Fox Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation fourth quarter 2022 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. If you should require assistance during the call, please press star then zero. 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 2022 fourth quarter earnings call. Joining me on the call today are Laughlin Murdoch, Executive Chair and Chief Executive Officer, John Mallon, Chief Operating Officer, and Steve Tomsik, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter, and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, this call will include certain non-GAAP financial measures, including adjusted EBITDA, or EBITDA as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Thanks very much, Gabby, and welcome aboard. We have concluded another successful fiscal year, achieving both the financial and operational goals we set ourselves, with a relentless focus on strengthening our core brands while investing in our high-growth digital initiatives. Over the year, we delivered 8% total company revenue growth, including 7% affiliate revenue growth, notably without the benefit of any meaningful renewals, and 9% advertising revenue growth. despite the record political revenues we saw in the prior fiscal. Those of you on this call who are at our 2019 Investor Day will remember our commitment to you that we would achieve $1 billion of incremental television segment affiliate revenue by the end of calendar 22. I am more than pleased to confirm that we have achieved that billion-dollar target in this past quarter a full six months ahead of schedule. As anticipated, our EBITDA was down modestly as we continued our investment in Tubi and the Fox News Media digital properties, including Fox Nation and Fox Weather, and with the launch of the USFL this past spring. Most importantly, Fox continues to stand apart in a crowded media ecosystem, delivering a consistent operating performance and a robust free cash flow profile alongside an enviable balance sheet. Our leadership position was again evident during the recent upfront advertising sales cycle in which we booked volume commitments approximately 15 percent above last year's upfront with nearly 25 percent of our current year commitments across our growing digital properties. We achieved pricing increases in the high single to low double digits as compared to last year's upfront. Sports led the upfront market, illustrated by the fact that we sold more NFL Sunday advertising in the current upfront market than we did across Sunday and Thursday combined in the prior year's market. This excludes advertising commitments for the upcoming Super Bowl, where we are pacing well ahead of schedule and seeing very robust demand at record pricing levels. Our success in the upfront spanned our entire portfolio. We were able to achieve broadcast-level pricing increases at Fox News, boosted sellout at Fox Entertainment, and, importantly, drove significantly more incremental ad dollars into Tubi. We are, of course, aware of the chatter around advertising headwinds, and, of course, we will be prepared if the market turns downward. But let me be clear, we are currently not seeing an adverse advertising impact on our business. This speaks to the unique positioning and strength of our core platforms. Over two-thirds of our fiscal 22 advertising revenue was generated by live content, with sports and news delivering 40 percent and 30 percent, respectively. Locally, base market advertising sales have been stable. In fact, we are currently seeing a return to growth in the auto category for the first time in a couple of years. This stability in the base market provides a good foundation for the upcoming political cycle where the outlook is remarkably strong. On a comparable basis, our June quarter political advertising revenues were roughly three times larger than those of the fiscal fourth quarter of the last presidential election, which turned out to be an all-time record political cycle for the company. With the combination of political races and ballot issues across our markets, we continue to expect this election to deliver another record midterm cycle. In fact, excluding the impact of the Georgia runoffs in the last cycle, this midterm cycle looks certain to surpass the 2020 presidential cycle at our local stations. There are U.S. Senate races in 13 of our 18 markets, including what we expect to be heavy political spend in Arizona, Florida, and Georgia. Additionally, there are gubernatorial races in 17 of our 18 markets, where we expect heavy spending in Arizona, Florida, Georgia, Michigan, Texas, and Wisconsin. Add to that the issue money in a few key markets, and we are seeing an unprecedented wave of political spending, which accelerates as we head towards November. At the national level, we believe that we achieved the highest upfront pricing increases in cable news history at Fox News, which to a certain