Good morning, and welcome to The New York Times Company's Fourth Quarter and Full Year 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Harlan Toplitzky, Executive Director of Investor Relations and Financial Planning & Analysis. Please, go ahead.

Thank you, and welcome to The New York Times Company's fourth quarter and full year 2018 earnings conference call. On the call today we have Mark Thompson, President and Chief Executive Officer; Roland Caputo, Executive Vice President and Chief Financial Officer and Meredith Kopit Levien, Executive Vice President and Chief Operating Officer. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call, and our actual results could differ materially. Some of the risks and uncertainties that could impact our business are included in our 2017 10-K. In addition, our presentation will include non-GAAP financial measures and we have provided reconciliations to the most comparable GAAP measures in our earnings press release which is available on our website at investors.nytco.com. With that, I will turn the call over to Mark Thompson.

Thanks, Harlan, and good morning everyone. Well, a strong fourth quarter kept a strong 2018 with The New York Times Company. Digital subscriptions grew more quickly than at any time since the months immediately following the 2016 election. Our strategy for digital advertising is paying off with exceptional year-over-year growth. Our smaller digital products are performing excellently. Indeed, we've made so much progress on our five-year goal of doubling digital revenue that we set ourselves an ambitious new target; I'll turn to that shortly. But first, let's look at the quarter in detail. One note first, Q4 2017 was a 14-week quarter. In our remarks this morning, we'll use the phrase like-for-like basis when comparing revenue in 2018 to our 2017 adjusted to account for that extra week. We don't make such an adjustment on the cost side. We added 265,000 new digital subscriptions in the quarter of which 172,000 were for our core digital news products, and the balance from Cooking and Crosswords. Although, the mid-term elections played a part in this strong showing, audience behavior in week-to-week subscription additions suggests that our present momentum is broad-based and far less reliant on the politics at the moment than the surge of two years ago. By the end of the quarter and the year, we had a total of 3.4 million digital subscriptions, and including print 4.3 million total subscriptions. On a like-for-like basis for the fourth quarter, estimated digital subscription revenue including Cooking and Crosswords grew 18% compared to 2017. On the same basis, total subscription revenue grew 5%. Now we've taken a different approach to digital advertising than many other news publishers. With a focus on large scale partnerships with the world's leading brands, a suite of creative services, and a relatively low exposure to open market programmatic.…

Thank you, Mark, and good morning everyone. As Mark said, this quarter represents a strong result for the company. As a reminder, fiscal 2017 included an extra week and therefore the fourth quarter of 2017 contained 14 weeks as opposed to 13 weeks in 2018. The earnings press release we distributed this morning reports revenue on both, a 14-week and estimated 13-week basis. Like Mark might comment on revenues today, we'll exclude the impact of the extra week. However, estimating the cost impact of this extra week is more difficult and therefore, all comparisons for expenses and profitability will be made versus the full 14-weeks of 2017 expense. Adjusted diluted earnings per share was $0.32 in the quarter, $0.06 below the prior year. We reported an adjusted operating profit of approximately $94 million in the fourth quarter which is lower compared with the same period in 2017 by approximately $12 million. Total subscription revenues increased 5% in the quarter with digital only subscription revenue growing 18% in the quarter to $105 million. On the print subscription side, revenues were down due to declines in the number of home delivery subscriptions, as well as a continued shift of subscribers moving to less frequent and therefore, less expensive delivery packages. Total daily circulation declined 9.6% in the quarter compared with the prior year while Sunday circulation declined 6.5%. Quarterly digital subscription ARPU declined approximately 3.5% compared to both, the prior year and the prior quarter, as the number of newly acquired subscribers on promotion was significantly larger than the number of existing subscribers whose promotional offers ended and graduated to full price. This downward pressure was magnified by the $1 per week promotional offer which was in market during all sales periods in the quarter. We expect that the more aggressive promotional…

[Operator Instructions] The first question comes from Alexia Quadrani with JPMorgan.

