Grupo Televisa S.A.B.

Thank you and welcome everyone to Televisa Univision's third quarter 2024 earnings call. I'm joined today by Wade Davis, vice chairman of the board, Daniel Allegre, CEO, and Juan Pablo Newman, interim CFO. This morning we issued an earnings release which can be found at .televisaunivision.com. Some of the information discussed today will contain forward-looking statements. These statements involve risks and uncertainties including those highlighted in our press release and may cause actual results to differ materially from these statements. We are not obligated to update forward-looking information discussed on this call, except as may be required by law. Our press release and reporting package contain definitions and reconciliations of our non-GAP measures to the most directly comparable GAP measures. I will now turn the call over to Wade.

Good morning everyone. It's great to be here this morning to discuss our third quarter results and to take a broader look at our progress in the company's ongoing evolution and of course to hand the torts to Danielle for the next phase of our journey. We've now completed the turnaround and transformation phase for Televisa Univision. The last critical milestone for this phase was the achievement of profitability for our D to C business, which we accomplished this quarter. This, combined with the foundation we've laid in other parts of the organization, has set the stage for us to shift our focus to further integration and operational optimization, which will be the core of our next phase of value creation. Four years ago, my partners and I invested in an opportunity to turn around and transform the Univision business, which at the time was principally a U.S. broadcaster that had been in decline for four years but of course had enormous potential. Within the first year, we redesigned the organization, reinvented the ad sales business, expanded distribution, and launched a library streaming service in the U.S. This progress was the foundation for a strategic transformation of the business by merging Univision and Televisa's content business, creating Televisa Univision, an extraordinary vertically integrated content company at a global scale and enabling the pursuit of an expanded and differentiated streaming opportunity. The Televisa Univision we have today is nothing like the Univision of four years ago. From the Univision starting point, we have doubled the company's overall revenue. We have consistently delivered market-leading revenue growth, including bringing the U.S. revenue to historic highs despite general market headlands. We made massive investments in launching the global leader in Spanish language streaming and managed these investments with limited EBITDA compression, which is extraordinary in comparison with the billions of losses the industry has seen in general market streaming. In addition, we strengthened our balance sheet through the merger with a meaningful reduction in leverage and an overall extension of our maturities. Much of our transformation was a function of executing our merger, which has created a generationally unique company. Our vertically integrated business built around our library and content engine has enabled strategic and financial advantages that we believe no other media company has. We have leveraged this into a modern, multi-platform global business with industry-leading margins. We have reinvented the advertising business with entirely new functions and capabilities, moved into growth segments of the market, and pushed the U.S. market to recognize the value of the Hispanic consumer. We captured consistent pricing growth in our up-fronts, eliminating the pricing discount in the U.S. altogether for new clients. And we made meaningful progress on the elusive opportunity of bringing U.S. television advertisers to Spanish language platforms. We've extended our distribution and successfully launched our networks and our We have retooled and expanded our traditional distributor relationships to include products such as Bix and new Spanish language bundles. And finally, the best example of how all of this has come together is what we accomplished with our D2C business. The merger and unification of our rights, our library and content engine, our modernized ad sales capabilities, and expanded distribution models all contributed to our ability to launch and scale a unique streaming offering. The differentiation of our offering and the efficiency of our model have now proven out in the most recent and significant milestone of profitability. A milestone we've hit just over two years from the full launch of the service, an unprecedented time frame by a wide margin reflecting all the distinctive elements of TU's business model. And achieving this milestone was essentially the final step in completing our multi-year turnaround and transformation phase. And with the wheels in motion, the next big opportunity for value creation is to build on this foundation through further integration and operational optimization of the business. The U.S. and Mexico are different markets that leverage our core content advantages. During the turnaround phase, T divisions maintain certain separations necessary to enable the agility required during startup and transformation. Our business has grown and matured and is at a point where additional value can be unlocked through further integration and unification, both from the standpoint of our lines of business and our geographies. There's huge value to be unlocked in this next phase, but this opportunity comes with unique challenges. It was with this in mind that we initiated our succession planning process earlier this year. We were looking for a leader that had a unique combination of skills and experiences that's difficult to find in one executive, someone who's a Spanish speaker, someone has extensive experience across the U.S., Latin America, and Mexico in particular, had experience managing large scale global enterprises, and media and technology expertise. We're thrilled that Danielle, who is truly unique in delivering across all of these categories, has joined us as our new CEO. There is no better executive to drive this next phase of our journey. And with that and with great pleasure, I'll hand it over to Danielle. It is

