I can see a few people still coming in the door. So while people are settling into their positions, why don't I just start by reminding everybody the disclaimers for this session today? Look at the website, www.morganstanley.com, or check in with your Morgan Stanley representative. With that out of the way and the door closed, welcome everybody to the session this afternoon with News Corporation. My name's Andrew McLeod from Morgan Stanley's TMT team in Australia. I'm fortunate to be joined up on stage here with my colleague, Sean Diffley, Specialist Sales for Morgan Stanley in TMT from New York. And of course, our guest of honor, Mr. Robert Thomson, CEO of News Corporation. Thank you for your time today, Robert. I thought I'd kick things off with a big picture question, a question on strategy. It's been a busy couple of years, Robert. I've covered the stock for about 10 years as a listed company. I think in the last two years, whereas I checked earlier, your share price is up about 70%. It's been a busy period of restructuring, shedding some businesses, adding capital to some new businesses, and delivering some earnings growth in a couple of your key divisions. So I'm interested in your reflection, though, of A, how far you are in the progress of what you set out to do a couple of years ago. And I'm also fascinated to know where you're spending your time at the moment. What parts of the business are you thinking longest and hardest about as to maybe where you can unlock some further value in the future? Is that before or after tariffs? I think we'll have to think about it on an after-tariff basis. Stock price was up 80% before the Trump announcement. But clearly, every company's on a journey, and we've been on a journey more dramatic than most in the sense that when we were spun off now 12 years ago, we were very heavily print-focused. Clearly, we had some challenging segments that we needed to address. We had News America Marketing. We had Amplify, the digital education company, which was a great company but a prolific loss maker. And if you look from there to now, we've lost, say, in print revenues, probably up to this day, something like $3.5 billion-$3.6 billion print revenues that have gone away simply because of inevitable digital transition. And so at the same time, even currency movements have taken off a significant amount of dollar revenue given the international character of the company. Bearing that in mind, we've been in the last year or so reporting record quarters for the company. Q2 numbers were very healthy as well. And yet we're still far from happy. And no journey ends per se. But we are somewhat pleased with the way the character of the company has changed, the way the revenues are much more sustainable. We're a more predictable company in some ways. And I think those of you who follow us closely will have seen that. Back a few years ago, a decade ago, we were talking about 20%-21% of our revenues were digital. We're now a majority digital company. And you can see with the imminent sale of Foxtel, it's been agreed. We're just waiting on one Australian regulator's approval, which should come this fiscal. That was a large chunk of the company in many respects. But first of all, we decided a few years ago that we needed to take control of Foxtel because at that time, it was a 50/50 joint venture with Telstra in Australia. 50/50 joint ventures are difficult to manage because one cannot insult Telstra, but for them, content was not a priority, particularly for us. Content is an imperative. And so we decided, look, let's take control of it. Our team there, led by Siobhan and Patrick Delany, have done a marvelous job in putting us in a position where a few years ago, as you well know, we'd put some money into the company. The question to us was, how much more are you going to have to put in? The question now, of course, is how much are we taking out? And so we sold, in principle, the company to DAZN for AUD 3.4 billion. And we will take a small stake in DAZN, around 6% or so. But we will be a good partner to them, both in Australia and globally. But that clearly transforms the personality of the portfolio. It will increase our return on invested capital, obviously enough, free cash flow, because that type of business demands a lot of cash and a lot of investment. And DAZN are the best in the world at sports rights. And they're able to leverage rights across jurisdictions. And I have no doubt they'll do well with the business. But it enables us to focus on the three pillars that we've identified in the past, which are clearly Dow Jones is important, digital real estate is important, books are important. So in the same time as us doing the DAZN deal, we just recently agreed to acquire two businesses for B2B for Dow Jones, one called Dragonfly, the other called Oxford Analytica, which provide sort of macro risk assessment for companies and fit into both the risk and compliance business, which is growing at about 16% annually, but also are a potential source of higher hierarchy content for Wall Street Journal readers who are interested in what's going on in the world. And it's fair to say we live in a tumultuous world. You do. But by coincidence, I wrote for Oxford Analytica when I was a correspondent for the Financial Times in Japan in the early 1990s, dare I say on the side. And so I have a fair idea about what they do, what they can do, how we can make them better, but most importantly, how they are relevant to a professional audience in a contemporary environment. So to answer your question, we will continue to look for acquisitions, particularly in those three core