Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Fourth Quarter of 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 that functionality for the question-and-answer queue will be given at that time. As a reminder, this conference is being recorded. I'd now turn the conference over to Chief Investor Relations Officer, Mr. Joe Dorrego. Please go ahead, sir.

Thank you, operator. Good afternoon and welcome to our fiscal 2021 fourth 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, both of 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 fourth quarter and fiscal 2021 results. At the outset, I want to emphasize the exceptional financial and operational results that we have delivered over the last year despite the challenges posed operating through the COVID-19 pandemic. The virus brought significant impact to our productions, to our processes and to our people. However, we stayed resolute and focused and demonstrated that, even in the most unexpected and challenging of times, our focus on a handful of powerful, highly engaging brands produces exceptional results. Over the past fiscal year, we have reinforced the competitive advantages of our core brands, enhanced our digital capabilities, solidified our growth potential, returned $1.25 billion of capital to shareholders through buybacks and dividends, and otherwise prudently allocated our capital. We have a strongly differentiated position in the market, which continues to benefit us to no end. But our greatest strength is our people who have really stood up this year and performed extremely well under such difficult circumstances. I know myself, my father, the board, and the management team appreciate all their hard work and all their achievements this year. In fiscal 2021, we generated revenue and profit which exceeded even our own bullish expectations. Our affiliate revenue increased 9% year-over-year, which is net of the distribution credits that we recognized last fall due to COVID. Our advertising revenue was up 2%, which is tremendous when you recall that we broadcast the Super Bowl in the prior fiscal year, during which we generated around $500 million of net advertising revenue. Importantly, the fiscal fourth quarter saw these trends accelerate, as quarterly revenues increased 20%, led once again by double-digit affiliate revenue growth and advertising revenue growth of 38%. This growth was underpinned by the ability of our core businesses to consistently deliver audiences at scale and capture the upward momentum of a rallying advertising market. We finished the fiscal year with historically strong upfront sales and are currently also enjoying sustained scattered demand with pricing at significant premiums. We finished the fiscal year strong and we feel we are in a very good place – or we are in a very good place with great momentum starting the new fiscal year. FOX News Media continued its ratings leadership and its multi-platform growth in the fourth quarter. The FOX News channel was the most watched network in primetime across all of basic cable for the sixth consecutive year, and notched its 78th straight quarter as the leading cable news channel in total viewers. While the year-over-year ratings comparisons are difficult due to last year's heightened news cycle, the FOX News channel has retained more of its audience than CNN and MSNBC since the presidential election. In fact, since the election, FOX News has solidified its leadership position in cable news, having reasserted its pre-election market share. For total day audiences, FOX News increased its market share by 11% in the fourth quarter compared to the prior year, while CNN and MSNBC lost 9% and 3% respectively over that same period. From a primetime perspective, we once again find ourselves in a familiar position, as we routinely see our ratings exceeding those of our peers combined. We were also pleased with the performance of FOX News Media's digital assets. FOX News remained the most engaged news brand across social media channels, extending this run to nearly seven consecutive years. This is a critical pathway to reaching, engaging and growing the broadest possible audiences with the FOX News brand. On the last call, I told you that Fox Nation, the direct-to-consumer offering from FOX News Media had recorded its strongest quarter for customer acquisitions since launch. And this quarter, thanks to new and expanded content offerings, Fox Nation once again notched its best-ever quarter for customer acquisitions. Later this year, we will expand our FOX News Media portfolio further with the launch of FOX Weather. FOX Weather is just one example of how we plan to grow the FOX News brand across multiple verticals. And the power of our brands and the growth potential of their digital extensions was also on display at the FOX Network, with another round of ratings wins on broadcast and record-breaking results at Tubi. FOX is the home to the best entertainment programs in television, which together with sport, helped propel the FOX Network to its second consecutive broadcast season as the top network in primetime among the key demo, adults 18 to 49. This fall, we have strongly performing returning hits and a slate of promising new shows. In particular, we are looking forward to the addition of two new dramas to our full lineup. These are The Big Leap and Our Kind of People. Fox has always thrived with shows featuring music and dance and The Big Leap, like Glee, and so many others before, lives right in that sweet spot. The Big Leap is an optimistic dramedy about second chances and chasing dreams. We think these themes are spot on coming out of the pandemic. Our Kind of People is inspired by Lawrence Otis Graham's book of the same name. It is executive produced by Empire creator Lee Daniels and