a pleasure to be able to speak to you in my first earnings call since becoming CEO of Penediza Unisoni a little over three weeks ago. This is a company that is deeply ingrained in me since my childhood. I grew up in Mexico City with Penediza content, and I am proud to be continuing to build on the legacy of Penediza Unisoni. Wade Davis and I have known each other for more than a decade, dating back to the time when I ran all partnerships at Google. When we started talking about the future of the company and the evolution of the business almost six months ago, it was apparent that there was a strong meeting of the minds that brought me here to TVU. I know that Wade is an investor in the company, and the reason why I'm here is because I believe that the companies in Mexico and the United States are more closely together culturally and operationally. They also emphasize the continued commitment to the digital and direct to consumer evolution of the company, something that is happening across the entire industry in general. This is my forte and particular passion, building a sustainable business through the evolution and confluence of media and technology. This just so happens to be also in the most vibrant of markets, the growing Hispanic population of the U.S. and the increased importance of Mexico in the global economy. There is a tremendous opportunity ahead, and I am excited to be here sharing with you some of my early observations, which underscore just how powerful our assets and brand really are. From our content factory to the library it has produced, the scope of our distribution platforms, and the power of the audience we serve, the company's mission to inform and entertain the global Spanish-speaking consumer is an incredibly important one. Our content factory has produced some of the most powerful and iconic content in the Spanish-speaking world. We also have the ability to maximize the value associated with that content on a global scale through a large volume of owned and operated linear and digital assets. We are uniquely positioned to continue serving a vital and growing target audience. Our two core geographic markets represent both the number one and the number two most economically valuable and popular Spanish language markets in the world. The significance of the U.S. Hispanic audience has never been more evident than in the presidential election cycle, where our audience will play a decisive role in the outcome of this election in the United States. After all, 91% of U.S. population growth since the last presidential election comes from the growth in Hispanics in this country. Whether it is advertising on our platforms or appearing on our networks, we're helping the candidates reach this valuable voter. Our recent town halls with both presidential candidates demonstrated how pivotal our networks can be in driving engagement both on and off a platform. At data point, the two town halls generated an astounding 100 million impressions across the internet. In the case of Vice President Harris, we saw a 5% favorable move in the perception of the candidate after the town hall. We are still awaiting the results from President Trump. What this tells us and what all campaigns should be aware of is that if you engage with their audience in their own language, the results can be game changing. This is even stronger case in the contested states where it is common knowledge that the Hispanic vote will be the determining factor and who will win the election in November. In Mexico, we serve a finely attractive economy and consumer as well. The strategic location of the country from both a American and a global trade perspective is underscored by the fact that in 2023, Mexico surpassed China to become the largest supplier of imports to the United States for the first time ever. From a consumer standpoint, as the world's most popular Spanish-speaking market with a median age of just 29 years old, Mexico offers an ideal environment for digital platform adoption. Overall, we believe the tailwinds associated with the growth in our addressable market will propel our opportunities well into the future. With that as a backdrop, we have to consider the evolving media landscape, which is in the midst of a profound transformation in the way content is distributed and consumed, having become increasingly fragmented across a multitude of disparate trends that have started to be felt in Mexico but have been prevalent for more than a decade in the United States. Meanwhile, the value proposition of the streaming alternative has shifted as companies manage structurally higher churn and subscriber acquisition costs that naturally pressure profitability in the new term and margins in the long term. As a result, we've seen prices of competitive services increase dramatically, with the average price of a basic plan across major streamers having grown on average by about 40% since we launched VIX. This point really underscores VIX differentiation in that we drove our VTC business to profitability after just two years, as Lee just mentioned, with zero price increases for a product that was already priced well below market. We're able to do this because of our content and marketing cost advantages, as well as our unique product design that naturally lowers SAG and manages churn. Now taking a step back, El Eviso Ni Vecion is also at a pivotal point in its evolution. Our next phase will center around further integration and operational optimization. So let me give you some insight into what that means. First, we need to drive further integration of our two legacy companies. Each of these has been around for more than 60 years, and while that creates a rich history, catalog and branding recognition, it also brings with it very established ways of operating. We have a real opportunity to shift from two regional companies into one global company. Second, we need to evolve from a company with siloed linear and streaming businesses into a content-first company that is platform agnostic. We need to be prepared to connect with our audiences wherever they choose to engage, particularly as court cutting structurally changes the value proposition of linear. This means more efficient content windowing strategies and involving our sales and marketing organizations to be more solutions and platform oriented. Our recent experiences with the reality show La Casa de los Famosos in Mexico is a sign of where this company is going with a cross platform strategy that engage users in both our linear and digital channels. In linear, we broadcast marquee events in the show during specific programming, and online on VIX, we had always on 24-7 content that continued to engage our audiences in unique ways and formats. From a commercial perspective, we were also able to provide cross platform advertising solutions and integrations for our sponsors. Expect for us to push the boundaries of cross platform content development further going forward. Third, given our differentiated audience, we offer a truly unique access point to this data consumer. We possess rich data and insights on this consumer that are not found elsewhere, and we need to evolve into more of a driven company that monetizes this unique position. As an example of the power of our data, our U.S. Hispanic household data graph consists of 400 million unique identifiers and covers nearly 100% of U.S. Hispanic households, providing unparalleled access to confirm and engage audiences. By the end of this year, this graph will have been leveraged by over 1,000 advertising campaigns as well as by both presidential candidates to target Hispanic voter activation. All of this will require a significant amount of work, but it will also open up substantial opportunities for growth and improved efficiencies. With this in mind, we are conducting a thorough review of our investments and operations, identifying areas where we can streamline and optimize resources. As a more integrated multi-platform company, we believe there are considerable efficiencies to be unlocked, allowing us to enhance profitability while maintaining our competitive edge. This focused approach will position us to invest in key growth areas, further innovate, and deliver even greater value to our stakeholders. In closing, I look forward to working with our global teams and partners to build up Penelisa Univision's great history and take the company to new heights. And now I'll turn it over to Juan Pablo to

