Hi. Hey, how are you doing? All right, we'll get started with Rich Gelfond, the CEO of IMAX Corporation, and it's really great to have you back with us. So Rich, you've managed your business extremely well throughout all the turbulence since 2020, and it's been a wild ride. What does the market not understand about IMAX? A lot, but I'll make it brief. Because we show movies around the world in theaters, the market somehow thinks we're an exhibitor. But we have less in common with exhibition than almost any industry I know. IMAX has a very strong balance sheet, no net debt. IMAX licenses technology to theaters. We also license movies from studios, and our model is based on license revenue almost completely. We're almost like a technology software company because these theaters in the world, we also maintain every year. So when we turn on the key, we have $65 million in revenue, which is just recurring every year. We're growing at a very rapid rate. Our box office this year, we've guided to the same level as 2019, which is about $1.1 billion. First quarter was our best first quarter ever. Third quarter will be our best third quarter ever. We'll probably be around $900 million of that $1.1 billion by the end of the third quarter, and most importantly, we don't sell popcorn. Okay. So with your Oppenheimer release, your opening weekend delivered 20% of the film's global debut on a relatively small number of screens. It's a really small percentage, right? And- 0.8%. Right. Really small. So, I mean, you way, way, way over-deliver, and you've maintained that share with incredibly strong demand in the 70-mm film locations. What is it about the IMAX experience that allows you to outperform so significantly? So I think it's a few things. First of all, I think it's the experience itself, and it's. You know, I don't want to spend too much time on this, but, it's a complicated technology system, and many people join, and I always say to them, "On the first day, you think IMAX is like a gimmick, like you have a well-known brand, and you put it up there, and people come." But we have proprietary technology that captures the image. If it's not an image captured, which Oppenheimer was, if it's not filmed with our cameras, let's say it's Indiana Jones, we have proprietary algorithms that convert it into an IMAX image. Then when it's shown in theaters, and we're in 90 countries, and we have 1,700 theaters in the world, every one of those is monitored in real time, 24/7. So if the volume is in Singapore off, we call the theater, and we tell them to fix it, or there's a problem with the screen image, so that's why they pay the maintenance recurring fees that we get. And then at the other end of it, the projection systems are also proprietary, patented, and it's so it provides fundamentally the best real this reality. And then there's the brand. For a company with $1 billion in market cap, you know, I don't know another company, certainly in the entertainment industry, that has that kind of brand recognition. I think that partly comes from the talent, whether it's the directors or whether it's the stars, so embracing, and I think they say to consumers that that's the way I want to see it. You provide a better experience with a great brand, you have a pretty good business. Yeah. Obviously, consumers opt for the premium experience. So how should we think about the runway for you to continue to gain share, not only in the U.S., but, you know, rest of world? So our market share in the U.S. is up 50% from pre-pandemic. Our market share in the rest of the world, in the whole world, is up about 40% since pre-pandemic. Our network, as I said, is 1,700 theaters. We have 500 theaters in backlog, which means those will be installed over the next several years. This year, we signed so far 87 new theaters, which is about double what we did last year. And, you know, it's somewhat of a complicated model, but when you cut through it all, in addition to the recurring revenues that we have, we get pretty much 18% of box office on a global basis. So Oppenheimer has done close to $180 million in IMAX so far. So what, I'll be lazy, and I'll say 20%. So you just take $36 million, and that goes into our gross margin, and we didn't make the movie, we didn't market the movie. You know, we invested something in putting the network together, and as I said, we get paid for maintenance. But every theater that we open in the world, so those 500 sitting in backlog today, when they open, you know, again, I'll do made-up math, but if the 500 theaters do $1 million a theater in PSAs, you take that number, and you multiply by 18%, and you have incremental revenues that you're adding. And then the second part of the question would be our penetration on a global basis. We're about 50% penetrated for our total addressable market. We've said that we have 3,300 potential zones that we can go into. But we did that study pre-pandemic, and just to give you a context, in China, we originally said that we could go into 90 theaters in China. That was our original TAM, and, we have 800 theaters open today and 200 in backlog. We haven't revisited that in a number of years, so we have a, we have a very long runway to go. How do you think about the positioning of IMAX in the overall landscape in a post-COVID world where demand for premium is so great? Yeah, I mean, I think that's a really important observation. You know, you look at the Taylor Swift concert, you know, doing $1 billion more. You look at sports going premium. People really want experiences, and it's reflected in our market share, and so that, I think, is one of the tailwinds we have going for us. I think another major tailwind we have is blockbusterization, and that's we do blockbusters. We don't do small movies, by and large. The small movies have gone to streaming. Theatrical has generally benefited from more and more blockbusters. Right. And we become somewhat of a curator for global blockbusters because the studios really can't coordinate with each other in terms of when the slots are and when the good films are. But people come to IMAX to... They'll say, you know, "Does July 4 work?" And we'll say, "We, we can't. We have another film coming out then." So with pretty much every studio, we've, you know, people clear with us before they date their movies. And then I have to expand that and say, that's not just in North America. That's very much on a global basis. So this year, we set a record for local language content, so we'll have about 50 local language films. And we're about to cross $200 million in local language content. And what's been interesting to me about this... And by the way, in the year before the pandemic, we had very little local language content, way less than half of that. So it's growing very rapidly. But what's really surprised me is the local language content isn't only playing in its local territory. So Japanese anime is a perfect example, where, you know, we've done higher box office in China and in Korea, in some cases, than we did in Japan with anime. And there's a Miyazaki film that, The Boy and the Heron, that we did 16% of the box office in Japan, and it opens in the U.S. in December. You know, people look at us, it goes back to the misunderstood first question, Jessica, and they say: "Well, you know, this weekend, Haunting in Venice is opening, and that's not a good movie, so maybe we should sell IMAX stock." But we still did, you know, $5 million in Oppenheimer the last weekend, which is, what, 7 weeks after it opened. Warner Bros. is re-releasing Barbie, and Greta Gerwig is doing new footage just for IMAX, and it's coming out the 22nd. We did a concert film two nights ago with the Talking Heads, which was our biggest kind of alternative content release ever. Last Tuesday or Wednesday, we opened an Indian film called Jawan, which was our second highest weekend ever in India, $2.5 million. So we're just such a different animal. And, you know, again, I said it's somewhat complicated to follow, though we post these results every week. So, but you just have to get through it, that there's recurring revenue, and then there's 18% of worldwide box office, and then you take out the costs, which are fairly constant, and you get to a gross margin number. And I was saying at an earlier meeting that in 2019, our EBITDA was about $150 million, and we had about 65 million shares outstanding. We've, we've had a lot of cash flow the last number of years. We've shrunk our outstanding share number to about 54 million right now. You know, box office is gonna be in the same range. And you look at the multiple that we're trading at, it's, it's, it's ridiculous. There's a lot of growth potential. One of your major initiatives