areas. We'll continue to think very carefully about the structure of the company as the Foxtel deal attests. And we'll continue to focus on the return of capital to our investors. Excellent. That's a good place to pick up on the simplification strategy, which a lot of investors are focused on. So just on the structure of the Foxtel DAZN transaction, maybe explain why you took equity, why they were the right partner. Clearly, as you referenced, I think the price was a bit better than most had assumed. So walk us through why that was the right deal. Yeah, price matters. It was a good price. There was some competition for the asset, it's fair to say, for those of you who follow the Australian market. And we believe in that asset. And we believe that DAZN will prosper from that asset, but particularly because it's able to approach sports rights from a global perspective. Because sports rights, complicated business. You have folks like Apple and Netflix and Amazon occasionally being interested. And the other thing is that having got Foxtel to a point of success, genuine success, during a difficult period of digital transformation, and its conversion to a strong streaming business where you're able to, in multiple formats, repurpose the same rights, really is a model for the world. But we're always going to have a little bit of difficulty in the Australian IPO market, genuinely, to fully monetize the asset. Whereas DAZN, not only does it have global sports rights, but because of those global sports rights, it has the opportunity, for example, and it's obviously up to the DAZN team to decide, but for example, to IPO in the U.S. Fantastic. Another asset I'd like to spend a moment on is REA Group. It's a stock that we cover ourselves. So we've got strong and clear views on what a good asset that is. But you've owned it for a long time. And I'd like to ask the question, what do you think, two-part question here, what do you think the market perhaps underestimates about REA? I mean, the market clearly thinks it's a great asset. But I'm interested in your perspective if there are parts that perhaps aren't as fully appreciated. And secondly, where does REA sit within your portfolio of businesses now? It sounds like, as per your opening comments, it's still very core. It is a great asset. But at the same time, I also read things frequently about looking for ways to maybe unlock value and change that structure. So if you can help us decipher all that a bit, Robert, that'd be helpful. We're always looking for ways to unlock value regardless of which companies, whether it's REA or Dow Jones or any. It's our job to maximize value for shareholders. People don't fully understand REA because I don't think they fully understand the Australian property market, which is hyperliquid. There's a lot more transaction there than there is here, where you have existing home sales at decade lows, probably 30%-40% below where it should be because of interest rates and the interest rate structure here. That will change. You'll see when it does change. I think you'll see a significant pickup at Realtor. Number one, being the leader in a market that's that liquid. Clear leader. A clear leader where really you have four times the visits of the nearest competitor. So you have more visitors, more visits per visitor, more pages per visit, which is actually also true of Realtor. Realtor has each visitor having more visits per month than Zillow or what's that other one, Homes.com? And that's not recognized. And then Realtor has more pages per visit. And that tells you about the quality of the site. And it also tells you that when people actually get round to buying a home in the U.S. or moving home, as they do in Australia, by the way, those are Comscore numbers, not internal numbers. And those sites have a comparative advantage. And the other thing that's not understood about REA is that it's a cluster of sites. One of the fastest growing sites in a very competitive market, and which will provide increased competition for demand, is property.com.au. It's the number three site in Australia. It's the number three site in Australia. So there's competition, which is great, as there must be. But I don't think people realize quite how competitive REA is and the suite of products that we have in that market. So it's still a core business for News Corp? It is a core business. It's an important business. It's a successful business with a great team. Owen has done an excellent job along with his executive leadership group in continuing to build the business, to investing in intelligent adjacencies. Again, that's another thing that I don't think fully understood, how they're using those leads, those valuable qualitative leads, for example, to drive customers into informed home finance. Yeah, I think they're a world leader in what they're doing in terms of real estate portals around the world. Robert, I'd love to get your perspective as well on that other company you referred to a moment ago, the CoStar Group. When CoStar making a bid for the number two player in Australia, the primary competitor for REA, the initial reaction of the Australian market was to sell off REA shares on the concept of a large competitor coming into the market. But of course, you've had experience watching CoStar in the U.S. and in the U.K. I'd love your perspectives on how you think that changes and how the market should be thinking about the valuation of REA in the context of CoStar maybe arriving in Australia. What are the lessons you've observed so far in the U.S. experience? Well, listen, each of those three markets is fundamentally different. I mean, from