Fox Corporation - Class A (FOXA) — Q2 2020 Earnings Call Transcript

Thank you, Operator. Hello, and welcome to our second quarter fiscal 2020 earnings conference call. Joining me on the call today are Lachlan Murdoch, Executive Chairman and Chief Executive Officer; John Nallen, Chief Operating Officer; and Steve Tomsic, 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 both available in the Investor Relations section of our website. And with that, I’m pleased to turn the call over to Lachlan.

Thanks Joe. Good afternoon and thanks everyone for joining us for our fiscal 2020 second quarter earnings call. We just reported an exceptional quarter which really underscores the strength of Fox and our unique position in the market. Nowhere is that strength and uniqueness on greater display than this past weekend culminating with our groundbreaking broadcast of Super Bowl LIV. Let me say at the outset how pleased I am with the efforts of our entire company. Our people delivered a flawless broadcast of Sunday's game to more than 150 million unique viewers across the country, virtually guaranteeing its place as the most watched live television event of 2020. We surrounded the Super Bowl with an immersive and innovative programming lineup from Miami across Fox Sports, Fox News, Fox Sports 1, and our local stations. We used this enormous platform to launch Season 3 of The Masked Singer right after the game, which became TV's highest-rated reality telecast in eight years. On Sunday, Fox had the largest revenue day in TV history, generating around $600 million of gross revenue and providing an unmatched platform for over 100 advertisers from the pregame through The Masked Singer. We delivered extraordinary ratings for our advertising, distribution, and NFL partners. While there's a massive amount of planning and activity that goes into broadcasting the Super Bowl, it has not been at the expense of delivering other imperatives for our business. During the first six months of the fiscal year, we have already achieved a substantial number of key operating milestones in support of Fox's growth and momentum. Among them were attaining number 1 status for the Fox Network in broadcast and maintaining the number one position of Fox News in all of cable. Delivering a strong sports calendar to viewers and advertisers, particularly across baseball and football. Launching the WWE, acquiring, and activating FOX Bet. We announced the expansion of our local station footprint with the acquisition of two key local market stations. We completed a substantial number of major distribution deals in line with our expectations, including gaining carriage for Fox News and Fox Business on Sling. We have delivered impressive financial results led by revenue growth. This quarter, we really knocked it out of the park. Steve will provide further color around the financial results shortly. Our first half results illustrate the power and importance of our brands to our partners and audiences, validating our strategy to build Fox around live sports, live news, and event programming. Overall, our top-line revenue is trending nicely. Total affiliate revenue increased by nearly 6% in the first six months of the fiscal year. Our advertising markets, both national and local, are buoyant, as illustrated by the current scatter market where we see pricing well over 20% higher than upfront levels. The strength of the television advertising market for us is at a level that we have not seen for some time. Across all of Fox, we are seeing growing demand because we are delivering sizable audiences for brands. Our national networks categories that are leading this intensity include financial, insurance, the streamers, technology, and foreign auto. At the local level, most of these same categories are prominent, except domestic autos are currently running ahead of foreign. On the national news side of our business, Fox News and Fox Business are seeing a significant advertising client expansion across both our linear and digital advertising business led by their financial and technology categories. The FOX News audience is increasingly sought after by more and more advertisers as they look to reach a large engaged audience, particularly across Middle America. This advertising strength is based in large part on delivering on the promise made last May at our upfront that Fox would own the fall across the entire Fox network. Overall, the Fox network took the top rating spot for the fall broadcast season marking its first number one finish in the 18 to 49 demographic in 10 years. Additionally, Fox is the only network to achieve year-over-year gains in both total viewers and in the 18 to 49 demo. Fox also ranked as the number one entertainment network in the fall in all viewers for the first time in our history, fueled by the success of The Masked Singer, 9-1-1, and the top new series Prodigal Son. We're focused on sustaining this momentum in the second half of the year with the addition of Deputy, 9-1-1 Lone Star, and non-scripted content like Gordon Ramsay's 24 Hours to Hell and Back, the third season of The Masked Singer and our newest show LEGO Masters which debuts tonight on Fox. I suggest watching with your whole family. It's truly great. On the sports side of our business, we continue to drive unparalleled audiences to our signature programming. So far this fiscal year, FOX Sports has been home to the U.S. Women's National Soccer Team, a riveting seven-game World Series, the inaugural broadcast presentation of WWE SmackDown, and ambitious new college football strategy alongside the launch of our partnership with TSG and FOX Bet. Clearly, it was a great year for NFL football and Fox, which culminated Sunday with the broadcast of Super Bowl 54. For the second year in a row, Fox was able to expand its audience for Thursday Night Football, college football Saturdays, and NFL Sundays. In aggregate, total regular-season football viewing on Fox, NFL, and college football combined was up 14% over 2018. It's worth noting that no other network was up more than half this level. While the momentum we've seen at the broadcast network has been strong, equally impressive is the performance of Fox News. Fox News finished calendar 2019 as a top-rated basic cable network across all cable networks for a