stars Karen Gist. It's an absorbing story that takes place in the aspirational world of Oak Bluffs on Martha's Vineyard. And I'm very pleased today to announce a new partnership with Gordon Ramsay, Studio Ramsay Global, which will acquire Gordon's current television business and will develop, produce and distribute new culinary and lifestyle programming across all Fox platforms, including TV. Now, let's take a moment to talk about Tubi. At the end of the fiscal year, Tubi surpassed 3 billion hours streamed, up more than 50% over the prior year. During the recent June quarter, total view time surpassed 900 million hours, up more than 40% over the prior-year quarter. We spoke about it together last quarter. But I cannot emphasize enough the importance of total view time, or TBT, as the critical metric for ad-supported streaming. It is the best measure of burgeoning engagement on Tubi and correlates directly to the monetization of the platform. And there's no shortage of great content to keep audiences watching. Tubi leads the industry with the largest library of content, with more than 35,000 movies and TV series available. And that library continues to expand with Tubi's first original movies, exciting genres that are informed by Tubi's machine learning capabilities and supported by tight production budgets. In just weeks, these titles have exceeded our financial and strategic objectives. Throughout the fall, we will modestly ramp the launch of Tubi Originals, a number of which will be produced in-house by Fox Alternative Entertainment and our animation studio Bento Box. But let me be crystal clear about one thing. Tubi's original programming strategy is very different from the strategies of an SVOD streamer. We have no interest or plans to invest in high-cost programming to drive subscriber acquisition as we are not in the subscriber business. We are focused on delivering programming that drives total viewing time and hence monetization in very short order. The return on our programming investment is measured in weeks, not years, and should be viewed through a completely different lens than investments in the SVOD universe. We are in a very different space. It's a space focused on advertisers. And advertisers are increasingly seeking out Tubi as a leading platform to reach a younger audience that is both largely unduplicated from our traditional Fox audience, and not regularly streaming other AVOD services. In the recent quarter, Tubi featured ads from more than half of the Ad Age Top 200 Brands. With the reach and brand recognition of Fox behind it, Tubi nearly doubled the number of brands buying its inventory in the upfront and more than tripled its upfront dollar commitments over the prior year. Despite the COVID-related headwinds earlier in the fiscal year, Fox television stations recorded core advertising revenue that was on pace with the prior year when excluding the Super Bowl comparison last year and the record political revenue in the current year. Just one example, the adoption of legalized gambling is driving increased advertising spend, particularly in Philadelphia and Detroit. We anticipate additional markets, including Arizona and Wisconsin, to launch legalized sports betting in fiscal 2022. The Fox television stations are particularly well positioned to capitalize on this opportunity, given the strength of our stations in these markets. FOX Sports also had a noteworthy year, expanding its ratings dominance in live sports, while also extending and enhancing our long-term rights agreement with the NFL. We will remain not only the leader in football ratings, but also the home of the premier NFL rights package through the 2033 season, thanks to our new multi-platform rights deal with our partners at the NFL, which includes the designation of FOX Bet as an authorized sportsbook operator of the league. We expect the company-wide momentum of fiscal 2021 to carry into our current fiscal year. Macroeconomic trends bode well for a strong advertising market and brands are increasingly turning to our linear and digital assets to reach the largest collection of loyal and engaged viewers. The return of normal sports and entertainment schedules, coupled with the ongoing leadership of FOX News Media, will enable us to capitalize on the robust ad market. In addition to delivering strong underlying operating and financial results in fiscal 2022, we are focused on expanding our digital businesses. We are reinvesting a portion of the profits and free cash flow from our core businesses into the high growth and high opportunity digital assets that we know to be essential elements of our future. This past quarter also saw the completion of a wide range of transformational technology investments that provide us with a range of modern, state-of-the-art platforms that will power the growth of our businesses for years to come. These new capabilities include a new distribution and streaming operation in Arizona, through the brand new data and advertising platforms that will underpin and evolve an advanced set of commercial offerings for clients across all of our products and services. These investments, now complete, position us strongly to seize on the growth opportunities that lie ahead. We continue to deploy capital in a responsible manner to support Tubi, the FOX News Media digital properties, including Fox Nation and the launch of FOX Weather, as well as our other emerging digital businesses. We believe these investments, relatively modest compared to those being made by our peers in subscription streaming areas, will yield long-term significant returns and position us well to continue to adapt and take advantage of the evolving media landscape. Now, Steve will take us through the details of the fiscal year and the fourth quarter.

