Fox Corporation (FOX) Q3 2021 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to emphasize the functionality for the question-and-answer queue will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to Chief Investor Relations Officer, Mr. Joe Dorrego. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to our fiscal 2021 third quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chairman and Chief Executive Officer; John Nallen, Chief Operating Officer; and Steve Tomsic, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter, and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA, or EBITDA, as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Thanks, Joe. Good afternoon. And thank you all for joining us to discuss our third quarter results. Once again, we have delivered a quarter of exceptional financial results, underscoring our ability to execute on our operating plan while making great progress on our longer term growth initiatives. Financially, we generated approximately $900 million of EBITDA, nearly as much as we did in the prior year quarter, when we had the benefit of a record breaking Super Bowl on Fox. This past quarter, our total company affiliate revenues increased by double-digits, once again, highlighting that our set of essential brands coupled with a focused strategy yields consistent industry-leading results. Our advertising performance was equally notable, despite the tough Super Bowl comparisons in the prior year, as we continue to see robust advertiser demand for not only our national and local in your assets, but for Tubi and our broader digital portfolio as well. Steve will give further details on these and other financial highlights in a moment. Over recent quarters, market commentary has indicated a focus on ratings trends at FOX News and on the outcome of renewal negotiations with the NFL. Our achievements in these areas are entirely consistent with the positive expectations that we have long been communicating to you. Our clear leadership and news coupled with the long-term renewal of the NFL provides a strong foundation to grow our company for years to come. Let me address each one of them individually. We have for the last several quarters being exceptionally forthcoming and utterly transparent about our expected outlook for FOX News ratings throughout the election cycle. Last November, immediately prior to the presidential election, we shared our belief that post-election the appetite for news would moderate and that a proportion of the record audiences that we were seeing would migrate back to the comfort of sports and entertainment content. At that time, what we did not anticipate was the short but heightened news cycle that immediately followed the election and that clearly benefited our competition. Last quarter, we experienced the post-election audience pullback that we anticipated. We also shared our confidence that the overall news audience would normalize back to pre-election levels. Through maintaining our dedication to providing America's best news, analysis and opinion, we had no doubt that the FOX News channel would regain its cable news ratings lead. I'm pleased to report that what we have shared with you over the last two earnings calls is precisely what has transpired. Since the second impeachment trial, FOX News regained its leadership position and maintain that leading spot ever since, averaging a 40% share of total day in primetime cable news audiences. Over this time, FOX News audience levels have held relatively firm when compared to our competition that have seen their audiences dropped significantly. With MSNBC losing approximately one-third of its audience and CNN losing over half over half of its audience. In fact, the FOX News channel finished this last quarter as the most watched cable network in primetime and finished March as the most watched cable news network overall. Calendar year-to-date, the FOX News channel is again the top rated cable news network and achievement that reflects a return to the leadership position that we expect not just to maintain, but to grow. Fortifying the success are the long thought out programming changes that we started implementing following the election and that have continued over the past several months. In April, the FOX News channel debuted the late night program, Gutfeld!, the exclamation mark is apropos as since its launch, the show is average over 1.5 million viewers per night, representing a 25% increase in the 11:00 PM to midnight time period versus the month prior. To put this into context, Gutfeld! is drawing an audience that is roughly the same size as Jimmy Kimmel Live! and larger than The Tonight Show, despite FOX News reaching fewer households than the broadcast networks. Our success at FOX News Media over the past quarter is not limited to our cable networks. FOX Nation, the direct-to-consumer offering from FOX News Media also had an impressive quarter, with the highest number of customer acquisition since launch and this momentum, which has carried over into the current quarter. Since mid-February, FOX Nation has seen a 40% increase in subscriber growth. The key drivers of this growth are the streaming of live events and the premier of exclusive flagship content, including the streaming of CPAC in February and