My first question is really on the impressive digital sub-growth in the quarter. Can you provide and maybe a bit more color on the drivers behind it? I guess you have a lot more data than we can see from out here. How much do you think is correlated with this sort of more intense promotional activity? How much do you think is sort of spiked around maybe news intensive events or how much is really just the overall strength in the product and the work you guys have been doing on the data analytical side?

Good Morning, Alexia, I think I'll let Meredith answer that.

I think it's a combination of things and it starts with and continues to be a very strong news cycle, albeit I think I think one now but that is not driven by a single story, and I think our journalists response to everything going on in the news continues to -- both, be and appear different and worth paying for. I think that's the first and probably the biggest reason. I think the news from The Dollar A Week as an introductory offer continues to be very good. We're seeing very positive results from that and we're through getting better and more precise about how we deploy it when we deploy it. It's also been a period of real experimentation and work on every aspect of the conversion funnel; we've done a lot of work in the second half of the year and it's really the end of their third and the fourth quarter. What I mean by that is everything about how we present and offer, from the messaging to the load time of the page, to the number of steps it takes somebody to get through the pay flow; we're saying on all of those things we've gotten a lot better but there is still more room to get better from there. I think we're also getting better at spending into strong moments new cycle and into high demand, those on direct response. And in our brand works, so we're able to spend more -- change the level of spend -- then mark places and do all of that quite efficiently.

And perhaps if I can just add one other point is; that sometime now we've also-- both from the data that we see and from other indicators come to believe that investigative breakthrough, stories which The Times breaks, which both in a sense, you know, you may well come to The Times to find but also I mean, that The Times is being talked about across the rest of media are also really important in driving the model. And one of the reasons that we've been investing so much on investigative journalism, we actually think it makes the distinctive pieces which only The Times have got, our work if you like that almost every bit of our marketing effort they are good for our brand and awareness of the brand, they're good for finding new users, they are also good for getting regular users to use more potentially convert the subscribers.

And I guess falling from that point, so I guess my takeaway is that the mid-term elections specifically which doesn't sound like a driver, it's not one specific event and there is -- I know you don't guide for digital subs going forward but there is nothing you would highlight saying well this was a particular benefit in Q4, so don't assume that will continue, that's my sort of read to [ph]. And then I just -- when I also ask about churn; I think historically you said it's been stable. I'm assuming that's the case now and I believe you started The Dollar A Week promotion back in August; so I can still need a few more months, at least to sort of see if we -- if the term begins to elevate when some of those promotions come off. Is that fair?

Let me have one more go at the mid-term, then we'll get Meredith to address churn and the Dollar A Week cohort. We had good mid-terms; we had a very good mid-terms, we saw good audiences, and we saw good conversion and good subscriber numbers through the elections. But in a way I think what we're saying is, I wouldn't over rotate on these events like the midterms now. I think we've shown for some time now almost going back to 2017 and me too, there are plenty of things we can do with our journalism which can move the dial as much as a kind of set-piece events. And I'm not sure this makes it any easier to model what our results are going to be but we're trying to generate our own momentum through our own efforts, more in journalism and that seems to be working well.