Thanks, Lachlan. And good afternoon. Looking back at our recently completed fiscal year, Fox delivered total revenues of $12.9 billion, up 5% versus the prior year. This is despite the impact of COVID-19 and the cyclical comparison with revenues generated from last year's broadcast of Super Bowl 54. Notwithstanding these two headwinds, full-year advertising revenues still increased 2%, propelled by a record political cycle, the significant contribution of Tubi and robust mid-teens growth of the cable segment, led by FOX News Media. Our best-in-class affiliate revenue growth was particularly noteworthy. Total company affiliate revenues increased 9% on a reported basis and 10% on an underlying basis after adjusting for potential distribution credits at the cable segment due to COVID. This underlying double-digit company-wide growth was led by 20% growth at the television segment. Momentum across our digital businesses continues to be strong, with digital revenues growing over 40% to reach almost $1.4 billion for the full fiscal year. Taken together, this impressive revenue achievement once again underlines our differentiated strategy centered on our leadership brands and focused portfolio of assets built around live event programming, including news and sports. From a bottom line perspective, the company delivered full-year adjusted EBITDA of $3.1 billion, an increase of 11% over the prior year, and a record in the company's short history. Full-year net income attributable to stockholders was $2.2 billion or $3.61 per share, while adjusted EPS was $2.88 per share, up 16% versus $2.48 last year. Now turning to our results for the fourth quarter. Total company revenues increased 20% to $2.9 billion, driven by our fourth consecutive quarter of underlying double-digit total company affiliate revenue growth and strong pricing gains across the national and local ad markets. Total company affiliate revenues increased 10%, with 16% growth at the television segment and healthy 6% growth at the cable segment. The rate of subscriber declines was stable in the quarter, with trailing 12-month industry subscription losses now running below 4.5%. Total company advertising revenues increased 38%, with over 50% growth at the television segment as the local market continued to rebound from COVID, Tubi delivered another record quarter and the FOX Network benefited from a healthy linear and digital marketplace. Total company other revenues increased 30%, primarily due to the timing of sports sublicensing revenues as a result of COVID, higher production volume at Bento Box, and continued momentum at Fox Nation. Quarterly adjusted EBITDA was $717 million, down 3% over the comparative period in fiscal 2020, primarily due to higher programming and production costs as we return to a more normalized programming schedule as compared to the COVID-related delays and cancellations experienced in prior quarters. Additionally, we also increased our investment in our high growth digital initiatives at FOX News Media and Tubi. Net income attributable to stockholders at $253 million or $0.43 per share was notably higher than the $122 million or $0.20 per share in the prior-year quarter. This increase reflects the absence of impairment and restructuring charges booked in the prior year quarter, net of the impact of mark-to-market adjustments associated with the company's investments recognized in other net. Excluding these impacts and other non-core items, adjusted EPS of $0.65 per share was up 5% over last year's $0.62 per share. Turning to the performance of our operating segments for the quarter, where Cable Networks reported a 10% increase in revenues. Cable affiliate revenues increased 6%, once again led by double-digit pricing gains at FOX News. Cable advertising revenues increased 17%, driven by continued strength in digital monetization at FOX News Media and the return of live events and studio show programming at FOX Sports, which were both impacted by COVID in the prior view. Cable other revenues increased by $25 million, primarily due to the timing of sports sublicensing revenues as a result of COVID and continued subscription momentum at Fox Nation. EBITDA at our cable segment was flat against the prior year as the revenue increases were offset by higher programming and production costs at FOX Sports following the COVID-related postponements and cancellations in the prior year. We also increased our investment in key digital initiatives at FOX News Media, including Fox Nation and the pending launch of FOX Weather. Turning now to the Television segment, which reported a 30% increase in quarterly