Good morning, everybody. I'm Ben Swinburne, Morgan Stanley's Media and Entertainment Analyst. Quick disclosure: please note that important disclosures, including my personal holdings disclosures and Morgan Stanley disclosures, all appear as a handout available in the registration area and on the Morgan Stanley public website. Really happy to welcome to the conference from Paramount Global Naveen Chopra, the CFO. Naveen, thank you for coming. Good to see you. You too. Thanks for having us. Absolutely. So last week, you guys reported fourth quarter results and actually had a lot of pretty big announcements and initiatives as you think about driving the business in 2024 and beyond, particularly around streaming and streaming profitability. I'm wondering if maybe we could start with those key points that investors should be thinking about, particularly around the changes that you and Bob talked about last week to drive the business. Yeah, sure. I think it's important to put it in the context of, call it, the broader journey that we're on, which is continuing to transition our business. Obviously, as consumer habits are evolving, as the industry is evolving, Paramount also has to evolve. For us, that really means maximizing the earnings and free cash flow generation from, call it, the traditional part of our business while also turning streaming into the future driver of earnings and cash flow. So in support of that, we did lay out really three key initiatives, both internally and then also on our call last week. It starts with maximizing the value of our content. We think of that as getting the most we possibly can out of every single dollar that we invest in content. We feel very proud of our content portfolio. We think we punch above our weight, and we're incredibly excited about what's coming. And we want to, as I said, extract as much value as we possibly can out of that. Second big initiative for us is driving toward D2C profitability. We talked about our goal of delivering profitability for Paramount Plus domestically in 2025. And that path, importantly, is a combination of both continuing healthy top-line growth but starting to get some real operating leverage in that part of the business. And then the third big initiative for us was all about unlocking synergies, both top-line and expense synergies, from inside our business, meaning finding ways to use our asset portfolio to either unlock more growth or find more expense opportunities. And we've done a variety of things there. You may have seen we had a specific headcount action in Q1, which is an example of some of the kinds of things that we can do there. Importantly, it's an ongoing effort. And so you will see us continue to find ways to extract more efficiency, more synergy out of the business across many different dimensions. That's a great overview. I want to talk about each of those three in more detail with you as we move through this conversation. Before we do that, though, obviously, a lot of focus, Naveen, in the capital markets on the balance sheet. Could you talk about where free cash flow generation and deleveraging sort of rank in the list of priorities for the company this year? High. High to quite high. Is the simple answer. Look, starting with leverage, we are very conscious of the fact that we want to de-lever the balance sheet. We need to de-lever the balance sheet. That is one of the reasons that we're so focused on delivering significant earnings growth in 2024. And we'll talk, obviously, about some of the ways in which we're going to execute against that. It's the reason that we pay down $1 billion worth of debt in Q4. And it's the reason that we continue to look at creative opportunities to divest or otherwise monetize non-core assets. So certainly focused on the leverage side of it. But free cash flow growth is also a very important part of the plan. And it has to stand alongside reduction in leverage. 2023, from a cash flow perspective, finished a little better than we expected. There was obviously some strike benefit in there. But more importantly, we expect to grow free cash flow again in 2024 despite the fact that there will obviously be some unwind from production that was impacted by the strike in 2023. So I think we're on a good trajectory in 2024. And then longer term, we're really looking at a combination of continued earnings growth and, very importantly, better cash flow conversion out of that earnings growth. And that's largely unlocked by the stabilization in cash content spend. We've been on this path for the last few years of ramping up content for our streaming platforms. We're starting to get to what I think of as kind of a critical mass there. So that starts to level off and results in significantly more free cash flow conversion. And then the last thing I'd say on that is we are also very focused on achieving those two objectives, meaning deleveraging and free cash flow growth, while maintaining a healthy level of growth in streaming because that's critical to that broader transition that we're trying to execute. That's very helpful. Thank you, Naveen. And again, before we get into the details, there's one other question I wanted to ask you about. I mean, there's been a steady drumbeat of sort of press speculation around strategic activity at Paramount. Where is management's focus right now? And is there anything you can share about sort of the opportunities you and the board may be exploring to kind of maximize value? Well, I got to applaud you for waiting till question three to ask about that. Thank you. You're welcome. Look, the answer is pretty straightforward. From management's perspective, we are focused on execution. We believe that continued execution of our plan will unlock value. We're very conscious of the fact that our job as management is to create value for all of our shareholders. There are multiple ways to potentially accomplish that. As I said, we think execution of our plan is compelling. To the extent that there are other alternatives, we'll be diligent about exploring those. That's how we think about it in terms of other things that have