the launch of Tucker Carlson content, including a new video of podcast series entitled, Tucker Carlson Today and long form documentaries entitled, Tucker Carlson Originals. Given the success that we have seen with this content, you should anticipate us to continue to invest in new programming for FOX Nation in the quarters ahead, to further increase engagement with our current subscribers and to attract new customers. Turning to the other important business development, I mentioned, we are immensely pleased with our renewal agreement with the NFL. Fox will continue as the home of the Sunday NFC package, the most valuable rights package in the NFL portfolio for the next 13 seasons. Just one reference point of its value to Fox. The Sunday NFC package has been the most watched NFL package for the past 15 years. Our NFC coverage is an important foundation for the FOX Network and strategically aligns with our local stations where we own and operate the Fox affiliate in 14 of the 16 NFC markets. Maintaining the Sunday NFC package is a significant programming milestone for our own stations and their local business partners and for our national affiliate base as well. In addition to our NFC package, we also added new and exclusive holiday games and secured rights to broadcast four of the next 12 Super Bowls. Fiscally, we are very comfortable with the scale of the new rights package, coupled with our decision not to renew the Thursday-night package. While we could not discuss this while we were in negotiations. Our intent was always to release Thursday-night and focus our future NFL investment solely on Sunday afternoon. Not only will we exit Thursday-night, but we also took the opportunity to do so one year in advance of the expiration of our existing deal with Amazon, assuming the rights to the 2022 and 2023 season or 2022-2023 season. Importantly, our NFL renewal also broadens and enhances our package of digital rights, providing us with the necessary flexibility and optionality to maximize all linear and digital opportunities in the future. Regardless of the way our businesses may change, our rights package provides us the ability to continue to evolve our business model. For example, we'll be increasing our digital programming right away by using our expanded digital rights to launch an NFL branded VOD channel on Tubi this coming season. Another important element of the new NFL deal relates to FOX Bet. Fox extended its rights to continue supporting America's leading free-to-play wagering game, FOX Bet Super 6. Additionally, FOX Bet has been designated an authorized sports book operator by the NFL. And we hope to share more details on the launch of NFL related integrations in the quarters ahead. The opportunity presented by uniting a leading media brand with prominent betting assets and influencers is tremendous. We continue to see substantial growth and revenue upside in this market and are investing to further expand and enhance our presence. Today, I'm pleased to announce an agreement to acquire Clay Travis' leading sports news and opinion platform, Outkick. Outkick is a natural compliment to several of our brands. And we'll deepen our investment in the sports wagering ecosystem. As a leader in sports opinion and pop culture content, Outkick provides clear overlap where their businesses and areas of expertise. Importantly, Outkick also creates content about sports wagering. And currently has an exclusive marketing arrangement with FanDuel that has proven remarkably successful. I want to welcome Clay and the Outkick team to Fox. Speaking of successful sports wagering businesses, we highly value our various partnerships with the Flutter Group. Currently, we are both looking to clarify our ongoing arrangements through a pending arbitration. While the arbitration process is ongoing, we do not expect to make any further comment about it. Turning to a couple of other areas. The harmonious mix of leading sports and entertainment on the FOX Network continues to prove a winning combination. Season to-date, Fox is the number one broadcast network for all primetime programming. FOX Entertainment programming, such as top unscripted shows like the Masked Singer and I Can See Your Voice and leading dramas like 911 and 911: Lone Star are delivering big audiences. We are deep in our program development process and are enthusiastic about the new shows coming to the network this fall. As we anticipate a return to a normalized full schedule, we are actively involved in our early upfront process and we are engaged with the leading agencies and brands about our respective plans. Brands are eagerly anticipating the pent-up consumer demand, following COVID and Fox offers the best place to invest multi-platform, multi-genre advertising commitments. Because of this, the very healthy current scatter market and the overall improving economic outlook, I am optimistic that there will be substantial demand across all of our platforms during the upfront, as we look to deliver solutions for advertisers. To that end, we are deeply integrating Tubi into this year’s upfront discussions. The unmatched reach of broadcast network television and the substantial digital audience of Tubi presents unique opportunity for our advertising partners. Our decision to acquire Tubi was