Okay, morning everyone. We're gonna get started here or restarted, I should say. I'm Bryan Kraft, Deutsche Bank's Media Telecom Services analyst. Thrilled to introduce John Nallen, who's the President and Chief Operating Officer of Fox. John, welcome and thanks for joining us. Thanks, Bryan. Thanks for having us. Really appreciate it. Very welcome. Fox has been the second-best performing stock in all of media over the past year, up 90%. Maybe to start off, you could talk about some of the highlights and accomplishments over the past 12 months and, you know, touch on what's ahead for Fox. I don't wanna spend a lot of time going backwards, but it's probably a good launchpad for the rest of the discussion. If you look over the last year and even up to where we are now, starting with advertising, it's been really strong for Fox across news, sports, and our local business. On the affiliate side, we renewed about 25% of our base during that last 12 months. You didn't hear a lot of noise, and it was quiet during that whole renewal. On screen, it was a really good 12 months for us. If you think from a news, both national and local perspective, we had the election cycle and a lot of both national, local, national, and international news, keeping our national Fox News and our local stations busy. Sports was particularly active over the last year. We had a great World Series. College football was good. It was not great for us. It was a good season. The NFL culminated with the Super Bowl we had just a couple of weeks ago with a $800 million gross take for us. It was strong. To be continued. I am sure we will spend some time on that, going from strength to strength over the last year, breaking the billion-dollar run rate, top line for us. From a corporate standpoint, we have been talking about this for as many conferences as you and I have sat through, Bryan, but we finally announced our D2C initiative a few weeks ago during the earnings release. We continued, I think, to be good capital allocators over the history of Fox and certainly over the last year with returns to shareholders. The stock, you know, to your point, I think there's finally a recognition of the strategy, the focus strategy of Fox, the focus on live news, on live sport, and some of the hidden assets that we call, you know, Tubi, wagering, The Lot, tax shield. Excuse me. Yeah, all in all, it's been a good 12 months, but our focus is really looking forward now and what's going on there. Okay. Great. That's a great overview. Maybe we'll start with affiliate. I think one of the surprises we've seen over the past couple of quarters has been just the improvement in rate, in the rate of Pay TV subscriber declines. What do you think is possible from a subscriber volume improvement perspective, just given the changes we're seeing in Pay TV packaging, Charter's bundle of streaming services, you know, now included with Pay TV, you know, which I think could expand to other MVPDs? Yeah. When we look, as I said, we did 25% of the base was renewed in the last year. We're done for fiscal 2025. All of the renewals are finished. We don't have anything ahead of us in the current year. As I look at it from the subscriber erosion standpoint, if you look at our Q4, our Q1, and our Q2 fiscal, we were down 8.5%, down 7.8%, down 7%. The trend is really moving in the right direction. That's before the announcement or introduction of the skinny bundles, or as Lachlan calls them, the junk bundles that are in the market. The trend was moving, is moving in the right direction. I particularly, even more so than my colleagues, am very encouraged about the introduction of the skinny bundles. DirecTV, Comcast, and Fubo have put three products into the market. They're priced in the $50-$70 range. Importantly, all of Fox's product is in every one of those skinny bundles. Again, the focus of these skinny bundles is live sports and news. That's what we do. That's the encouraging part. I do think the skinny bundles are a real positive. There's finally innovation between the distributors and the content owners talking about this. I think that the rest of the distribution market will be offering skinny bundles. It's not just these three. Yeah. It's expanding. Yeah. It will expand. It's just contractual when each of these contracts renew that others, the big names that you all know, will offer skinny bundles in the market. I think it's finally a real positive toward ameliorating the erosion that we've had on the subbase. Those numbers I gave you were even before that happened. It's a real positive for us. Yeah. Okay. It's really encouraging. Staying on affiliate, you mentioned that you've completed all the affiliate renewals for this year. What did you achieve in those renewals? And maybe if you could talk about what the renewal cadence looks like going forward when that sort of restarts again. The two debates always in an affiliate renewal are around pricing and packaging. That's where all the noise is. If you look at what happened in 2025, and as I said, we're completely done now, we achieved all the objectives we were after in both of those areas, including