walk through the financials. Thanks, Enrique. It is great to speak with you all to share our third quarter results. We grew revenues by 2% or 6% excluding ethics and grew at Justice EBITDA by 4% or 7% excluding ethics. This reflects growth and profitability in our D2C business. We generate total revenues of 1.3 billion, which grew 2%. In the U.S., revenues of 852 million grew 6%. In Mexico, revenues of 452 million declined 5% in U.S. dollars but actually grew 5% in Mexican pesos. Our consolidated advertising revenue grew 3% to 799 million. In the U.S., growth of 5% was driven by D2C and record-setting third quarter political ad dollars, which added 300 basis points to our growth rate. Within VIX, a strong stocker lineup helped drive a 30% increase in ARP, even as we continue to expand our user base. Tell-all from VIX remained near 90% and we effectively leveraged cross-selling opportunities, achieving an 80% of that rate with linear advertisers during the quarter. In Mexico, we grew advertising revenue by 10% in local currency. The third-party ad inventory we acquired at the start of this year contributed approximately half of this growth. Beyond that, we benefited from top-performing content across sports and entertainment. In sports, we have strong demand for Copa América, while revenue from the Olympics approximately doubled versus the last cycle. In entertainment, season two of La Casa de los Mexico broke viewership and engagement records where over 50 million viewers tuned in throughout the season. In subscription and licensing, we grew consolidated revenue by 1% to 478 million. In the U.S., the revenue stream grew 6% driven by VIX, where we posted strong growth in subscribers. This more than offset a low single-digit decline in the annual subscription revenue. In Mexico, the revenue stream declined 4% in local currency. It was primarily driven by global content licensing, all of which runs through Mexico. This decline reflected some strategic decisions we made not to sub-license certain sports content onto other platforms. Our total company expenses grew 1% to 878 million. Our expenses benefited from FX, given that a large amount of our costs are based in Mexico, and this offset some of the revenue headwinds associated with FX. Otherwise, growth was driven by higher programming costs, particularly related to sports where we aired Copa America in both regions and the Olympics in Mexico. Adjusted EBITDA of 427 million grew 4% or 7% ex-FX. This reflects profitability in D2C, which more than offset the decline in the linear business. Moving on to the balance sheet, we ended the quarter with 303 million in cash, a continued improvement from 240 million at the end of the prior quarter. Looking at our leverage and debt profile, we ended the quarter at 5.9 leverage, a reduction from the prior quarter driven by EBITDA growth and debt reduction. We paid down $150 million in debt by utilizing net proceeds from the sale of our tower portfolio, a true non-core asset, given that we already leased the vast majority of our towers. This streamlines our operations and allows us to deliver on our key priority of leveraging the company. With this non-core asset sale, combined with a $750 million add-on to our 2,031 senior nodes, we have eliminated our 2,026 maturities. This transaction extended our maturity profile with our nearest maturity now more than two and a half years away. And with that, let's take your questions. Operator, please open the line.