I think that's right I think we've also gotten better at the gearing of our access model around big events; so we opened up for a few days the meter around the mid-terms in an effort to drive registration and log in which was very successful and then we've now gone through a whole second half of the year where we also experiment with typing [ph] in key moments and I think that's going well in the US continue to test, more there. On the question of churn broadly, and then specifically on A Dollar A Week, I think churn has been for the last 2.5 and 3 years, very good story for The Times, and continues to be in the fourth quarter and it continues to be broadly, overall. I would say that most of the work we're doing on churn and the best work we're doing on churn is in engagement though actually at the point of someone subscribing, getting the tooling right on getting them to set up so that they engage and they're still -- we've still got a lot of room to get better there but that is starting to bear out and have an impact. On A Dollar A Week, we're actually almost 6 months in on the first domestic cohort; we've started that as an introductory offer in late August. And if you control for news event which we always do when we go back and look at our data, they are -- that cohort is retaining sort of right alongside all of our cohorts at 50% off, so we're broadly optimistic about that. And you can actually go back even a little further, I forget the month but I think it was the beginning of the second quarter, it might have even been the end of the first quarter when we launched A Dollar A Week outside the United States much more aggressively, and so we're now like 9 months -- 10 months into those subscriptions and I would say the same thing there. I'll also tell you because back to my answer sort of broadly on retention that we're incredibly focused cohort-by-cohort on what it's going to take to get people to engage. One of the interesting things about the folks coming in on A Dollar A Week is many of them are coming to us and going through their pay flow on mobile, and therefore the expectation that they're going to engage on mobile really matters. So we're doing a lot to stimulate engagement in a wrap and on member broadly [ph].

The next question comes from John [ph] with Evercore.

Thanks a lot for the question. I just want to ask two on your new long-term subscriber target. So the $10 million number sort of implies an acceleration from what we've been seeing over the last couple of years even. I'm just wondering if you've contemplated maybe the changes to the pay wall and how you're going to get to that $10 million number. And then the second one is, where the contribution from the -- from international subscribers that is long-term. Where is the subscriber mix going geographically? and where is it going, if possible?

I'll start on the second question and then I'll answer the first. We were now -- I think 16% of our subscribers are coming from outside The United States which is a bit of an uptick, and we saw international subscriptions were a little bit faster, broadly this year I think actually across two years. Then in prior periods, and we still believe that there is a very big opportunity for the New York Times to be one of the dominant, one of a handful of dominant global news providers, and we see a giant audience for who were relevant and we're doing quite a bit of work to continue to be even more relevant outside the United States. That said, I think as we think about $10 million, we shouldn't under-think the domestic opportunity. I think we really are beginning to get our hands on the gears of our subscription model here in The United States and around the world, but sort of first year in the United States. So I think you're going to see us continue to push very hard, both, domestically and internationally and I think the opportunity domestically is quite large. And that brings me I think to your first question which is how are we thinking about the access model? And if you go back to the launch pay model in 2011, we have broadly had same-ish meter model, it's been at different levels of access but it's been probably the same, we had 20 stories, you get 10 stories, you get stores. And then you have to buy a subscription if you want more in a given month. In the second half of last year and particularly, in the fourth quarter, we began to launch a series of sort of increasingly aggressive and scaled tests, first outside the United States, now inside the United States, where we are testing essentially getting registration and log-in in exchange for more and deeper access to The New York Times, and overtime, we will test getting registration and law again in exchange for different kinds of features and the opportunity, to use new aspects of product in New York Times. And I would say we're still quite early in those tests in December, we launched the sweepings registration and log-in for access -- more access tests in Canada and Australia and we launched a similar version of that test to a portion of the U.S. population in January. So I would say it's still very early, you'll continue to hear us talk about this but the early results are relatively promising.

But I want to go back to the -- right of the start of your question, John. You're quite right. I mean, with our digital service model is growing very quickly now. But if we carry on at the current rate, we will not hit 10 million buyers by 2025. Hitting the target on a further acceleration in the model, and you've heard us say, we think that's about putting more money and giving more support to our journalism. It's about improving the engagement and the product experienced about optimizing the pay model and the customer journey, and it's getting smarter and using more resources to effectively market, both brand marketing all the way down to direct conversion marketing. So this is a plan for further acceleration with not excessive but we think some additional resources going into make sure your plan works.