present, and we are focused on its growth plan over the near-term. In the short period, we have owned it. It is already exceeding all of our expectations and we continue to find innovative ways to expand its product offering and propel its growth. In terms of operating performance, in the month of March, Tubi’s reach increased over 30% as measured by viewers and now reaches $40 million monthly active users. But as we have shared before, we are intently focused on engagement as measured by total view time or TVT, because that is what we monetize. To that end Tubi generated over 275 million hours of total view time streamed in March, a monthly record for the platform. Tubi also set a record for total view time in the third quarter with nearly 800 million hours streamed up more than 50% year-over-year. And this is on top of the exponential growth the platform experienced in 2020, where Tubi streamed more than 2.5 billion hours of content. We also shared additional demographic info for Tubi as part of its impressive new front presentation earlier this week. The median age of the platform’s viewers is 37 years, that's 20 years younger than linear TV. Nearly 40% of Tubi’s audience identifies as multicultural and over two-thirds of its audience does not watch other ad supported streaming services. Tubi truly broadens the reach of never television and allows our advertising partners to access a substantial incremental digital audience. And an audience that is not readily consuming other AVOD services as well. The increase in viewers total view time, and the unmatched advertising opportunity has translated into significant year-over-year revenue gains. Tubi’s quarterly revenue increased over 150% compared to the same period last year. The power of Fox’s promotional sales and content synergies are accelerating Tubi’s business, putting it on a path to be $1 billion revenue business in the coming years. On the content side, Tubi has now expanded its library to over 30,000 titles, comprising of movies and series from all major Hollywood studios. Additionally, we are continuing to make more Fox programs available on the platform. Tubi features key Fox titles, including the Masked Singer, I Can See Your Voice and Lego Masters among others. And while Tubi continues to expand its library, it will also soon be home to its own original content. This fall, Tubi will introduce approximately 150 hours of original content, including movies and documentaries produced by Fox alternative entertainment and animated films produced by Bento Box. Contrary to the strategy of the major SVOD services. Tubi’s goal is to turbocharge certain genres of content that already make Tubi successful, and thereby allow us to super serve certain segments of Tubi’s audience, again, all to continue to drive engagement and therefore monetization to new heights. And the good news is, given Tubi’s best in class tech stack, we will be able to measure the ROI on the original content investment as we go. Another important differentiator of Tubi’s content is live local news. Tubi recently closed deals with scripts and talks to bring an additional 20 local new stations to the platform later this year. These added stations extend news on Tubi and on Tubi’s reach to 24 of the top 25 markets. Underpinning the news on Tubi offering our live local news feeds from 18 owned and operated FOX Television Stations. In total news on Tubi will carry nearly 100 local station feeds in 2021 covering 58 DMAs and offering the most robust local news offering of any free streaming service. Another digital achievement across the company is the growth we are seeing at FOX Television Stations. Digital ad sales at our core stations are up nearly 40% compared to the third quarter last year. Our multi-year strategic investment to further build our digital capabilities and enhance our digital product and advertising teams at the stations are yielding great results. Across the entire company, we surpassed $1 billion in digital revenues for the third quarter year-to-date. Our owned and operated stations are also benefiting from the ongoing lifting of COVID restrictions. The financial services category and the entertainment category, which includes gaming are performing particularly well. We're optimistic that this trajectory will continue as restaurants, retail and other businesses continue to reopen in the large metro areas where our stations are located. Even despite COVID related disruptions, our fiscal year-to-date has been characterized by an operating and financial performance that has exceeded even our own high standards and our initial expectations. Our core businesses provide a stable foundation, but the opportunities that were propelled our future growth. We are optimistic about the current fourth quarter and look forward to milestones in fiscal 2022 that include the return of our full sports and entertainment lineups, the beginning of the midterm election season, investments in the growth of Tubi and FOX Nation, the launch of FOX Weather and the integration of Outkick. We continue to capitalize on the ongoing momentum of our core brands, as well as capturing the added growth from the initiatives I've discussed today. And now with that, Steve will take us through the details of this impressive quarter.