has been to weave IMAX's DNA into films. How do movies filmed with IMAX cameras typically perform in your theaters versus films not captured with your technology? But, like, what's the typical uplift that you would see from IMAX DNA? It's probably 20% of the gross box office. So using a simple example would be, you know, if we took a film and we converted it using our algorithms, we do 10% of the U.S. box office on 1% of the screens. But if we use IMAX DNA in the movie, film it with the cameras, you know, it may be a little bit more than 20%. Maybe it'll be, you know, 12%-15%. You know, as I said before, we've done 30% of Oppenheimer in the U.S. on 1% of the screens. Dune, we did 22% of the movie globally. That was shot for IMAX, and Denis Villeneuve, for that movie, shot 40% of it for IMAX with IMAX cameras. For Dune Two, he shot 100% of it- Wow! with IMAX cameras. And it has a lot to do, though, with how the filmmaker markets it. It's not just the technical part of filming it, but obviously, the most recent example is Chris Nolan, 'cause he goes everywhere, and he says, Right. You know, you've got to see this in IMAX." I mean, it would be- Right ... for you, Jessica, like, you know, someone in finance running all over and saying, "You got to go to Bank of America. Yeah. You can't go anywhere else." So, you know, it's not just the technology, it's the co- and it's kind of like the filmmakers are like artists. And as I explained earlier in the conversation, it's real. It's not just some brand gimmick. So Nolan wants people to see it in IMAX 'cause it- Better ... they like it better. Right. We've done a lot of testing, and people watching the same movie in IMAX or not in IMAX say it's a better movie. And in fact, it is because it looks better and it sounds a lot better. ... So who actually makes the decision to use IMAX cameras? Is it the studio, the management? Is it the director? Like, who actually, and how much can you influence that choice? So it's either or both. Some studios which we have really good relationships with, like Warner Bros. and Disney, they would say, "Hey, this is the kind of movie that we think you should film with IMAX cameras." And, you know, that's a common way it happens. But if you're a well-known creative director or producer, so that happens. So, for Creed, Michael B. Jordan said, "I wanna shoot with IMAX cameras." Or, for Bond, Cary Fukunaga said, "I wanna shoot with IMAX cameras." And of course, you know, Chris Nolan is very kind of addicted to it. By the way, Cary Fukunaga, after he saw the result, he said: "You know, it feels like I've been flying economy my whole life. I could get used to this." So there's a lot of repeat. That's right. People use it, and, you know, we're hoping, like I said a few minutes ago, Barbie, Greta's gonna... You know, is working with us on the new footage. So that's an example of someone new to it, and, you know, since you cover the studios and understand them well, when something works, the studios want more of it. Yeah. So one tornado movie, we need three tornado movies. So since Oppenheimer was filmed with IMAX cameras, and it's done so well, you know, recently, a lot of people are calling and saying: "How do I get my movie filmed with IMAX cameras?" So I think that's a good short-term incentive for that. Right. So just when the box office seemed to, like, really be taking off, really come back post-pandemic, the strike shut down production. So can you talk to us about, like, how deeply will this impact your business? We see movies being pushed back. You know, what do you think the impact will be? So, I mean, nobody's happy about this. Let's just, you know, start there. After the years of pandemic and doing really well and Barbenheimer and, you know, the momentum that that's built, you know, it's obviously disappointing in a small way that actors can't promote their movies and writers and things like that. For IMAX, we're incredibly nimble. So if you look at our releases over the next, you know, month or two, we're doing Killers of the Flower Moon from Apple, which there was no Apple releases in our budget this year. There's Napoleon from Apple. There's Barbie, which just came in. There's the Taylor Swift concert, which just came in. There's 5 or 6 international films that just came in. So, you know, we have... We're not like an exhibitor that has to fill 24 screens. I just need one good property, and it works for us. So my understanding is that everything that's on our slate for the rest of the year that is gonna move has been moved. So I think the slate is kinda locked for the rest of the year, at least for our content. And, you know, there's a little bit of a silver lining to it. So we were scheduled to play Dune, but, which meant we couldn't play The Marvels from Disney, and it meant we couldn't play The Hunger Games from Lionsgate, and it meant we had to give some of the Apple movies a shorter run. But with Dune moving, we have a good movie, a very good movie, on the slate for March of next year, and we can play those other movies, so that mitigates it. Now, for next year, I think most of the first half of next year is kind of locked, and I think some of the movies in the second half. So I think if the strike were to be settled, you know, in over the next several months, it wouldn't have a big negative impact on- Right. We're trying to lock down more live events, more foreign content, but I think if the strike drags on into the new year, you know, we're gonna be impacted by it, just like other people. Well, obviously, it affects everyone, but you just mentioned a few things. So you mentioned the Taylor Swift. Like, that came out of nowhere, right? Almost. You said something about Talking Heads earlier, which I saw the reviews. It was like, it seems like it was insanity in Toronto. Like, just people trying to get in and the audience reaction. So can you talk about other kinds of content? Like, local language is one thing you said, but what else can you bring in that, like, we're not thinking about? So we wired 250 of our theaters to be able to do live content, which includes. It could be films. So, Stop Making Sense was a Jonathan Demme concert film that he did 40 years ago, but we used our technology to make it look great. And then the band got together for the first time in 20 years to do a live Q&A. And it wasn't just Toronto. We streamed it to about 200 theaters globally. And, you know, I was in Toronto. I mean, it was crazy. People were standing up and screaming, and, you know, my wife was dancing in the aisles at it. I mean- The reviews were insane. Well, the experience- It must have been amazing. The experience was insane, and I'm, you know, really hoping that... So I, having just done it two nights ago, I was thinking, you know, not to downplay how good the theatrical experience is gonna be in movie theaters, but, you know, why would you see this on a, you know, on a small screen if you could see it like it looks like you're at the concert? And by the way, we remastered the sound in it. So in the New York Times article, I don't know if any of you saw it, but usually the New York Times, you can tell if they hate something or like it, but this article, they called it the best concert film of all time. But they said the sound was better-... than the sound was seeing the talking heads live, because the technology has changed, and you could remaster it. We've done some tests with the NHL. We've done some tests with Major League Soccer. So, you know, I think live content is an interesting possibility. Right. Because we just had Michael Rapino from Live Nation, and the whole experiential economy, you know, is just seems like such a growth area and an interesting, possibly interesting for you guys. But anyway, IMAX typically plans, you know, you plan each year to optimize the slate. How is your planning process changing, given the uncertainty in the industry, given the strikes? Well, you know, as I said before, there were four or five movies we didn't plan on having in September, October, that we have, so we're, we're kind of agile and, and informal. But, you know, when you look into next year for the first number of months, what, what part of it is, we're global. So in February, it's Chinese New Year, and this year we had the best Chinese New Year ever, and by the way, I don't know if you were gonna get into China, but I should- Mm ... mention that the Chinese box office, if I took a poll and I asked you all, "What percentage of China is it at versus 2019?" I, I'm sure people would guess 50%, 30%. In fact, it's 95% of 2019. So the Chinese box office isn't doing well with Hollywood films, but it's doing really well with films. And by the way, IMAX in China, we