been speculated. I'm not going to comment on that stuff. OK, fair enough. Let's go back to the three priorities you guys talked about you introduced. So maximizing the value of content direct to consumer profitability and then unlocking synergies and savings. So on the content side and you talked a little bit about it last week. But I think the whole market is trying to figure out how Paramount and, frankly, the whole industry can continue to drive value in your networks and your streaming services while limiting cash content spending. So there's sort of an inherent question around driving return on content spend. Can you talk a little bit about how you approach that balance and what the opportunity is for Paramount? Yeah, sure. I mean, I think of it really as all about content efficiency. How do you make the dollars that you spend on content more efficient? And I think that manifests slightly differently on the linear side of the business versus the streaming side of the business. So on linear, there's a certain volume of content that we need to produce. And we obviously have viewership objectives that are very important both to us and, quite frankly, our distribution partners. But there are ways that we can accomplish those goals more efficiently. And that includes doing things like changing the mix of programming over time. It includes leaning into more international production where, quite frankly, the factory costs can be significantly lower than what you see in the United States. And it includes sharing content across platforms, including sharing content between cable and broadcast and, interestingly, sharing content from streaming into linear. And you look at what we've done with our linear networks over the last few years. I think we've been able to capture some synergy, some efficiency in doing that. And we're confident that there's more that we can do there. On the streaming side, it's a little bit different because there, it's all about engaging consumers while continuing to bring new subscribers in. And I think we are getting to a place now where it's all about the right volume and the right cadence of original content, which you then use to drive consumers into, call it, library and affinity programming, which tends to be significantly less expensive and, therefore, more efficient. What we've learned when we look at our first three years in Paramount Plus is that, given kind of the monthly subscription nature of the business, we really want every single one of our customers to believe that there are, call it, one or two new originals available on the service that are relevant to them at any given point in time. I say it that way because it's important that having three, four, five for each individual household doesn't necessarily generate the kind of return that would justify the incremental investment in those originals. It's about that right volume of originals programmed at the right cadence and programmed intelligently so you know how to link people from one asset to the next and then also give them opportunities to engage much more deeply in the library. So as I said, it's a little different dynamic than what's going on on the linear side. But when you put them together, we see a business where cash content spend can grow at, call it, low single digits. 2024 is going to be a little bit of an outlier just because of the strike unwind. But the combination of getting those efficiencies across linear and streaming is really what allows us to do that. Yeah, I think you guys I think Bob mentioned Tulsa King as an example last week of having a show on streaming and on linear. It sounds like you can do and plan to do more of that kind of multicasting simultaneously. Yeah, I mean, we've had a lot of success with that, frankly, using a variety of flavors. So one example is we actually ran Yellowstone, which normally sits on cable on the Paramount Network, on CBS. That was ostensibly to help replace strike programming, programming that was impacted by the strike. But it ended up being a very interesting experiment for us. The show had 7 million viewers on CBS, which for a series that's been around as long as Yellowstone is a lot more than you would expect. So I think you'll see us do more of that. We've also taken programming from streaming and put it onto cable properties. Best example of that, I think, is 1883, which is also part of the Yellowstone universe. Interestingly, when we did that and we put the first season of 1883 on the Paramount Network, I think about 2 years after it premiered on Paramount Plus, obviously did very well on linear. But it created a boost on Paramount Plus because you had a bunch of customers who got into the show on linear and then would go to Paramount Plus either to explore kind of the broader Taylor Sheridan universe or, in some cases, they just didn't want to wait to see the remaining episodes. And they'd want the ability to watch it kind of on their timeline. So there's a lot of synergy that can be unlocked by effectively windowing content. And you mentioned Tulsa King. That's another one where we're going to take the first season of Tulsa King. We're going to run it on CBS just prior to the launch of season two on Paramount Plus. So I think there'll be sort of a magnification of interest in that series as a result of that. Listening to you talk about it, it brings up, of course, sort of all that's going on with the MVPDs, particularly around Charter, who's speaking later this morning, and the changes they've been trying to make with Disney and other partners. The idea of sort of bundling streaming services into the multichannel bundle, particularly when the content is sort of all moving around these different services, is that a model you guys like at Paramount? Do you think that's something that would work for you financially and strategically as you look forward? Yeah, well, as you said, I mean, effectively, we look at what Disney and Charter decided to do as a version of a bundle. And it's actually quite similar to the hard bundles that we have embraced outside of the United States, where we've bundled Paramount