revenues. Television affiliate revenues increased 16%, reflecting 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. This once again reaffirms that we are on track to achieve the television affiliate revenue growth we outlined at our Investor Day. Television advertising revenues increased by over 50% as we benefited from a meaningful rebound in the base market of the local Fox television stations, achieved strong pricing gains at FOX Entertainment, and saw the return of Major League Baseball at FOX Sports this spring. Meanwhile, Tubi continues to exceed expectations, comfortably surpassing $100 million in revenue for the quarter, typically its seasonally slowest quarter. This brings Tubi's full-year revenue to almost $400 million, up nearly 170% versus their full prior year. Other revenues at Television increased 18% in the quarter, led by higher production volume at Bento Box and higher co-production revenues at FOX Entertainment. EBITDA in our Television segment was down $21 million versus prior year as gains at our local stations were more than offset by our investment in Tubi and higher costs at the FOX Network, primarily due to schedule changes caused by COVID. Switching now to cash flow. During the year, we generated free cash flow, which we define as net cash provided by operating activities less CapEx, of $2.2 billion. As we foreshadowed on our last earnings call, we deployed $1 billion of capital in fiscal 2021 to repurchase over 22 million Class A shares and over 9 million Class B shares. Against our initial buyback authorization of $2 billion, we have now cumulatively repurchased over $1.6 billion, representing 8% of our total shares outstanding since the launch of the buyback program in November 2019. And as a reminder, our board recently approved an additional $2 billion to our buyback authorization, meaning that we have over $2.3 billion of our combined authorization remaining. Underlining our continued commitment to shareholder returns, today we announced an increase in our semi-annual dividend to $0.24 per share. Over the course of the fiscal year, we returned $1.3 billion to shareholders in the form of share repurchases and dividends, which when including the payment of the dividend we declared today will take the total cumulative amount of capital returned to shareholders to approximately $2.5 billion since the spin of Fox Corporation in March of 2019. From a balance sheet perspective, we ended the quarter with $5.9 billion in cash and approximately $8 billion in debt. Finally, let me take a few moments to provide some markers for our fiscal 2022. We are anticipating robust top line growth across our businesses over the course of next fiscal year. This is predicated on disruption-free programming schedules and comes despite the comparison with the record net political revenues of over $350 million we saw in fiscal 2021. As Lachlan referenced, we expect the underlying company-wide advertising momentum to carry into fiscal 22. With approximately 5% of our total company affiliate revenues due for renewal, we expect a moderation in the growth of distribution revenues in fiscal 2022 as we compare against a major renewal in the prior year and prepare for the start of our next renewal cycle in fiscal 2023. Using the strength of our core business as a platform, we will use fiscal 2022 to invest in the expansion and acceleration of our digital assets. Here we anticipate investing in the range of $200 million to $300 million of net EBITDA, with a particular focus on Tubi, Fox Nation and the launch of FOX Weather. This is an appropriately sized investment for these high growth assets that will be a key part of our future. Looking further out to fiscal 2023, the confluence of premier sporting events, including the Super Bowl and the World Cup, in combination with the midterm election cycle, will make for a unique opportunity across our leadership brands and platforms. These cyclical items, coupled with the start of our next major distribution renewal cycle, the early exit from our Thursday Night Football deal, and continued growth of our digital initiatives, are poised to provide a strong financial tailwind for our business. Coming back to today, we entered fiscal 2022 from a position of operating and financial strength. This strength is reflected in our balance sheet where we'll use existing cash balances to pay down the $750 million debt maturity that will come due in January. Beyond this, we will continue to take a balanced approach to allocating capital between direct investment in our businesses, strategic M&A, and capital returns to shareholders.

