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spk07: Ladies and gentlemen, thank you for standing by and welcome to the Fox Corporation's first quarter fiscal year 2024 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 the functionality for the question and answer queue will be given at that time. Should you 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.
spk08: Thank you, Operator. Good morning, and welcome to our fiscal 2024 first quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Mallon, Chief Operating Officer, and Steve Tomczyk, 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. 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.
spk06: Thank you, Gabby, and thanks, everyone, for joining us this morning. I just want to start with a comment and a note of thanks. We are living through tumultuous times. And at the outset, I want to acknowledge the work our journalists are doing covering the horrific October 7th terrorist attack and the subsequent ongoing war in the Middle East. From the reporting of Trey Yingst, Greg Palcott, Mike Tobin, and Lucas Tomlinson in Israel, and Steve Harrigan in Baruch, to the deep analysis and insightful commentary by our reporters and hosts, including John Roberts and Trace Gallagher, to the essential and brave work of our on-the-ground producers and camera crews, Fox is fulfilling its mission to find, report, and analyze the news of the day without fear or favor. News reporting is hard, and war reporting is perhaps difficult. the hardest. And while the horror central to this news cycle can wear heavily on those we ask to expose them, their exposure is necessary. And so our team deserves our admiration and our gratitude as they continue to work tirelessly and under demanding conditions to keep us up to date on events far away and on their impact closer to home. My sincere thanks to them all. Now, turning to today's first quarter earnings release, against a backdrop of an active news cycle and a robust sports schedule, fiscal 2024 has started off on a solid operational and financial footing. Fox's focused portfolio of assets continues to distinguish itself and deliver exceptional results. Financially, we are now comparing against the fiscal 23 cycle of events that delivered then record revenues in EBITDA. Despite this comparison, we posted total revenues this year slightly ahead of last year's record. On the affiliate side, we reported 2% total affiliate growth led by 8% growth of the TV segment in the quarter. Importantly, we have continued to secure constructive renewals which deliver for our partners and reinforce the value of our brands and programming. Advertising revenues in the quarter decreased by around 2%, principally due to a comparative quarter last year that was much heavier in political ad revenues at our local TV stations. We understand there is inconsistency around the broader advertising market, particularly in entertainment, but our focus on live sports and news continues to deliver. with healthy national pricing and demand in addition to continued momentum at Tubi. Underpinning revenue are our core brands, which consistently resonate with viewers. And the consumption data clearly shows this, with total viewing of Fox brands up 2% in the quarter. Fox Sports was a big driver of that consumption, especially with its broadcast of the Women's World Cup, where the US versus the Netherlands on Fox was the most watched Women's World Cup game match ever on U.S. English language television. From summer to fall, our lineup is bolstered by our football packages, led by the NFL and Fox, where we are averaging over 17 million viewers through week eight. Based on the strength of our remaining schedule, especially from Thanksgiving through Christmas, we expect that engagement to improve significantly. In college football, interest is reaching new highs. Fox's Big Noon Saturday is progressing to a third straight year as the number one game window in all of college football, averaging almost six million viewers. At Tubi, we had another enviable quarter, delivering 30% revenue growth driven by an impressive 65% lift in total view time. Tubi surpassed 70 million monthly active users in September, logged nearly four billion streaming hours in the first half of the calendar year, and remains the number one Ava player and most watched free ad-supported TV streaming service in the United States. Additionally, Tubi has beaten Pluto, Max, Paramount+, and Peacock in view time for five consecutive months. One reason for the high engagement levels of Tubi is its extensive content library that now exceeds 60,000 titles, which translates into more than 225,000 movies and TV episodes. in addition to approximately 300 fast channels. And during the quarter, Tubi introduced Rabbit AI, a chat GPT-4 powered recommendation engine to help users navigate this incredible range of titles. Tubi also offers a unique and compelling proposition to advertisers. A recent MRI study of streaming peers concluded that Tubi saw the fastest growth amongst young and diverse populations. and the Tubi is able to deliver high value net new audiences with 33% of Tubi streamers unreachable on other top AVOD services. Now turning back to Fox News, the strength of our overall news coverage and the reach of our linear audio and digital content is unmatched. Whether it is the conflict in the Middle East, the upcoming 2024 election cycle, or volatility in the financial