get a much higher take of the box office when it's a Chinese local language film than when it's a Hollywood film. So, you know, there's just so backing up to your question, so we could plan our Chinese slate for next year. We could plan our Indian slate for next year. We could plan a lot of our global slate, and then the first six months, you know, I think we could lock down pretty tight. I don't think a lot of that's gonna move. You know, in the second half of the year, it's gonna be a little bit challenging, but you know, there are Marvel movies in the mix. You know, there are DC movies in the mix for next year. Mission is coming out. Again, we're not sure what the date will be. Right. Mission VIII next year. You know, there's a lot of good content out there. Right. So we'll get to China in a second, but, you know, so one of the concerns about these strikes is that everybody will reevaluate how much they're spending. It sort of was, at least from a television side, unsustainable, like, just because of competition. And everybody's, you know, maybe stepping back a little bit. Does this affect film? Do you think, like, when we get out of this strike, will it affect kind of the cadence of films and how much companies are spending? Again, I don't wanna just talk my book, but I think if there's been one lesson out of the last couple of years, it's that you have to spend money on content to achieve results. You know, I think the Netflix model, which looks so attractive at some point, quantity, you know, lots of movies, and for Netflix, it was really smart. They didn't have a lot of original IP. But I think the ad studios learned the hard way that just throwing things up on streaming services didn't work, and the quality of the content mattered a lot. You know, Warner Bros. Discovery and Zaslav have clearly articulated a focus on content as using that as a driver- Right ... for the whole business. You know, I think Iger has said that since his return- Well, Bob, Bob Iger actually said, "less quantity, more quality. And I think, you know, again, IMAX is the ultimate in quality. That's what we do. Right. I think it also enables us. If you look at, in 2019, there were 9 movies over $1 billion. This year, there are 2, and our box office is anticipated to be in the same range. I think that's because of people seeking premium, people seeking blockbusters. And I think, you know, you just have to be flexible. Remember, you know, when I was growing up, Westerns were the big thing, or, you know, I used to watch with my father, you know, World War II movies. But every kind of genre has a cycle, and it cycles away. It cycles away. You know, I'm sure The Marvels will still do very well. It might not do the same number it would have done three years ago, but I think the industry always transitions, and I think as long as the studios commit to quality and putting the, the money in, that's what's gonna drive them. 'Cause, you know, how are they gonna separate us, you know, especially going back to Netflix, which has so many more subscribers and is making so many more movies? I mean, how do you compete with them? From my point of view, I think the way you do it is IP and blockbusters and, and high quality and spending money. So I, long way of saying I don't think that scenario is gonna play out. And one other thing, and then we'll get to China, but the, you know, what worked for a few years, several years, were these superhero movies. We just talked about that with Tony Vinciquerra. And it just feels a little like, you know, you know, consumer fatigue, and, and we saw that with Barbenheimer. You know, like, it was just, like, really original IP resonated incredibly well. How does it affect you? Like, does that affect you? Like, is it you nervous about that, or is this maybe a different opportunity? When I think of the IMAX audience, I think some part of it is fanboys, and maybe that'll fade away if some of those things fade away. But I think a lot of it is cinemaphiles, and I think it's people who really wanna see things the best way that they could possibly be displayed. And, you know, the crazy numbers, you know, when we did Oppenheimer, our ultimate for the year was $65 million, and we're about triple that right now. And, you know, some of the movies coming up, like Scorsese and Ridley Scott, I mean, those are really high-quality movies. So I think, you know, we stand a much better chance than anyone of filling in with that. And, again, I think the fanboys and fangirls will go through a little of a transition. So maybe while superhero movies are going down, it hasn't been written about that much, but the anime trend is going very much the other way, and, you know, it's just crazy. I don't know if you've gone in to look at the numbers on those things, but it's a worldwide phenomenon on anime. And even Spider-Verse this year, which Sony did, was a version of anime, which really worked. So I think you'll see the studios pivot in those ways- Right ... to different genres. Now, of course, original IP, like, you know, they don't have another Barbie. You know, I don't think Hot Wheels is ready to exactly challenge them in box office in the next week, and I don't think a series of famous physicists is really gonna be, you know, the next box office sensation. So I think you just have to be a little more creative and a little more innovative. But the studios have learned, I would hope, that that's the way to go. Right. And it just, Tony Vinciquerra definitely said anime. They're doing more in anime, so. Well, and Sony's the most in on anime. Yeah. And they- Okay. ... I think they own Crunchyroll- Yeah ... which distributes anime globally. We, well, they distribute for us a lot of things, too. Yeah. Yeah, so you talked about that a bit. So let's turn to China, and there's, like, multiple aspects of this. So first, let's just, just in general, the... let's just talk about the box office there. Obviously, as you said, there's, like, real demand for your technology and your offerings in the region, whether it's Hollywood movies or local language movies. But it's a, it's a complex market, and, I think one that we've always found it, you know, a little more difficult with the, the rules and regulations and who gets in, who doesn't. What is your view on, you know, how Hollywood films will do in that country over the next, you know, couple of years? It's a hard one to answer, but I think what's happened this year is kind of three things. I think, one, the economy is very challenged. Two, people forget, but China didn't come out of the pandemic really until around January 1st. I mean, they were still had drones flying over, and they were, you know, stuck in their homes until January. And if you look at the way the world came out of the pandemic, everywhere in the world, it took time. It wasn't like turning on a light switch. And then I think years ago, there weren't as high quality local language films. So I think, you know, Hollywood, it was a lot easier to just say, "It's either not much or this Hollywood film." But, you know, a lot of local language films in China, like this year, we did $52 million on a film called Wandering Earth 2. And there's a film we just stopped playing called Creation of the Gods, a Chinese film that we did $35 million. Now, Oppenheimer, you know, is probably gonna do $60 million or something like that in the country overall. And, you know, we'll have a nice share of that. But, but, but, but I think it's gonna take a while to transition back to normal. So is normal the old normal, where, you know, Marvel films did $150 million, $200 million? Or is it a new normal, where, because of the pandemic and because of higher quality films in China, the percentage of the box office is more local language? And if I had to guess, I would say it's gonna be a little more the new normal and not the old normal. And you also have... China's very complicated 'cause, as you know, there's tiers of cities. So I think in the top-tier cities, one and two, that Hollywood content will continue to do really well. And I think in the bottom-tier, lower-demographic cities, local language content will gain market share. Right. If you ask me, my confidence on anything in China— China ... right now, I would say it's in the, it's not the highest in the world. But, you know, you did recently propose to take 100% ownership of IMAX China. So can you kind of give us your view of, like, why you're taking this strategic step? What does it allow you to do? You know, what will it allow you to do that you couldn't do previously, and what is the financial impact? So we took an investor in our Chinese subsidiary, I don't know, like, 10 years ago. I don't remember exactly when. And that