Ladies and gentlemen, thank you for standing by and welcome to the Discovery Incorporated Third Quarter 2021 Earnings Conference Call. At this time, all lines are in a listen-only-mode. After the conclusion of the speaker’s presentation, there will be a question-and-answer session. Also, please be advised that today's conference is being recorded. I would now like to hand the conference over to Mr. Andrew Slabin, Executive Vice President, Global Investor strategy. Sir, you may begin.

Good morning, everyone and welcome to Discovery 's Q3 earnings call. With me today is David Zaslav, our President and Chief Executive Officer. Gunnar Wiedenfels, our CFO, and JB Perrette, President and CEO of Discovery Streaming International. Before we start, I'd like to remind you that today's conference call will include forward-looking statements that we make pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include comments regarding the Company's future business plans, prospects, and financial performance, as well as statements concerning the expected timing, completion, and effects of the previously announced transaction between the Company and AT&T relating to the WarnerMedia business. These statements are made based on management's current knowledge and assumptions about future events and about risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, the Company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see our Form 10-K for the year end in December 31, 2020 and our assessment filings made with the U.S. Securities and Exchange Commission. And with that, I'd like to turn the call over to David.

Good morning, everyone, and thank you all for joining us. This continues to be an exciting and busy time here at Discovery across a range of business initiatives and strategic planning for the next year and the years ahead. I'm very pleased with our focus, performance, and strong operating discipline as we simultaneously ramp up our integration planning, strategic reviews, and approach ahead of the WarnerMedia merger. We are increasingly enthused about the transformative opportunity ahead for our bringing together these complimentary assets, talented creative leaders, and employees all around the globe. This morning, I will provide some brief commentary on Q3 operating performance and update you on the progress we are making as we work toward the close of our transaction and integration of the businesses. Gunnar will then take you through additional puts and takes on the quarter. Very briefly on Q3, it was a solid quarter all around. Subscriber growth for our direct-to-consumer platforms picked up nicely post summer. And we added a healthy 3 million paying subscribers around the globe, reaching a total of 20 million subscribers. And we've seen continued growth thus far in Q4. We were able to deliver this growth as well as driving double-digit growth in both advertising and distribution revenues while converting a healthy amount of OIBDA to free cash flow. This positions us nicely above our guidance of at least 50% conversion this year. And we see free cash flow is tracking to exceed $2.1 billion for the full year. And that after funding very significant investments in our Discovery+ rollout. Additionally, and importantly, we have had the opportunity to refine some of our transaction leverage assumptions after examining WarnerMedia's draft carve out financials. Though we took a conservative approach initially, while modeling the proforma transactions. We now expect our…

Thank you, David. Good morning, everyone, and thank you for joining us today. Reiterating David 's comments, I'm pleased with what the Discovery team has achieved since the Discovery+ Analyst Day not even a year ago. Over that time, we have added 15 million paying direct-to-consumer subscribers globally, finishing the third quarter with 20 million paying BBC subscribers. Since the start of our Discovery+ journey, we have launched an over 25 new markets, notably the U.S. and the UK. And most recently Canada and the Philippines. With Brazil to come over the next few weeks. At the same time, we have continued to drive growth in markets like Poland, the Nordics, Italy, and India, where we doubled down on our direct-to-consumer efforts with a renewed and expanded content offering. I know our next-generation revenues finished the third quarter with $425 million for the quarter or a $1.7 billion annualized run rate with global D2C ARPU of approximately $5 and $7 blended Discovery+ ARPU in the U.S. Again, supported by our over $10 ARPU for the Discovery+ Ad Lite product, which continues to monetize very well. Investment losses for the quarter were in the low $200-million range, slightly better than our guidance from last quarter. And we expect investment losses more or less in that range in the fourth quarter as well. As always, we maintained a disciplined approach with respect to investing in direct-to-consumer initiatives. As both David and I have noted over the last few months, it is through this lens that we view the opportunity ahead, both leading up to the marker and beyond. We are very focused on nourishing our existing subscriber base with an increasing content offering and new product features. At the same time, you should expect us to be guided by a rigorous analysis…

Thank you, sir. And we will now begin the question-and-answer session. Your first question is from the line of Doug Mitchelson from Credit Suisse. Your line is now open.