Absolutely. At this time, if you would like to ask a question, please press the star and one keys on your telephone keypad. Keep in mind, you may remove yourself from the question queue at any time by pressing the, or by pressing star and two. Again, it is star and one if you would like to ask a question today. We'll take our first question from Jessica Reif-Ehrnick with Bank of America. Please go ahead. Your line is open.

Thank you. A couple of questions. I totally appreciate the focus on cost, but maybe you can give us a little more color on revenue, on current trends you're seeing in the U.S. ad market, how the U.S. upfront brands up for you for television, Univision. Political, obviously you mentioned, is critical this year for Hispanics. And then one last one on advertising. Can you talk about the efforts you're making in programmatic and where you think it will be in the next one to two years?

Sure. Jessica, thank you. Thank you for the question. Wade, maybe if you take a look back at what we've seen in the past, then I'll be able to answer the questions moving forward. Wade?

Great. Thanks, Danielle. Good morning, Jessica. It was a great quarter for us in U.S. ad sales, as we said in the prepared remarks. We saw 5% growth, which was an acceleration from the prior quarter. That was led by D2C. And we really saw strength across all the elements of our ad sales business, as we've talked about in previous calls. We have a huge priority around zero-share client activation. We saw double-digit growth in new client revenue. We saw great pricing growth across all the categories, pricing growth on upfront, pricing growth in scatter, both in terms of scatter over scatter pricing growth, but also importantly, where we're seeing scatter over upfront premiums, they're now over 30%. We saw strong high-teens growth in DR and continued price growth in D2C, which is, I think, amazing, particularly given the massive influx of supply in that market. And we've also been able to maintain sell-outs in D2C, close to 90%. And overall, ARPUs were up over 30% in the quarter, reflecting both the growth in engagement as well as the kind of increased productivity related to monetization. So in terms of the upfront, we had a very solid upfront against, as you know, Jessica, pretty challenged industry. Backdrop, you know, from an industry standpoint, our view overall is that the industry was flat to down low single digits. That was driven by both linear capacity declines, but also kind of the massive influx into, you know, streaming inventory into the upfront market, which, as you know, has pretty significant differences in terms of the dynamics in the upfront. Against that backdrop, we were able to achieve single-digit volume growth. We also delivered pricing growth across the board, and we saw a record number of clients participating in the upfront, again, reflecting the success that we've been able to have with the strategies around new client activations. The last thing I'd probably say to that, before handing it over to Danielle to talk about political, is that I think these results are even more impressive in the context of where our strategic priorities were. So, I mean, obviously for any upfront, you're going to go into the upfront with a set of strategic priorities, whether that's, you know, taking volume and share early, focusing on price. And for us, as we said, going into the upfront, our main focus was really the transition to advanced and alternate currencies beyond Nielsen's panel-only measurement, which, you know, as we've said before, under reflects minority viewership pretty substantially. And for us, it's, you know, in the 20 to 30% range in which our ratings are under-reported by panel-only measurement methodologies. And so in this upfront, we had an enormous priority to move the currency that was agreed with our clients in the upfront towards more accurate advanced measurement. And we were able to write about 40% of this year's volume against advanced alternate currencies beyond Nielsen's panel-only measurement, whether that's Nielsen's Panel Plus Big Data or other alternative currencies. And in all cases, these alternative measurement methodology show ratings growth, which really, again, highlights the pretty significant under-reporting associated with legacy panel-only. So to be able to deliver on that strategic objective and to drive single-digit volume growth against an industry backdrop that was down on volume and see pricing growth across the board, across linear, all categories, and D to C, we think was an extraordinary result for the team.