the financing of housing, the number of transactions per 1,000 people, just the culture of the buyer-agent relationship, the structure of the revenue model. So for example, in Australia, most of the revenue for REA comes from the sell side. In the U.S., most of the revenue for Realtor and for the other digital property comes from the buyer side. Now, Damian, who's running Realtor, is developing a sell side product that's relative to the total, not yet in the majority, but it was up over 40% in Q2 year- on- year. So understanding that these are very different markets. And secondly, understanding that they are competitive. And we're obviously, by nature, a competitive company. But we have the comparative advantage in these competitive markets of having media properties. And in a world when search is fundamentally changing because of AI, I mean, we all know that. Anytime you do a Google search, you see the impact of AI on the search. Your ability to create a network effect with your own sites, so be able to drive traffic to realtor.com from MarketWatch, be able to drive traffic to REA in Australia from news.com.au, that's a huge advantage. And it also, I think one of the reasons why Realtor is such a sticky site is that we've spent a lot of time and a fair amount of investment through the years building up the Realtor news and analysis section, which fits into, for example, something like the Mansion section at the Wall Street Journal. So not only in a commercial sense, but in an editorial sense, you're able to move traffic around your site. Andy's a great competitor himself, but that's not something he's able to do. And so you can certainly spend a lot of money on marketing. But what we can do really without spending money is networking. We wanted to get your broader perspective on the macro and economy broadly. You see a bunch of different markets. You referenced high interest rates in the U.S. impacting the real estate market here. But what's your take? Obviously, post-election, a lot is changing. You referenced tariffs earlier. Any interesting kind of thoughts that you have from your vantage point on the state of the global economy? Any trends that you're seeing in the business more recently? Anything you'd call out there? Yeah, particularly here in the U.S., we are in an interesting phase. So we have the second edition of the Trump presidency. It's very different to the first. During the first Trump presidency, the president really didn't know who he should put in his cabinet. This time, he knows very much who he wanted in his cabinet because he has more experience. But if you can extrapolate the turmoil, say, the tariff turmoil, with the certain amount of uncertainty, and believe that that will be perpetual, what Chairman Mao used to call a permanent revolution, that this is not a permanent revolution. If you were going in and wanting to disrupt, you would do it at the front end. And then, hopefully, obviously, the goal is to change the terms of trade, to reduce the federal bureaucracy spend, et cetera, et cetera, which is why DOGE essentially has a limited time live. But we're in the midst of the early Trump 2 turmoil. The optimistic interpretation is that it's purposeful turbulence. Because there's no doubt the president is focused on the stock market, which, as we all know, didn't react too well today. There is no doubt the president is focused on inflation. Those two things of themselves provide a natural discipline. But there's also no doubt that in the end, he wants to be seen as a successful president. A successful president presiding over four years of chaos is not a successful president. I would try to contextualize the upheaval in which we find ourselves. I guess the more optimistic school could be proved wrong, but that these are transactional tariffs. And there's a certain purpose. There's a certain method to the madness. And if that's the case, then in six to nine months' time, I think for our businesses, for any business operating in the States, for any global company contemplating investment, the scenario will be somewhat different. It's a good segue to Dow Jones, which obviously would benefit from all the news and news flow that we're trying to digest and understand. On the call, you spoke about an acceleration in the back half of the year. Maybe walk us through what you're seeing across Dow Jones. Obviously, Wall Street Journal has had good trends. You've talked about subscribers and pricing tailwinds. Maybe just walk us through what the biggest drivers are there. Yeah, the B2B business obviously doing very well. The acquisition of OPIS and CMA, they've been growing mid-teens year-on-year, quarter after quarter. There's no reason why that shouldn't continue to be the case. We've had some issues with Factiva and a Factiva contract, which brings down the overall growth in the B2B business. But that's, one, something to be resolved, and two, something that we're lapping. So the B2B business doing particularly well, again, which is why we made those two recent acquisitions. The consumer business, as you say, we're starting to see an increase in ARPU, as was planned by the team. They expect that the second half will be auspicious in that regard. Essentially, we're getting much better at dynamic pricing. And there's no doubt that, for example, GenAI will help with that, both in identifying cohorts and elasticity and identifying price points at which the obvious value of a subscription is meaningful to a subscriber, i.e., bring down the churn rate. Because different subscribers derive different benefits, say, from the Wall Street Journal. They read different