markets, Fox News is increasingly the viewer's first choice. The launch of our new expanded primetime lineup in mid-July further solidified Fox News' leadership position, not only in cable news, but in all of cable, finishing the quarter as the most watched cable network in both total day and primetime. Fox News maintained its lead as the most watched cable news network, beating CNN and MSNBC in total viewers, and in the demo for both prime and total day. We have seen this lead continue and expand in the current quarter, with October viewership increasing over 20% from the first quarter, with over 30% growth in the key demo. Ratings leadership during the quarter was achieved across the platform. The Fox News Channel had the top six cable news programs, with P2+, and the top seven programs within the demo. In P2+, the five led the way in terms of viewers, followed by Jesse Waters Primetime and Hannity, while the five, Gutfeld, Hannity, and Jesse Waters Primetime were the top four programs in the demo. And Fox Business News ended the quarter as the most-watched business cable network, beating CNBC in total viewers during the business day for the sixth consecutive quarter. The election cycle started off with a successful Republican presidential primary debate, which was Fox News Channel's highest-rated telecast since Election Day 2020 and the highest-rated non-sports telecast of the year across cable. While the debate kicked off the election cycle, once we get deeper into it, our local station group will benefit greatly from increased political spend in the coming quarters. Over at Fox Entertainment, we started the 2023 to 2024 broadcast season as the number one network in the key adult 18 to 49 demo, and Fox ranks as the top network in entertainment programming, a first in at least 10 years. Fox has three of the top four highest rated premieres, of the 2023-24 season to date in Krepopolis, the Simpson, and the Masked Singer, and the season's number one new game show with Snake Oil. Across the company, fiscal 24 is shaping up nicely. We look forward to a great enthusiasm across the fall sports season, underpinned by the NFL, college football, and now the completed World Series. Continued viewing growth at Tubi, and renewed momentum at Fox News and our local stations as the election cycle heats up. Our balance sheet remains a core asset for Fox, and we will continue to deploy it in a disciplined and thoughtful manner that delivers value for our shareholders. Finally, I would like to congratulate my father on his 70-year career at News Corp and Fox. His enduring legacy can be felt in both of these companies, and I can assure you that he is still very much involved and will continue to be for years to come. With that, I'll turn it over to Steve to take you through the operating details of the quarter.
spk05: Thanks, Lachlan, and good morning, everyone. Fox reported total first quarter company revenues of $3.21 billion, which is slightly above the prior year quarter. This was led by a 2% increase in affiliate fee revenues as the pricing gains from recent distribution renewals more than offset the impact from industry subscriber declines. From an advertising perspective, we of course face the tough comparison to last year's record mid-term political revenues at our local stations. This, coupled with continued softness in the direct response marketplace of Fox News, more than offset the benefits we saw from the broadcast of the FIFA Women's World Cup, the 30% revenue growth generated at Tubi, and continued supportive national pricing for live content. Taken as a whole, our advertising revenues declined 2%. Meanwhile, total company other revenues increased 2% or $6 million. Quarterly adjusted EBITDA was $869 million as compared to the $1.09 billion reported in the prior year quarter. Expenses increased this quarter driven by higher rights amortization and production costs associated with the Women's World Cup, the first year step up from our NFL rights renewal, and increased expenses at our digital businesses. Net income attributable to stockholders of $407 million, or 82 cents per share, compared to the $605 million, or $1.10 per share, reported in the prior year period. This move largely reflects the EBITDA impact I just mentioned, along with the change in fair value of the company's investment in Flutter, recognized in other nets. Excluding this impact and other non-core items, adjusted EPS was $1.09 versus last year's $1.21. Turning to our operating segment results, starting with television, where we delivered total quarterly revenues of $1.78 billion, or a 4% increase year over year. This was driven by an 8% increase in TV affiliate revenues, as healthy growth in fees across all Fox-affiliated stations more than offset the impact from industry subscriber decline. Advertising revenues at our TV segment grew 1%, led by the benefits from the broadcast of the Women's World Cup continued growth at Tubi, and the timing of college football broadcasts, partially offset by the absence of last year's midterm political revenues and lower ratings of the Fox network. Television and other revenues increased 6% in the quarter, primarily a result of the timing of participations tied to our entertainment production initiatives. The growth in revenue at our television segment was more than offset by a 10% increase in expenses, including costs associated with the Women's World Cup, the first-year step-up