the introduction of the skinny bundles. If you look at 2026, we have just a touch under 25% of our base renewing at that point in time. Importantly, they're of the same vintage as 2024 and 2025. We're not breaking new ground from a pricing or packaging standpoint. We have market prices, market packaging for our product in the market. As we talk to distributors who are renewing in 2026, it's of the same ilk as we had in the prior years. When you look beyond that, to 2027 and 2028, we get back to a cadence of about a third or a touch more than a third of our base renewing in those periods. Skinny bundles will be even more important in those years because I think by then everybody will be offering the skinny bundles. As we look forward, you know, we stay in our lane with the focus portfolio that we have. Mm-hmm. I think these renewals will be quite successful for us as well. Okay. Maybe if we could talk about Fox News for a few minutes. What are you seeing in national news advertising? Fox News ratings have only strengthened since the election, and you've talked about, you know, new national advertisers coming to Fox News. You know, what are you seeing there? It's hard to talk about advertising at Fox News without talking about share and strength of viewing, because it's just gone from strength to strength. If you look at Q3 to date, we're up 50% in viewing from where we were a year ago. If you look at January, as an example, we were second to NBC in prime time weekday. In February, we were second to CBS. In many ways, Fox News is the fifth broadcast network now when you look at competition on a prime time basis. Weekend is quite different because of sports calendar that happens during that. Its share in news varies between two-thirds and 70% now. From a competitive standpoint, we're really looking to the broadcast market more than we're looking to the cable market just because of those kind of statistics that we have. Yeah. A lot of advertisers have come to the Fox News Media platform, particularly since the election and the inauguration. Just by way of example, across pharma, auto, and travel, we have nine of the top 10 advertisers in America on Fox News. Across retail and financial, eight of the top 10 are on Fox News. It is a complete sea change from where we were certainly 24 months ago to where the viewing is in Fox News. I just think it continues. How about, you know, on the rating side, how sustainable do you think the Fox News ratings are? You'd have to tell me about this administration and how sustainable it is. I mean, the president has two press conferences a day. Right. You know, the amount of news that's coming out of this is just, you know, shocking, the amount of viewing. An example I'll give you is last week, the equivalent of the State of the Union address, Fox News had 10 million viewers for it, which was, if you look at ABC and CBS combined, we beat that combination. From a sustainability standpoint, I certainly think the next three and three-quarter years will be a really sustainable amount of news and viewing on the Fox News platform. I think most people in the room are hoping a little less news content on a daily basis, given these markets. Yeah, particularly given this morning's movement in the markets. Yeah. How is, how is demand from the new advertisers that you mentioned impacting CPMs at the network? Seems like it probably should be pretty positive. Yeah, it is. If you look, we've brought about 125 new advertisers to Fox News since the election. The demand from a viewing standpoint is what I outlined. From a pricing standpoint, it really is pretty significant. Upfront is not huge for news in any, for any news category. Use it as just a barometer for the moment because there is some news that's booked there. Our pricing is up 50% from upfront, 53% to be exact, where we are in the market. From a DR standpoint, which is an important part of Fox News's advertising, year on year, we're up 28%. So, you know, I said it's hard to talk about advertising at Fox News without talking about the share and the viewing and all of that has really come back to pricing. Yeah. Okay. That's helpful. You know, I think that the past year has, as you mentioned, has proven that Fox News is strong from a linear perspective. But can you talk about what Fox is, what Fox News is doing on the digital side, and how does your recently announced acquisition of Red Seat fit into your strategy, you know, where your plans are on the business? It's interesting because when we talk about Fox News, virtually all the time, people are focused on the linear network. The digital part of Fox News is a really important element to what we call Fox News Media, the wider group inside of Fox News. One of the secrets of Fox News is a massive digital site that almost feels like 1.0. It's foxnews.com. In January, we had over 110 million uniques come to foxnews.com. It does feel like 1.0, but it's where people post leading into the election. What we saw was that people either supplemented their news consumption with digital or solely sourced their news consumption with digital, be it dot