Doug?

Mr. Doug Mitchelson, your line --

Okay.

-- is open.

He only responds when he is addressed as Mr. Doug Mitchelson. Okay. Sorry, Doug.

A hundred I still can't figure out the mute button. Look, David, I appreciate the update on the merger and the lower debt leverage. Can you talk about the content vision for the combined Company and how that's evolving? I guess it’s a three-part question, David. The first is Warner Brothers investing enough now in content under AT&T while they're focused on the merger. How are you thinking about how much content spend should be to women in global streaming versus how much the companies are spending today? And do you have visibility on what Warner's making that's going to be coming out in late '22 and '23 and '24 since movie, in particular, is a 2 or 3, 3-year cycle? Any thoughts on that would be helpful. Thank you.

Thanks Doug. First, this is something John Stankey and I talked about us. We created this vision together of this Company being what we believe is the best media Company with the greatest and most comprehensive content offering. And as part of that, we're spending more money on content and leaning in. And WarnerMedia is spending more money on content and leaning in. We both committed to do that to keep both of our ecosystems nourished and strong and growing. So, when the deal -- when and if the deal gets approved, then we come together, we'll come together with strength. And you see that with on the Warner side where we're cheering them on with the success of Dune around the world with Ann and Toby on that side and Casey Bloys having an incredible run at HBO with Succession, Light Lotus, Hacks, Mare of Easttown. It's just if you look at the culture and the impact of that content, together with the extraordinary library they have, us leaning in on our side with more original content. And so, for us, we're also spending a lot more on the international side to get ready. We think that's a strategic advantage. And when you look at the content, we think in terms of the demographics that we will appeal broadly to every demo. I mentioned this, but it's very strong with women. That's a particular strength of Discovery where we're during many quarters with a leading media Company in America for women. Together with length of view of women watching our channels. Whether it's Food or HG, or Oprah, or ID, and TLC and that's continuing. In addition, we look around the world, it's not just local content, but we're the leader in sports in Europe. They have sports in…

Doug, just one point I would add obviously, so we scrutinize of each other's investment plans as part of the deal discussions. And as we said before, all the financial guidance that we've given around the deal is always assuming a pretty significant step-up in content investments over the coming years.

Great. Thank you, both.

Your next question is from the line of John Hodulik from UBS, your line is now open.

Hey, guys. Thanks. A couple of quick questions on advertising. Obviously, a lot of sort of trend going into the fourth quarter, you got the step-up from the upfront, but potentially some slowdowns in supply chain issues. Dave, is there any way that you guys could sort of characterize what you see going forward on that side and maybe breakout what you're seeing in terms of the linear business versus the DTC business. Thanks.

Sure will. I will just start with this is the most successful upfront that I've seen in my career. I think from an industry perspective, it's up 20. And it was very materially bigger upfront for us because of Premier and because of the length of view and the certain advertisers wanting to be aligned with the brands that we have and the characters that we have. And so I think it's a big, big helper to us that we had a very strong upfront. There are supply chain issues. There are putt level issues., but we're still seeing that there will be material growth in advertising. And we can't predict what's going to happen in the future. But as I've said before, I saw a lot of people in the mid-90s saying that it's the end of broadcast television. It may be a transition away from a lot of the younger demo being on there. But we see huge numbers and we're not getting credit for it. But I think one of the reasons why the ad market was up so much for us is the advertisers know there's massive audience over 55 watching food, watching HG, watching Discovery, watching ID. And they get those. Right now, they get them for free. We talked about in the upfront number of us in the industry independently, we're out there trying to get credit for that. But I think that the linear platform is here for quite a long time. And there'll be ups and downs on advertising. But advertisers, they find it very effective to be in linear video, much more effective than others. And then we have the complemented Discovery+, which is just a huge driver for us in terms of a demo complements and attractiveness. Now, Gunnar?