sections. And the woman or man who reads the second section, the business section, is obviously, compared to somebody who's reading mostly general news, is likely to be a higher value subscriber and may well then subscribe to Barron's and may right through to, say, Oxford Analytica. And that upselling potential, which has always been inherent in the Dow Jones portfolio, is something that the team will be working on particularly hard over the coming months and quarters. Can I ask a couple of questions on the books division, which I think has been a fascinating evolution of the change in revenues and earnings mix of that business? I really think it's an interesting case study of traditional media business becoming more digital. But could you spend a moment, Robert, talking about where we are on that journey, how important some of the deals like Spotify have been for the books division? And to date, or more recently, the growth's been organic. But historically, you've got a good track record of buying some other books assets, folding them in, doing an excellent job of cost out as well. I wonder, are there still any opportunities on that front as well in the world? Do you still see opportunities for further industry consolidation in books, perhaps? Yeah, look, there are definitely opportunities. And I think you're quite right. Brian Murray and the team there have been excellent at consolidating acquisitions. And in a way, HarperCollins, who would have imagined over a decade and a half ago the print book business would be thriving in the way that it is? But I think we all felt that inherent potential. And it's emblematic, really, of the News Corp story in that we've been both driving revenues overall and driving margins. So the margin last quarter for HarperCollins was 17% compared to 15.5% the same quarter a year ago. For the overall company, it was 21.4% compared to 18.7%. So you can sort of see the similar. So we are driving both revenue growth and margin growth. So we have our three key pillars, and they're our two key pylons. And part of it is it is so fascinating when you look at how that business has evolved. Because when I became CEO 12 years ago, it was interesting that e-books were taking off. And there was a genuine I knew nothing about books. I still know very little. But there was a real confidence in the book publishing industry that e-books would work its way up to being almost the majority of all books sold. And it peaked at around 24%, 25%, and then abated. It ebbed. And it went as low as around 11%, 12%. There's been a little flick up again in e-books. And then audiobooks have come from almost out of nowhere to, as a percent of digital, now to be a larger share than e-books. And those who follow the company know that quarter after quarter, year-on-year, we were seeing 25%, 30% growth in audiobooks in the last couple of years. Then we did the original deal with Spotify. I think we are the most important partner in the book industry. Meanwhile, Audible, because of the Spotify competition, has become more active, more inventive. And so in the most recent quarter, audiobook sales were up 13%. And that's even with the lapping that's been going on. So they were tough comparables. And something fundamentally different has happened to reading, listening habits. And it's linked into the growth of the iPhone, people learning how to stream, podcasts. And so I'm fairly confident that we're still at the front end of the audiobook experience. And there's so much more that you can do with them. Your ability, for example, to use AI to translate. That's one of the areas that's, I think, not necessarily understood about the value of our content center, where you know that auto translation is getting in the sort of 95% accuracy range. Your ability to do audio to text, text to audio, text to visual. If your core content is of a high quality, the potential permutations to profit from it at low cost, they're almost endless. It's really we will be limited by our imagination, our creativity, and our marketing ability. Yeah, I think it's a fantastic asset the market hasn't necessarily fully recognized. Yeah. Sure. I wanted to ask next about your relationship with Big Tech, which has evolved over time, and tie into that AI. Obviously, big theme throughout the conference. You have a partnership with OpenAI. You have a lawsuit with Perplexity. Maybe walk through what we should be thinking about as it relates to News Corp on your Big Tech relationships, monetizing AI, but also going after those who are not appropriately compensating you. Well, I think we should call Perplexity by its full name, which is the perplexing Perplexity. Yeah, so we're in the midst of litigation with them. And those of you who've attended this conference in the past know we have a dual strategy: wooing or suing. And we wooed OpenAI. And Sam in particular, Sam Altman, that is, is very focused on quality content, the freshness, the immediacy of content. And that partnership is really blossoming. And because it's more than a transaction, a significant transaction, though it is for us. And you can see the impact in the news media section. You can see an impact at Dow Jones. If you do the math, the numbers are not public. But if you do the math, you'll be able to get a reasonable idea of the scale of it. But it's also us assisting Sam's team in understanding how you display content, the importance of links, provenance. Because they're finding that actually their search users want to go back to original sources. And that reinforces the value and the provenance of content. And for us, we're getting access to great information about