extent is to be expected as the Fox News channel again closed the year as cable's most watched network in prime time and total day and continues to generate audiences on par with those of the big four broadcast networks. Fox News was the only cable news network to post viewership gains in the fiscal year in the key adult 25 to 54 demo and total viewers, while extending its streak to 16 consecutive months, beating CNN and MSNBC combined in prime and total day for both the key demo and total viewers. For over two decades, Fox News has been the highest rated cable news channel in prime time. Notably, Fox News just finished the month of July as the third most viewed network in weekday prime in all of television, trailing only CBS and NBC. You know, I've spoken about the political diversity of the Fox News audience previously, specifically about the fact that we have more independents and Democrats watching us than watch CNN or MSNBC. But the diversity of our audience extends beyond political affiliation. In July, the Fox News Channel was the most viewed cable network with Asian and Hispanic viewers. In fact, in that month, viewing among Hispanic households was up 38%, and among Asian households, up 43%. Elsewhere in news, the Fox Nation platform increased its subscriber base by approximately 80% over the past fiscal year, supported by its sustained and high conversion rates of trialists to paid subscribers and retention rates well above industry averages. At Fox Sports, live event viewing was up 5% through the first half of the calendar year, led by our NASCAR schedule, which generated viewership up a solid 10% over 2021. This spring was busy for Fox Sports as we launched the inaugural season of the USFL. The USFL averaged over 1 million viewers on Fox, at least 20% higher than the EPL on NBC and regular season NHL broadcasts on ABC, and more than twice the viewership of MLS on Fox. In its first season, the USFL clearly delivered on its most essential goal, which was to demonstrate that the league belongs alongside other long-established spring sports properties. And as you know, we have an incredibly strong year ahead in sports, which includes the FIFA Men's World Cup beginning this November and the Super Bowl next February. At Fox Entertainment, our content strategy is focused on ad-supported, multi-platform television that can thrive both creatively and financially well into the future. We look to use our broadcast network to build and support businesses beyond our linear air. An example of this approach is Next Level Chef, which was the number one new broadcast entertainment program this past season and Fox's first own production inside our partnership with Gordon Ramsay. Whereas we used only to license Gordon's product from third parties, we now license hits like Next Level Chef to third parties. And we have done so with the sale of the format to ITV in the UK. Another example of how we extend and monetize our IP is the just-launched Gordon Ramsay Fast Channel on Tubi. And speaking of Tubi, One year ago, one year into a focused investment cycle at Tubi, the platform generated TBT growth of nearly 40 percent and revenue growth of 45 percent across the fiscal year, with both metrics coming in better than planned and reinforcing our decision to invest in this strategic asset. During the June quarter, 34 percent growth in TBT helped drive revenue growth in the low double digits. despite a more difficult prior year comparison when we began our ramped content and monetization strategy. In the quarter, we launched 25 linear channels, grew our VOD library to over 45,000 titles, and premiered 13 efficient Tubi originals. We will continue to invest judiciously in Tubi with our sights set on achieving $1 billion in revenue run rate in the next couple of years. As you know, our affiliate renewal cycle begins in earnest this new fiscal year, and we are again looking forward to industry-leading gains from the superior value of our channels and services. With some early, meaningful station and affiliate deals already completed, including the recently closed Verizon deal, we go into this renewal cycle with confidence the market appreciates the value of our brands. In aggregate, these financial and operating achievements again highlight the fact that the Fox story is one of strength, one of focus, and one of stability. We will see how the macroeconomic environment evolves during the months ahead, but as we have demonstrated over the course of the last few years, Fox is well positioned to outperform. We remain encouraged by the Fox specific trends that I've highlighted and that we are observing in real time, underpinned by the best balance sheet in the business, the same a solid balance sheet that helped us thrive despite the challenges of COVID and that will continue to support our investments for long-term growth and shareholder returns. And with that, I will turn you over to Steve.