It's fine. I don't really have a lot to add to that, David. We're feeling very, very good about our position, the upfront, the continued contributions from D2C. But I did want to point out a little less visibility and for known regions. But we'll be growing very healthily in the fourth quarter, I believe, from today's perspective.

Great. Thanks, guys.

Your next question is from the line of Jessica Reif Ehrlich from Bank of America. Your line is now open.

Hi. Thanks. I have 2 questions. On the integration on -- I appreciate all the comments you did make. What is the most challenging area and 1 area of opportunity, and you've actually gone through it at Discovery already in waves But on your technology stack, on your tech stack, can you talk about you transitioned off of the Major League Baseball -- Stemtech, off of Stemtech created your own. So as you look at combining with HBO Max, but what are the challenges and what are the ultimate benefits and cost savings? And then, second question, David, you said in your prepared remarks that you can make acquisitions without asset sales. I'm just wondering what pieces do you think you're missing in the combined Company?

Okay. Let me start by saying, look, I don't think we're missing anything. And the first thing we're going to do is look to drive all the tremendous assets and the differentiated IP and the great library and local content that we have. Pull it all together and go to market. We think we have something quite strong. I'm just making the point that there will -- given that we are going to be delivering quicker, given the fact that we're -- we will be much lower levered than expected. That over time, as others are struggling that there will be an opportunity for us to look at IP and to see where we need more help if we need more help. On the integration side, we're really lucky. We got two big tenpoles here: 1. Is Gunnar will be the CFO of this Company. He did -- he's done an exceptional job. He led the initiative with Scripps where we said we'd be less than 3.5 times levered two years later and we did it in less than a year. And we said we delivered $350 million and we delivered over a billion. And all of that was just cost not revenue synergy. He came up with these targets and is quite confident in those targets. And so, Gunnar will be kind of the lead horse here. He'll talk to it. We have a very experienced team here. Bruce Campbell, and JB, and Adrian and I have been together for 25 years. We're looking forward to bringing in some incredibly talented people at Warner. But when we acquired Universal, JB was the one for Bob Wright and for Jeff Immelt that ran the integration of that entire transaction, which was cable, movies, theme parks with over a 146 work teams and work groups and did a magnificent job on that. And so, we're fully deployed. We got with -- there's a lot that we can't do now, but Gunnar, why don't I pass it off to you and JB?

Yeah, and I'll let JB comment on the tech part of your question, Jessica, but again, I mean, from the perspective of challenges, again, as I have -- as I've been saying from the very beginning, we've taken a conservative approach to this and we're very well aware of the size of the checks that were riding here for and this combination. And we have been careful with our assumptions. So in all the work that we've done since gives me more, more confidence in our ability to deliver or against this . As David said, and as I said earlier in the prepared remarks, doing more work now, having transparency into albeit draft, carve out financials for the WarnerMedia car park group. As I said, the cash payment is going to be a significantly lower one from today's perspective, that gives us a better starting point from a leverage perspective. And as we said earlier, this sort of below 4.5 times leverage that we're seeing right now is to a large extent driven by working capital adjustments, but to some extent it's also driven by our current performance, both for the P&L and the free cash flow being above what we, what we assumed in our conservative agency model that we based our first communication on. So, again, it's early still. We obviously still can only do so much until we have regulatory clearance. But as we said, the team is up and running. Simon Robinson, our Chief Transformation Officer and his team fully redirected at this now. So that the ground running. And I think we're in very good shape. You are pointing out obviously one of the key questions here with the tech platforms. JB, you want -- why don't you give a perspective on how we're looking at that.