investor needed to get out. So we went public in China with IMAX China, and there were a couple reasons. One was to get that investor out, another one was to become more a part of the fabric of China at that time, and another reason was to raise capital. And at the time, I think we had less than 100 theaters, and now with backlog, we have 1,000 theaters. Right. So a lot of those objectives were accomplished, raising the capital, getting rid of the investor. And the company in China still does quite well. Even last year, during the pandemic, when the whole country was basically in quarantine, we had positive EBITDA and positive cash flow coming out. But as good as the company's done there, the stock just hasn't worked there. So it had been as high as, you know, I think HKD 60, and then it just traded in a rut for the last couple years, around HKD 5 most recently, something like that. So it, you know, it just didn't seem to make sense for investors over there. It didn't seem to make sense to invest a lot of resources in it, and we thought it was a good idea to offer you know, the investors there a chance at some liquidity and getting out, and we offer them about a 50% premium. At the same time, for the parent company, it gives us a lot more flexibility. So if we want to introduce a new product in China, because of the Hong Kong Stock Exchange rules, it's cumbersome, it's bureaucratic, it's very difficult to do. Also, there are strategies we might want to pursue in terms of global tax strategies. You know, it's much more efficient doing it if we're all in one organization. Also, it's accretive for the parent company, because the multiple is so low in China, so we thought it was good for shareholders in both places. When you say product, do you mean other kinds of programming or something like actually different business? Yeah, related, different kinds of businesses. Okay. So we have something called IMAX Enhanced, which is on Disney+. If anyone goes on the Marvel tile, all the content is shown in a format called IMAX Enhanced, and we wanted to introduce that to streaming services in China, and we couldn't do that unless they had to buy it from us, and we needed the approval of the independent directors, and it took a long time. It was cumbersome. We just acquired a company called SSIMWAVE. But it's really not catchy, so we're calling it IMAX Technology and Streaming. And what that company does is streaming optimization. So if you're a streaming company, it figures out a way using algorithms to save you a lot of money streaming. And we have a lot of clients in North America. We don't have very many clients internationally. But if we want to introduce that product in China, they have to pay us for it. We need approval. So it's just a cumbersome way of doing business. Right. Okay. And then you mentioned local language is doing much better in China and probably many other areas. Can you just talk about what you're seeing in terms of local language production versus—I mean, here we know there's a shutdown, but what's going on in the rest of the world? It's pretty much unaffected. You know, the strike hasn't affected it- Right ... at all. And in fact, you know, as, as you know better than I do, it, it's also become a big thing in television and streaming and, you know, y-- We used to think of the world, right, as a Hollywood world, and that was a big place for the content. And Netflix has been very successful in foreign language production, and the amount of it has really ramped up enormously. So I'm trying to remember, but I think in 1979, 3% of our box office in India was local language content. And I think this year, I don't remember, but it'll be more like 30% or 40% of it. Wow! We've also given tools globally as well. We film in China, films in China using IMAX cameras. We're about to do that in India with IMAX cameras. It's pretty. In Korea, we made a number of films. In France, we've made a number of films. And as I said earlier, the thing that surprises me is how well they play outside of their indigenous market. Oh, so it sounds like there's a long runway for growth just from local language. But then going back to something we talked about earlier, which was the your backlog and the number of, you know, just your backlog, where are you? Like, where do you think you are in terms of total TAM? Where do you-- What, what markets do you think you have the most upside over the next, let's say, 3-5 years? So, where the model works best are where there are the highest per-screen averages. So Japan is about double the per-screen average of North America. It's about $1 million here and $2 million there. So, you know, we only have, like, 50 theaters in Japan, and I think we could do multiples of it there. The Middle East, even though it recently opened, we've gotten a lot of traction there, and the per-screen averages are very good there. So that's a promising territory. I've said for years that India is promising, and again, the per-screen averages there are similar to North America. But the difficulties in doing construction there and the complexity of that particular market have always made it go slower than I hope. And then Western Europe is a tremendous market for us. So in England, we have, like, 60 theaters. In Germany, we have 10, which is the same as we have in Ecuador. And in France, we only have 20 theaters, and it's one of the highest PSA markets for us in the world. So, you know, I think there's a lot of opportunities. LATAM, we're incredibly under-penetrated, but, you know, there are tariff issues and other issues there. But I think there, there's an awful lot of TAM left, and I think especially because of the local language strategy, you know, when people model it out, they think differently about it. They used to say: "Well, IMAX is this company that shows Hollywood blockbusters." But now it's a whole different mindset that we show local blockbusters and Hollywood blockbusters. So we also use local filmmakers to help promote it in that way, which I think works. Big plus. We've only have, like, two minutes left, so I'm just gonna skip to the, you know, technology. You've really been at the forefront of a lot of, like, technological innovation. There's a lot going on. I mean, it's so overused at this point, AI, but, you know, streaming, et cetera, you've got your StreamSmart streaming technology. Given the strength of your brand, your reputation, the, you know, the most premium content offering that there is, really, with leading technology, you know, just give us your views of some of these newer technologies and how you plan to integrate them into your business. ... Yeah, so, you know, I think AI, I don't think that where it writes stories and, you know, replaces actors and puts new faces on bodies, you know, I don't think that's where there's gonna be, you know, a lot of development. I think it's gonna be, you know, much more on post-production and much more on image enhancement. So we've actually dabbled with AI for a number of years, and, as I said earlier, we blow up images. So, we, you know, we make them look better, we sharpen the edges, we take the grain out, and we've been using AI as a supplement for a while, and I think advances in that area are gonna be really good. I think AI is also gonna help a lot in marketing and analyzing data. You know, I think at least IMAX, you know, we really could use a lot of improvement in that area. We have a lot of data, but I don't think we're as adept as we need to be in how to analyze that data and how to target audiences, and I think AI is gonna be extremely helpful there. And then, you know, in terms of SSIMWAVE, which I mentioned, you know, there's a lot of AI technology locked there, and the former CEO of that company has now become our Chief Product Officer. So we're actually aggressively trying to figure out how we could use AI in other areas of our business. Great. With that, we're like out of time, but thank you so much for joining us. Thank you, Jessica. Thank you. Welcome everyone to Bank of America's Media, Communications, and Entertainment Conference 2023. Our pleasure to have with us on stage. Well, first of all, I'm Brian Fenske, the TMT sector specialist here. It's my pleasure to introduce to you, for the second year in a row here, Nexstar Media Group. Today we have with us Tom Carter, a 14-year veteran of Nexstar, former President and COO of the company, who recently announced his planned retirement and transition to Senior Advisor to the CEO and Board of Directors, and also company CFO, Lee Ann Gliha. So welcome, and thank you for joining us. Yeah, thanks for having us. Thanks for having us. Yeah. Of course. Of course. So, you know, as we started developing these