Yeah, thanks, Wade. And Jessica, you know, the point that Wade just made about the inaccurate measurement really can't be underestimated. This is obviously extraordinarily important and strategic for us as a company because we really offer, you know, the access point to the Hispanic consumer. And we need to be able to accurately represent that to the advertisers. In the U.S., for instance, we're making a lot of progress using more advanced data sets to drive the more accurate measurement. So this includes shifting a portion of our business to Nielsen Panel and Big Data as a measurement currency, and we expect that portion to continue to grow. We've been using Video Amp for more advanced demos, and we're also using our very rich first-party data delivery in conjunction with Nielsen to ensure that we really have an accurate count for eyeballs on CTV. Something that's actually from a political campaign perspective, very, very, very important. But looking beyond measurement, we have growing components of our advertising business that are really not reliant on a measurement currency such as sponsorship, social media, and branded content. And what we did with La Casa Los Famosos is a perfect example of that, of leveraging all those three components. So we'll be doing more of that. Finally, on the measurement front, it's worth noting that in Mexico we are working as part of an industry coalition to really improve audience measurement standards. So we're no longer receiving ratings from Nielsen, and we expect the entire industry to begin to transition to a new measurement standard next year. And that is going to be very, very strategically important to us as a company. You also asked a question about programmatic, and programmatic is obviously important to us. It's a source of growth for us in the U.S. for VIX. The Mexican market is undeveloped for programmatic, and we think that there is going to be continued opportunity in that particular space. And VIX having such incredible reach and brand recognition in the Mexican market, I think will be an important catalyst for growth in programmatic. Lastly, Jessica, you asked about the political ad spend. This has really been a very atypical political cycle. I can't overemphasize that. Spend was really slow to materialize in the first half of the year. And with the change from President Biden to Vice President Harris, there was a stall in how the spend was going to happen. But that started picking up in the second half of this year as we expected. So late in Q3, the rates really began to take shape, and the candidates started refining their overall pitch. That led to a 30 percent growth in our ad revenue over third quarter of the previous cycle. And that's a huge accomplishment and really reflective of what we can do to help the campaigns going forward. There's a lot more to do. On the presidential race, there's an incredible opportunity for both candidates to really lean into Spanish language spend to a degree that really reflects the power of the Spanish-speaking vote. It's never been stronger and directionally. It's just going to keep getting more important as the Hispanic population grows in the United States. And we've been able to demonstrate the power of our audience to both candidates through our household data graph. It really is the most refined way and most specific way to be able to reach the Hispanic population here in the United States. The town halls that we hosted a couple of weeks ago for Vice President Harris and last week for President Trump, those two events not only averaged over one million viewers on linear television, but also gained significant attention across the news cycle and generated more than 100 million impressions across social and digital platforms. So while we wait for the results of President Trump's town hall last week, I can't share that Vice President Harris saw a five percent favorable move in perception after the town hall. And it's really just absolute evidence of the power of our networks, our audience, and how important it is to be able to speak to our community in their own language. It makes a difference and we see immediate results.