Yes , it's obviously a big opportunity for us. We look at it as one where we're undergoing right now, essentially an audit of both platforms. And I don't think necessarily the decision as monolithic one. We look at these as multiple different modules that make up all the different components of both their and our tech platforms. And we have a lot of experience, as you mentioned, in terms of the effort and the work and the discipline required in re-platforming either one to the other -- in one direction or the other. That decision we haven't made yet, but we're undergoing obviously, a significant diligence process to underscore which is the best in class on both. And it may be a little bit of a combination of those depending on certain modules in the platform that we may apply. And so we think it's actually a great opportunity, because Rich and Jason and the team on their side have obviously spent a lot of time and are investing a lot in upgrading their tech platform as we speak. We've obviously spent a lot of time and a lot of money doing the same over the course of the last 12 to 18 months. And as the 2 groups come together, we will have essentially a choice of a what we think will be an incredibly attractive kind of tech buffet that we will look to make the best of both to decide how we move into a common platform going forward.

And, Jessica, maybe just 1 -- I just want to clarify one thing, Jessica, because if I understand your question correctly, you were referring to acquisitions. That's nothing that we said in our prepared remarks. And just to clarify, we're not anticipating or planning for any acquisitions at this point,

David was really clear. It just gives you opportunity. And but just maybe, I just wanted to follow-up on the -- does it take a lot -- you've gone through this as you said already, with Stemtech, can you just talk a little bit or give us any color on what the cost savings will be from combining and what the benefit are from having one platform?

Well, there will be meaningful cost savings from coming combining into one platform. I think there also will be meaningful consumer benefits from combining into one platform. And I think the other thing to keep in mind is yes, part of what in David's comments about us being more disciplined and tactical at this stage of phasing the further rollouts of Discovery+, for example, is also a view towards -- we may be able to more quickly in markets where we may not have launched Discovery+, to be able to quickly fold -- more quickly fold the content offering into a joint platform at that stage versus having to re-platform 2 existing platforms in a market into 1. And so I think speed to market will be a variant of both -- Where we have and haven't launched. Number 1 and number 2, while we -- the final decisions on exactly which parts of the tech platform we migrate to will influence how long it takes us to get there. But remember that there may be two phases to this, where there may be an initial phase, which allows for more of a quick bundling of services. And a second phase, which eventually allows for, obviously, a common service on one tech platform. That's the timeline and evolution certainly , that we'll talk more in detail as soon as we can give you more color.

But maybe if I can add one thing, Jessica. What we said when we first announced this deal was remember there's roughly $6 billion in technology and marketing spent between the two platforms. We're assuming growth. We brought together two companies with significant expansion plans. A lot of that spends is, by its nature, a fixed cost relatively independent of the subscriber number. Obviously, there's a streaming-related cost that's there, but a lot of it is fixed. And so, there's a huge opportunity to completely to duplicate that spend base. And to JB 's point of multiple waves, especially on the marketing side, I have no doubt that we will, out of the gate, even in the first phase before fully aligning tech platforms will be able to get a lot of leverage out of the combined marketing spend.

Thank you so much.

Your next question is from the line of Alexia Quadrani from JPMorgan. Your line is now open.

Just a couple of questions if I can. How do you think about growing sort of local content following the success you've seen by others with that strategy? And then secondly, really on the new side, is it better to have sort of standalone new streaming service in your opinion, or combined it with entertainment streaming?

Thanks, Alexia. One of the real advantages of Discovery is for 20 years, we've been in-market with local teams selling locally, producing local content throughout Latin America, throughout Europe. In Europe, we expanded into free-to-air in a number of markets where we're the equivalent of NBC or CBS. In some markets, we're the equivalent of like NBC and CBS combined. In Northern Europe and Poland, we're quite big with number free-to-air channels in Italy and Germany. And we have a library that's meaningful in each of those markets. And we have a lot of data on what people are watching. We have a good sense of what kind of content they're looking at on the direct-to-consumer platforms because we've been at it for a long time. We also have sports in Europe. And we've tried a lot of things, some haven't worked out as well as we'd expect. And that's a good thing because we've learned that sometimes packaging the sports independently doesn't work as well as packaging it more broadly. Number of sports together, reduces the Churn significantly makes the appeal higher. When you put sports together, with entertainment together with non-fiction, we came out with the Olympics. We had a million-plus sign-ups for the Olympics. And so, we continue to learn. That's a good thing. We're continuing to invest, learn, and grow. That's what John, and Jason, and Ann e, and the team is continuing to do on a parallel basis independently. But as we come together, we'll all be smarter. You look at what people thought about windowing of just as a student of this and the meetings I'm having, what's the right window in strategy? What works best for direct-to-consumer product? Is it better to have to build up a movie in the theater and then…

Thank you very much.