And I'll add to that. Mark talked about the investment in journalism and we continue to do that, and I think the differentiation of that journalism will continue to be the most important aspect of the model. Beyond that I think the biggest opportunity we have certainly in the next couple of years and potentially for this whole period that we're talking about over the next 6 years is to make the product experience itself a better engine of getting people to form a habit and to pay and to stay as subscribers. And when I talk about the product experience itself, I'm talking about the customer journey which I've just described; ways we're beginning to make it much more deliberate. I also mean the user experience, the features and functionality that enabled you to form a habit and engage with the journalism and the programming in association with those features and functionality. And I would say we have a fair amount of work to do there to get that engine. I mean, frankly, a lot of opportunity to get that engine working far, far better to get a very large audience of people who already come to us to engage much more deeply.

The next question comes from Craig Huber was Huber Research Partners

In the start, you mentioned early on, if I heard you right about the price increase for the digital-only subs. Can you maybe talk about the magnitude of that and the timing did you say was the first quarter?

I think what Mark said in his remarks was that we're going to begin this year and the early part of this year to test what is the right approach to a price rise. I think it's worth noting that we have not raised prices in digital in 7.5 years since the launch of the model, and that we -- as Mark said, we believe there is an opportunity to do so, particularly as we continue to invest in the journalism and to invest in the product itself, and -- our products and our journalism is playing a bigger role in people's lives, so you can expect to see us invest and begin to test their -- and sort of test our way into what is the right formula to continue to scale subscriptions at the rate that we need to with a higher price. But we do think -- look, I think it's worth saying, we know from our experience with print that there are a number of people who are willing to pay a lot for The New York Times, and we also know from our experience with print that we can continue to add value to the product with investment in journalism and product experience to make it worth more to people, and we intend to do work on both sides of that.

I'm sorry, is there a range of what you're thinking about to raise price, we're talking like maybe 10%...

I mean to be really straight forward about it. One of the things we will be testing is the level of price rise and how to apply them. So the answer is, once we've done some testing, we'll have more say -- both to our subscribers and to you but nothing yet.

And my second question is, you always had very impressive digital ad revenue growth. For the year, roughly, how much of your digital ad revenue do you think comes from paying subscribers versus people that come on the site for free, what's the sort of break down there?

I think that's a great question and I would broadly say that this was the year. I can't give you a very sharp answer to it but I think thematically, this was the year that we proved that the key to being a successful growing digital ad business was being a subscription business first, and the sort of high octane gas in the tank of advertising is the same high octane gas in the tank of our subscription business which has deeply engaged users who feel real affinity and emotional connections with the brand, and who comes back day after day and form a habit at the time. That said, we guide -- depending on what month you look somewhere between 130 million and 150 million people who use us, and only 4.3 million of them pay us, and so we like having a multi-revenue stream business because we're able to monetize all of those who are not yet subscribers.

So we think our pay model is growing faster than colleagues and competitors who have got harder pay walls because of the porosity of our model allows lots of people to sample the product. The biggest value of letting people look at The Times for free, the biggest single advantages; they get used to the journalism and many of them get attracted by the journalism they engage, and some of them ultimately become subscribers. But it's true to say that a very-- we don't break out the numbers for digital advertising but it's true that our subscribers also turn a large number of the pages of The Times and therefore, they account for a lot of the digital advertising revenue, it's also kind of put by subscribers because of that high level of engagement. So a very significant part of our total digital revenue across advertising, as well as subscriptions comes from subscribers but that doesn't mean that we should simply go for a super hard pay wall, both for mission reasons and for the long-term health of our marketing funnel. We believe it makes sense to have a pretty porous model.

My last question is, if I could ask marketing costs. Can you give us a sense on a percentage basis maybe how much you think you know might be out for this year or maybe as differently in the first quarter? I think you talked about cost being up roughly 10%; if you took out marketing costs increase how much of that the overall number be up?

I'm not going to give you an exact number but in the first quarter, it's a good percentage of the increase is made up of marketing costs but really, I think the way you think about it; you've got the commercial printing piece which is comping on basically zero last year, so that's a large part of the increase. But the combination of marketing, commercial printing product and news together is explaining about 90% of the increase; a large chunk of that is commercial printing. So basically the message here is the thing that we believe are going to drive our subscription business growth and are going to benefit the long-term profitability of the company. Those are the things we're spending money on.

