which is a business in the FAST industry that's been talked about a lot at this conference as well. What differentiates that asset both to consumers and advertisers? You know, with Netflix and Disney now coming into the ad-supported tiers, you know, does that create a more competitive backdrop for Tubi that may slow the growth down? There's a few parts to this question. Tubi, I don't know how much detail you want me to go into, but Tubi is very differentiated, and I'll for a couple of different reasons. First of all, to the consumer, it's a video on demand service, right? It's not really a FAST channel service. It's very different for example, from Pluto, right? which is more sort of streaming kind of loop channels. The second part of that, this is important from a consumer point of view, is that it has the largest library by far of any video on-demand service like in the world. It is over 50,000 titles, which is, you know, a factor of, you know, four or five times larger than sort of Netflix, for instance. They're all library titles, right? Which is what keeps the cost down. From a consumer point of view, it's the largest number of channels. It's on demand. It has very intelligent sort of AI that suggests to you what you might wanna watch. It's free, right? Which again is a great position. The quid pro quo for being free is that there's a few minutes of advertising which most people are by far the largest majority of people are willing to accept. Because of that and because of the high engagement in Tubi, because you have to, like 90% of people on Tubi that are total viewing time or time spent viewing are actually people that have clicked to watch that TV show or clicked to watch that movie. There's a very high engagement with our viewers, which makes that interaction incredibly valuable to advertisers. That's what makes Tubi so unique, and it's different from any of the other AVOD players and obviously different from SVOD players. A lot of the new volume that's coming into the market, a lot of the new advertising opportunities are sort of a hybrid or combined between SVOD players that have decided to launch AVOD options, right? AVOD tiers within their SVOD service. We think that's great. We think ultimately, you know, when some of them, like an HBO or something, can help drive up CPMs, that's fantastic. We think it'll help Tubi in the long run. We also like the fact that we are the only true video-on-demand service that's entirely focused, at least the only one at our scale, that's entirely focused on advertising. It's always been focused on advertising. It actually started as an ad tech business, when it was launched, you know, eight or nine years ago. We think it's a tremendous space to be in, and we think it's, we can see it in the performance, both in the performance of total viewing time and in the advertising performance. You know, we can see the results of, you know, very tangibly. I wanna do, you touched on advertising a bunch there. Just wanted to step back and ask you about advertising kind of broadly across the company. Been a lot of commentary at this conference about, you know, a generally weak macro advertising environment, particularly in digital. What can you tell us in terms of an update around your footprint and what you're seeing? We're in an odd situation. It's a good situation, but it's different from the rest of the industry in that once we got through the Super Bowl and, in fact, we had Daytona 500 the week after, the weekend after the Super Bowl, we'd already written about 80% of our advertising for the fiscal year. We're now in a quiet time for advertising. We don't have a lot of impressions that we're selling and so we're in a bit of a different position from others who are trying to, you know, flog their wares now. For us, it's been an incredibly strong advertising year. You know, we had a record Super Bowl, you know, very close to beating the record, third highest-rating Super Bowl in history, but $600 million across the company of revenue on Super Bowl Sunday. You combine that to a, you know, great playoff games, you combine that with the World Series earlier and the FIFA World Cup, you know, we've had a tremendously strong advertising portfolio and performance over the last few months. We really haven't seen the weakness that some other people have started to see. Having said that, as we get towards our even in this quiet period, we're turning our thoughts towards our upfront, which is in May, and how we negotiate with our the ad agencies and our different advertising partners. As we do that, you know, we're keeping a close ear to the market and what we're seeing is mixed depending on the category, right? Mm. We're seeing automotive back to being, you know, very strong category. You know, travel back to being a very strong category. The other category that's really picked up and I'm thinking you told me, Ben, that a lot of people are thinking about entertainment and the movie business being back. We're absolutely seeing that in our revenue, right? The entertainment business, movies are back advertising, you know, robustly. We're seeing a lot of strength in certain categories and that's partially offset with some weakness around finance, around like consumer packaged goods because of inflation. There are categories like that where there is also I think I think tech, there's some weakness into the tech sectors. We're seeing a little bit of a mixed bag. Overall, we think it's gonna be a healthy upfront, but you're gonna see differences category to category. Got it. That's very helpful. We've only got a couple minutes left and I wanna make sure. I think the timer's being on, like, fast forward. Like it's gonna go or you cut the time back this year. We did. I wanna make sure we had a chance to talk sports betting which I know is a big strategic focus for you, and the company. How would you sort of give the audience a sense of your exposure to the sports betting growth in the U.S. and sort of your long-term vision for how Fox evolves there? We have two exposures to sports betting and very different sort of categories. One, the simple one that I think all big media companies have, particularly, well, I don't know all big particularly companies that are focused on sport, and there's no other company that's focused on sport as we are. We're in a tremendous position to capture advertising marketing revenue from some sports betting. That's really boomed over the last couple of years. You know, unfortunately with California not That advertising was shifting to national advertising. Mm A s opposed to market by local market by local market when because of our station footprint, we really gained very strongly local market to local market. That was shifting to national. It's now sort of gone back to the local markets and that's been soft as it shifted back. The other exposure is obviously our option in FanDuel. When we created FOX Bet and then The Stars Group which we created FOX Bet with as a joint venture was bought by Flutter, we were able to garner a 18.6% option into FanDuel, which is obviously the leading sports betting operator in the United States. That's a 10-year option. We think it's worth billions of dollars. We have our chips, you know, placed in, I think, in the winning operator. We have an option which we will exercise at some point over the next 10 years, but we're in no rush to do so. That's great. Well, Lachlan, I really appreciate you coming back. Any last comments for the audience before we wrap up? No, look, thank you, everyone for having the patience to listen to me and I look forward to actually meeting with a lot of you during the year and coming back next year, Ben. Thank you. Thank you very much. Thanks, everybody. All right. Thank you.