Plus with paid television services in several different markets. Those have been quite successful for us. And the reason we like them is that, number one, it's obviously a route to significant expansion of your subscriber base in a relatively short period of time. The cost to acquire those subscribers is very low. So it's efficient from that perspective. Those subscribers typically churn at a much lower rate than, call it, a direct retail subscriber. And you've got a partner who is helping you market and drive awareness of the service, your content, et cetera. So there's a lot of tailwinds that it provides. Now, obviously, the trade-off is, call it, a wholesale RPU versus a retail RPU. But based on what we've seen outside of the United States, we really do believe that if you structure those things correctly, they can be quite accretive to the business overall. That's helpful. Let's talk about number two, which is probably number one in most people's minds, which is direct to consumer profitability. And you guys introduced the idea of us thinking about this in terms of domestic and international. So now I get to ask you lots of questions about domestic versus international. So domestic Paramount Plus profitability in 2025. When we look at the segment last year, it did almost $7 billion of revenue. You improved the losses quite a bit to $1.7 billion. What can you tell us that would help us think about the domestic versus international business within that P&L as we think about driving to domestic profitability in basically a year? Yeah. Well, the domestic business is definitely the larger part of the business. That's certainly true with respect to revenue. It is also the larger share of losses today, although probably not as big a relative share compared to international as you might expect. Now, to the extent that sounds counterintuitive, the thing that you got to remember is that 2023 was really the first full year of availability of Paramount Plus in many key international territories. So for that reason, we generally think of the international business as running, call it, 12-18 months behind the domestic business. Now, we haven't put any specific timelines on profitability for international. As you pointed out, domestic, our target is 2025. But long term, I think of profitability or break even as really just a milestone. I mean, the ultimate goal continues to be to turn the business into a business that generates healthy margins on a global basis. And I think the progress we've made in 2023, what we'll deliver in 2024, domestic profitability in 2025 will demonstrate the potential of that trajectory. What's the sort of revenue opportunity, top line opportunity, in the U.S. business, which, at least our numbers, we estimate it's about 70% of the revenues last year? But as you mentioned, it's the larger piece. What do you see ahead available for the business in terms of revenue growth from here? Well, it's a simple formula in the sense that it's about subscriber growth. It's about deeper engagement. It's about reducing churn. And it's about driving growth in RPU through both pricing and also improvements in ad monetization. And when you look at our plan for 2024, there are elements of all of those things. We've talked about our expectations for RPU growth this year, more than 20% on a global basis. That's driven, at least on the domestic side, by, call it, the roll forward of price increases that we did last year and on the international side, largely by mix of where customers are coming from. So we still feel good about the RPU dimension. I talked on the call a little bit about our expectations for subscriber growth, which we still are enthusiastic about, albeit it's a little softer than 2023 because 2023 has some tailwind from the transition of Showtime subscribers into Paramount Plus. We expect to see continued improvements in churn and engagement. There's a variety of things that we're doing with the product, with how we program. Obviously, we're incredibly excited about the content slate, particularly in the back half of the year, partnerships that we have lined up. It's really the combination of all those things that help drive that deeper engagement, which then translates to improvements in churn as well. How about on the advertising front? We've talked about that a lot this week with a lot of your competitors. There's really nice engagement growth in these ad-supported tiers. I'm sure that's true for Paramount Plus as well. Often, the monetization lags the engagement. Maybe you could talk a little bit about the ad tech and sell-through and sort of the advertising efforts that Paramount's made around your Paramount Plus AVOD tier. Yeah, well, our experience with advertising on Paramount Plus has been phenomenal. If I look at, call it, the ad RPUs on the service since we launched the ad-supported tier, they've grown double digits every single year. Sell-out is very high. And I think we have an incredible go-to-market, excuse me, go-to-market capability with our ad sales force that obviously has the ability to sell not just Paramount Plus but a broader ecosystem of digital and linear assets. So we feel very good about that. Sell-through has been very high continuously. And when we look at near-term plans, we do believe that there will be continued growth in that ad RPU. There's some market dependency there, obviously. But I would note that we've been successful driving that growth in Paramount Plus despite what has been talked about a lot, which is the increase in supply of Connected TV advertising. I think one of the reasons for that that's important to understand is that even in a world of immense supply, advertisers do still lean toward very high-quality, long-form content, mainstream, franchise IP. Those things all have value in distinguishing one source of inventory versus another. We definitely see that in Paramount Plus. I think probably gives us some bullishness about thinking about how we could get even more aggressive around pricing and other things on the advertising piece because it is such a unique asset. More aggressive on the consumer price point to drive people into the. Yes, but for a different reason. I was referring to what we think we can get from an advertising perspective. We'll talk maybe in a minute about our thoughts on consumer pricing. OK, got it. Yeah, well, let's do that. Why don't we talk about RPU? I mean, what'd you learn from the price increases that you guys put in late last year on Paramount Plus? And I would imagine that pricing plays a big role in the long-term growth of the business. Absolutely. When we look at the business going forward, we do anticipate future price increases. 