the evolving use cases in the AI age. So that our editors understand when people access content, what they're looking for, why they're looking for it, what's the right length of content for this or that subject. And having that insight at this time of sort of exponential evolution is really important. More broadly, with Big Digital, we have a great partnership with Tim and the team at Apple. We were the cornerstone partner of Apple News+. We have an agreement with Google. Obviously, in the AI age, there'll be negotiations about AI and Google and us, but that's to be expected, then with Meta, complex relationship there, varies country by country. At a personal level, Mark and I get on well. At a professional level, there's some work to do. I'm not going to volunteer to fight him in a cage match, and then whether it's Microsoft, whether it's Amazon, these are evolving relationships, but what I am reassured by is the level of expertise our team has built up over the past decade in negotiating, in haggling, in defining, really leading the world in fashioning a clearer understanding about the value of content, the value of provenance, the value of IP in the digital age, and that team is still working on each of the contracts with each of these companies, and I think that does give us an advantage. Robert, I'll ask you a question on the U.K. and Australian newspapers. It's a smaller part of your portfolio now, however you measure it, in terms of profitability or valuation. But I know I still get questions from investors sometimes who worry about those businesses potentially becoming a big drain on profitability. I'm interested in how you see their evolution. To me, it looks like the cost structure's been variabilized as well as reduced. So I'm interested in how you see the outlook for earnings from those businesses. Is there still scope to take further cost out? Do you think we'll get a rebound in revenue at some point? And probably overlaying all that, do you think there's scope for industry consolidation in Australia and the U.K.? And could you find yourself a buyer or seller of those assets? The team has done quite well on the cost front. If you looked at the margin for the news media business last quarter compared to a year ago, it rose from 9.8% to 13%. That in a tough advertising environment. That includes the New York Post, which is frankly doing particularly well. It increased advertising both in print and digitally. It will be, I suspect, an interesting beneficiary of a trend we haven't talked about, which is there is a course correction culturally, which will have an impact commercially in America. If you look back at some of the ad agency associations like GARM, which were essentially putting publications like the New York Post on prohibited lists, that is clearly going to stop. There are investigations going in Washington at the moment into the nature of that bias, basically. Clever companies who in the past were influenced by sort of ultra-liberal ad agency associations and frankly ultra-liberal ad agency executives will be starting to ask, what is the best venue in this era to have my voice heard on issues that matter? I suspect quite a few of our properties globally will be a beneficiary of that. That's a cultural trend with commercial consequences. With Australia and the U.K., the teams are constantly innovating. You see with the increase in digital circulation revenue in Australia. You see with the most recent experiment, the introduction in the U.K. of a Sun Club membership. Starting to generate more revenue in more ways from what are still very, very large audiences. news.com.au has been generally the largest news site in Australia. Where we're different to a lot of other publishers is that we just have a scale and that network effect, which is a comparative advantage. But I think, and really, frankly, back to Rupert and Lachlan, we have a culture that is incessantly innovating. Because the company, however well it's doing, believes that complacency is a sin. And that's true of Rebekah and her team and Michael Miller and his team. All right. And we wanted to close out with a question going back to corporate simplification, which you obviously have been on a journey you referenced. We had Lachlan here earlier today from Fox. How far along are we in the journey? You referenced we're about 12 years from the split. Investors have asked, does it ever make sense to recombine? Obviously, the media industry is in a lot of turmoil. How far along are we in this process? How should investors think about the path forward from here from a corporate simplification standpoint? We are incessantly introspective, and as we should be institutionally. It's fair to say that the Foxtel sale is evidence of that, that at the right moment came the right offer, essentially the right partner. We were prepared to sell a company that we had literally taken majority ownership of only a few years earlier. It certainly simplifies our portfolio. I should say that that deal is not the end of us being thoughtful about simplification. We're conscious of the difference between the share price and the actual asset value of News Corporation, given the quality of the assets. We are always thinking about, OK, what's the right thing, the right time, the right structure? It's incumbent on us to do that, given the responsibility we have to investors. Fantastic. Well, look, we're out of time, Robert. It's always a journey talking about all the different divisions of News Corporation. Thank you for your insights. I hope everybody found that interesting. Thank you for your time. Thank you. Thank you. Cheers, mate.