com, social, whatever. What we see in foxnews.com is really healthy engagement. On YouTube, in January, Fox News had something like 410 million views. It was two and a half times the next news brand inside of YouTube. It's the number one news brand on YouTube, which is, again, people don't appreciate the digital side of Fox News. January also was a really historic high for Fox News across social media. Whether it was Instagram, TikTok, X, Facebook, it was the best that Fox News has ever done from a consumption standpoint. I said in the opening, the best kept secret about Fox News is the digital side where there is really significant consumption happening. Maybe we could talk for a second about advertising more broadly. You touched on, on Fox News advertising trends. How would you describe current ad trends across the networks, the stations, as well as Tubi? I probably won't spend a lot of time talking about the verticals because Steve and Lachlan did a thorough job. If you go back to the earnings release, gone through each of the verticals. Around this time of year, this conference, we start looking toward the upfront. Even though physically we have our upfront held on the 12th of May, we really start planning toward it at this point in time. The upfront's about two things: pricing and supply. If you look from a pricing standpoint, all indications for us, at least, are for a healthy upfront. Mention what Fox News is achieving from a pricing standpoint. Across entertainment and sports, we're up, high single digits above upfront, and our cancellations are at historic lows. That bodes well from a pricing standpoint, looking toward the upfront. From a supply standpoint, there's only two big events that are going to add linear inventory into the upfront. One of them is ours, the World Cup, and then the Olympics that NBC has across. Absent that, from a linear perspective, there's not a ton of new inventory coming in. That's not the case in digital. In digital, we're going to see inventory increases from this natural growth of the SVOD and AVOD participants, including, of course, Tubi. You've now got product on digital that you didn't have a year ago, like the NBA on Peacock and Amazon. You've got ESPN Flagship that's coming into the market as well, which will be more digital inventory that's going to be sold. I don't see pressure. I think the market will absorb the supply, and Tubi in particular could be a real player in it. It is more supply that you're going to see on the digital side. You know, there could be some headwinds generally as you look at it. Clearly, what we're talking about last week and over the weekend with tariffs in the area of auto and retail is question mark. Does that impact what's going on? Pharma was a question for some time. People had raised around regulation. I don't see it as big that to be a particularly big issue. Yeah. Importantly, it's a big pharma consumer pharma year. There's over 70 new consumer drugs coming to market in the upcoming year versus 50 that were in market currently. Right. There's, you know, from a demand standpoint, I'm sorry for all of you that watch commercials for pharma, but there will be more of them coming out in the upcoming year. You know, the punchline of all of that is, the upfront for us looks to be a healthy upfront. I don't know across, you know, other peers how they're looking at it, but certainly we're looking at it quite positively. Okay. Yeah. Maybe we could, you know, talk a little more about Tubi, which you touched on. Tubi's on track to generate more than $1 billion in revenue this fiscal year. I think that's within our model anyway. What's the path forward for Tubi over the next few years? What do you need to do to continue to grow the business while at the same time turning it profitable because you have, you know, talked about turning profitable a couple of years? Yeah. Very important. Now we've said publicly that Tubi has now broken the billion-dollar run rate for us. It's a milestone, but only one of many milestones that we'll have. Right. If you look at the growth of Tubi alone in Q1, we were up 19% in revenue. In Q2, we were up 31% in revenue. That had some political inside of it, ex-political. Q3 so far, we're pacing at or above where we were in Q2. The trends, for Tubi from a top-line perspective are all very encouraging. The investment that we've made into Tubi from any measurement against an AVOD or SVOD product are modest. I mean, we peaked our investment in it, fiscal 2024, and we've been moderating our investment into Tubi in 2025, and it'll moderate yet again in 2026. This business will achieve margins at "maturity" at somewhere in the 20-25% range. It will be a real growth engine for Fox. I mean, this will be a big grower. The rest of our verticals, we feel very strong about how they'll grow in line with the market. Tubi's growth is a bit outsized. Tubi's also my frustration. I don't mean that from a business standpoint to the people that are running Tubi. My frustration inside the value of Fox is that I don't think we're getting the appropriate or the full value for the kind of growth that Tubi