Thanks for the question, Jessica. Thank you.

We'll take our next question from Brian Pitts with BMO Capital Markets. Please go ahead. Your line is open.

Thanks for the questions. Daniel, congratulations on the new role. You mentioned the strong execution on DTC. Any additional color on DTC here, especially around the ramp in profitability expected from here? Also, last quarter you mentioned passing 50 million MAU globally on the DTC. Are there any updates you can provide on this or other metrics?

Thanks. Yeah, sure. Brian, thanks for the congratulations and thanks for the question. In terms of DTC profitability, the fact that we achieved profitability in just a two-year time frame shorter than any other major streamer, really by a wide margin, really underscores that business model has fundamentally superior economics. It works. The execution is part of it. But the other one is we have a really differentiated focus and strategy. First, we focus solely on Spanish. We are trying to win in 30 different languages across more than 150 different countries. We're laser focused on the Spanish-speaking community. Second, our existing mark position where we've been able really to leverage our reach and scale for both content and marketing advantages has borne tremendous fruit. We produce content at lower cost. We utilize our rich content library and we really leverage our massive reach among Spanish speakers. Just in last quarter, we brought back El Chavo del Ocho and Chespirito, which is iconic content from our catalog from the 1970s onwards. Just bringing that back on to our linear network as well as our VIX channels has borne tremendous success and reinvigorated what is a great catalog that we have. Finally, we created the two-tier product design to lower SAC and provide churn management benefits. That's also been very beneficial. The model really is economically superior and it's actually resulted in EBITDA losses that have been a fraction of what the general streaming market has experienced. This point really underscores we just have a better economic model than the general marketing streaming companies going forward. While this milestone is important, it really underscores the differentiation in our business model through our scaled content factory, content library, and reach and influence of the Hispanic consumer. A lot of what you heard me talk today is our focus on a much deeper integration across Televisa and Univision, both our legacy companies, and of our two major platforms. In many ways, having a profitable B2C business enables us to make a more holistic approach to areas such as content and marketing, which we intend to manage through a more platform-agnostic approach going forward, meaning we'll be focused on the total company results. Our content investments going forward are going to be focused on a smarter cross-company windowing strategy that will have benefits across the entire business. Thanks for the question, Brian.

Thank you. Great call.

We'll take our next question from Aaron Watts with Deutsche Bank. Please go ahead. Your line is open.

Thanks for having me on. Two questions for me. The first is around cash flow potential for the business as VIX turns the corner to profitability. Two parts I'm hoping you can help with. First, how much of a drag was the ramp investment in VIX this past year, and how much will that improve going forward? And then number two, content costs, program rights payments. Where can we expect to see payments trend going forward versus where they've been the last couple years? And how are you thinking about the trajectory, just overall, of content spend going forward? Should we expect it to move higher, be stable, decline? And that would include consideration of sports rights renewals that may be coming up. And then my second question was, Wade and Carlos have historically described deleveraging as a top priority, and you highlighted debt paid on with a non-core tower asset sale this quarter. Does that focus hold true with Danielle taking the reins? And are there additional non-core monetization opportunities? And do leadership changes delay plans? Are the timing to be opportunistic with the capital markets or raising capital in the future? Thank you.