Thank you, Steve. And now, we'd be happy to take some questions from the investment community.

We do have a question from Jessica Reif Ehrlich of BofA Securities.

I have a follow up and then a question. So, my follow-up is, you've laid out, Steve, in particular, towards the end, your investment priorities for fiscal 2022, including digital assets and originals, etc. If you can clarify, is this the peak year of spend and whatever you can say about sports rights and sports betting as part of this investment year would be helpful. But even with all of that, you still have an incredibly strong balance sheet. So, do you feel like you need to get bigger? And then my question is, you've had a great – really fantastic upfront, as big as the whole industry has had, can you give us color on pricing and sell out pretty much across all of the assets, not just the network, but the cable assets as well as Tubi.

First of all, in terms of the investment in the digital assets, our digital assets are growing very impressively. I think, this year, if we look at the fiscal year, we ended up at a $1.4 billion of digital revenue, which was up 44% year-on-year. So, obviously, we like these assets and we're going to continue to invest in them to continue to grow them. But I think we're doing so pretty prudently, sort of balancing the opportunity with the costs that we're putting against them. Do we need to get bigger? We're always looking at how to grow both organically and inorganically. We don't feel any pressing strategic need to get bigger. We don't have any kind of holes in our portfolio, particularly when you look at our kind of strengths in live news and live sports. And now in entertainment, the strength in Tubi, and it's really pleasing to see how quickly Tubi has grown. So, we don't see a strategic need to grow defensively. If you look at the consolidation that's been happening around the industry, a lot of that is around subscription video streaming. And that's not a – and the desire to sort of acquire larger entertainment libraries and production capabilities, and that's not a – and that sort of scale, not a space that we need to be in right now. So, we feel pretty confident where we are, but we are pretty comfortable where we are, but we do continue to look at opportunities as they come up. In terms of the upfront pricing and I think you asked to go into some detail around it and current scatter pricing. Look, this was an absolutely historic upfront season for us, but I'm sure for some of our peers, as well as the ad market rebounded from the depths and the lows of the COVID-affected year last year. So, the comparisons are kind because of where we were a year ago. But having said that, all of our categories are up very strongly, with the exception of two, which are auto and telecom. And there are specific reasons around those categories. I know we've spoken on prior quarterly earnings calls about the auto supply issues they're having. But if you look at retail, I'm talking, Jessica, this is for our local business at the moment. So, the TV stations. Our retail is up like 10%. Entertainment, which includes that really growing and exploding wagering categories, is up 300% year-on-year, media up 43%, pharmaceutical up 25%, even travel which is a much smaller category for us locally up 76%. So, a lot of growth across the majority of categories, again, with the exceptions of auto and telco. If you exclude political advertising, our sales are pacing up about 8% locally. So, we feel we feel really good there and, obviously, the momentum is – carrying the momentum into the new year. From a national point of view, so the upfronts were very strong. Pricing was all up over the 20% mark and then pushing into the mid-20s. And since the upfront, our scatter pricing is again up that much again and more. The NFL is selling very well. Major League Baseball is interesting as an aside. And I think this bodes well for the rest of the season and postseason. We have a Field of Dreams game next week. And that's set a record for a regular season baseball game. So, a lot of positive momentum across all of our categories, not the least of which is FOX News, which has shown very strong sales, with expanded demographics and, obviously, the digital platform as well. So, we feel very good about the ad market and we think it's going to continue for some time.

We have Robert Fishman of MoffettNathanson.

