Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Fourth Quarter Fiscal Year 2024 Earnings Conference Call. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Thank you, operator. Good morning, and welcome to our fiscal 2024 fourth quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer; John Nallen, Chief Operating Officer; and Steve Tomsic, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter, and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA or EBITDA, as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Thank you, Gabby, and thank you all for joining us this morning to celebrate our fiscal fourth quarter results. Fiscal 2024 was another successful year for FOX, in which we delivered nearly $14 billion of revenue and $2.88 billion of EBITDA. The year that just ended and the momentum from the start of our new fiscal year underscore the soundness of our strategy, the consistency of our delivery and the strength of our financial position that has never been more clear. Looking back, there were clear achievements across our businesses in fiscal '24, including delivering strong total company affiliate revenue growth each quarter from our ongoing renewals, cementing Tubi's position as the most watched free TV and movie streaming service in the United States, and generating reinvigorated ratings and share growth at Fox News. The power of our brands and our ability to deliver engaged audiences at scale across our platforms remains remarkably strong. Total time spent viewing all Fox brands increased in fiscal '24 despite the absence of the Super Bowl and FIFA Men's World Cup. Tubi viewing time, as measured by Nielsen, grew 57% in fiscal '24, with absolute growth in minutes viewing, easily surpassing the growth of leading subscription video-on-demand services. Fox Sports' big new Saturday was the #1 ranked window in college football for a third straight year, while America's Game had a week in an 8-year viewership high this fiscal year. And FOX News was, again, the most watched network in cable news in fiscal '24, with 52% more minutes of viewing than its closest competitor. Our foundation for this coming fiscal year is solid as we carry the momentum from fiscal '24 into another year of major events, particularly for our news and sports businesses. The recent news cycle has been nothing short of extraordinary. And when news breaks, people turn to the news brand they trust. The strength of our news coverage is unmatched and Fox News remains the clear first choice for viewers during the most pivotal moments. The fourth quarter saw audience levels return to growth at the FOX News channel driven by our political coverage and strong PrimeTime lineup. FOX News exited the fiscal year as the most watched network in all of cable in total day and in PrimeTime and gained share amongst cable news networks in both prime and total day versus last year. Furthermore, the rating story at FOX News continued to improve into this fiscal year, when in July total viewers grew nearly 80%, and the 25 to 54 demo grew 120% over last year. FOX News had its highest rated weekend ever in PrimeTime in July with over 5.7 million viewers tuning in to its extended coverage of the Trump rally in Butler, Pennsylvania. In fact, FOX News had its highest share of the cable news audience across the board in PrimeTime since August 2015. And the FOX News channel rated #1 across all linear television in July for total viewers and weekday prime, beating the nearest broadcast competitor by nearly 10%. These positive trends bode well for news as we continue through this extraordinary news cycle. But news is not our only business with great momentum. Tubi is also enjoying impressive viewership metrics and revenue growth. To be clear, Tubi improved upon its status as the most watched free TV and movie streaming service in the U.S., finishing the fiscal year at a record high of 2% of total TV viewing. Tubi saw continued momentum in viewership during the fourth quarter, reaching an all-time high of 81 million monthly active users and growing total view time by 17%, driven by an expansive library that offers something for every consumer. Not only is the Tubi library the largest in the U.S., but it also has unique content that audiences can only find on Tubi. Notwithstanding a complex digital advertising marketplace and a tough year-on-year comparison, this viewership drove 7% revenue growth during the quarter. Importantly, however, we ended the month of June with revenue growth in the teens, and that pace has continued into this quarter with steady pricing despite increased inventory in the overall market. Over at Fox Sports, the fourth quarter was very active, thanks to Fox's "Summer of Soccer", which exceeded all expectations and set viewership records. The UEFA European Championship averaged 1.7 million viewers across the FOX Broadcast Network and FS1, a 34% gain over the 2021 tournament. And Copa America averaged 1.4 million viewers over a 3x increase above the 2021 tournament. The two finals also broke records and now rank as the most watched soccer matches ever on Fox other than World Cup matches. But it's not just soccer that our audiences are watching in the summer. The regular season of Major League Baseball is also trending positively and our special broadcasts — the Rickwood game and the Major League Baseball All-Star Game — each performed well above expectations. And in just a few short weeks, we welcome back the NFL and College Football on FOX. Our 2024 NFL schedule will start strong. FOX's first four America's Game of the Week windows include three Dallas Cowboys games and a rematch of last year's Chiefs versus the 49ers from the Super Bowl. And of course, our schedule is strong culminating in Super Bowl 59 this February on FOX. Also debuting this fall will be a new lineup from Fox Entertainment, with a return of popular shows like Hell's Kitchen and The Masked Singer and the debut of new dramas like Hi-Surf and Murder in a Small Town, which many of you saw a preview of at our successful upfront presentation in May. Speaking of the upfront, we see a much healthier market than the nuanced one I referred to 6 months ago. As evidence, our upfront commitments were strong. Our focused portfolio of market-leading properties in sports, news, entertainment and streaming delivered year-over-year growth in both linear and digital advertising commitments as well as growth in the overall portfolio pricing in this year's upfront. Notably, we saw double-digit volume growth and stable pricing at Tubi, which is a testament to its incredible momentum in the streaming marketplace. At the local level, we are expecting a very robust election advertising cycle that will be weighted to our second quarter. If anything, as the polling tightens, the election map may be extended to more of the markets in which we operate. As we enter a very exciting fiscal 2025, we will continue to focus on execution with events such as the U.S. election cycle at our local stations and FOX News, Super Bowl 59 on Fox, the renewal of a quarter of our distribution revenue and the launch of the Venue Sports streaming service in the fall. Our strong differentiated position, coupled with the strength of our balance sheet, underpin our confidence on continuing to deliver meaningful shareholder returns. And with that, I'll hand over to Steve.