Thanks, Lachlan, and good morning, everyone. We ended our third full fiscal year with total company revenue growth of 8% and top-line growth across all of our operating segments in every quarter of fiscal 22. Even in a year that for us was light on major sports events and was an off-cycle political year, total company advertising revenues led this growth with a 9% increase over fiscal 21. Cable segment advertising revenues were up 9% and primarily benefited from higher pricing across our news and sports networks. Television segment advertising revenues were up 8% on the back of increased engagement at Tubi as well as higher pricing and the normalisation of live event programming at the Fox network following COVID-related disruptions last year. These gains were partially offset by the absence of the prior year's record political revenues and lower ratings at Fox Entertainment. Total company affiliate revenues increased 7%, led by 10% growth at the television segment and 5% at the cable segment. Total company other revenues increased 15%, driven by high sports sub-licensing revenues as compared to prior year pandemic-related disruptions, growth in Fox Nation subscription revenues, and the consolidation of TMZ, Marvista, and Studio Ramsey Global. This growth in other revenues was partially offset by the impact of the divestiture of the company's sports marketing businesses last fiscal year. We also delivered sustained momentum in our consolidated digital revenues, with a nearly 30% increase year over year. This digital growth was supported by the organic investments across our digital portfolio that we articulated at the outset of the fiscal year. These investments, the establishment of USFL and higher programming rights amortization associated with the normalized sports and entertainment schedules contributed to a modest decrease in our full year adjusted EBITDA, which came in at $2.96 billion. Full year net income attributable to stockholders was $1.21 billion, or $2.11 per share, while adjusted EPS was $2.79, down modestly against the $2.88 reported last year, primarily due to the impacts on EBITDA I just mentioned. Turning to the quarter, we delivered total company revenues of $3.03 billion, up 5% over the same period in 21. This growth was led by a 7% increase in total company advertising revenues, highlighted by the strength of Fox News, record June quarter political revenues at Fox television stations, and continued growth at Tubi. Total company affiliate revenues grew 4%, with 7% growth at the television segment and 2% growth at the cable segment. Once again, this distribution revenue growth was driven by rate increases as the rate of subscriber declines increased modestly in the quarter, with trailing 12-month industry sub-losses running in the high 5% range. Total company other revenues increased 4% as the consolidation of our entertainment production companies and continued momentum at Fox Nation were partially offset by the timing of sports sub-licensing revenues, which were impacted by COVID in the prior year. Quarterly adjusted EBITDA was $770 million, up 7% over the comparative period in fiscal 21, as our revenue growth was partially offset by higher expenses including the impact of the anticipated digital investments of Fox News Media and Tubi, and the first-year deficit associated with the launch of the USFL. Net income attributable to stockholders of $306 million, or 55 cents per share, was higher than the $253 million, or 43 cents per share, in the prior year quarter. This variance reflects the EBITDA movement I just described, along with the mark-to-market adjustments associated with the company's investments recognised in other net. Excluding non-core items, adjusted EPS in the June quarter of 74 cents was up 14% over last year's 65 cents. It is worth noting our effective income tax rate was high for both the quarter and the full year, primarily due to a $30 million remeasurement of our net deferred tax assets. associated with changes in the mix of our jurisdictional earnings. This had no impact on our cash taxes. Now let's turn to the performance of our operating segments for the quarter, starting with cable networks, which reported a 4% increase in revenues. This was led by a 14% increase in cable advertising revenues, driven by strong gains in both pricing and audience at Fox News, notwithstanding slightly higher levels of preemptions associated with our breaking news coverage. Also contributing to the overall segment revenue growth was a 2% increase in affiliate revenues, once again due to the healthy pricing gains across all of our networks. Cable other revenues were unchanged compared to the prior year, as the continued subscription momentum at Fox Nation and the addition of the USFL were offset by the impact of the timing of sports sub-licensing revenues as a result of COVID in the prior year. Ibadara and our cable segment was down 7% against the prior year, as these revenue increases were more than offset by increased expenses, including the planned digital investment and higher programming costs, including those associated with breaking news coverage at Fox News Media, as well as the launch of the USFL. A television segment reported a 5% increase in quarterly revenues. This was led by a 7% increase in television affiliate revenues, reflecting increases for both direct retransmission revenues at our owned and operated stations, and our programming fees from non-owned station affiliates. A television segment delivered 4% growth in advertising revenues, driven by higher political advertising at the Fox television stations, continued growth at Tubi, and the introduction of the USFL, partially offset by lower ratings at Fox Entertainment. Other revenues of television increased 3% in the quarter, primarily due to the impact of the acquisitions of TMZ and Mar Vista Entertainment and the consolidation of our stake in Studio Ramsey Global, partially offset by the timing of deliveries at Bento Box. EBITDA in our television segment increased over 50% as expenses were flat against the prior year quarter. Here, we saw accelerated digital investment of Tubi and the consolidation of the entertainment production assets offset by the timing of programming costs at Fox Entertainment. During the full year, we generated free cash flow, which we define as net cash provided by operating activities, less capex, of $1.6 billion. Over the course of fiscal 2022, we returned $1 billion of capital through the repurchase of 18.7 million Class A shares and 8.7 million Class B shares. This was supplemented by over $270 million in dividend payments and, underlining our continued commitment to shareholder returns, today we announced an increase in our semiannual dividend to $0.25 per share. With the payment of this dividend, we will have cumulatively returned over $3.75 billion of capital to our shareholders since the formation of Fox. This includes share repurchases totaling over $2.65 billion against our buyback authorization of $4 billion. From a balance sheet perspective, we ended the quarter with $5.2 billion in cash and approximately $7.2 billion in debt. Our fiscal 2022 financial performance, along with the progress we have made on our strategic priorities, provide a strong foundation for us to springboard into fiscal 23 where the setup is incredibly favourable. We remain confident that collectively the financial tailwinds from Super Bowl 57, the early exit of Thursday night football, the momentum heading into November's midterm elections and the start of our next major distribution cycle will deliver record revenues and EBITDA in fiscal 23. As we've highlighted previously, our plans for fiscal 23 incorporate maintaining our current level of investment in our digital growth initiatives. From an affiliate revenue perspective, as you would expect, we make no predictions on industry subscriber volumes. However, from a rate perspective, given the timing and nature of our affiliate renewals, you should expect to see the financial benefit of these renewals skewed to the second half of the fiscal year and concentrated toward our television segment. Our focus strategy and operational execution continue to distinguish us. Together, they have delivered sustained financial outperformance since the establishment of FOX and will be showcased with a banner year of events in fiscal 23. This momentum, supported by the most robust balance sheet in the industry, position us well to navigate the broader macroeconomic turbulence while creating value for our shareholders. And with that, Gabby, let's now open it up for Q&A.