Your next question is from the line of Kutgun Maral from RBC Capital Markets. Your line is now open.

Good morning and thanks for taking my questions. I wanted to ask about DTC investments for standalone Discovery and then drill in a bit on the deleveraging comments. So first, given the deal, it clearly makes sense to take a more disciplined approach to your DTC strategy. I assume this will drive some near-term financial benefits. So, can you provide a bit more color on the DTC investment levels going ahead? I know you called out the low $200-million range for Q3 and Q4. Where are you seeing some opportunities here? And is that a good quarterly run rate through deal close, or can the losses continue to maybe narrow given the strong top-line trends? And then just second, accelerated path to deleveraging post deal close is very encouraging. Is there any more color you can provide on the drivers for both Discovery standalone where you continue to deliver robust free cash flow and then on the pro - forma outlook? Just Gunnar, it's fantastic to hear about your continued role here, and I know you provided a lot of details already. But any more specifics on the improved pro forma leverage targets, particularly if there's an updated view on pro forma EBITDA, given maybe some minor asset sales from the WarnerMedia side. Thanks.

Great. Thank you, Kutgun. Let me start with the delivering piece here and give a little more color. Again, the -- there are two things that we have updated. 1 is sort of our model of how we look at pro forma combined in financials for the Company, and number 2 is just flowing through our current performance, and that's, by the way, linked to your first question as well because we're just doing a lot better and we're generating a lot more free cash flow than what we anticipated half a year ago. But if you take a step back, the challenge here is that WarnerMedia is not a standalone Company, but is a carve-out group. We obviously made certain assumptions about what the balance sheet of that Company and carve-out group would look like, but had to wait for some still draft carve out financials to get full confidence in the financial setup of that combined entity. And accordingly, what we put into our model and what I presented to rating agencies for the rating discussion was a conservative model not fully flowing through certain adjustments. The most important, one of which is the working capital adjustment. So, we have always talked about the $43 billion as subject to adjustments. And that's the working capital adjustment from today's perspective that looks like it's going to be $4 billion, $5 billion lower in terms of what the net payment is going to be will have an impact on the net debt balance that we're going to start this Company with. And then, that has obviously a very significant impact on leverage. So, the second thing though, is about 25% or 30% of this improvement here is just driven by our better operating performance. Obviously, better OIBDA improves the denominator…

Yeah. And the only other thing I'd add, Gunnar, is obviously, as we approach the deal term, not surprisingly, many of the partners that we work with internationally that have been a great part of our success. And that you've heard us talk about also asking the fair questions about how much money and how much effort they should put behind launching a new market as we go into 2022, given questions about the future brand and the future product offering, etc. So, we're getting the same questions from partners, which is totally legitimate and that is making us, in some cases rethink when is the right time to launch? And a lot of that is largely when they're -- those things are being pushed off is a pushing off a marketing, and in some cases, content expense to later when we have a better view of what the combined product will look like. And we can come back to our partners with them more definitive sense of when and what we will be launching together.

That's great. Thank you, both.

Your next question is from the line of Rich Greenfield from LightShed Partners. Your line is now open.

Thanks for taking the question. A few months ago, WarnerMedia left behind its own channel platform. I think they've joined Disney, Netflix, Hulu, even Apple TV Plus. we're just looking at they were just looking at the DTC subscriber business and wanting to be in a fully direct relationship versus sort of a whole down relationship with Amazon. But I think that's sort of puts Discovery by common stars as sort of the 3 largest players on Amazon channels. Again, sort of David, your perspective big picture hasn't been about the puts and takes of Amazon, whether going fully independence is something you can see Discovery's future, or whether you think companies like WarnerMedia had been in the state not working with Amazon channels and just be curious how you think about that and then just lastly, including calendar on Varick, are you planning on keeping more HBO Max, and Discovery+ separate with that sort of the bundling comments you were making or is that decision of integration still not made. That would be along faster.