Thanks, Lachlan, and good morning, everyone. Fox once again delivered financially in fiscal 2024 with total company revenues of almost $14 billion and adjusted EBITDA of $2.88 billion. We successfully completed approximately one-third of our affiliate renewals this year, with the financial benefits of these renewals driving 4% growth in total company distribution revenues, led by 9% growth at the Television segment. Our fiscal 2024 results compare against the prior year of marquee events, including the record-breaking Super Bowl 57, the FIFA Men's World Cup and the midterm election cycle. As anticipated, the comparison to these cyclical events contributed to an 18% decline in total company advertising revenues. Total company other revenues were down 4% year-over-year, with higher sports sublicensing revenues more than offset by lower content revenues impacted by the SAG and WGA labor disputes. Total company expenses decreased 5%, largely due to the absence of costs associated with the Super Bowl and Men's World Cup in the prior year. However, this was partially offset by the first year step-up under our new NFL rights agreement. Also contributing to this overall decrease in expenses were lower entertainment programming costs due to the strikes. Net income attributable to stockholders was $1.5 billion or $3.13 per share, up versus the $1.24 billion or $2.33 per share reported in fiscal 2023. Restructuring, impairment and other corporate matters was impacted by charges associated with the FOX News Media litigation last year and nonoperating other net was impacted by the change in the fair value of the company's investment in Flutter, partially offset by the book gain on USFL assets contributed to the United Football League joint venture. Excluding non-core items, full year adjusted net income was $1.65 billion and adjusted EPS was $3.43 a share. Turning to our fiscal fourth quarter. Fox delivered total revenues of $3.09 billion, up 2% from the prior year quarter and quarterly adjusted EBITDA of $773 million, up 5% from the prior year quarter. Total company affiliate fee revenues grew 5% over the prior year, with growth at both our television and cable segments supported by our recent cycle of affiliate renewals. Total company advertising revenues were flat as the revenue generated from our Summer of Soccer and growth at Tubi was offset by lower ratings and pricing of the FOX Network. Total company other revenues were down 11% primarily due to a lower volume of third-party content sales in the current year quarter. Growth in total company expenses was held to 1%. Here, costs associated with the broadcast of the UEFA Euro and Copa America along with digital investments at Tubi were partially offset by the deconsolidation of the USFL and lower programming and production costs at Fox Entertainment from the higher mix of unscripted versus scripted content. Net income attributable to stockholders of $319 million or $0.68 per share was down versus the $375 million or $0.74 per share reported in the prior year quarter. Excluding non-core items, adjusted net income in the quarter increased to $423 million, while adjusted EPS grew 2% to $0.90 a share. Now turning to the quarterly results of our main operating segment. Our Cable Networks fourth quarter revenue grew 2% year-over-year. Cable affiliate fee revenues increased 2% with growth in pricing from our affiliate renewals, outpacing the impact from industry subscriber declines running in the mid-8% range. Cable advertising revenues grew 3% at the national sports networks; advertising benefited from the broadcast of the UEFA Euro and Copa America. At FOX News, ad revenues benefited from higher pricing, improved ratings and slightly lower preemptions. Cable other revenues were essentially unchanged from the prior year quarter. Cable expenses were 11% lower than the prior year quarter, primarily due to the deconsolidation of the USFL and lower programming costs at FOX News, partially offset by the UEFA Euro and Copa America. All-in, quarterly adjusted EBITDA at the Cable segment grew 20% over the prior year quarter to reach $703 million. Turning to our Television segment where we delivered 2% growth in quarterly revenues. This was led by 9% growth in television affiliate fee revenues as price increases across Fox-owned and operated and FOX-affiliated stations continue to outpace the impact from subscriber declines. Television advertising revenues fell 1% as the broadcast of the UEFA Euro and Copa America and growth at Tubi were offset by lower ratings and pricing at the FOX Network. Television other revenues fell 19% in the quarter, primarily a result of the lower volume of third-party content sales. Expenses of the television segment grew 8% over the prior year quarter, primarily due to costs associated with UEFA Euro and Copa America and digital investment at Tubi, partially offset by lower programming and production costs at Fox Entertainment. Taking the lease factors into account, quarterly adjusted EBITDA at the Television segment declined 35% against the prior year quarter to $148 million. During the full year, we generated free cash flow, which we define as net cash provided by operating activities less CapEx, of $1.5 billion. Before we get to capital allocation and balance sheet, it's worth noting some key items for this coming fiscal year. Most notably, we returned to another major event cycle in fiscal 2025, led by Super Bowl 59, which we expect will drive significant growth in both advertising revenues and free cash flow. However, this is the first Super Bowl under our new NFL contract, and accordingly, we'll have elevated rights amortization. We continue to expect strong political advertising in the first half of the fiscal year from the election cycle, which will particularly benefit our Stations Group. From an affiliate revenue perspective, we have a relatively light year of renewals with approximately one-quarter of our total company distribution revenues up for renewal, which are more weighted to our cable segment. We expect to continue to invest in our digital-led growth initiatives. Here, Tubi will continue to be the focus of investment spend with the collective digital portfolio expected to deliver improved EBITDA relative to 2024. We also look forward to the expected launch of Venue Sports this fall. As a reminder, our share of ownership results from Venue will be recorded below EBITDA in equity earnings. Returning to capital allocation. Over the course of the fiscal year, we returned $1 billion of capital through the repurchase of 40 million Class A shares and a further $250 million in dividend payments, underlining our continued commitment to shareholder returns. Today, we announced an increase in our semiannual dividend to $0.27 per share. With the payment of this dividend and taking into account share repurchase activity since year-end, we will cumulatively return over $7.25 billion of capital to our shareholders since the spin in 2019. This includes $5.65 billion of share repurchases, representing over 27% of our total shares outstanding since the launch of the buyback program in November 2019. This is all supported by the strength of our balance sheet, where we ended the quarter with $4.3 billion in cash and approximately $7.2 billion in debt. And with that, I'll turn the call back to Gabby to get started with Q&A.