associated with the renewal of our NFL rights, and continued investment at Tubi. Together, these revenue and expense impacts led to quarterly adjusted EBITDA of $351 million at our television segment, compared to the $409 million reported in the prior year quarter. Our cable segment reported total quarterly revenues of $1.39 billion, a 3% decrease year over year. Cable affiliate revenues were down 2% in the quarter, largely a result of industry subscriber declines which continue to run in the 8% range. Cable advertising revenues were down 8% as the broadcasts of the Women's World Cup and the Men's CONCACAF Gold Cup were more than offset by the continued impact of a softer direct response marketplace and lower ratings at Fox News Media. Notably though, we continue to see healthy national linear and digital demands from advertisers at Fox News Media. Cable other revenues increased by $6 million in the quarter due to the timing of sports sub-licensing revenues. Meanwhile, expenses at our cable segment increased 13%, led by higher programming rights amortization and production costs for the Women's World Cup and Gold Cup, the timing of college football broadcasts at Fox Sports 1, and contractual rights increases across our sports portfolio. All in all, this resulted in adjusted EBITDA at our cable segment of $607 million compared to the $742 million reported in the prior year period. Turning to cash flow, where free cash flow, which we define as net cash provided by operating activities, less capex, was negative $70 million in the quarter. This is consistent with the seasonality of our working capital cycle, where the first half of our fiscal year is characterized by a concentration of payments for sports rights and the buildup of advertising-related receivables. both of which reverse in the second half of our fiscal year. From a capital deployment perspective, fiscal year to date, we have repurchased a further $300 million through our shared buyback program. We've now cumulatively repurchased $4.9 billion, representing approximately 24% of our total shares outstanding since the launch of the buyback program in 2019. and we remain committed to utilizing our full buyback authorization of $7 billion. This is supported by the strength of our balance sheet, where we ended the quarter with approximately $3.8 billion in cash and $7.2 billion in debt. This excludes the one and a quarter billion of senior notes that we issued in early October, the proceeds from which we intend to use to pay down the corresponding maturity coming due in January 2024. And with that, I'll turn the call back over to Gabby.
spk08: Thank you, Steve. And now we would be happy to take questions from the investment community.
spk07: Thank you, 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 1, then 0 on your touchtone phone. You will hear a tone indicating you've been placed in the queue. You may remove yourself from queue at any time by repeating the 1-0 command. If you're using a speakerphone, please pick up your handset before pressing your number. Again, if you have a question, please press 1 and 0. And it has been requested that you limit yourself to one question. And one moment for our first question. And that'll come from Robert Fishman from Moffett Anderson. Please go ahead.
spk03: Yeah. Good morning, everyone. After deciding on passing on the WWE renewal, can you share anything specific on how you evaluated the ROI of the deal in the context of driving higher advertising and affiliate fee revenue? And then maybe just more broadly, can you discuss whether you expect to see any impact on future sports rights negotiations if the Disney charter renewal impacts the industry rate of cord cutting or affiliate fee growth going forward? Thank you.
spk06: Hey, good morning, Rob. There's a lot in there, so let me unpack it bit by bit, and I hope I don't miss anything. So how we – I think we've talked about this before, but how we analyze the WWE renewal, and we look at all of our sports portfolio in the same way and on all new rights, opportunities to acquire new rights in the same way. On the basis of that analysis, on both an advertising point of view, we were not hitting the advertising numbers due to the audience of the WWE for our return on investment to be above the levels that we would accept, but also we didn't attribute enough significant retransmission revenue to the WWE either. So it made sense for us to move on from them. They've been a great partner for many years, but just quite simply we're very disciplined and the RRA didn't meet our pretty disciplined parameters. So we wish them luck and we've moved on from them. We're currently in, I think, the final stages of a very constructive negotiation for our NASCAR renewal. We look forward to continuing that partnership with NASCAR. It's been a great partnership for many years, and obviously NASCAR exceeds our expectations from an ROI point of view. In terms of Disney and Charter and how that affects our view going forward, I think it's a net positive for us. I think that we want our distributors to do well. We want them to continue to invest in high-quality programming and high-quality brands. And obviously, between Fox News and Fox Sports, our station group and our network, We have a very focused, very valuable set of core brands that distributors such as Charter value. So net-net, the Disney Charter deal has been positive for us and positive for our strategy.