questions in advance of this, the narrative changed on us. So it felt like we were gonna be sitting here, and Disney and ESPN was still off the air, and they've obviously reached a settlement or a negotiation. So I'd love to just kick off with what that could have meant and maybe what is some of the interpretation of this agreement and the fact that it was settled so quickly, if you will. Yeah. I think, you know, we, we saw our stock take a hit, as a result of the Charter-Disney dispute, and it's now on its way to recovery. But we, you know, we definitely think that the outcome was good for us from a broadcasting perspective. I mean, at the end of the day, what, what ended up happening? The premier programming stayed, got paid, the DTC services are now actually being looped back into the bundle, and the lower-rated networks got rationalized. And, you know, I think all of this supports our business model. You know, I think there were some questions about, you know, how does this impact broadcast at ABC? You know, the conversation about the broadcast model in ABC was actually very, very limited. You know, I don't know if everyone's familiar, but with respect to the broadcast networks, they enter into affiliation agreements with station groups and air their content, like us, and then we have the right to negotiate with the MVPDs. So with respect to this Disney-Charter conflict, they really have the smallest O&O station footprint of any network out there. They only have 8, 8 stations. So the discussion about ABC was actually limited to that, and obviously, that got renewed. You know, we also feel like... You know, the other thing that's interesting is that the broadcast networks, you know, we actually over-deliver for the MVPDs. You know, we're the most watched stations and networks, and we're proportionally paid less relative to our ratings. Like, so for example, you know, when this all happened, I said to our ratings guys, "Can you actually go back and pull for me, for all of 2022, 24-hour ratings, on average, seven days a week, for the, for the national content?" And what came back was the top four broadcast networks generate the most viewership. They actually generate 4x more viewership than ESPN, which is the seventh-rated network. So if you think about the importance of that programming, it's very important, and we get paid less for it. You know, broadcast networks, in general, get paid about 26% of the total pie of retrans and cable affiliate fees, but we generate 40% of the viewership. You know, we're actually the cable company's best investment. We return very well for them. You know, and on top of that, the other piece—point I just want to make is that our local broadcast affiliates really provide valuable local news and other content. You know, so at the same time, I asked the ratings guys to go back and give me that broadcast, those network ratings. I said: "Can you go back and look at just over our overall station group over the last 12 months? How much of our viewership is from network content versus Nexstar content?" So our local news, our syndicated content. And the answer was, for the last 12 months, our non-network content was 45% of our viewership. So go take those broadcast numbers and then double them because that's what we're providing to our customers. So, you know, we think, you know, because we're the most popular networks offering the majority of the NFL content and our local news and other programming, that, you know, we are gonna be successful, continue to be successful with our MVPD relationships. And our content has continued to be offered on the most basic tier because of that. And, on top of that, we're not competing like Disney was with the MVPDs. We don't, we don't have our own DTC platforms, or we're not making our content less exclusive by putting it on other platforms more cheaply. You know, we're invested in the health of the ecosystem. You know, and then to make it really clear, you know, we did about 50% of our subscriber renewals towards the end of 2022. We did our ABC deal at the end of 2022. So, all of that has been business as usual. So, you know, we feel like, you know, we've got, you know, good visibility and good reason for our business to continue in the way that it has been, and we don't really see this conflict being anything but, you know, somewhat positive because now, guess what? DTC's back in the bundle, where probably it should have been. Excellent. Now, you know, while we're on the topic of DTC, that obviously became a focus of the major media companies over the last few years. We've seen it be quite destructive to the free cash flow of those companies. You guys have always been somewhat of a free cash flow machine. So, one, how do you think DTC plays out, and how do you guys participate, not participate, compete in that DTC ecosystem? And do you suspect that these larger media companies are going to back away from DTC, lean into the linear business where, you know, they historically generate lots of free cash flow as well? Yeah, I mean, look, I think our point there is, if you look at the major media companies, Fox, Comcast, Paramount, Warner, Disney, almost 80% of the revenue comes from linear, and all of the profit comes from linear. You know, there isn't any DTC product out there that actually makes money. And so, you know, we think that this will incentivize those media companies to lean back into linear. And you're already kind of seeing that. You're seeing price increases that are happening on the basket of DTC services. Now, a basket of DTC services is actually more expensive than the average cable bundle. And, you know, I think the other piece of it is, you know, half of the video revenue that is, that these companies generate is from distribution, which is supported by the MVPD companies that generate almost half of their residential revenue from video services. So there's just an entrenched reason why linear needs to continue to exist. But that doesn't mean that DTC is gonna go away. You know, we think it'll coexist. I mean, the interesting thing that we point out, and we see this with our CW app, is that, you know, there is a younger audience that's on these DTC platforms, and it's almost, you know, non-exclusive, right? You've got two unduplicated, different audiences, a younger audience here, an older audience here. And so, you know, we do feel like, you know, you probably, you may need both, going forward, and we don't have any problem coexisting. We've coexisted with lots of other video services for, for many, many, many years. And at the end of the day, you know, the largest and most distributed audience is the broadcast audience. And here's where I'm gonna just take a minute, sorry, but I wanna give you guys my broadcast virtuous cycle pitch because this is against the MoffettNathanson article that came out, or the Charter of the doom loops. I've got our broadcast virtuous cycle, which is, one, our content's already the most watched content. Broadcast has the broadest reach of any medium. We reach 76% of the population on a daily basis. Sports teams and leagues wanna be on broadcast. They wanna reach the most people. They don't wanna alienate fans. They wanna create more health of their franchises and grow that value. You know, NFL is a perfect example of this. And as a result, you know, pay TV providers are gonna continue to carry and pay broadcast networks because it has the key sports and news content that audiences want. And then viewers will continue to subscribe to pay TV services to access the content in an easy-to-use interface, and that virtuous cycle will continue. So, you know, I think that, you know, to answer your question, you know, I think we'll have some rationalization, we'll continue to coexist, but broadcast will continue to thrive as it has, you know, for many, many years. And to just clarify something, 'cause the word linear sometimes has a negative connotation these days, 'cause just some people's mind goes to- Mm-hmm. That's legacy, sitting back on a couch, watching TV like my parents did, and new media is DTC. But I think what you're saying is, is linear is kind of the old distribution model. Yes. It's intelligent. It's still gonna have apps. Yes. Still gonna have websites and streaming. It's just not going to be do it alone. It's gonna be do it with partnerships with- Absolutely. -MVPDs. Absolutely. Absolutely. That's great. That's really helpful. So a number of media companies, including Disney and Paramount, have engaged in processes or talked about potentially selling or reconfiguring their asset portfolios. No major news has hit yet, but it's, it's certainly a topic our Jessica Reif Ehrlich has written extensively about. Since M&A