On Tubi, going to expand on your prepared remarks. How do you measure the ROI of content investment? And can you further explain whether the shift to originals essentially moves you away from the more standard AVOD model of revenue share? And just lastly, on a related note, how do we think about Tubi margins as revenue grows and reaches your billion dollar guidance?

Let me start with how do we look at the ROI on the content and then we can get into the margins and maybe Steve can take the financial aspect of that question. So, when we look at Tubi content, from an AVOD perspective, and as I mentioned in my prepared remarks and I've mentioned last quarter, it's all around total viewing time and the advertising impressions that we can generate through increasing and expanding the engagement as measured through total viewing time. And it was really pleasing that, I think, in the fiscal year, we did 3 billion hours of total viewing time, which was up 50% year-on-year. So, the way to grow, obviously, total viewing time is we can grow viewers and multiply that by the amount of content and the length of time they're spending watching that content. And we look at the content, and basically, I'd say, five different categories. There's your third-party content. And that's where we have 34,000, 35,000 hours of library, which is growing. So, there's that third-party content. That's a mixture of a revenue share and sort of licensed content. There's an increasing amount of Fox-owned content and IP that we're able to put on to Tubi, which is really pleasing to see and I think helps drive the TV awareness and the brand. There's the news category, which is really starting to take shape and increase engagement. There's a sports category, which will be launching sports channels soon, including the NFL channel and some other sports. And then finally, there's Tubi Originals. And Tubi Original has only just begun to launch, but we are seeing the return in a very short order. These movies are very price-effective. And we're able through Tubi's technology to really target them very specifically to very well-defined genres that we know, if we promote them correctly on the Tubi platform, they will drive a consistent, expected amount of viewing, which we can then monetize very efficiently. So, the model from the investment into the original programming is really derived specifically by the exact amount of revenue that we can derive out of that original program. Unlike SVOD where you're creating original programming to pull subscribers in, often once they're in the platform, they don't watch that program or they watch other library programming, we're not interested in the subscriber acquisition. We're purely interested in the time they spend on the platform and the amount of content they're consuming. Steve, do you want to talk to the margins?

Robert, just in terms of margin, listen, the biggest single cost of the business is obviously programming. And even with our steps towards original programming, the library is going to be heavily concentrated towards revenue share titles, both movies and series on that front. And so, therefore, it kind of governs a lot of your margin because that revenue share comes straight off of revenue and then you've got customer acquisition or viewer acquisition cost as well as technology. As you sort of call out the billion dollar target that we have, which is an interim target that we have for the business. It's almost like a market establishment phase for this business. And so, you shouldn't expect this business to be a margin contributor to us anytime soon. We're going to continue to invest in it as we've called out on the call today, and that investment will go towards a sort of three core pillars, being content, user acquisition/marketing, as well as technology. If you look at sort of the Tubi in the first three quarters of this fiscal year, it was virtually a push for us financially. So, we can almost dial up and dial down that margin as we see fit. But, certainly, our bias at the moment is to lean into investing in that business, which will mean it will be a drag on margin for the next year or two to come.

Next, we have John Janedis of Wolfe Research.

One would be, can you tell us more about how you're thinking about spending that incremental investment dollar. Lachlan, you talked about growth. So, when you speak to those growth areas, does that suggest investment in the linear cable and network business and sports will be fairly modest going forward? And then separately, it sounds a lot of AVOD services out there were not aggressively in the upfront and some have a pretty big tailwind on CPMs. And so, can you talk about how you think Tubi's priced relative to other services and to what extent there's a gap? And at a practical level, how quickly can you close it?