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

Ladies and gentlemen, I'd like to emphasize the functionality for the question and answer queue. If you wish to ask a question, please press one then zero on your touch tone phone. You will hear a tone indicating that you have been placed in queue. You may remove yourself from queue at any time by once again pressing one then zero. If you are using a speakerphone, please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question. Once again, if you have a question, please press 10 at this time. One moment, please, for the first question. We have a question from John Hudlik with UBS. Please go ahead.

Okay, great. Thanks, guys. Two quick ones, if I could. First of all, on the Verizon renewal, anything you could tell us about pricing you got with that deal and how that positioned you for the sort of upcoming renewal cycle. And then looking out into 23, you know, given the cash balance and, you know, sort of all these sort of EBITDA drivers, you know, how should we think about capital return and the buyback? And, you know, do we have to wait for a resolution to the FanDuel situation or, you know, How should we think of that, just sort of given all the cash on the books and what you'll generate this year? Thanks.

Hey, John. Good morning. I'll answer the Verizon renewal question, and I'll let Steve answer the fun question about our cash on the books. And he's got the keys, so that's an important answer. On the Verizon renewal, I'm obviously not going to give you a specific exact pricing, but it's – absolutely in line with what our forecasts and sort of long-term plan suggested. We're very happy with our partnership with Verizon. And, you know, I think it's fair to say that when we achieved, you know, industry-leading pricing increases for, you know, really are the best brands in the business, you know, between Our local stations and on retransmission renewals and the really incredible strength of Fox News and the loyalty and engagement of the Fox News audience, we're able to drive these industry-leading pricing increases. Just one added element to that, which I think is important for us, is we're also able to achieve distribution for Fox Weather, which we'll continue to include in our future upcoming renewals. And also, we expanded our relationship with Verizon to include a distribution of Tubi. So overall, we are very pleased with that renewal, and we think it sets us up well for the next two years, but we have two-thirds of our distribution coming up. So we're very pleased, and we appreciate the partnership with Verizon.

Steve?

Yeah, hi, John.

So yeah, you're right. Listen, we've got a really strong balance sheet. We've ended the year with a little over $5 billion in cash and as the opening remarks indicate, we're really bullish about going into fiscal 23 from a revenue, EBITDA and cash flow perspective. But listen, our story remains consistent. We're going to continue Our biggest use of cash since the inception of Fox from a capital perspective is to actually return it to shareholders. And in my opening remarks, I talked about the volume that we have returned to shareholders, and we continue to remain committed to that. We have $4 billion authorization. We have $1.35 billion of headroom left in that. But we're going to remain open to investing both organically and inorganically in the business. We're going to be balanced about that as we see opportunities on the horizon. So... So a remarkably consistent story on our capital allocation.

Operator, we can go to the next question.

And that is from Phil Cusick with JP Morgan. Please go ahead.

Thank you very much. Good morning. You know, one quick follow-up on your comments on the ad market. Any sort of thing you're seeing overall in the macro environment, whether it's your own deals or not that we should be aware of, And then second, I wonder if you can talk about, you mentioned, I think it was high fives of industry declines. I'm curious if Fox affiliate customer accounts reflect that acceleration in the video industry decline, or if maybe you're seeing a little bit less, given your different customer base. Thank you.