Thanks, Rich. We have a go-to-market strategy that we feel that we've built. I think having Kevin Mayer in the passenger seat with JB and Bruce and I, and eventually with the Warner team, with all of his knowledge and expertise, haven't built and driven Disney+ globally I think will help to finalize and fully inform our strategy. But we're -- given where we are on the regulatory process, we're just not ready at this point to share all that with you guys. We will -- we expect to and we will soon. JB?

I mean, Rich, on the channel store question. The reality is they've obviously been a very good partner of ours on Discovery side. We're well aware that as you said, HBO is taking a different position. I think the 3 questions that we'd have that we are waiting to engage further with the HBO side is: 1. We have found so for that hit -- there is a -- the question about these channel stores bringing in a different customer base than what we might be able to address directly is an ongoing question, and we certainly seen some good incremental subscriber growth coming from that channel store ecosystem. And how much of that is cannibalistic versus what we could do direct or not is an ongoing set of analysis that we have going. And obviously, we want to compare notes with the HBO team at the right time. But that's a question --because ultimately, we want to try and get our products out to as many consumers on whatever platforms as necessarily. The second is the data element and the customer relationship, which I think is a little less known. And I think as some of the Amazon executives have talked about publicly now, we do have access to customer information as part of our relationship. And that's an important differentiator that doesn't make this just a traditional anonymized channel store relationship but where we actually have customer information on the channel store consumer. And so that makes the equation a little bit different. And so, you overlay those two things, and we say, the third thing is obviously, we want to have more engaged conversations with the Warner team and look and see whether the strategy that they're following today or the strategy that we're following today makes sense for the combined and the Northstar will be two things, which is ultimately how do we get the product getting in front of more consumers in aggregate? And how do we do it in a financially strong way? And if we think we can deliver a -- still get the customer relationship, but get in front of more people with the right economics. I think it's one that we will certainly remain very open to. So, we haven't made a decision definitively, but we are remaining very open and we'll certainly that will be part of the story when we come back to so, you, Rich and the team, we'll tell you more about it at the right time.

Very helpful. Thank you.

Your next question is from the line of Steven Cahall from Wells Fargo. Your line is now open.

Thanks. Maybe -- Gunnar, thanks for that color on the lower leverage and the expectation for the merger. You also mentioned that you're having some pretty encouraging conversations raising the debt. So I'm just wondering if that's going to come in a little cheaper. And I think you gave some steady-state guidance of around 3 times for the combined Company initially and getting there in about two years. Should we assume that you get there a little more quickly just because you're going to be starting from a lower base, or is it more that you'll just have a bit more flexibility starting from that 4.5 times or below? And then maybe one for JB on Discovery + and NextGen, is it logical for us to assume maybe just a little bit slower pace of net adds going forward as you take a more focused approach and void stepping into places where HBO is strong and be a bit more selective. And if that is the case, I'm wondering if there's some free cash flow benefit that near-term strategy just cause SAC expense runs a little bit lower. Thank you.

Great. Steve, yes, l'll start with the flexibility. As I said, in my prepared remarks, I am very convinced from today's perspective that we're going to hit that upper end of our target range of three times earlier than we originally mentioned. And it is the 2.5 to 3 times range that I want to see going forward. And to your question about flexibility, we don't need flexibility because our deal model already assumes very significant reinvestments and further investments in building out the DTC product and growing content expenses over the five-year term here that we have modeled. So clear answer is yes, very, very hopeful that we will be hitting that upper end of the 2 to 2.5 to 3 times range earlier. And regarding raising debt, again, we've mentioned the $15 billion hedge that we have put on. And pretty much in line with what I said earlier about the conservatism in our initial model. The answer is yes, there is some room. We have obviously taken some conservatism as well as we modeled out our interest rates, We've, we've locked in very attractive rates with this $50 billion hedge program. Again, I don't want to make any promises, we'll -- it still will be some time before we implement the financing, but a good part has hedged now. I will have to monitor the spreads as well, but I rates, believe that we're in a very rate, comfortable position relative to what we put out in the original statement and in our deal models. And before I hand it off to JB for the subscriber outlook here, the financial part of that question is you should absolutely assume further free cash flow performance here as we move forward. I do want to have the balance sheet in the best possible shape as we come up on closing the deal. And as I said earlier. I now have explicitly guided to at least $2.1 billion of free cash flow, so it's a significantly higher conversion than what we went into the year with and what we guided at the beginning of the year. And that's all part of our ambition here: to be disciplined and get this Balance Sheet in perfect shape. JB?