Great. Thank you, Steve. And now we will be happy to take questions from the investment community.

Your first question comes from the line of Ben Swinburne from Morgan Stanley.

I want to ask about Venue which is launching quite soon. You guys have announced or they've announced the price point. I guess, Lachlan, how are you thinking about this product now that it's about to launch and pricing is out, you've given us some sense of sort of longer-term subscriber potential, but I don't know if you wanted to revisit that or just share your thoughts on how you think that product fits and who the audience is? And Steve, is there anything we should be thinking about in terms of the impact to the financials in fiscal '25 from Venue sort of across the income statement or cash flow statement that we should be keeping our eyes on? I know you guys are obviously equity partners and also will benefit from any revenue generation product?

Ben, thank you very much for the question, and good morning. Obviously, a number of milestones have been achieved on the development of Venue as we've gone through the beta and as you lead towards the launch later this month, this new beta releases practically every day. And the product is looking both excellent, really good, but also quite revolutionary in the way Americans are going to view sport. So we remain incredibly excited about it. The Venue announced their pricing of $42.99 as an initial launch price. We think that really hits the right mark and the target for what we want to be as a business but also as a consumer proposition. And there's no update really on our expectations of 5 million subscribers over 5 years. That's what's in the business plan, and that's what we're aiming to achieve. Obviously, it's very important that those subscribers are focused on cord-cutters and cord-nevers. We feel that all the partners in Venue feel very strong that we can target our marketing and our subscriber acquisition to sports fans that are not currently in the cable television bundle. That's important to us and that really is what leads us to subscriber levels in the mid-single-digit millions.