fourth year in a row, beating its nearest competitors by over 40% and achieving its highest-rated primetime in history. Given the well-documented headwinds facing the broader cable industry, Fox News's ability to grow its audience over last year is a testament to the enduring power of the brand. The current news cycle continues to drive passionate viewers to Fox News, and it's hard to see that trend subsiding. All these achievements point to a simple fact: Fox is the home to both a top-rated broadcast network and the most viewed cable network, and that is an exciting position to be in. Equally exciting is being the home of the two events that command the attention of the entire country in the same year. We started calendar 2020 with the first event, the broadcast of Super Bowl 54 on Fox. We now set our focus on the second event, the news equivalent of the Super Bowl, the presidential election. Fox News has branded Democracy 2020 election coverage, which is already in full swing. If history is any guide, audience levels and engagement will build significantly as the cycle progresses through the upcoming primaries and caucuses, the conventions, and the presidential debates, all culminating in our election night coverage across Fox News Media on Tuesday, November 3. As we build towards November, the financial benefits are not limited to Fox News. We will see a sizable ad revenue uplift at our local television stations. As a reference, in calendar 2018, during the last midterm election, our stations collectively generated record gross political revenues in excess of $200 million, shattering the previous record set during the 2012 Obama-Romney election by 40%. Although we are very early in the political season, we are already seeing signs of further increased political spending with a vast majority of the spend dedicated to the unmatched reach of television. We saw it on Sunday for spending in the Super Bowl on a national level, and we're already seeing it at our local stations, which positions us to deliver a new record for political revenues in calendar 2020. Our confidence is further strengthened by the fact that we will soon be expanding our station footprint, which already includes stations in Florida, Michigan, Minnesota, Pennsylvania, and Virginia into another perennial swing state, Wisconsin, with the previously announced acquisition of the Fox affiliate in Milwaukee. As you can tell, I'm thrilled with the rapid progress that we have made and the recognition of the great value of our networks by our distribution partners. As indicated earlier, we have achieved our goals in all distribution renewals we have completed, which reflects the importance of our content to the market. However, we recognize that the trends in the paid subscriber universe have an impact on our business. As you know, we are dependent on our traditional and digital distribution partners and their business plans for our inclusion in their pay television retail offerings. While I'm not going to predict where a normalized pay TV subscriber base ends up in the near- to medium-term, I know that this ecosystem will still be a large component of our revenues for some time. Nevertheless, we have begun allocating capital to expand our revenue base while reserving our subscriber fee relationships for direct-to-consumer initiatives, which will grow in importance over time. FOX Nation, FOX Between, and Credible are three recent examples of this, but we continue to evaluate opportunities where Fox can bring unique value directly to consumers while sustaining existing business models. Nonetheless, there is solid growth and momentum at the company's existing digital businesses, with total engagement increasing last quarter by over 40% versus the previous quarter. Fox News Digital had a record calendar 2019, beating cnn.com in both total views and minutes consumed. For the first time, Fox News Digital averaged over 100 million unique comScore monthly visitors. Fox Sports also had a record digital year in calendar 2019, growing both total video views across streaming and social platforms and total minutes consumed by over 20%. It was also our highest streamed regular season for the NFL on Fox with a growth of 57% over last year, and I’ll refer to the Super Bowl one more time. The game was the most streamed ever, with 11.7 million users streaming all or part of the Super Bowl, and 70% of their consumption was on Fox-owned platforms. While we have remained focused on executing against our operational plans and hitting our financial targets, we have also demonstrated how we look to deploy our capital to an appropriate balance of organic investment, strategic M&A, and return of capital to our shareholders. On the organic investment side, the previously announced $200 million to $250 million EBITDA investment began to ramp up this past quarter with the broadcast of WWE SmackDown and our investments in greater originality and co-production rights at the Fox Network, along with investments in our digital initiatives led by Fox Nation and the refresh on Fox Business. In terms of strategic M&A, in October, we deployed approximately $260 million for the previously mentioned acquisition of Credible Labs. In the short time we have owned Credible Labs, we have seen the signs of exceptional growth the business is capable of. For example, during calendar 2019, Credible more than doubled its cumulative registered user base and experienced record close loan volume, both of which drove substantial top line revenue growth. We have also committed around $300 million to acquire the Nexstar television stations in Seattle and Milwaukee in exchange for our stations in Charlotte. We expect this deal to close in the next month or so. Our commitment to return capital to our shareholders remains an integral element of our capital allocation strategy. In addition to the recently announced semiannual dividend, we have now finished the initial $500 million of share repurchases that we committed to when we announced the $2 billion authorization three months ago. We have consistently noted that we remain committed to deploying capital in a disciplined manner to maximize shareholder value through this balanced approach. Now, I will turn the call over to Steve to provide more detail on our financial results.