So on the advertising market, and good morning, Phil. I'll give you a little bit of color. I might jump around a little bit, but, you know, as I mentioned, you know, for us, you know, one of the most sort of pleasing things that we're seeing is actually in the local stations, you know, our base markets are ex-political. The, you know, base market is very stable, and I mentioned in my remarks, you know, particularly the return to growth for the auto category. is, you know, it's obviously something that's concerned. So the last couple of years with COVID and the softness in the auto category, the return of growth, the auto categories is a, you know, a really strong indicator of things to come. You know, we are seeing locally, you know, two verticals or two categories that are soft. One is the local wagering, sort of betting category soft. But that's really what we're seeing there. I think it's pretty interesting and perhaps predictable, a shift of that business going to national. So where we're seeing softness in local for wagering, we're seeing strength in national for the betting market. I think that's, you know, the purpose or the reason for that is obviously as more states become legalized, the national platform is particularly national sports. is an efficient and a good buy for the betting businesses. And then we're seeing some softness in government spending. That was really COVID health spending over the last couple of years, which obviously is not there anymore. But that's being more than made up across our other strength in our other categories. So two areas of weakness locally in betting government, but it's more than made up by strength in other categories. In terms of the scatter market, We're actually seeing a scatter for us before we get into the fall sports cycle is a quiet summer, is a quiet period for us, or it has been. So we actually don't have a lot of scatter avails, but scatter pricing is up in the low double digits, which is good to see that strength. And then from a macro environment point of view, again, we're seeing no impact in our advertising across our businesses, with the exception of softness, which I think has been well-reported in other areas, some softness in programmatic advertising. For us, that's sort of 10% of our advertising business, so it's not having a significant or meaningful impact on us at all, and that 10% is really due to programmatic advertising into Tubi and into our Fox News media digital platforms. Steve, do you want to answer the second part of the question?

Yeah, so Phil, just on the rate of subscriber erosions, I think, listen, our channels are mass-carry channels, so I think we're best positioned to buffet any sort of weakness in the subscriber universe. I think where people... find it challenging to reconcile between sort of how we report numbers and where you see numbers from the street. There's a couple of things. One is we're on a two-month delay versus what's being reported by the distributors. And the other piece is there's a fair amount of opacity around some of the platforms that don't report. So you've got many of the virtual MVPDs don't break out their numbers, and DirecTV no longer breaks out its numbers. And so that's probably where you're seeing the sort of friction between the reported numbers.

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

Very good. That's the line of Robert Fishman with Moffitt Nathanson. Please go ahead.

Good morning, everyone. There's lots of chatter right now around the Big Ten renewal in the marketplace. Just wondering if there's anything you can share specifically on those rights or maybe bigger picture how Fox is positioned to renew key sports rights with your current portfolio of assets compared to either some of the pure digital companies or other media companies with SVOD services. And then how do you think about the ROI of these sports rights investments going forward?

Hey, good morning, Robert. So just a little overall, then I can come down to drill down to Big Ten. You know, we're always going to look at sports rights as they become available. I think, you know, we've been... very disciplined in terms of how we analyze and how we think about acquiring any additional incremental sports rights. We look at it both obviously from any individual sport can achieve both in terms of an audience and advertising revenue. We can attach to that, but we specifically also drill down into what we can achieve from a subscriber, what we can attribute to a affiliation agreement with the distributor in terms of subscription revenue. So we do take a pretty scientific and I think very disciplined approach to how we view sports rights, but we do look at all the sports across the marketplace and see what would fit within Fox Sports. I think if you look past over the past years, the story that hasn't been written is the sports rights that we pass on, that we decide are too expensive to or won't add any incremental revenue to our business. And that continues to be the way we look at it. As regards to Big Ten, Big Ten Network is a key strategic partner of ours. We've had a great relationship with them, and we look forward to renewing those rights, potentially with some new broadcast partners within the mix. That'll be a that Big Ten will make. We expect in the near term, but it's one that we'll leave for them to make. But we're looking forward to a continued long-term and profitable relationship with them.

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

That is the line of Ben Swinburne with Morgan Stanley. Please go ahead.