has always been a clear driver of growth for Nexstar, how do you see your company potentially participating? Well, we think that there could be some opportunities, depending on, as you say, how it really falls out. I think, you know, all of these companies, Disney included, you know, have shareholders to answer to for these massive amount of investments and the massive, you know, free cash flow that they're reinvesting in direct to consumer, that may make some of the linear assets, as we just talked about, available. But it's interesting, you know, and I know that, Disney had talked about it this way, you know, let's kind of morph into a growth co and a sustainable co, if you wanna think about it that way. The only issue is the sustain co is funding the growth co, and if you sell one, you've lost access to that, that cash flow. Now, granted, you're gonna have proceeds, but, you know, is that really what you wanna do and how you wanna fund that with a one-time sale versus, you know, correcting? So, to your point is right. You know, we spent the better part of the first 10 years I was at Nexstar in an acquisition mode. We made over 40 acquisitions in 10 years. A couple of them were sizable, where we more than doubled the size of the company, and we did it with largely debt, but those were massively accretive. The Media General transaction was 40% free cash flow accretive, and the Tribune acquisition was 60% free cash flow accretive. That's work worth doing. If those types of opportunities present themselves going forward, whatever it is, I think you'll see us take a look at it. But more specifically to those assets, a lot of those assets, the linear and the DTC assets, are intertwined. Mm-hmm. From a programming perspective and from a content perspective, you're seeing, you know, ESPN simulcast the majority of their large sporting events on ABC. If you were to buy the ABC complex, how would that work going forward? So there's a lot of questions that need to be answered there, but it's something that we- Have you gotten the regulatory limit yet for station acquisitions, or? We are- Okay. But that would not preclude us from buying stations because, as Lee Ann rightly pointed out, ABC's portfolio of stations is modest. It's only eight, largely in the top 10 markets. We're in eight of the top 10 markets already, so we could buy... and with a CW station, we could buy a second station in that market and not increase our household footprint. Got it. There may be a few stations that would require divestiture, either of a Nexstar station or an ABC station, but we could onboard those with relatively little friction. ... Got it. Okay, extremely interesting. Switching gears here- Yeah, before we leave, the only thing, I don't know if there's a deal to be done there. Right. Because I think they've got to be a little bit clearer in their own thinking with regard to how that goes, because, you know, we can take direction, but we're not necessarily out there leaning into any of this stuff without a clear path. Understood. So yeah, switching gears a little bit, you have an ongoing dispute with DIRECTV. So I'm told. And where you've taken down your stations from their service since the start of July. Any update you can provide on this, key sticking points, asks, and how are they... What are they thinking? All good questions, not all of which I can or will answer in a public forum. But you're right. I mean, you know, the first month or so, we were, you know, in a blackout with them. There wasn't a lot of movement going on. We've been in pretty constant contact over the last several weeks. Progress has been made. We don't have a deal. Mm-hmm. We're not gonna do a bad deal. Yep. But I think, you know, our expectation is that we will reach an agreement at some point, hopefully sooner rather than later, because everybody agrees it's not in anybody's best interest to alienate the consumer. Right. Okay, thank you. A point I wanted to get to is your view on capital structure and leverage and use of free cash flow. You know, you're, as you said, you've intelligently used debt when we were in a very low-rate environment to make these incredibly accretive free cash flow deals. So I'd love to just hear some commentary, because I think you guys have been very thoughtful about use of the balance sheet. Yeah, I mean, look, from a leverage perspective, for the last quarter, we were at 3x leverage. We don't feel like we're in any situation where we're over-levered. We also don't necessarily feel like we're under-levered. As a result, then, we've had the flexibility to use our free cash flow to fund our dividends, to make some, you know, a few small acquisitions. We did a small station deal earlier this year, and then, you know, to use the balance of our free cash flow for share repurchases, because we feel like our stock is incredibly undervalued at these levels. Great. Thank you. Especially at these levels. Yeah. Yeah, absolutely. I noted that earlier in the day, but it has been one of the best-performing media stocks on a trailing one-, three-, five-year basis, and- Yeah. Yeah ... it doesn't get highlighted all that often. So switching gears a little bit, there's the traditional companies, we've talked about a few. Charter came up in this discussion and so did DIRECTV, but obviously Hulu and YouTube TV are two of what we call virtual MVPDs in this world. So can you just and I guess educate us a little bit how negotiations and deals work with those players? How different are they, either from the complexity or are they easy to work with, and what's it like? It's more complicated under the virtual world than it is under the traditional MVPD world. The MVPD world is very closely governed by FCC regulations, because that was part of the ecosystem when the whole concept of must-carry or retransmission consent was really put in at the end of the 1990s. At that time, virtual MVPDs didn't exist, so they ended up being classified really as more Internet than video providers and distributors. So the stations are granted under FCC regulations for each individual station or group of stations with the right to negotiate directly with the MVPDs, and that's what we do. That's what we're doing with DIRECTV, all the cable companies, et cetera. Because the virtuals are deemed more to be digital, the networks have retained the digital rights that they have, and so they negotiate with the virtual MVPDs, and then they offer us the right to opt in or opt out of that. It's a binary kind of outcome. You either like it, and you opt in, or you don't like it, and you opt out. Obviously, there's always a third alternative, which is you, everybody band together, and you try and negotiate a better deal with the networks. But there, there's an intermediary between us and the virtual MVPDs, which is the network, and the network can, you know, negotiate for more than just, carriage of the network with those virtual MVPDs. They have other properties that are cable channels, et cetera. So they have the potential to have conflicts with regard to what's doing best for the network and its affiliates, and that's where we take umbrage with that. And there is a move afoot in Washington through our, you know, government representatives and the business of the vMVPD and the MVPD are not any different at all. It's just the delivery mechanism, and it's now a delivery mechanism that's excluded from FCC regulation because it didn't exist at the time that that regulation was put in place. So maybe it's either a regulatory solution through the FCC or a legislative solution through Congress to include the vMVPDs in the retrans ecosystem that exists. We think that's a fair outcome. Is there a momentum? It reminds me a little bit of the music industry- Yeah ... you know, moving from radio to satellite to streaming. We had to- Yeah ... adapt copyright rules- Right ... and things like that. Does this have momentum, this movement? I would say it does, but is it at the top of any legislator's list? No. Mm. But, you know, that's incumbent upon us and our peers to go out and make it so. But it's also difficult because we have the networks that are pushing back against it because they see value accruing to them in the existing ecosystem. ... Got it. Okay. So there's not unanimity in the sector with regard to how this should work. Okay. We'll see how that- Stay tuned, as we say in television. So, Lee Ann, you referenced this, that 50% – I think 50% of the deals were kind of struck last year, which is great. Helps de-risk the portfolio for many years. But, can you tell us a little bit about – obviously, I'm not asking you for the details of these agreements, but what have you seen in these recent resets with Fox and ABC