Thanks, Ben. So in terms of impact on financial statements, obviously, we have a two-sided relationship with Venue Sports. So as a shareholder, the business is going to take some time to sort of get to cash flow breakeven. From a shareholder perspective, you'll see that investment come through — we'll take the deficit through equity earnings in the P&L and investment through the cash flow. But obviously, we're a key supplier to the JV being a content supplier of our sports networks and so the benefit of that you'll see come through in our affiliate fee revenues, both in cable and TV. So it's a touch early. I think we saw 100% lockdown in terms of launch date to give you any sort of guide on quantum in terms of fiscal '25 impact. But as I said, I think a couple of earnings calls ago, on a net-net basis, it should be accretive to us on a pretty quick basis.

Your next question comes from the line of John Hodulik from UBS.

Maybe a couple of quick questions on the ad market. First of all, on the TV side, you guys mentioned the lower pricing that you were seeing. Could you delineate what you're seeing on the sports side versus entertainment? And on cable, just any outlook you can provide on the cable ad outlook, just given the strong ratings we've seen thus far in 3Q? And then — and lastly, on political as we sort of head into this what I would call unprecedented sort of political situation. I mean, just any way to sort of size what you expect from political spending versus other or previous presidential elections would be great?

Thanks very much, John. So overall, our pricing is very strong, and we had both pricing and volume increases coming out of our upfront; we've now closed our upfront. We've — 99% of the business is in-house. So we've — the upfront process is now completed, I'm happy to report very successfully. Going into the upfront to be totally honest, there were ins and outs. There were some headwinds that you could see, and we were — we still remain cautiously optimistic about what could be achieved, but we actually came through the upfront above our expectations. And again, I'm pretty pleased with the momentum that we saw in our businesses. Of course, this was led by sport in both football and other sports inventory that we have and the marquee events that we have culminating in Super Bowl 59 this year. Sport was incredibly strong, not just in football, but also in Major League Baseball. So we're very pleased with that. In cable, Fox News also saw volume increases in the upfront, most pleasingly, I think — and obviously, that's coupled with really remarkable ratings increases. But most importantly, and we've talked about this a number of times on previous calls, the strength in the direct response marketplace in the high teens in terms of pricing is a great return to growth in pricing for direct response and really bodes well for that line of our business. When we then look at political, we expect probably ex the Georgia runoff, right? So if you look at the apples-to-apples political cycles, we would expect a record political cycle this year. And in particular, as the race heats up, we're seeing more money flow into the marketplace. A new marketplace is emerging, as I mentioned in my prepared comments, as the rates tighten. For instance, Atlanta and Phoenix, where there's a significant amount of money now being placed only in the last couple of weeks. So we do expect a very robust political cycle, and we think a record political cycle ex the Georgia runoff four years ago.

Your next question comes from the line of Robert Fishman from MoffettNathanson.

Can you share your latest expectations to keep growing affiliate fees in fiscal '25 after the pricing increases roll through from your recent renewals and how much more room is there to drive retrans pricing given the importance of FOX's exclusive sports content in the pay-TV ecosystem, and then just separately, if I can, how should investors think about the level of content spend across the company? Maybe just help us with the right balance between sports and scripted entertainment, unscripted and even Tubi.

Thank you very much, Robert. I think on growing affiliate fees, we expect to continue to modestly grow our affiliate fees in light of, obviously, the declining volume of subscribers. I think we called out in the past quarter, last quarter, sort of reduction in subscribers are around 8%, mid-8% and as that continues, we'll be able to grow our pricing above that, but it's going to be modestly above that number. And that's what is based on the focus of our core brands. The fact that we're not carrying the baggage of any entertainment cable channels or legacy channels, which are — we have to use the leverage of FOX News or Fox Sports to support. We can be entirely focused on driving the appropriate value for our core cable brands and also for our television stations' retransmission.