Thanks Lachlan, good afternoon. Having delivered another strong quarter, we are encouraged by the robust underlying trends that underpin our distribution and advertising revenues. And our strategic investments are exceeding expectations highlighted by the trajectory of Tubi. Before reviewing our financial performance for the quarter, it is worth noting at the outset that our third quarter results are comparing against our broadcast to Super Bowl LIV in the prior corresponding quarter, which accounted for approximately $500 million of net advertising revenue and approximately $100 million of EBITDA across the company last year. Where appropriate, I will share both our reported results and the underlying performance when excluding the impact of Super Bowl LIV. Now turning to our results for the current quarter. Our leadership brands and focused portfolio of assets delivered double-digit growth in total company affiliate revenues and mid-single digit growth in underlying total company advertising revenues. Excluding the benefit of the Super Bowl in the prior quarter and the consolidation of Tubi in the current year quarter. Total company affiliate revenues increased 10% with 18% growth at the Television segment and healthy 6% growth at the Cable segment. Meanwhile, the rate of subscriber declines continue to moderate in the quarter, with trailing 12 months industry sub losses running at approximately 4.5%. Our reported advertising revenues declined 24% in the quarter, due to the absence of the prior year broadcast to Super Bowl LIV and a slower news cycle. Despite the headwinds from comparability, our brands continue to deliver robust CPM growth across the portfolio led by the FOX Network and FOX News. Encouragingly, our core local television stations like Super Bowl, Political and the impact of the next stock transaction return to growth across the base market in the quarter. Meanwhile, advertising revenue growth of Tubi continues to exceed expectations. Today, we anticipate reaching revenue of $350 million for the current fiscal year, which is up from the $300 million forecast we shared with you on our last earnings call. Putting it altogether, reported total company revenues of $3.22 billion were down 7% over the comparative period in fiscal 2020. Excluding the impact of Super Bowl and the acquisition of Tubi, underlying total company revenues increased mid-single digits. Quarterly adjusted EBITDA was $899 million, down 2% over the comparative period in fiscal 2020, excluding last year’s Super Bowl contribution, quarterly adjusted EBITDA grew low-double digits led by continued growth at the Cable Network segment. Net income attributable to stockholders of $567 million or $0.96 per share was notably higher than the $78 million or $0.13 per share in the prior quarter. This was primarily the result of movements recognizing of the net, including the mark-to-market adjustments associated with the company's investments. Excluding this impact in other non-core items, adjusted EPS of $0.88 was up slightly from last year's $0.93, primarily reflecting the comparative items that I've just mentioned. Turning to the performance of our operating segments for the quarter. Our Cable Networks reported a 7% increase in EBITDA on essentially stable revenues. Cable affiliate revenues increased 6%, once again, led by double-digit pricing gains at FOX News and continued moderation in the rate of industry subscriber erosion. Cable advertising revenues decreased 7%. As continued strength in linear pricing and digital commercialization at Fox News Media was more than offset by the elevated linear audience levels of the prior year. Cable other revenues fell 24%, primarily due to the lowest sports sublicensing revenues and the absence of pay-per-view boxing events in the current year, both due to COVID as well as the disposition of our sports marketing businesses. EBITDA at our Cable segment increased by $58 million over the prior year and benefited from lower costs at FOX Sports, including the absence the prior year's Super Bowl week studio shows and production cost efficiencies. Our Television segment reported a 12% decline in revenues and an $89 million decline in EBITDA, both of which principally reflect the absence of the prior year contribution from the broadcast of Super Bowl LIV. Television affiliate revenues increased 18% in the quarter. This robust growth reflects double-digit increases for both our programming fees from non-owned station affiliates and for our direct retransmission revenues at our owned and operated stations and reaffirms, we are on track to achieve the television affiliate revenue growth we outlined at our Investor Day. Television advertising revenues declined by 28%, primarily due to the absence of the price of Super Bowl, partially offset by the benefit this quarter from the timing of our NFL Week 17 double header and the rotating NFL divisional playoff game. Meanwhile, on the back of the increasing total view time Lachlan mentioned earlier. Tubi set another advertising record this time for the March quarter, which seasonally is its slowest quarter. Other revenues at television increased 21%, led by higher production revenues at FOX Entertainment and higher content revenues at Bento Box. Turning now to cash flow. In the quarter, we generated strong feet free cash flow with $1.54 billion, reflecting our normal seasonal cycle of collecting advertising revenues from our fall programming and the result of our sports rights payments being concentrated in the first half of our fiscal year. Year-to-date, we have deployed $825 million of capital to repurchase approximately 90 million Class A shares and nearly 8 million Class B shares, and are on track to complete the $1 billion of share repurchases this fiscal year that we announced on our last call. Against our buyback authorization of $2 billion, we have net cumulative fleet repurchased over $1.42 billion, representing approximately 7% of our total shares outstanding since the launch of the buyback program in November 2019. From a balance sheet perspective, we ended the quarter with $5.77 billion in cash and $7.95 billion in debt. As we look to the final quarter of our fiscal year, we expect continued progress and affiliate revenue growth and fair advertising revenues to strongly outpace prior year, driven in large part by the strong rebound in local advertising sales, as well as the acquisition of Tubi. Well, this couple and growth in the quarter will be more than offset by our investments in the Tubi and FOX News Media digital platforms, as well as higher programming costs due to the return of normal sports and entertainment schedules. We expect to deliver full year revenues and EBITDA comfortably ahead of fiscal 2020, despite the challenges of COVID and the comparison to a Super Bowl need. And with that, I’ll now hand the call back to Joe.