Great. Thank you. Thank you for the questions. I'll ask Juan Pablo to talk about the cash flow question, and I'll be able to give a little bit more color on the deleveraging and the content cost questions. Juan Pablo, do you want to talk about cash flow?

Yeah.

Thank you.

This quarter, we are cash flow positive, and we expect year-end to be cash flow positive. So that's very good news. And as free cash flow generation improves, we will prioritize usage towards our debt repayment. So it's important, and free cash flow generation has been heavily impacted by our investments in streaming, but has improved significantly this year versus 2023. The biggest factor impacting free cash flow has been the differential between cash content spent and content amortization, which is most pronounced in the early days of any streaming services. But right now, this differential has been narrowing. So we actually see that as this differential narrows content amortization and content cash spent, this factor will be neutralizing on the next coming day.

Great. Thanks, Juan Pablo. I'll address some of your other questions. In terms of the ramp and investment in VIX, we've been very focused on three things. One is ensuring that the technology is scalable and robust. And we've moved beyond just the core plumbing of getting the service up and running, which to my very pleasant surprise, the uptime and the performance has been exceptional. Now we're moving more towards personalization and greater level of targeting of the content on VIX, as well as the investments that we've made in content and content production for VIX have been tailored for the platform. And these three years have given us a significant amount of learning as to what works and what doesn't work. And obviously, we're going to be leaning much more on things that work for the business in addition to a more refined performance marketing plan going forward. Reaching profitability is an important milestone. And now ensuring that we keep the engine running as efficiently as possible is a key priority. I can't emphasize enough how we as a company are going to be thinking about content cross-company and not necessarily specific for a platform. We have great cost advantages in our studios, in Mexico is very well known. And we'll continue to leverage on those. But we also know that the VIX platform and D2C provides an opportunity for greater breadth of kind of content. So we're going to be playing around with different formulas for content creation between linear and VIX that will benefit the entire company overall. In terms of your content costs and trends, we're going to continue to be laser focused on keeping costs down but ensuring that we're investing in the right level of content. Sports is obviously a very important area where you've seen bidding for sports rights go through the roof. But our sports content costs are very different for a couple of reasons. One, we have a broad portfolio of sports rights which are mostly centered on soccer. And our most important soccer rights are la Liga Mexicana, the Mexican league, where we negotiate with the teams as opposed to leagues. And as a result of we have long-term rights in place with staggered expirations which really lessens our dependence on a single renewal. So while we've seen increased in cost at renewal, really the magnitude is very different than what you see in the general market in sports in the United States. Lastly, to your question on deleveraging and that being a priority, it is an absolute priority. We just had a board meeting yesterday and we reinforced that with the board. There are obviously ways that we're looking at the cost structure of our company and really getting the benefits of the two televisas and univision companies together to provide great levels of efficiencies. And Juan Pablo and I are partnering very, very closely on this, on identifying areas where we can improve our overall cost structure but again continue to build on the magic that Televisa y Univision is known for which is our content. But it's a priority. We don't really have any specific areas that we're going to talk about that we're looking at in terms of other assets that we may be thinking about for business. We're being opportunistic but right now we're really focused on our core business and improving our way of operating. Thanks for the question.

Appreciate all the thoughts. Thank you.

And as a reminder, if you'd like to ask a question, please press the star and one keys. We'll take our next question from David Joyce with Seaport Partners. Please go ahead. Your line is open.

Thank you. A few more questions please. First on a linear business, could you please describe how things have been trending both in the U.S. and Mexico on subscribers and viewership and I guess more recently on advertising, yeah, if there's any anything notable from month to month. Second on the VIX, given that some other streamers in the industry have considered and announced some opportunities. Do you see any opportunities in bundling there? And then third, I was just wondering if there's a road map for where you might be licensing or you might be rolling out VIX into more markets. But also if you're not going to roll out, where would you be licensing your content on other platforms? Thanks.