Yes, I think consistent with what Gunnar just said, you we should assume obviously. We are continuing to obviously push and see good growth in the markets where we're in. And we'll be launching our newest market at Brazil here over the course of next two weeks. And so, we're excited about that, and we still see healthy growth out of those markets. And we're spending at levels to Gunnar 's point that we think are reasonable without leaning too far in. But they slightly more conservative SAC to LTV ratios that we're spending at, plus the slowdown in some of the new market launches as we go into towards the end of the year and into 2022. It doesn't mean that the net adds numbers will be a little bit slower than they might have been in the past.

Great. Thank you.

And it may be worth just, Rich, I realize we didn't hit Rich 's second question about the bundling clarification. I think David in my point on the bundling was purely that in back to Jessica's question about the tech rollout, it will take a bit of time, no question to come to 1 platform. And so while that process is underway, there will be opportunities in a much quicker fashion, closer to day 1 to potentially do some very creative bundling propositions. That is a interim strategy, not a long-term strategy, I think at this point is what we'd say.

This will be our last question from the line of Ben Swinburne from Morgan Stanley. Your line is open.

Thanks. Good morning. I think the release noted renewals with DirecTV and Verizon during the quarter, I'm just wondering if you guys could give us a little bit color on the key takes there and whether you see healthy affiliate fee growth coming out of that or any changes in packaging. And if the merger impacted how you approach those deals, given, David, you've made that point that bringing the Turner networks in as a real underappreciated asset and part of this transaction. That's my first one. And then I just wanted to come back, David, there's obviously a lot of focus on the merger and including your management team that you're putting together. Congratulations on bringing Kevin on board. Is that -- I don't know how much you can say, but is there hope that that converts from a consultancy to an employee ship? And I'm just curious if you still going to remain Chairman of Dezelem, which I think is, at least in some regard, a competitor to you guys in Europe. Thanks a lot.

Thanks. Len Blavatnik is a very old friend and he's out he is he worked with me and Kevin and providing the opportunity for us to get a good amount of Kevin's time. But he is fully committed to LAN and the zone and he's doing some other things as well. He's driven down all these paths. And he's a great entrepreneur and he's got a number of really exciting things he is doing and working on. This is one of them. And I think it's going to be really helpful to JB and I and Bruce. And he's is having a great time doing what he's doing, but he's super excited about really coming in and giving us the full scope of his experience and brain on everything he's seen and learned. And working with LAN has been a good thing. I think he's seen and learned more about Europe and sports and -- so I think that's exciting. The team at Warner and the way they're growing, the knowledge, the capability there, the attack plan that they have is really impressive, and the super strong. If you look at the strength of that product, you look at the strength of our product. So, I think, we've got a lot of really good people. You've seen through the hits for our history with Scripps that we're really about who are the best people. I think we're going to have -- be able to build a really strong team and bring in some outside experience as well; but it's really encouraging how well they're doing and what we are learning along the way, and that's a big helper to us. On the affiliate side, Gunnar, you could fill in some more. But I think we reached deals that were very…

Just obviously, the caveat that we don't call the support or we don't control the subscriber trends. So that's always the -- and we have as much visibility into that as many of you on the call here, but I'm very, very pleased with the distribution team's successes this year and we've gotten done so many questions about, sort of, the outlook and we just continue to go through deal after deal after deal with very encouraging results.

Great. Thank you.

Thank you for joining us today. And with that, this concludes today's conference call. Thank you for attending. You may now disconnect.