In terms of the investment going forward, as mentioned in my prepared remarks, the big investment in terms of our – partially, in terms of our linear business from a technology point of view has been this Arizona play out and data center, technology center, which is now completed, and that brings us into – I think they are our best-in-class kind of infrastructure for all of our products. Obviously, that's built today to be multi-platform. So it's an investment both in the linear business, but also as importantly in the digital businesses as our digital business continues to grow. The $200 million to $300 million that Steve has called out in terms of the investment this year, further investment in our digital assets is really split between – I think Steve mentioned Fox Nation, which is a subscription service, but continues to grow engagement, has really tremendously low churn and remains kind of a fantastic conversion rate from trial users to paid users of well over 80%. FoxNews.com, we'll continue to push into new verticals of content. They're planning and exploring content around sort of real estate, around cooking, around sort of some engaging games and crosswords and things as we drive the Fox News brand into sort of more lifestyle categories. And Tubi, I think we've addressed. So, those are the key areas of the investment this year, not the linear businesses. In AVOD, Tubi, in terms of how we price the upfront, I think the important thing for us – and I can't talk to our competitors and I wouldn't know – but the Tubi revenue in our upfront is entirely incremental, right? And that's really important. We're careful to not move revenue from one pocket to another and say, look at all the revenue we've been able to attach or push in Tubi. But Tubi revenue is entirely incremental to what we otherwise sold on our linear assets. And that's a really pleasing thing to see. Because of the way Tubi is structured with our programmatic advertising, in fact, we get a very high rate for our programmatic advertising on Tubi. And so, we were careful actually to constrain ourselves somewhat into what we sold into the upfront for Tubi because we feel towards – as the year progresses, we'll do extremely well through our programmatic advertising and the CPMs we get through programmatic. So, when we hit the triple revenue mark in the upfront for Tubi, we decided that was enough, we would stop there, and we would leave plenty of impressions for programmatic which I think is the right strategy for us.

Ben Swinburne, Morgan Stanley, please go ahead.

Steve, you mentioned renewal cycle starting again in fiscal 2023. And you guys were really helpful back at your initial Investor Day in kind of helping us think about the timing of that over the course of the next few years, which you're now wrapping up. I don't know if there was anything you could help us in thinking about the cycle that starts in 2023, if it looks like the last one in terms of the curve or anything you would add. And then, on Tubi, I don't know if this is for Lachlan or whoever wants to take it, maybe you could just give us sort of the pitch to advertisers who have a number of AVOD or FAST options, including buying, I think, Tubi inventory through people like Roku and Vizio and stuff, what is it that you offer an advertiser that's better or differentiated from Pluto or Hulu or even buying AVOD inventory through one of the platforms that have an ability to aggregate an even larger audience and maybe more specific data? Would just love to hear more about how you guys go to market?

Steve, if you want to jump in on distribution. Steve can go through the detail. But fiscal 2023 and 2024 is about a third of our distribution kind of volume comes up. So, this year is relatively quiet compared to that, and then 30 odd percent or 33%, 34% of our deals come up in 2023 and then again in 2024. I don't know, Steve, if you want to add anything.

Exactly. You're bang on. Really like single digits this year, mid-30s the following year. Then 2024, again, mid-30s, and then about a quarter the year after that. And remember that the 2023 renewals will largely hit us – will give us the benefit in terms of affiliate revenue growth in the back half of that fiscal year.

Ben, you reminded us or me of the Investor Day, the original Investor Day we had, and I think we call it out there that we were going to increase our affiliate revenue in the television segment by $1 billion by, I think it was calendar 2022. And we're well on track to achieve that objective and that target that we set for ourselves back at that Investor Day. So, we're very pleased with that. For Tubi, in terms of advertisers, Tubi is a very – it's not about – you don't sell these advertisers around sort of the mass scale. And so, I understand your point about some of the AVOD aggregators. But with Tubi, we have an audience that's younger, that's more diverse, that can be very targeted. We have very sophisticated advertising tools to ensure that advertisers and, frankly, the people they're trying to reach are not inundated with digital advertising frequently, right? So, we have these frequency tools that make sure that the advertising on Tubi is appropriate and that the viewer is getting a mix of ads served to them. So, there's a dynamic technology behind Tubi, which is very unique and very valuable to our clients. We're also not duplicated. So, we have very low duplication, not only with the FOX Network, but also Tubi viewers are unlikely – a very small percentage of them are watching any other AVOD service. They are to a large part exclusive to Tubi. So, it really is a unique offering, an offering that our clients are seeing the value in. And really, the proof is in the pudding. If you look at tripling the revenue in the upfront, and I think it was sort of doubling the number of top brands on the platform, I think the proof is in the pudding that the Tubi story and the Tubi sales story is really resonating with the top advertising brands and clients in the United States.