Yes, Robert. In terms of content spend, if I just go through the sort of the key verticals we have, at sports, we've got regular amortization increases. Obviously, the NFL is the single largest piece of that in fiscal '25; that's partially offset by the fact that in October, we move away from WWE programming. Tubi, I think you should expect us to continue to grow content. Some of that is active in terms of licensed content and originals and some of that is passive because so much of the revenues come from revenue share deals. And so that just grows with the amount of user and advertising growth. News is pretty modest growth. A lot of that to do with talent and breaking news coverage and that sort of very predictable spend. And then the final one, I think you were alluding to, was entertainment and the shift from scripted to unscripted. With that, it's probably worth noting that fiscal '24, obviously, was very impacted by the strike, and so you had a very significant shift from scripted to unscripted programming. And that trend was particularly amplified and it basically saved us north of $100 million in terms of entertainment programming costs; don't expect that to continue to happen. In fact, it will swing back a little bit the other way as we rebalance the portfolio heading into next year with a little bit more scripted content. I think though when we look at entertainment, we look at it from the perspective of how do we get our cost per hour down. And when I compare, I think fiscal '25 will look like versus fiscal '23, that cost per hour is probably down 10% to 15%. But we obviously want to have a balanced broadcast network that serves our sort of cross-promotional needs, serves our capacity to monetize from an advertising perspective and serves our capacity to monetize our content in downstream windows and its ownership of the content. So we're going to be balanced about it.

Your next question comes from the line of Jessica Reif Ehrlich Cohen from Bank of America.

One follow-up and one question. So on the follow-up, it sounds like you had a great upfront. But I'm wondering if this is the first year of your new ad sales team. Is there anything that they're doing that's like anything different in that approach? You've obviously had great results, but you also have like great events. And then secondly, one of the key assets of the company is your balance sheet strength. And just wondering, since you're already in live news and sports, like the couple of areas of the traditional media industry that are still growing, where do you see your next opportunity, like where do you expect to deploy capital?

Thanks very much, Jessica. First, on the ad sales team, thank you for calling them out. They've done a tremendous job, and we're very happy with their performance. Jeff Collins has stepped into the role very, very well and is leading the team effectively. And obviously, I'm monetizing all of the impressions that we're able to generate. So we're very pleased with that. Going into the upfront, we're structured, I think a little bit different than some other media companies. I'm not aware of sort of the structure of the advertising sales organizations across the entire industry. But we retain expertise across the verticals. So we have a very focused sports team, we have a very focused news team, entertainment and importantly, more and more our digital team, which is obviously a great part of Tubi. So while we have sort of expertise in those teams, in the upfront, we were able to sell across the entire portfolio, our ONE FOX portfolio, and that proved to be very successful and very effective in this upfront. So I'm not sure if that's very different from what everyone else is doing, but it's a structure that we think works for us and has certainly proven its value in the marketplace this year. In terms of what we want to do with our balance sheet and how we deploy capital, I think we are careful and prudent deployers of capital, that's going to continue. We have the right mix of investment — capital investment in the business of organic investment in our businesses in return to shareholders and then increasingly, our focus on M&A. We have nothing to update you on in the latter category other than to say we're going to be prudent and careful, but we are aware that M&A remains one of the important levers that we have and how we deploy capital.

Your next question comes from the line of Michael Ng from Goldman Sachs.

I'll ask one on Tubi. Mid-teens revenue growth which is great in the quarter despite some heightened competition on the connected TV side. I was wondering if you could just talk a little bit more about that strength and then give us an update on where the digital investments losses ended up this year in fiscal '24 and your outlook for fiscal '25.

Great. Let me start with Tubi, then I'll hand over to Steve. Tubi continues to go from strength to strength. I think importantly, exiting the fourth quarter with revenue growth in the mid- to upper teens, I think was very good to see, to see that momentum as we moved into July, and we've seen that momentum continue into this quarter in July. You have to put that in context of a tremendous supply of advertising entering into the streaming market with Amazon Prime entering the advertising-supported streaming business. That caused a lot of other streamers to really fight hard for their revenue and drop pricing; Tubi did not have to. Tubi has a sustainable pricing in this market and really drove this growth on the strength of its brand and their tremendous reach and quality of its audience. So we're very pleased with that, and we expect further growth in Tubi as the year progresses.

Thanks, Lachlan. So just in terms of investment, if I look at where we landed for fiscal '24, Tubi was the single largest driver of the investment across our growth portfolio. So its level of investment was at a consistent clip to where we were in fiscal '23 — in the mid-$200 million range. And if I look across all the other growth businesses, whether it be weather, Nation, Credible, the entertainment studios that we're building out, that collectively sum to about another $100 million in rough numbers. Looking forward to fiscal '25, I think most of the improvement comes from a little less investment at Tubi, which should put us in the high $200s, I think, from a net investment perspective across those businesses.

At this point, we're out of time. But if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us today.

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