The next question comes from Doug Arthur with Huber Research Partners

I'd just like to follow-up on that. I mean, when you put out a goal of 10 million subs down the road, I mean killing -- should we expect this marketing investment to continue ad infinitum or in terms of the step up, probably not a 50 % rate or do you envision some leveling out here in the next four or six? So, that's question one.

Yes, I think that's a good and an important question. I don't think you should expect to see marketing costs go up in a linear way as we scale subscriptions. I think marketing has played a very important role and will continue to play a very important role in the model over the last couple of years. Two things to say about that, one; we are spending more today than we have probably the any other point certainly in last few years more but much more of that money is now going to upper funnel or brand work, and I think you'll see us continue to do that, that pays back over a longer time horizon, that is work that you do I think to build relationships and build engagement over the long haul. I think as time goes on and as we invest in the journalism, the journalism itself begins to play some of that role, I think the best example we have of that today is The Daily where we're able to sort of explain the story of the story, all that goes into it, that is also what we're doing with a lot of our increased marketing spend and the more that the journalism itself can do that in products like The Daily, The Weekly, in the cues [ph] that we put into the product itself; I think the more efficient we can be in our marketing spend. I think the second thing to say about that, Mark and I have now both talked about -- and Roland just mentioned it putting more investment into the product itself, as the product itself by which I mean the customer journey, the user experience, the programming that goes into that as that becomes a better engine of getting people to form a habit, pay and stay. I think overtime there is less pressure on marketing and less of a need to sort of pay to get people to come to us. Now just going back to that figure, 130 million people already come to us, they are already in front of us only 4.3 million of them pay us; so there is a very big opportunity right in front of us where we don't have to go out and create an audience.

This is I think a really important point, Doug, that success there -- investment in making a fundamentally more engaging stickier product is in a sense one chunk of cost going in which has a fundamental opportunity to improve the coefficients of engagement and conversion in a way which should make the entire -- as it were, the entire curve steeper. And so unlike, for example, kind of -- like a direct marketing expense which is a continuous expense and you never get out of that generation, this is an attempt to make a fundamental change in that kind of geometry, and the coefficients of how well the product engages and converts people description.

And then, in terms -- again, going back to the $10 million, I mean the Cooking and Crosswords, obviously not a big revenue contributor but $93,000 sub-growth in Q4 which is a pretty big number. What I would assume in the $10 million figure, you have other products that you're testing or looking at that may come into play here down the road?

Sure. Let me address that sort of broadly and specifically, and I'll be specific first. We are very pleased with formats of both, Cooking which is a relatively -- I'm sorry, Crosswords which is a relatively mature products, I think we're 4.5 years into the pay model on Crosswords. And on Cooking, and I would say we see real running room in both of those products. In Cooking, I think the fourth quarter was the best quarter we've had so far on cooking, so better than when we launched the pay model, I think that was our second best quarter ever on Crosswords. And I would say on Crosswords, lookout for new games, we've got a new game out in the market called Spelling Bee, now it's sort of games, puzzles and games for curious intelligent people, we've got a new one coming out that will test in the first quarter; and we're seeing real momentum there and see no reason why that growth won't continue. On Cooking, I would say we are -- we're just getting started, I think that product -- and the product itself has a lot of opportunity to play a bigger role in people's lives, if you haven't seen it yet I would point you to -- we just launched a commercial for Cooking, first served mid-funnel and upper funnel brand, effort around Cooking and you get a sense of how much running room that product has by watching that. I think what you're really asking about is do we intend to keep putting more and new products into the market? The answer is, yes. We will get a beta out on our parenting exploration which we launched last year. We'll get a beta into the market in the first half of this year there, and we have a number of other irons in the fire in terms of products around which people have daily habits, where there is -- brands concurrency with The New York Times and the time has permission to play in the States and where there is real user need. All of that said, I think your question is more broadly about $10 million, and I would not underestimate the power of our journalism, and particularly, our digital products around that journalism to play an increasingly large role in people's lives; in other words, just the market for people paying domestically and internationally, for our core news subscription we think it's very large, and we think we've only just begun to get it all the way to our product. Our core news product can play wrong people's lives.