2024 does not currently have any price increases built into it. But in the long term, we do see. But you'll get multiple quarters of benefit from last year. From last year. Because it really wasn't until Q4 that the price increase we did kind of was rolled out across the entire subscriber base. So yes, we do see upside in pricing. In terms of what we learned from the price increase that we did last year, when you do a price increase, you're focused on two things, right? What does it do to my churn? And what does it do to my ability to attract new customers? And we went in with a belief that there was probably less risk on churn and more risk on, call it, new starts. And the reason for that is really the power of our content. We know that once people experience everything that is available on Paramount Plus, new content, library content, big movies, sports, et cetera, the value proposition becomes very, very clear. Would you pay another $2 a month to keep getting that content? Pretty easy decision for people who have experienced it. For new starts, it's a little harder because if you're not already in the service, then the question of, do I want to add another either $6 or $12 streaming service is one that requires more consideration. And that's where we've been able to use things like promotional pricing, bundles, et cetera, to kind of lower that barrier to entry, if you will. So we're now, call it, six, seven months into our new price structure. And I would say it's done pretty much exactly what we had hoped, which is to say you do have some movement in each of those dimensions. But it's more than offset by the incremental RPU that you generate. It's highly revenue accretive. Any way for us to think about where you think long-term pricing might go? I mean, other than you feel like you've got pricing power? Yeah, I mean, I don't think I'd necessarily put any specific numbers out there. But you saw what we did in 2023. And you should assume that over some regular cadence, there would be similar price increases over time. OK. Why don't we talk about international next? So this felt like an area where you guys were making maybe I don't know if you would agree a little more strategic changes to how you were thinking about the marketplace. Can you walk us through sort of what you've learned so far internationally with Paramount Plus and how that's informed sort of your updated plans? Yeah, I think the big thing that we've learned, and which has led us to make some decisions about how we're going to program the service a little bit differently outside the United States, is really that the vast majority of viewership on Paramount Plus in certain markets is all our what we call global Hollywood content. And the stuff that was highly localized really wasn't a big percentage of viewing time or what we think of as acquisition drivers. Yeah. And now, one of the reasons for that, by the way, is that we have a lot of distribution partnerships in some of these markets. And in many of those cases, the distribution partners bring a lot of local content as part of whatever the bundle is that the consumer is subscribing to. So we don't really add a lot of value from a local content perspective because it's already there. I see. I think the learning for us is that that was an opportunity to right-size the content slate in those markets, to focus on our big Hollywood content because that's what we want. That's what our partners want us to deliver. That unlocks, obviously, some savings from a content perspective. It also unlocks savings on the marketing side because those local titles, by way of the fact that they're not necessarily big franchise IP that people already know about, require a decent amount of marketing to build awareness in order to get the wheel turning on them. When you make that kind of a change, effectively dialing back on local content in some of these markets, there is a bit of an impact from a top line subscriber perspective. But as we've looked at it, it's pretty clear to us that with respect to the overall P&L, it's quite accretive. Doesn't mean we're not going to grow in these markets, just that we're going to really focus on growing with profitable subscribers as opposed to investing a whole bunch of money in local content where it's less clear that you really get a return on it. Right. So I imagine this is obviously going to create some relief on the programming cost side. Are there marketing dollars and even sort of headcount or infrastructure costs that maybe will come out of the P&L over time as well as you work through this? Yes, all the above. OK, great. We touched on it a bit before, but just to make a finer point of it, so you have guidance for 20% plus global Paramount Plus RPU growth in 2024. I think it was over 30% in Q4. Is there anything that you need to do or that needs to happen in the market to deliver that guidance for the year that hasn't already been put in place? You mentioned not more price increases in the U.S. But anything else to highlight? No, I mean, and I guess just to kind of remind of the components of that RPU growth, you kind of got to look at the domestic piece and the international piece separately because there are slightly different dynamics. And as I said, on the domestic side, it's really the roll forward of the price increase that we did in 2023 and some expected improvements in ad monetization, although I'd say probably been somewhat conservative on that piece. So my hope is there might even be a little upside there. And then on the international