Thank you, Steve. And I’d be happy to take questions from the investment community.

[Operator Instructions] We have a question from the line of Alexia Quadrani with J.P. Morgan. Please go ahead.

Yes. Really circling back to the decision to get out of Thursday Night Football a year earlier. I'm curious what kind of programming you plan to replace it with? And then more generally speaking, what other sports rights would make sense for you guys in terms of potentially adding to that portfolio?

Thanks, Alexia. Hope you're doing well. So we are – Thursday Night Football, when we entered into that agreement some years ago, we were focused on building that brand for the NFL and really sort of increasing its ratings and its production quality, bring it back to one home, if you remember, it was split amongst a couple of different networks, and I think we achieved all those goals. But having that, it was expensive and Sunday afternoon football is really the home of football frankly for America and for Fox. So having the – securing the NFC package at an appropriate price for us was our absolute focus. By releasing Thursday Night Football are early – a year early that we have to. We're going to achieve roughly a $350 million to $400 million EBITDA positive impact in that fiscal year, which we think is important. And then invest in the NFL rights going forward, so financially, it was absolutely the right decision, and we're proud of how we've been custodians of Thursday Night Football over the last few years.

And in terms of other sports rights, you might make sense for you guys to look at or are you very happy with the NFL and NTL and the other sports you already have, and there is nothing else?

No. Look, we're always keeping an open eye on sports rights and sports rights that become available. I think we look at everything, but we're very sort of financially disciplined with what we believe they're worth on our – certainly on our platforms and paying appropriate prices that are going to drive either our growth, whether it's from a subscription or retransmission point of view or an advertising point of view. But we continue to look at any significant sports rights that come available.

Thank you.

Operator, can we go to the next question, please?

We have a question from the line of Ben Swinburne with Morgan Stanley. Please go ahead.

Thanks. Good afternoon. I wanted to ask a couple of questions on Tubi sort of the longer-term strategy. I know you guys have owned it, I think for about a year, maybe a little less. On the programming side, Lachlan, how are you thinking about programming Tubi as it relates to content that Fox owns and produces sort of the way you've run the broadcast network over the years versus just trying to build a big audience that you can monetize through advertising and using third-party content. If you have a view on that yet, it'd be interested in. And then as you go to market in the upfront and think about even the $350 million guidance you've given, how do we think about how incremental that is? In other words, I guess there is an argument that maybe some of that money is just coming out of Fox broadcast without a one pocket into the other. Can you just talk a little bit about your conviction in driving incremental revenue into the company from Tubi over the course of the next year or so?