The next question comes from Kannan Venkateshwar with Barclays.

I have a couple; first is, I think there was a test in December or actually there was a promotion run for $2 a week for some time and obviously he was earning $1 per week kind of a promotion. If you can just help us understand the compare and contrast between those two promotions and how they tend to scale? And how the elasticity is that's the first one. And maybe I'll follow-up after that.

I think for a lot of the fourth quarter and potentially, some -- I'm trying to remember some of the third quarter, we were using our non-sale periods, $2 a week and there it's a lot of tweaking around sort of the language of how you describe what is ultimately the equivalent of 50%. I mean $2 week is faring well, we do tend to drive more conversion in our sale periods when we launched A Dollar A Week, we actually launched it for a sustained period of time in the third quarter, and that we dropped back in the fourth quarter to only running it in our sales periods which roughly correlate to the last 10 days of the month. If you're following occasionally, we do sales because something is going on in the world with so little we'll do it a one-day sale. But I think that's probably as much as I can say that would be useful to you about that role [indiscernible].

And I'd just like to add when we have The Dollar A Week promotion in market, the tape rate is such or that the increment in the tape rate is such that the amount of new subscription we get per dollar of media spend makes it such that the return on this acquisition investment is in excess of our hurdle rate, and we're able to bring many more subscribers on to the platform per dollars. But we're looking at looking at lifetime value and we're tracking the retention and as we mentioned before, the retention thus far up about 2 to 5 months.

The second quarter is more mound the Investment Guide and then I just wanted to understand, I mean as we go through this year, is there a pick-up over the course of this year in terms of marketing and then you normalizes at some point, how should we think about the cadence of marketing spend and how that evolves overtime?

Right. So, I mean we guide quarter-to-quarter, so I can't give you any guidance out for the year but the investment -- the kind of the components of the investment as we've mentioned before it's the marketing, it's investing in journalism, it's investing in our product, and how -- so that the engagement with our readers increases and the ratio of those items will change overtime, so you've seen us heavy on marketing the last few years and we expect that to continue through quarter one. Eventually those ratios will change and as the product develops we don't believe we'll have to add as much marketing spend to get as much benefit from the other aspects of that kind of that circle that trilogy of investment. So we do not expect the marketing spend to continue to increase clearly?

Yes. I think without giving any precise proportions for them, rather we decide there is another fairly obvious point which is that marketing spend. He commenced relatively quickly, the business of harming new terms, the new engineer's takes a little bit more time. So there is a sort of natural phasing of how this will appear.

And lastly Mark, from your perspective; when you think about the pricing strategy obviously, there is -- you've had a lot of success with A Dollar A Week kind of promotions, and at the same time you're testing a higher price point. So longer term when you think about the product, how should we think about the pricing structure? Will you change…

I think we should think of us trying to exploit a demand curve as effectively as we can to use and it relatively low introductory prices to attract people to become customers. And then I think, crucially, never being exploited it but being at work, in a relationship with engaged users where we can reflect rising costs with rising prices. But also we get better and better at bundling additional services; we talked about Cooking and Crosswords already to overtime move customers to richer packages and higher price points. So what we're trying to do; I mean clearly with mainly -- we're significantly focused on scaling the number of customers but we're also at the same time trying to figure out intelligent ways of maximizing aggregate yields by thinking hard even as we're trying to grow the scale of customers about how to make sure that reasonably quickly we're also coming up with answers on yield. So as I said in my remarks, we're already focused on margin, especially medium and long-term margin, and looking hard at how to make sure that we're using and have available to us leavers like price and bundling to make sure that we can maximize yield on the model, as well as the simple scale of a customer's.