side of the business, it's really two things. One, which I think I mentioned, is the mix of subscribers as between lower RPU markets and higher RPU markets. When we first launched Paramount Plus outside of the United States, it was primarily in Latin America. Those tend to be lower RPU markets. Through the course of 2022, and then as I mentioned, 2023 was the first full year where we really had Paramount Plus in, call it, key Western European markets, higher RPU. So a lot of our subgrowth outside of the U.S. is now coming in those markets, which is accretive to RPU. Makes sense. The other thing that is happening internationally, which I guess is a form of a price increase, is we have launched some premium tiers in certain markets, which is more about distinguishing product capabilities. Content's pretty consistent across the tiers. But based on the analysis we've seen to date, that will be helpful from an RPU perspective as well. Got it. Before we get to the last one, which is unlocking synergies, you mentioned sort of advertising and maybe some conservative assumptions in the guidance. Could you just step back, Naveen, and give us a sense of the broader ad market that you guys are operating in today? Yeah, I mean, we talked about this a little bit on our call. I think it's fair to say that we're encouraged by what we see. The digital ad market continues to demonstrate healthy growth. And we like what we're seeing from an engagement, call it, our ability to drive supply and participate in all that. So that's a helpful fact. On the linear side of the business, we are seeing some stabilization, which is encouraging. Scatter premiums in the market are pretty healthy, which is a good dynamic going into the Upfront. So we like that. And as I said on the call, I think Q1 we expect to see some, call it, mid-teens type growth in the advertising business. Now, there's some help, obviously, from the Super Bowl in there. Sure. But in general, I think sentiment is more positive than it was the last couple quarters. That's great. Ok, let's talk a little bit about synergies and sort of cost opportunities. You guys quantified in the 10-K that you're taking, I think, a programming charge of around $800 million this quarter. I know you're always optimizing. But can you talk about sort of the overall opportunity around cost optimization this year for the business? Yeah. Well, I think it's probably worth clarifying a couple things. So on the impairment charge that we took, that was primarily related to content. And that's related really to these decisions that we've made about how we're going to think about the Paramount Plus service, where it's going to live, what kind of content we're going to continue to focus on versus what we're going to rely on partners to provide, et cetera. So when I look to the future, there's nothing of that nature that I would say, like, oh, we should expect some other strategic change that's going to yield, excuse me, a content impairment charge. However, we are, as we talked about at the beginning, very focused on other forms of synergy unlock, cost reduction, et cetera. That can come in multiple forms and in various parts of the business. That's not just a linear thing. I do think there are things that we will continue to do to get more efficient on the streaming side of the business. It includes opportunities in marketing. It includes opportunities in technology. It includes opportunities in people and the organization. So it is broad-based. And it's really about getting all of these different assets at Paramount pointed in the same direction, working together to figure out how we can do things more efficiently. And I do think that that's a big opportunity. And it's a big part of our broader narrative of driving earnings growth as well as top line growth. Naveen, as you guys drive OIBDA growth this year, that's obviously an opportunity to de-lever the business. You touched on this earlier in your comments. But do you look at both EBITDA growth and free cash flow as important sort of benefits to leverage as we think about defining leverage and sort of balance sheet health? Yes. I mean, our traditional definition of leverage is obviously earnings-based. And so from that perspective, we focus on the earnings side of the equation. But there are obviously folks who are looking at ratios of cash flow to debt as well. And so we're certainly not sort of running the business with a view that the only thing that matters is earnings. We do think about free cash flow growth. I talked about the fact that we're going to grow cash flow in 2024. That's not accidental. I mean, that's a very intentional thing. We said, ok, how are we going to do this? We obviously were making growth investments. But we also want to grow cash flow. And so we're making a lot of very thoughtful decisions about where we're going to invest in content, where we're not, where we're going to invest in marketing, where we're not. We are focused on that. I think it's worth repeating, as I said earlier, longer term, we think there's significant unlock that comes from the stabilization of cash content spend, shrinks working capital, and results in better conversion from earnings to cash flow, which is ultimately where we need to get to to make sure that we're achieving objectives on both of those dimensions. No, that's a great, that's a helpful way to think about it. Naveen, any kind of last points you want to leave the audience with as we wrap up? Yeah, look, I would just say that we're really excited about the path ahead. It all starts with our content. As we said at the outset, we've got an incredible slate coming in 2024 and beyond. And that's true when I look across the portfolio of the film studio, what we're doing at CBS, what we're doing with our cable networks, what we're doing, obviously, at Paramount Plus. And I think as we continue to execute, we look forward to unlocking real value there while we continue to explore ways that we can enhance that value creation. Great. Well, thank you very much for coming. Thank you, everybody, for joining us. Thank you. Good to be here.