Sure. So thanks, Ben. Thanks for the question. So first of all on Tubi, the programming strategy at Tubi is entirely as we've discussed and this is a critical difference between Tubi and certainly other subscription video on-demand services and the hybrid advertising into a subscription video on-demand services that we see our competitors operating. And the Tubi is entirely focused on total viewing time. And the reason we're entirely focused on total viewing time is because that translates directly into revenue. So the more we can grow total viewing time and this is as opposed to purely users or and as far as service subscribers, the more we can grow total viewing time, we can translate that very directly into increased advertising revenues. And so, when we look at our programming strategy, we're not interested in spending billions of dollars as the others are on sort of driving subscriber basis with very expensive programming. What we're interested in doing is very efficiently scaling our programming to drive our total viewing time. And we can do this because of the technology, we can really target specific genres and specific cohorts of our viewers to drive their total viewing time, and hence drive revenue. So it directly correlates with it, so we've had a record total viewing time in the last months and it completely correlates with having driving record revenue. So that's a business model and that fits into the – sort of the efficiency of our programming strategy. To the second question, in terms of where we moving money from one pocket to the other, absolutely not. I don't know, well, I'm sure you did have the opportunity to watch the Tubi presentation at the new fronts just a few days ago. What Tubi allows for us and frankly for any advertiser that's also advertising at broadcast, it allows them to increase their reach dramatically. The advertisers are trying to reach new viewers and viewers that don't traditionally watch broadcast, they're younger, they're more diverse, they really need to go to Tubi to reach those audiences that can't reach them anywhere else. So what that allows us to do is really expand both the amount of the partnership, the scale of partnership with our current advertisers, but also find new advertisers that we haven't enjoyed our relationship with before.

Operator, you can go to the next question, please.

Our next question comes from the line of Jessica Reif Ehrlich with BofA Securities. Please go ahead.

Thank you. I have a question on sports betting, but just two small follow-ups, but it's from the previous questions. If you could say on Tubi like what the incremental investment will be in the coming year and on Thursday Night Football, will that effect your retrans, do you think over the next couple of years? And then for my question, it's on sports betting. Can you talk about the impact now on, I guess the owners are benefiting from advertising. Are you seeing any impact on ratings in markets where it's legal and what are the expectations down the road? There is a direct investment, but what are the ripple effects of sports betting? And if you can include your new acquisition of outset, you haven't said what you're paying or how big it is and so you'll integrate it? Thanks.

Thanks, Jessica. I lost track of how many questions it was. So if you could – if I forget any, please remind me, it's good to hear your voice. So first on Tubi and I think it was the further investment in Tubi. We're really focused on being very efficient, being very disciplined around an investment in Tubi, while at the same time not losing sight of the immense opportunities that the Tubi is. I think we've designed our programming strategy and our marketing strategy around that. So a lot of the investment you will see will be accommodation of continuing to assign the revenue and what would have been sort of profitability of Tubi back into growing the business and adding some modest for capital in addition to that. So it's not a tremendous sized investment when it comes to sort of the scale of a Fox, but we think it's appropriate, given the opportunity that Tubi presents us. On Thursday Night Football, I think you asked what the effect on retransmission would be, the logic behind being able to release Thursday Night Football, not to follow it in the new deal and indeed to release it a year early is that we don't think it gives us incremental retransmission revenue above what we already get for the premium NFL package in the country, which is Sunday afternoon NFC package. So due to that, we can really save the cost of the Thursday Night Football package and invest further in Sunday, retaining all of our potential retransmission revenue through Sunday football. On sports betting, there was a couple questions, but I think the impact of sports betting and on the ecosystem sports betting in every market where there is licensed operators, they are spending heavily which is a terrific benefit to our station groups. We think this will continue. It's a very competitive market and this won't ameliorate anytime soon. And all the more reason why we consider further investment in Outkick is a great example is sort of a leading operator in both sports news and critically in sports opinion. You haven't seen Outkick or listened to any of its podcasts or radio shows or been through its website. You should, it's really a unique and special voice. And I think the one that aligns with the Fox audience incredibly well. So we're very excited to bring that team to be a part of ours.

Next question, please.

The next question is from Robert Fishman with MoffettNathanson. Please go ahead.

Hi, good afternoon. I also have an NFL related follow-up question. So with Sunday NFL rights locked up, do you expect your relative negotiating position to actually improve in your next set of deals with both the distributors and your TV station affiliates, especially if some of your peers make their live NFL games available on their streaming platforms?

Yes, so we are very mindful of the exclusive value of live NFL on broadcast television. And we're very mindful of the value that that attributes to both our O&Os, and also to all of our highly valued affiliates. So we don't have a – on a streaming service behind a paywall where we would currently put a similar cast of our NFL games. And we have no plans currently to do so.

Go to the next question, please.

We have a question from the line of Doug Mitchelson with Credit Suisse. Please go ahead.