towards the end of last year? How has the balance of power shifted, if at all, over the last few years? Yeah. Look, I think we've been very clear with our network partners that historically, part of what we have paid a large amount of our... You know, our largest expense is the payments to our network affiliate partners in the entire corporation. So part of what we have historically paid for is exclusive programming. With the exception of Fox, the other three networks have started to diminish the exclusivity that we have by putting the same programming, whether it be football on ABC and ESPN or Paramount+ or Peacock, putting some of the programming that historically has been exclusively available to network affiliated on their DTC platforms. That diminishes our, the value of that programming to us, and by the way, they're creating a whole new revenue stream, or at least part of their revenue stream, on the backs of something that used to be exclusively for us. So we've told them historically, if that starts to happen, we'll start to pay less in affiliate fees, and you're starting to see that manifest itself. Will investors start to see that reflected in the—what line item on the income statement would that be, your costs go down? Station operating expenses. Station operating expenses start to either moderate. Right. You know, the growth will tail, and then eventually it will start to decline. Right. At least that's our expectation. And this year, we really in our guidance, we said that we expected, and this was before the DTV blackout, if all went according, went well, we thought our retrans revenue growth would be high single- to low double-digit percentage growth, and we said that we believed our total network affiliation payments would increase mid-single digits. So that's how you can see that retrans revenue continues to grow and the cadence or the trajectory of the growth in the network affiliate fees would start to moderate. Got it. Now, next question, I wanted to ask you a little bit about concerns that are around traditional media, larger media, and you guys about just subscriber declines, just classic cancellation, cord-cutting that we see. How are you guys contending with that? How do you plan on growing revenues as a total company in the face of, you know, subscriber attrition and, you know, how do you think about it? Sure. I'll start and let Lee Ann follow in behind. Yes, I mean, we're experiencing that. We're not adverse to that. As the largest television broadcaster, I think it's gonna be hard for us to materially deviate from that. We had some stations that weren't historically carried by the virtuals, and we have worked hard to get those included, so we did have a little bit of an uptick from or a relative decline lessening of decline in our subscribers relative to some others. But, you know, I think one of the benefits of the Charter-Disney deal is basically, we're putting the band back together. We're recreating the bundle by bringing Disney+ back into the pay television ecosystem and not strictly as a DTC product. So I think that one of the potential benefits of the Charter-Disney deal is it could potentially lessen the decline in attrition or lessen attrition going forward because there's less reason for those subscribers now to leave the pay television ecosystem to a all-DTC type of bundle, because one of the biggest DTC players is now inside the bundle, that all of the Charter subscribers will have access at some point to Disney+ or some version of Disney+. So we think that that's a positive development overall and could affect attrition. But generally, I think, you know, attrition is driven somewhat by the direct consumers, but we participate in that to a degree. And so from that perspective, I would say, generally speaking, we believe that attrition will continue, but we disagree when people say that the pay television ecosystem as we know it now in linear is going to zero. Yeah, the other point I would just add on to that is what I said at the beginning, which is we're still undercompensated, right? We're delivering a higher share of the viewership than we are receiving of the fees. So as we, you know. So, you know, as you saw in our guidance for this year for distribution, we were able to guide towards something that was a higher growth in that revenue line that offset the attrition. So, you know, I think we anticipate we'll be able to continue to do that. So in a way, some of those lower quality networks that are getting pushed out, that part of that pie- Right ... could accrue to you. And that's what's causing the, you know, disparity in our contribution to the viewership versus what we get in return is because there are other, you know, content providers where that's upside down, where they're getting paid more than they're contributing. And when you start to get rid of the bottom, you know, quartile of underperforming and marginally viewed cable channels, that's where a lot of the dollars aren't big, but the dollars can be meaningful in terms of redistributing it to others in the ecosystem. Got it. Now, moving on to a different topic: sports. Obviously, sports played a critical role in accelerating this Charter-Disney deal timing, as everyone was anxious to watch sports during football seasons. But, they're a big driver of viewership. Engagement is unbelievable. It's been fans are passionate. Obviously, you know, you're a leading affiliate of all the major broadcast networks, therefore, you participate in sports in that way. But, I've seen you've done a number of deals for sports rights at The CW. Your L.A. station renewed its deal with the Clippers. Can you talk a little bit about your, how your company participates in sports and, and why it's important? Well, I think let's first back up a second. All of the sports teams, all of the conferences, all of the leagues want to have a presence on broadcasting because the pay television ecosystem is not ubiquitous. It doesn't reach all of their fans, and what they want is engagement with their fans. And the way to do that, the only way, really, to do that, is through the broadcast medium. That works for the teams, and it works for conferences and the leagues. And so you, you're right. We see that with the NFL, and we participate on all four of the big four networks in their NFL offerings and college offerings. As you know, we bought the CW in September of last year. It historically had 0 sports programming on it. We took a little bit of a flyer on LIV Golf early this year and had great success at the station level. I think some of the historical golf advertisers were still very much wed to the PGA Tour, and so on the network level, it didn't work out so well from an advertising perspective, but that's okay because we had a really low-risk contract in terms of the fee payable to LIV. It was basically a rev share deal. So it wasn't really, we weren't exposed to anything there. But what we found is the affiliates were very excited to have sports, especially because CW had never programmed weekend days before, and that's, you know, that's a fertile field for us because we could now program 5-6 hours a day on the weekends with sports. We have done that with ACC Sports, Atlantic Coast Conference, and with NASCAR, which we announced we'll start the Xfinity Cup in 2025, and we'll have sports on 48 out of 52 weekends in 2025. That's all new programming to the local affiliates and to our CW affiliates that they haven't had before, and we're able to—we'll be able to increase our affiliate fees that we charge those stations for CW programming, and they're happy to pay it because they see value in that, and it's really, you know, new programming and new time slots that can attract new advertising. And so we're seeing that on the network side, and then on the local side, you're right, we have an agreement with the Clippers, and it's the same thing. Historically, they were a regional sports network-only customer. But again, the regional sports network or regional sports channels in Southern California are even more fragmented. There are so many of them, and so they weren't reaching nearly all of their advertising or all of their fans. So we're taking 15% of their regular season games, putting them on KTLA, promoting them, and not only are we broadcasting them in Los Angeles, we're broadcasting them in San Diego and Bakersfield as well, where we have stations to elongate their footprint and reach more of their fans. But they don't give up the entire direct-to-consumer product because Steve Ballmer obviously is the owner of the Clippers, and they're gonna do their own white label product that they can, you know, do on their own from a DIRECTV... I'm sorry, from a direct-to-consumer