has ahead of it or has achieved inside the stock. Some market participants just capitalize our television segment. By doing that, Tubi's got a negative value inside the stock. Without pulling out Tubi and separately analyzing it, comparing it on a sum of the parts basis to peers or other SVOD platforms, I think is a, again, is a frustration for me, at least inside the stock. Okay. New segmentation next quarter, it sounds like. Uh-huh. How, you know, maybe talk like related to that, how sustainable is Tubi as a business, you know, just given the number of other free ad-supported streaming services in the market? You know, what is the moat around the business? You know, how is it differentiated? I think that's, you know, people would love to hear more about that from your perspective. Yeah. I think Tubi's got probably the three things that are the moat for Tubi or what sets it apart are content, its user experience, and its scale. If you take each one of those, from a content perspective, you've heard these stats before, but there's over 275,000 episodes and films inside of the platform. There's a great user experience in the fact that the personalization engine, Tubi started as a tech company. It didn't start as a television company. The personalization engine for Tubi is really strong for consumers. The experience also for viewers is better than, I think, some of the comparators because there's less than six minutes of ads in an hour for any one consumer and substantially less. It's just a good platform that way. From a scale standpoint, there's 97 million monthly active users on this platform, and 65% of them are cordless. From an attraction of advertisers to try to access a market, Tubi accesses a market that's been very difficult for them to get to, and clearly they can't get to from a linear perspective because they're cordless. Right. I think those three factors—content, user experience, scale—are the three factors that we focus on in growing Tubi, into the moat that I described earlier from a profit standpoint. Yeah. Okay. Great. I wanted to ask you also about just Tubi's ad sales model. How much of, of Tubi's ad inventory is sold programmatically versus through Salesforce? And how integrated are Tubi's sales with the Tubi side of the business? Whether it's SVOD or AVOD, what's vital to advertisers in those platforms is data, where they can get much more data in those environments than you can in a linear, than you ever could in a linear environment. Therefore, programmatic is important to it. We saw this in the election cycle where Tubi did attract a lot more advertising than we expected because they were able to target for campaigns or issues into certain markets and certain communities, advertising. Importantly, Tubi is a VOD service. By that, I mean it's not a FAST service. 97% of the consumption on Tubi is video on demand, not jumping into a FAST. Right. Fast set of FAST channels. Just over half of the revenue that we generate on Tubi is programmatic. The balance is direct sales, which is right out of our sales group that—and Tubi is an important part, therefore, of the upfront to us. Different than what I described on Fox News, where very little sales happen in the upfront, Tubi has a substantial amount of direct sales happening in the upfront. Therefore, if you watched our upfront last year or you see our upfront this year, Tubi is center stage, where our direct selling. It is about balance between programmatic and direct selling. I touch more on the programmatic side. Okay. That's helpful. Maybe we could talk about your new direct-to-consumer service. Finally getting to that. Finally, we got a chance to talk about that after all these years. Right. You recently announced that you'll be launching, you know, this Fox streaming service. You know, it would be great to hear your thoughts on, on what segments of the market you'll target, which content you think will primarily drive these subscriptions, and, you know, really any other details that you can give around the service. The one place that we won't be offering the D2C service or competing with, more importantly, is the traditional bundle, the traditional distributors. From a pricing standpoint, we're going to respect the wholesale arrangements we have with the current distributors. You won't see us competing from a pricing standpoint with the traditional distributors. From a content standpoint, there will be nothing exclusive on it. Whatever the traditional distributors are offering their consumers, we'll be offering the cordless community, which is where we're pointed to on this D2C service. All the marketing and promo that we—as we look toward it—will be addressed toward the cordless community. The worst thing we could do is take a consumer from the traditional side of any of our big partners and move them out and bring them into D2C. So, the target market and therefore our aspirations for the size of the platform to us from a subscriber standpoint are pretty modest. That mid-single digit millions over the next three to five years. Okay. That's about what we're targeting. Okay. Great. Could you give us