The question comes from Vasily Karasyov with Cannonball Research.

I wanted to ask you a question first about The Daily [indiscernible], it may be an underappreciated part of the business there; can you give us an idea about what the usage base is? How is it growing? And how far you think it can grow? And then how is the monetization? What is the monetization model here? And how much it's contributing to the digital advertising growth?

First thing to say is, I think it was the most downloaded podcast in America last year; so it is still -- it has a very strong audience and that audience is still growing. And I think the product keeps getting better, we keep investing in the team, making the product -- I think the product is showing that it's able to move across a range of topics and I think you may see us do more and more with it. As to audience, I think we're now well over a 1 million and I think close to 2 million daily listeners, my favorite thing to say about that is there are more daily listeners than the weekday paper ever had subscribers, and it's very, very long life; so I think that's a milestone. That character of who is listening to The Daily is also great for the times in terms of the brand reaching into new audiences. I think Mark mentioned this already but three quarters the audience is under 40, and the audience is disproportionately female so more women than mentioned; so all of that is about sort of bringing new audiences to The Times. On the economics, the daily is a now scaling and very successful ad business, we're essentially sold out all the time, as it grows we can charge a higher CPM for it and we can actually just large more because there is more audience to it and we now have a good track record of beginning to build programs around the dailies; so you'll see us continue to grow the daily as part of our ad business. And I would say and in the ad market generally, audio and high-quality podcasting specifically is of top interest. The last thing I'll say which I…

I'm sorry for the TV; I mean -- I think we showed with The Daily that we could move into an area podcasting and really breakthrough. And we haven't talked much about The Weekly because we've had so much talk about this morning, it's a big deal, we've seen video, it's very exciting, it arrives in June; and again, who knows what -- if that works, if that is a breakthrough as well what we could do in the TV field as well.

That's very interesting. Can you please -- I think this is the first time you mentioned the economic impact of The Weekly, you said it's a cash flow positive right away in the prepared remarks, if I understood you correctly. Would you mind sharing more details how it works? Is it a straight line?

I noticed that was small but it was commissioned by FX and Hulu [ph]. So a cable and digital operator FX and Hulu [ph] over the top streaming service; and the commission and other rights associated with the show means already there is a margin in Series One, we're not going to say how much but it's already -- this is not required as it were risk investments in the times it's already a margin of that activity. Clearly, it -- the series, subsequent series also depends on the success of the show with audiences and with those who have commissioned it but it's an example and we actually have a surprising number of examples of big innovations that we've managed to engineer in a way which doesn't require substantial risk money.

The next question is a follow-up from Craig Huber with Huber Research Partners.

Your sale leaseback that comes up in the second half of this year, we can get out of those 21.04 [ph]; what is the exact date, it hasn't been clear to me for a while what the exact date is when you could potentially get the question…

Yes, that's going to close in Q4, Craig. I don't have an exact date for you but it will be Q4.

And then, is the intention to the extent you could talk about it publicly just to hang on to those 21 floors or sell them off?

We don't have a plan to do anything with those floors as of yet, other than hold them.

And then my last question is on the new $10 million target. How are you guys thinking about the news-only product as a percentage of the $10 million versus these smaller products; Cooking and Crosswords, and other ones you're going to launch? By the time if you get to that number, are you still thinking roughly say three quarters of that if it's news-only?

I'm sorry, Craig, we're not going to give you any kind of guidance on this. It's clearly going to be a very, very large part of the total. But the smaller products, bundle packages or indeed our great print product are also all going to form part of that $10 million plus. Just to say, we think it was a milestone, not a ceiling of what we can achieve with the model.

This concludes our question-and-answer session. I would like to turn the conference back over to Harlan Toplitzky for any closing remarks.

Thank you for joining us this morning. We look forward to talking to you again next quarter.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.