spk07: Next question, please. The next question is from Vin Swinburne from Morgan Stanley. Please go ahead.
spk04: Thanks. Good morning. My one question is on unlocking value, although it does admittedly have two pieces that might be connected. I guess first, it's a confession. I wanted to ask about sports and Tubi. Arguably, the popularity of sports, particularly football, and even more particularly college football, has probably never been higher. Your college rights are probably more valuable today than ever. I'm just wondering if you guys have ideas on capitalizing and maximizing the return on those rights beyond the kind of stuff we always think about with, you know, advertising on the, on the live rights and, and retrend fees. And then kind of related maybe is, is leveraging to be both in terms of sports, but also just broadly like your stock doesn't have, I think probably objectively credit for what to be is worth. And it continues to grow. are you guys thinking about ways to try to highlight that value more or, or scale it up maybe through some strategic activity? I don't know. Any thoughts on helping to unlock some value around an asset that's, that's obviously doing quite well and probably would be worth a lot more of the public company than, than what it, what it is currently priced at inside of a Fox. So I know that's a lot, but we'd love your thoughts.
spk06: No, that's fine, Ben. Good morning. Uh, so, uh, I think the best way – I can answer both questions sort of with one answer, I suppose, which is the value – you're 1,000% right. College football has never been more popular. It's rating extremely well. And one of the things we haven't talked about is, frankly, advertisers have found it. Advertisers are pouring in to college football with tremendous rates and with tremendous – appetite for volume because they can see the value in this audience. And perhaps it's been underpriced in past years. I'm not sure. But certainly advertisers are recognizing the opportunity in college football, and obviously we're the leader. But ultimately, we build value through our brands and through the Fox Sports brand and Fox Sports and station distributions. And so we'll continue to build value through college football through the Fox Sports brand and monetizing it that way. The same thing with Tubi. First of all, we don't envisage any kind of significant live sports on Tubi in the near or, frankly, medium, perhaps even long-term future. But Tubi is very focused on on primarily entertainment, particularly in video on-demand entertainment, which makes that content and that engagement with their users all the more valuable. And I think it'll be a long time before we see significant live sports on Tubi. In terms of how we unlock the value in Tubi, Tubi will be the way... Our audiences primarily engage with entertainment in the future. It's a core part of our business and a core part of our strategy. We're building value there organically through driving its growth. I couldn't be more pleased with the arrival of our new CEO, Anjali Sood. She's doing a tremendous job and has a very clear and strategic sort of attention and view for how we continue to drive Tubi's success. Thank you, Ben.
spk07: Operator, we'll take the next question. And that's from Jessica from Bank of America Securities. Please go ahead.
spk00: Thank you. First of all, I want to say I really appreciate your introductory comments regarding news reporting and, of course, about your father, who is definitely one of a kind. But my question, I guess, to part two, as usual, from all of us. First on advertising, can you give us your outlook for political advertising and what the current tone of sports advertising is? We know the general marketing still seems pretty tepid. And then maybe kind of a nuance on what Ben just asked, but the longer-term vision for 2B, like it's clear, you know, there's tremendous growth near-term, but is this the vehicle, as you mentioned, think about possibly transitioning to streaming given the decline in the universe, or how are you thinking about it?