a little more on just how you plan to go to market and sell it from a marketing and distribution standpoint? Yeah. I can't believe this product will stand on its own. By that, I mean this will have to be bundled with other products by a consumer, self-bundled. Right. Alternatively, we may partner with other streamers who are in the market to offer a bundle to consumers at some price point that's a little different than if you offered it unto itself. Again, our focus is everything outside of traditional. Pete Distad has come to join us, who, those of you that may not know, ran the Venu Project for us that we shut down about a month ago. He has a history at Hulu and Apple, and he will launch that D2C service for us. You should expect it to be in the market before football season this year. Therefore, the digital promotions that will happen in marketing will happen in the summer. Yeah. In advance of the autumn launch of it. Just to maybe a follow-up there, when you talk about, you know, partnering or bundling with others, other streaming services or, or more, you know, distributors, whether it's a wireless distributor or a broadband distributor? A couple there. First, and I should have made this clear, if you're a linear customer of one of our partners, you will get this product for nothing. This will be part of your linear service. If in your linear service, you're in a skinny bundle and you have Fox News and Fox Sports, you will authenticate into the service as part of your subscription over there to access Fox News and Fox Sports. That helps that traditional ecosystem retain and avoid churn. From a bundling standpoint, no, I expect that other streamers we would bundle with. That integrate with, which, you know, our service won't exist inside of another service, but it will sit alongside. Right. Other services. If you're an NFL fan and you're in the cordless world and you're trying to put together an NFL package, you'll need a couple of other services to join in to get it done, and we will likely partner with them. Okay. That makes sense. How should we be thinking about losses early on to launch the service? What incremental costs will there be to support it? If I go back and comment on the SVOD losses that other peers have incurred, it's because they've added exclusive and original content to their platforms. We're not doing that. We currently have the rights, and we don't need to pay any more for the rights that we have for all of the product that will be on our D2C. Whether that's news or sports or local, those rights exist. They were paid for inside of contracts that have been negotiated. I don't particularly, the content's not an issue. From a tech standpoint, we had kept warm a tech stack for D2C ever since Fox started nearly six years ago to the date. We've augmented that with the Venu platform. Right. Where each of the partners had access to the platform. From a tech standpoint, again, there's not going to be a big incremental cost. Most of the cost will go toward marketing and promo. Okay. To launch the product. Our intent is there will be a margin, and it will be a profitable platform after we launch, but there will be some launch costs associated with it, but nothing along the lines of what you saw the big SVOD streamers do. Right. Okay. All right. That makes sense. Maybe moving on to just sports and content a little bit. On the, on the sports side, Fox has assembled a portfolio of really premium sports rights. I mean, you've got the best NFL package. You've got Big Ten, Major League Baseball. Then you've got rights to NASCAR, you know, World Cup, and then more recently you've added LIV and IndyCar, MotoGP. Is this current sports rights portfolio complete? Is there anything you want to add if the opportunity came up? And if so, how would you go about evaluating that opportunity? Not really that much available, to be honest. You know, you mentioned three that just came on board in the last month or so with MotoGP, IndyCar, and LIV. And LIV, the first event we had was on Super Bowl weekend, and last week was the first event we had for IndyCar. So there's not, from the big sports standpoint, obviously, they're all contracted. Right. I think what will come to market in some form will be, some baseball product, particularly after baseball and ESPN announced that after this season their relationship would change. You know, baseball's been a great product for us, and we'll probably look at that and look at it in the context of how it makes sense to us overall. Absent that, from a product standpoint, there's not a lot out there that we'd be attracted to at this point. Okay. I'd say the worst kept secret in sports is that the NFL has this clause to opt out of the current media rights contracts after the 2028 season. 2029 season? Twenty-nine season. Sorry. Two questions here. I guess one, how do you make sure you retain those rights? And two, how do you generate the incremental revenue to make the economics work at a higher price tag? I don't see how it's, how it's been, and you're right about it, but how it's been, worst kept secret. Because in March of 2021, when we announced the new deal with the NFL, we specifically put in our press release that the NFL had a termination right after the 2029 season. Right. 