Hey, good morning, guys. Two questions. One, you know, I think there's been a lot of enthusiasm over the past couple years about Fox's opportunity in sports betting. I think it's gotten a little quieter on that front, at least in terms of the market discussion. Can you guys update us on what you see ahead of the company there, both directly with FoxBed, and is there any timing on something with Flutter, and also just sort of the benefits to the broader business? And then I just wanted to clarify, Steve, you said you expect to maintain the current investment level in fiscal 23 versus 22. Is that a comment on just the amount of capital you're deploying, or is that sort of an EBITDA net impact on EBITDA? Just want to make sure we understood the comment there. Thanks.

Thanks, Ben. So, look, we continue to, you know, have a, you know, believe sort of have a fundamentally sort of strong belief in the sports betting business. We think it's a huge opportunity. in the marketplace, specifically in its association with the Fox Sports brand. We drive the largest sports audiences in this country, and no other broadcaster can achieve the reach and engagement that we deliver, certainly during the autumn and the fall, on a weekly basis. And so we've proven this the last couple of years with Fox Bet Super 6, which really taking our sports audiences, and I know we've talked about it before, Ben, but taking our sports audiences from television into Fox Bet Super 6 provides a tremendous funnel, which Fox Bet is the ultimate beneficiary of. That continues to be our strategy, and it continues to be very successful. As regards to Flutter, we're still in our arbitration process with them. We look forward to the clarity of getting through that process, which we expect to be in the next couple of months, certainly sort of by the beginning of the autumn. But once that situation is clarified, And also in early September, as you see the NFL season kick off again, you'll see a lot more activity around Fox Bet and Fox Bet Super 6.

Hey, Ben, just picking up on your question around organic investment. So the way we defined it, we called our $200 million to $300 million of net EBITDA investment for fiscal 22. So put another way, our fiscal 22 EBITDA would have been $200 million to $300 million higher than what it was had we not made those investments. We anticipate maintaining that level of investment, meaning that when you compare 23 to 22, you will not have that drag on the results. So I hope that explains that for you.

Operator, we have time for one more question.

Very good. That's the line of Doug Mitchelson with Credit Suisse. Please go ahead.

Thanks so much. If I could get a clarification on the Big Ten website, you have digital rights for big 10 games and you'll maintain those, uh, in any new deal that, uh, that you're looking at another clarification. I'm wondering if you have up for volumes X Superbowl and X, you know, FIFA, I'm just trying to get an X unusual, how strong we are up for volumes. And then, uh, lastly for, uh, Steve, any swing factors in that free cashflow outlook for fiscal 23 that we should be thinking about working capital or CapEx or anything like that? Uh, And good morning, everybody. Thank you. Hey, good morning, Doug.

I hope you're well. So we have Big Ten digital rights, and we will keep those in the new deal. So I hope that clarifies that. Again, I don't want to say too much because it's for the Big Ten to announce their new agreements. Um, in terms of, uh, upfront volumes X, I think your question was, well, what are they X Superbowl? You know, obviously we look at everything X, X Superbowl because, uh, because, uh, you know, it's obviously such a huge year for us. We, you know, we're looking forward to, um, you know, we're getting record pricing for Superbowl and, and, uh, and we're well ahead of plan in terms of selling our, our, our Superbowl, uh, uh, positions. Uh, but X, X Superbowl upfront volumes were about 15%, um, higher than, um, than the last up front. I think one of the, and that's across entertainment, sports, and news. I think the important thing to note there though is that the up front volumes to some degree are a metric that we control. We chose very purposefully, and I think in a very disciplined and hopefully judicious way, to sell more volume into this upfront because we felt it was a period where having certainty around or the highest level certainty we can around our sales and our inventory was important. So for instance, in years where we would, the past years where we would sell in the mid-70s, a percent of our available ad impressions, we now sold in this upfront in the low to mid 80s. And I think that was sort of a smart decision and one that we felt was appropriate given any uncertainty around the economy or the advertising market going forward.

Doug and Steve, just on the free cash flow, I think from a working capital perspective or big swing factors, I think from an accounting version of working capital, Remember that we're into a Super Bowl year, so therefore we amort a ton of the NFL costs in a Super Bowl year, so it has an impact on our working capital. Our CapEx was down to a touch over $300 million this year, which was down from a touch north of $480 million the year before. You should expect the $300 million to go up a touch. But the rest of it is, I think, pretty much stopping trade in terms of cash flow swings. There's nothing... particularly unique about next year, apart from the tailwinds that we have going into it from an operating perspective. Great.

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

Thanks, everyone. Thank you.

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