spk06: Thank you, Jessica, and then thanks for your thanks for my comments. So let me start with advertising. So, you know, we also hear and understand that the advertising market – appears to be, I use the word mixed, right, or sort of unsettled. However, we are not seeing that to the same extent due to our focus on sports and news. So let me start with sports where we're seeing high demand around you know, our NFL, and we just discussed our, you know, college football schedule. You know, particularly in the national sort of market, pharmaceuticals, auto, quick service restaurants, and CPG categories have all been, you know, quite active. And I think importantly, our pricing has been at a premium to our upfronts. It's a modest premium, but we are pricing above our upfronts, which, you know, shows certainly in the sports category that you know, the market remains healthy. This will be somewhat tempered by postseason baseball, including the conclusion of the World Series last night. You know, I think, you know, sometimes you get lucky and you get seven series, seven game series, you know, with matchups that incite the imagination of a national audience, and sometimes you're less lucky. So that's how the cookie crumbles. And so I think we would have liked to have seen more games, and we'd like to have seen a bit more sort of national excitement around these games, but it is what it is. Having said that, we should congratulate the Texas Rangers for a great season and winning the World Series. At Fox News Media, national advertising is solid with growing pricing. And, you know, it's important to note that we have over 80 new national advertisers in primetime, specifically in our 8 p.m. hour in the first quarter. So, you know, the refreshing of our schedule and our lineup, you know, has worked from both a ratings perspective but also from an advertising perspective, you know, really, really very well. Direct response continues to face some headwinds, really from last year, from the previous upfront, which technically created sort of an oversupply in the market for direct response and put downward pressure on pricing. We would expect as we go forward for that pressure to be relieved. There will be some, and we've got increased audiences due to the news cycle, which is a positive from a ratings point of view, but that's partially offset by an increased level of preemptions due to our really in-depth and incredible reporting. So overall, just overall at sports and news, we are very happy with the overall performance of both of those verticals in our business. We're also very happy at Tubi. We've announced we've had 30% revenue gains, which has really driven off the 65% growth in total view time. I think going forward, you will see continued growth in view time. Anjali is very focused on that. There is softness in the entertainment advertising market, and Tube is not immune from that softness. Anjali is focused on how we better monetize. We've ridden this incredible growth in audience and viewership, and now it's time to really focus on how we more effectively and efficiently monetize that huge audience. You know, we've earned the right because of the audience growth to really start to take a greater share of wallet from our advertising partners. Finally, the local stations. We are pacing slightly ahead of last year in the base market if you exclude political. You have to remember, you know, this... quarter last year, October particularly, and I think it had over $125 million worth of political revenue in the month of October alone. So it's a huge year-on-year comparison. But ex-political, we're very pleased that the base market is strong. And that's really led by the auto and recently the retail categories are very strong, also financial services. That's offset with betting, wagering. And also entertainment, right? Due to the strike in Hollywood, there's no movie launches. So that's offsetting some of the growth in auto, retail, and financial services. Now, I should go on to some of the other part of your question. Sorry, I'm taking too long, Jessica. That's what happens when you ask three questions in one. So the longer-term strategy for Tubi, look, I think we have a multi-pronged strategy. I think Tubi is in an enviable position. It's the leading AVA player. It's free. It's focused. It's entirely advertising-driven. That's appreciated by all of our clients and obviously by our audiences. And I couldn't be happier with our transition from Farhad, who is an incredible entrepreneur who deserves all the credit for founding and building and driving Tubi to date. It's always a difficult transition when you move from a founder to a new leadership. So far, it's early days, but Anjali is very focused on all the issues and all the opportunities that Tubi has in front of it. to continue to grow at impressive levels. But 2B is our free AVOD streaming service. It's not our only strategy in the streaming space. Direct-to-consumer is obviously something that we look at closely. We have a small direct-to-consumer SVOD service in Fox Nation. And we have optionality of, you know, expanding those services, you know, further into news and potentially sports. I hope I answered most of your questions, Jessica.
spk08: Operator, next question, please.
spk07: The next question is from John Hudlick from UBS. Please go ahead.
spk01: Okay, great. Morning, everyone. First, can we just get an update on the affiliate renewal process? I think you guys had said that it would be more weighted on the TV side, but I think a lot of the new agreements kick in in January. So just any color on the trends we should see there. And then getting back to the charter Disney renewal, you guys seem to be somewhat unique in that you don't really have any long-tail networks or I would say a major SVOD network. platform, Lachlan, you talked about Fox Nation, but it's obviously very different than what we're seeing in the rest of the industry. Just any thoughts on the implications for Fox if this model that we've seen out of this renewal would be broadly adopted over time for the industry?