2030, 2031, 2032, and 2033 were optional by the NFL. We're firm through the 2029 season. After the 2030 Super Bowl, they have the right to terminate the contract. We're firm through 2029. We've got a great, robust product there. I have no idea whether the NFL will invoke that termination right or change the character, change the games, whatever. At this moment, I have no idea. Yeah. What I do know is that in any negotiation we've had with the NFL, the discussion around it happens well before the termination date. In prior pre-contracts we've had with the NFL, the discussion is two years ahead of time or 18 months ahead of time. I fully expect that any discussion around those option years will happen well in advance of the 2030 Super Bowl, which is under contract. Look, the NFL is vitally important to us. We provide them with great production quality, the ability to do national and regional games. We give them the reach for broadcast that they can't get elsewhere. We'll evaluate whatever it is if there is something in those option years. We focus principally on our two top line, revenue. So 50% of our revenue today is advertising, 50% is affiliates. And those are the drivers behind supporting virtually all of our businesses, with advertising being particularly important to our sports contracts and, and, and particularly to the NFL. In evaluating it, that will be an important element for us. I mean, you have to look today, counting it up over the weekend, the NFL has eight partners, different platforms between the broadcasters, the streamers, and Sunday Ticket. That, that's a lot of partners to be involved with. Yeah. Okay. Sounds like we have at least three years before there's even a conversation anyway. I think that's right. Okay. That's really helpful. Do you see any opportunities for Fox in the disruption that's taking place in local sports right now? Obviously, you were in the local sports business before. You got out of it at probably the best time you could have. Now it seems like there may be some new opportunities. I'm smiling because if it's a question of, "Are we interested in getting in the RSN business again?" the answer is no. It wasn't really that. Okay. Even on the stealth basis, it's not that way. We have across our local stations, we have some contracts with NHL teams, WNBA teams. We'll look at ones that come up, but if I look at big strategies for the company, that's not one. Okay. Getting involved in, in local sports in a big way, you know, basically taking on RSN contracts into the local stations, you shouldn't expect to see us doing that. Okay. I didn't know if there was anything, you know, new models that you were looking at potentially on the streaming side. We've started, like I said, with these NHL and WNBA contracts, but they're modest. Yeah. I think that's what you should expect to see from us. Okay. We only have a little bit of time left. Maybe just to talk about capital allocation for a second. I mean, you've been a very prudent allocator of capital, as you mentioned in your in the beginning. Really, ever since the divestment of assets to Disney or including that decision, what are your capital allocation priorities from here? You've got quite a bit of cash on the balance sheet. Looks like net debt will be below one times, you know, by the end of this quarter. As we talk about a lot of the assets of the company up until now, another key asset of the company is our balance sheet. We are really focused on maintaining a pristine balance sheet and having firepower available to do something. We did Red Seat. We talked about, you know, I forgot to comment on Red Seat, but it's a modest acquisition that we made, using our capital to get into an aligned industry. You should see us basically, as I've mentioned to you in the past, three focuses of our capital allocation: our organic investment, take Tubi as an example of that, take D2C as an example of that, Fox Nation was an example of that. Aligned M&A. We haven't found anything really big there. If you look, Tubi was an example of that. Red Seat recently is an example of that. Absent a good use of capital for those two in a moment or in a cycle, we look to capital returns. We have delivered $6 billion by way of the buyback since Fox, since the inception of Fox six years ago, a little over $1 billion in dividends. You know, that's really where the allocation of capital is. We have a maturity coming up, a $600 million debt maturity. We'll use cash to make that maturity. Importantly, the way I look at our balance sheet, I look at gross debt and cash. The cash is intended to be deployed for growth of the enterprise and for shareholder returns. The gross debt is what I look at to see how levered we are. Okay. Some people look at net debt and Steve Tomsic, our CFO and I, are really focused on the gross debt position and deploying cash for shareholder value. Great. That's a great way to end it. John, thanks so much. All right. All right. Thanks, everyone. Thank you.