Thanks so much. So I just wanted continue on the NFL vein, Lachlan. Thank you for taking the question. There's been a lot of discussion about the digital flexibility, the NFL broadcast rights holders have earned under these new NFL contracts. And Comcast already indicated it will simulcast its Sunday night football games on Peacock. Do you have any concerns regarding the impact more NFL streaming by your competitors if not by you might have on pay-TV subscriber levels as a result of more NFL games being streamed, and you noted the ability to be flexible in your business model, given the rights that you have. So what's the fail-safe if you start to see more erosion than you might've liked in the pay-TV subscriber base. What does Fox do to monetize those rights and earn a return on that contract? That'd be helpful. Thank you so much.

Thanks, Doug. Yes, look, a huge part for us, and I can't speak for anyone else, but of our negotiations with the NFL in particular, because this is such a long-term deal was making sure we had the flexibility going forward to monetize these rights in different ways. And it's hard enough to think or to predict five years or six years out rather than sort of 12 years or 13 years out. And so we made sure we had every ounce of flexibility within our rights package to be able to evolve our business model and monetize these rights going forward. Having said that, today clearly the best monetization, the best opportunity to monetize the rights are through broadcast television, both with our owners and our affiliates. And that's really where our focus is.

Operator, we have time for one more question.

We have a question from the line of Kannan Venkat with Barclays. Please go ahead.

Thank you. So Lachlan, I guess, if you just step back and look at some of the strategic decisions you guys have made recently, which is walking away from Thursday night football and investing in Tubi and sports betting. Broadly, it almost seems like a pivot in the business model where you guys were the loss leaders in football in the mid-90s and one slice of football and investing in other areas, is that how we should think about the investment priorities going forward, which is potentially new areas become bigger priorities for investment. And legacy television broadly becomes a cash source to pivot your business model. And then broadly, you think about the broadcast business, football is of course important, but what role does it have in the broader ecosystem? I mean, it is structurally in decline with respect to pay-TV subscribers and the kind of role it used to play in the past with respect to reach is very different versus what it plays today. So if you could just expand on the portfolio on the legacy television side and what the strategic priorities are across your portfolio? Thanks.

Thank you very much. Look, I think our so-called legacy television businesses are all very healthy and we expect it to grow them significantly. But when you look at them from a point of view in terms of how we grow and how we – I think you used the word pivot, our business model going forward. You have to look at what they can offer in broader – with broader opportunities to monetize their existing content, right, and their existing genre of content. So if you look in the sports business, the sports business is really what's driving our wagering business, right, on our betting business. You're going to see us be really one of the major players, certainly from a media point of view in the sports wagering business in America, going forward, we're going to continue to exploit that marketplace and to grow in that marketplace. And that's really driven off the – our engagement with our audiences through our sports broadcasting business. We wouldn't have nearly the opportunity I believe in wagering, a stand-alone without coupling it with the FOX Sports and overall Fox brand and Fox audience. And this can be seen very clearly through our success with our FOX Bet Super 6. FOX Bet Super 6 in the last year, we grew very aggressively through marketing it across all of our platforms, FOX Sports, FOX Entertainment, FOX News. And we drove to over five million users. There was no other free-to-play game like that and at that scale in the United States and what that allows us to do with FOX Bet Super 6 obviously, is in the markets where we're licensed, drive that traffic or drive that sort of the widest part of that funnel into sports wagering and also the poker and casino businesses where they're licensed. So there's a tremendous opportunity there, but it's really because of our strength in our traditional sports broadcasting business. The same thing by the way is true at FOX News, we branded the FOX News business, FOX News Media, I think a couple of years ago. And that's really because you can't look at FOX News anymore as just a linear cable channel. The opportunities of FOX News to grow revenue beyond the impressive growth within cable is really through it's powerful website, it's podcasting, FOX Nation, new channels like FOX Weather. We're seeing a tremendous opportunities to expand its reach and the power of its brands.

At this point, we are out of time. But if you have any further questions, please give me or Dan Carey a call. Thank you once again for joining today's call.

Ladies and gentlemen, that does conclude our conference call for today. Thank you for using AT&T Executive Teleconference. You may now disconnect.