perspective that, you know, will cover the other 85% of their games. So it's a portfolio approach locally and nationally. It's an approach where a lot of the leagues and the teams, NASCAR in particular, wanted a broadcast network because their historical providers are Fox and NBC, but the Xfinity Cup had been relegated to FS1 and to USA, not to broadcast for the most part. They see broadcast viewership as, you know, a potential 40% increase over the cable channels that they've historically been on. Now, the financial stress that RSNs have been under for the last few years, it's been a challenged model, to put it kindly. Yes. That seems like it's going to create opportunities for you to get high-value sports programs from RSNs who are seeking to strike creative partnerships to get eyeballs. Is that fair? Well, you know, we've used the term we're playing Moneyball with sports programming, and the ACC contract is a great example of that. That was a contract that historically had, it's a national contract, but it has historically been purchased by Bally's. During the bankruptcy process, they rejected that contract, and we got word that they were thinking about doing that. And so 10 days after they rejected the contract, we picked it up for a fraction of the cost that Bally's had been paying. Last Saturday night was the first ACC football game on The CW Network, and our game was up against the Big Ten Saturday night game on NBC. And our Pittsburgh-Cincinnati game outdrew the audience on the NBC games. I'll tell you, they paid $hundreds of millions for that contract, and we paid significantly less than that for the ACC. That's great. So, we think about it just in a cost-per-hour basis. Got it. I wanted to talk a little bit about demand, advertising, macro trends while we have you up here. But, you know, world seems to be factoring in soft landing to a degree. Any update you guys can provide on the trends you're seeing in local advertising, by businesses in the markets and you serve, in which you serve and, and just demand out there? I think, no, no, no change in the trend, no change in our commentary. Our local business has significantly outperformed our national business. Local is a lot closer to the consumer. It's more of a demand and a price and an item and a sale type of ad. And the closer to the consumer you are, I think the better off you are right now, because the consumer continues to be healthy. I think what you're seeing in national advertising is an uncertainty in the overall economy. And the closer you get to the cash register, I think the better businesses feel about the health of the economy. Okay. That's great. And then, look, we're heading into 2024, presidential election year. Can you remind us how big this is for you guys and any expectations, whether yours or experts, we should pay attention to on the topic? Well, I think, you know, nobody expects this election to be any less contentious than the last several elections, and obviously, we have the added benefit of a presidential contest this time, where we didn't two years ago. Each of the last two cycles, we've been in excess of $500 million of revenue, which is substantial. And also it's interesting because the last presidential election being in excess of $500 million is noteworthy, but the last non-presidential also being, for us, in excess of $500 million is noteworthy because historically, about 25% of advertising in a presidential election is around the presidential election, or in a presidential cycle, is around a presidential election. So you can see why some of the estimates for 2024 can get a little out of hand in terms of what the expectations are. But we clearly expect it to grow. I think there are a lot of different ad agencies that give their estimates on total political advertising, but all of them have it increasing double digits over 2022, and we think it'll probably do that or potentially more. Okay, great. Another topic I wanted to... I want to see if there's any questions in the crowd. We have a few more minutes left. Anyone? Okay, we'll keep talking. You recently put out an RFP for a measurement company, and your chairman, CEO, Perry, made some comments on your last earnings call, talking about being undermeasured. This has been a controversial topic in media and in the transition to digital media for the last several years. So can you talk a little bit about what you're looking for here and how you think you're not getting measured properly in some ways? Sure. I would say, our problem with the measurement or our, you know, general, unhappiness with the measurement, it comes primarily in out-of-home advertise or out-of-home viewing and in local viewing, specifically outside the top 50 or 55 metered markets, which is a large portion of our, television station portfolio. And so we're looking for either new entrants or the incumbents willing to put more assets and emphasis on those two areas in particular, because we think, you know, whether it's, viewership in bars or clubs, of sports primarily, or viewership in small markets where people meters aren't used, and essentially what they do is they mathematically try and extrapolate what viewership is. We're looking for more, more, you know, consensus and also, energy to be put behind those two efforts where we think we're underrepresented. Okay, and I guess getting down to the wire here, but I wanted to ask you, obviously, The CW was an interesting deal that you guys struck and acquired about a year ago, I think. So, we see the new slate is launched. You recently announced some distribution deals at Sinclair, Gray, and it has sports rights as well. Are you more or less optimistic about this business than from when you acquired it? And just any color on CW, how it's going? Yeah. I would say we're equally as optimistic about it. The sports, I wish we could say, you know, when we did our strategic plan in the lead-up to the purchase of the CW, we knew that the RSNs were gonna implode. We knew that a lot of the teams were gonna come back on the market. We knew that there would be new opportunities like LIV Golf, because all of those opportunities fit well for us. When you consider that the incumbent sports providers, the four large broadcast networks and ESPN... basically have overbought and not only from a price perspective, but from a volume perspective. They have more sports than they can show, and so ESPN has put a lot of that now on ESPN+, but that, that's expensive to a relatively small audience. And so we're at the intersection of, you know, the right time to be coming to market interested in sports, because again, we had 12 hours a weekend of basically fertile field, ready to plow with good sports programming. So we always thought we would get into sports programming, but to have ACC football on less than a year in, to have golf, live golf on less than a year in, and to have, you know, a major portion of NASCAR's product on our network two years in, is a win for us. I have one last question, and it's a little more, I don't know, thematic or topical, which is, as we're sitting here and talking about Disney+ being folded back or made available in a bundle, it's kind of a jarring thing to say, or a change from the last year. Am I reading that right? Is it that big a deal? Did we just like, in the last... Did, was the bundle just saved? Well, I think you know, if you look back on when all this started, which was really, you know, at the tail end of the pandemic, right? It's when everybody was at home, everybody was consuming more television, everybody wanted more choices. You know, the hue and the cry for more entertainment programming was, you know, at its zenith. And back then, in the zero interest rate economy, everybody was paying premiums for growth. Well, we're in a different economy now, and growth is important, but, you know, growth has to come with profit. And as, you know, Lee Ann pointed out, all of the major, large media companies that have DTC products are losing money on their DTC product, and there's no clear pathway to profitability. So I think investors have had a meaningful effect on companies with regard to, you know, growth at any cost, which was basically what they initiated and how they set out down this path from a DTC perspective. But investors have pivoted away from that, and the companies are having to do that, too. So, yes, I would say relative to two years ago, it's pretty shocking. Relative to the last year, I don't think it's shocking at all. Yeah. Perfect. All right, well, thank you, Tom. Thank you, Lee Ann. Thank you. Again, really, really appreciate you guys attending our conference. Great. Thanks, everybody. 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