David, thank you. Thank you for the three questions. You know, I'll talk about them and wait, please, if there's any additional call you want to provide, please do. In terms of linear, we continue to navigate with the obvious challenges of cord cutting. But luckily, we have invested ahead of the curve on this multi-platform strategy that really is positioning us well to do this. On the advertising front, in Mexico, linear remains really continues to be the engine behind our advertising revenue growth. You know, we maintain a significant excess capacity and our teams have done a really great job with brand integrations, given the speed and scale at which we develop content. There, the streaming advertising market is still relatively nascent, as I mentioned earlier, and that presents a long-term opportunity for us where we have huge amounts of unmonetized engagement on VIX. In the U.S., our linear business is more capacity constraint, but it still maintains areas of upside relative to the overall market, where our average pricing really remains at a discount, which we are narrowing by onboarding new advertisers at rates in mind with the general market. And with approximately half of all U.S. television advertisers not yet on our platform, there's great execution opportunity for us going forward in that space. In terms of linear subscription, we've seen very low single-digit revenue decline in both the U.S. and Mexico, driven by subscriber declines that were mostly offset by price increases. On a consolidated basis, this impact has been more than offset by growth in VIX subscription revenue, and it's a testament to the strategy of building out VIX three years ago. Now, we're addressing the challenges in linear in really two ways. First, having the multiplatform strategy allows us to widen our reach and maximize the value of our content. We're focused even more on efficient content windowing strategies, as I mentioned earlier, and we'll continue to do so. And then second, working with our distributors to implement much more innovative solutions, such as adding VIX into a linear bundle or offering a skinny Spanish plan in the U.S. to reach incremental TAM of users not interested in any English language content. For instance, the early results from Charter's Spanish skinny bundle, their really offering has been fantastic, and it's exceeded our initial expectations, suggesting that our thesis on market opportunity here is really correct. Wade, do you want to add anything on the linear front?

No, I think you did. I think you covered a lot there. I mean, probably the only thing I would add just, you know, U.S. linear, last call we just, we talked about our focus on overall ratings and market share and kind of our view, our outlook for this late in the third quarter. And we talked about viewership going back up, our share of viewership going back up over 60%, which it did both on a primetime basis and on a total day basis. And then the only other thing I might highlight in the U.S. just around linear is just, you know, for the first time, we did see overall pay TV subs, declines, moderate slightly, actually on a sequential basis. They were flat, which was the first time we've seen that in a very, very long time. And then, you know, just to really underscore what Danielle said, the strategy that we have around, you know, VIX and linear that we've talked about many times as complementary has really started to pay off, you know, in these expansions of the deals that Danielle referenced, obviously Charter being, you know, being the main one that's alive right now. And that was a big contributor to driving what you saw from a revenue outcome in U.S. subscription and licensing and kind of amid the high single digits in the U.S. overall this quarter. And, you know, you had asked about bundling opportunities. I think that'd be one thing that I would just highlight is I do think that the model that Charter has been evolving is one that we believe other distributors will migrate towards. And, you know, given the complementary nature of VIX and our linear offering, and VIX is obviously market leadership in Spanish language, you know, we expect to see more deals like that out of the MVP universe, you know, so that's going to be a big part of the bundling point that you asked about.

Yeah, I agree. And then,

sorry,

I just, just to answer your last question, which was, sorry, David to interrupt you, the roadmap on VIX for more markets, you know, we are working on a plan to make it available across other markets, obviously it makes strategic sense. There's so much runway and upside for us to continue to grow in Mexico and the United States, so that's obviously going to be a core area of growth. But you can imagine that, you know, we're making it available in other parts of Latin America, and that's a strategy that we'll continue going forward.

Thanks for the color, Daniel and Wade. Thank

you. And thank you. This does conclude today's program. Thank you for your participation, and you may