spk06: Thanks. Thanks, John. On affiliate renewal, let me start with a big question, and Steve can talk to any of the numbers going forward. or not, depending on. But look, the main thing on affiliate renewal is, you know, we, you know, really due to our focus, strategy, our focus on our core brands. Also, I think our focus on being good partners with our distributors and wanting their businesses, you know, to succeed. Because, frankly, from a Fox perspective, The cable bundle, cable distribution or pay-to-be distribution remains our largest and really most important revenue stream. And we believe that it will remain our largest for years to come. So we feel the success of our distribution partners is our success as well. We want them to succeed and we want them to do well. which is one reason why we've kept our premium content within the cable bundle. We are not interested in, at this stage, moving premium content away from our cable distribution partners. That would be, I think, a mistake for us and for them. And so due to that, since our last call a quarter ago, We have renewed a number of distribution contracts and in every case we've been rewarded by that focus, rewarded by our partnerships with our affiliate partners, our distribution partners with our rate increases and distribution agreements that fit absolutely in line with our plan. And that's because they value our brand, they value Fox News, they value Fox Sports, and obviously our local stations and network. So we are very pleased with our pace of field renewals, and we haven't seen any changes to the way we're able to work constructively with our partners. And that goes to the second part of your question with Charter and Disney. It's hard for me to say how I – I don't want to talk about other people. I know a lot of people have their earnest calls next week. I think we're early in the media cycle. They can talk about how that renewal affects them and particularly their entertainment channels. For us, because we're not in that space, I think it's net positive. We like to see our – our partners focus on the core brands, the core brands where all the audience is, and frankly, where the leverage is in terms of retransmission, unless so on channels that might not be as popular. Steve, do you want to?
spk05: Yeah, so John, just to reinforce Lachlan's point, we had just over a third of our distribution meals due this fiscal year, and we're virtually through all of that. And as Lachlan mentioned, we've achieved our pricing objectives against those renewals which goes to either the fact that we haven't gone dark with any distributors and the fact that we've been able to achieve objectives and I'm assuming the distributors are also happy with those renewals. It goes to the constructive relationship we have with those distributors and so we negotiate our full portfolio as a bundle and I think you should expect to see that coming into the new calendar year you'll see the impact of those renewals and I suspect that The benefit of those will be skewed towards the television segment, but you should also expect to see some progress on the cable side in the new calendar year, I should say.
spk08: Operator, we have time for one more question.
spk07: Thank you. And that question will come from the line of Bill Cusick from J.P. Morgan. Please go ahead.
spk02: Hi. Thanks. A lot's been asked, but Lachlan, thinking about your comments on DR and recognizing that some of those upfront issues hopefully fade, but it makes me curious about your view on the future of the linear video ad landscape. You know, you have 2B, which allows you to benefit from the shift to digital, but do you think we reached a tipping point where linear video advertising is in secular, not just cyclical decline?
spk06: Thank you. Thank you, Phil. The short answer is you have to, I think, break it up by category, right? And so if we look at sports advertising, and news, there's no sign of a slowdown in demand for the really incredible and unique reach that those platforms deliver our advertising clients. I think the DR issue is a specific issue. that really relates to, you know, up from before last, you know, where there was a, you know, due to the negotiating strategy of some of our competitors, there was an oversupply of direct response in the market, and that's driven pricing down. You know, and we see, we didn't see the same activity in this past up front, and so we expect the pricing pressure on DR to, ameliorate or wash out in the coming quarter. So we do see that as a shorter term problem and not a structural problem at all. And so it comes back to, particularly in news and sports, there is no other content or platform that offers the reach that those categories offer. And so we are optimistic is not a strong enough word. We are very confident in the future of linear advertising when you can deliver the audiences that we deliver with the brands and the brand safety that we also can offer our clients.
spk08: 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.
spk06: Thank you, everyone. Thank you.
spk07: Ladies and gentlemen, that does conclude your conference call for today. Thank you for using AT&T Executive Teleconference. You may now disconnect.
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