Our next question comes from the line of Doug Mitchelson of Credit Suisse.

For Steve, my follow-up. I just wanted to be clear on the Tubi investment. It sounds like from Lachlan's commentary that any incremental investment you make in originals, you expect a fairly quick payoff. So, is it right to think that within your $200 million to $300 million of EBITDA, the investment in growth, the Tubi portion of that on a net basis is really just the content and user acquisition? Excuse me, the user acquisition and marketing and technology and not the content front? So, the content return should be so quick in. Lachlan, the clarification is on NFL advertising pre-sales. How does that compare to the entertainment upfront? Are you seeing similar pricing? Or is there any difference there? And the question, Lachlan, CNN launching a streaming service next year, not necessarily unexpected, but is that interesting from a competitive standpoint? Does that influence your strategy at all with the digital offerings you're pursuing on the FOX News site?

I think the first question or clarification or follow-up first, the answer is yes, that the Tubi investment is subscriber acquisition, marketing, which obviously feeds into subscriber acquisition, and technology spend. So, that's the majority of the investment in Tubi. Am I wrong, Steve? I hope not.

No, you're right. And I think you've got to look at content in two kind of buckets. There's the originals, and I think that's going to be modest from both a cash and P&L perspective, because you physically just can't ramp that up that quickly. And then the second piece with the content investment is just building that bigger library with licensed content. And so, that's going to come in the form of both revenue share deals and license deals, and the license deals will obviously have a P&L impact.

I'm glad I was right on that. Look, on NFL, pre-sales NFL is selling very well. CPMs are strong, positive. And we couldn't be more pleased with the sales there. We think for a lot of issues in the marketplace, we think scatter pricing as well is going to remain a robust pricing through the end of the year just because of the availability of spots across the kind of television universe. So, we're confident in a very strong NFL year. By the way, I didn't mention this – it's not NFL, but on the sports side, the All-Star game from Major League Baseball was a terrific revenue result for us nationally. But interestingly, locally, in Atlanta, we generated a really extraordinary amount of political revenue on that local station for the All-Star game, which was obviously driven by the controversy around Major League Baseball moving the game from Atlanta to Denver. And that political advertising was all focused on the midterm elections next year. And so, when we look at that, the lessons I think we're taking from that is that the next political season, the midterm season is going to be another record political season next year. It's not this year, next year, but we're going to see staggering amounts of political dollars flowing into these local stations. And we can see that from simply just the one example of the Atlanta station for the All-Star game. On CNN, CNN+ I think it's called, look, we think it's a – what's the word when someone copies you, it's the best form of flattery. We think Fox Nation continues to grow. We think we're doing all the right things with Fox Nation. I talked about it before, but tremendous growth in the quarter driven off of clever acquisition and clever high-quality programming. So, we don't see CNN launching into that space as anything other than affirming of our strategy and what we're doing, really driving the engagement and the tremendously high engagement from FOX News into a paid-for subscription service. When we look at our competitors, we are heartened by their ratings trends. As I mentioned in my prepared comments, we are now regularly beating both the combined ratings of primetime, and many times in all day, of CNN and MSNBC combined. If you take just last night as one example, ratings just dropped half an hour or so ago while we're on the call, in primetime, FOX News did 2.4 million on P2+. CNN under 750,000 and MSNBC under 1.2 million. So, you've got 2.4 million versus 1.9 million, 2 million. So, we beat them combined, plus with a margin of 20% or so. So, very strong ratings trends, very strong engagement with our audience. And that really goes through our whole digital strategy, how do we take that audience and take that engagement and expand it across multiple platforms.

At this point, we're 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 your conference call for today. Thank you for using AT&T Executive Teleconference. And you may now disconnect.