Thanks Lachlan, and good afternoon. As you just heard, our operating momentum continued in the second quarter, and we continue to exceed the internal goals that we commenced the year with. This past quarter we delivered strong top line growth, led by an increase in total affiliate revenue of 7%. We achieved this growth despite aggregate industry pay TV subscribers continuing to decline at a rate in excess of 4% over calendar year 2019. During this period, the losses across traditional distributors, many of whom reported last week, were at least partially offset by continued growth of digital MBPDs, where subscribers have grown by 2.3 million. In this past quarter, we saw digital MBPDs grow by over 1.5 million, representing sequential quarterly growth of over 20%. As we've highlighted in the past, the natural seasonality of our business means the second quarter is traditionally the low watermark from an EBITDA margin standpoint. This is primarily due to the timing of broadcast sports and entertainment expenses that are concentrated in the fall season. This includes the investments in sports and entertainment content at the Fox Network, which have, as we have previously outlined, set us up well to complete our remaining distribution renewals in this cycle and achieve our longer-term financial targets. Let me now take you through our second quarter results. Along the way, we remind you of some key factors that shaped the remainder of our fiscal year. In the second quarter, the company reported total revenues of $3.78 billion, up 5% over the comparative period in fiscal 2019, reflecting revenue growth across all operating segments. EBITDA was $261 million, which compares to the $445 million generated in the prior-year period. This growth was primarily due to the change in fair value of the company's investments recognized in other net, including the Stars group and Roku, which together have a current market value of approximately $1.1 billion. Excluding this impact and other one-time items, adjusted EPS of $0.10 was down compared to last year’s $0.43 per share, reflecting the change in EBITDA and interest expense, which, as we have flagged in the past, now reflects the amount associated with operating a stand-alone company. Now turning to the performance of our operating segments for the quarter where cable network EBITDA of $556 million was up 7% on revenue growth of 2%. Cable affiliate revenues increased 2% as the impact of higher average rates across essentially all of our brands was partially offset by the net decrease in pay television subscribers that I mentioned earlier. Assuming current subscriber volume trends continue, we continue to anticipate modestly accelerating growth in cable affiliate revenue in the second half of the fiscal year as the full impact of rate resets from recent renegotiations begin to take effect. Cable advertising revenues decreased 5% due to fewer units at FOX News Media, including higher preemptions associated with its breaking news coverage of the impeachment hearings and the absence of USC programming at the national sports networks. These impacts were partially offset by strong results from our coverage of the MLB American League Championship Series between the New York Yankees and Houston Astros on FOX Sports 1. Cable other revenues grew by $32 million, driven by high sports sub-licensing revenue and pay-per-view boxing revenues associated with the heavyweight bout between Wilder and Ortiz, as well as subscription revenues from FOX Nation. EBITDA at our cable segment increased 7% over the prior year, reflecting these higher revenues while costs were essentially held flat. From a cost perspective, savings from our non-renewable of UHC programming were offset by the contractual increases on existing sports rights agreements at the national sports networks along with higher costs at FOX News Media, which includes our investment in digital. It is worth noting that we anticipate elevated growth in cable segment expenses in our fiscal third quarter versus the prior year. This is driven by the increased costs at our national sports networks reflecting both contractual increases for our sports rights and the production costs of the shoulder programming around the broadcast of Super Bowl 54. It also includes increased costs of FOX News Media related to our coverage of the presidential election and continued investment in FOX Nation. The television segment reported an EBITDA loss of $214 million, higher than the loss of $40 million in the prior quarter on a revenue growth of 5%. The revenue growth was led by an 18% increase in television affiliate revenues, reflecting double-digit programming fee growth from non-owned station affiliates and double-digit direct retransmission revenue growth at our owned and operated stations. Television advertising revenues in the quarter increased $39 million, or 2%. This was achieved despite us lapping the record political advertising revenues at our owned and operated stations from the midterm elections in the prior year quarter. This result was underpinned by the robust advertising market conditions that Lachlan just described, coupled with stronger NFL ratings, the programming successes we've delivered at FOX Entertainment, a compelling seven-game World Series, and the introduction to the schedule of WWE Friday Night SmackDown. EBITDA at our television segment decreased $200 million over the prior year, as an increase in expenses of over $300 million more than offset strong revenue growth. The increase in expenses was due to the anticipated increase in sports programming amortization and production expenses led by the NFL, along with investments we have made in television segment programming. During the quarter, these investments included the premiere of WWE, the expansion of original entertainment programming, and our participation in co-production arrangements with third-party studios. Finally, from a P&L perspective, the net EBITDA loss in our other segment amounted to $81 million, reflecting a full quarter of standalone costs as opposed to the carve-out basis of presentation in the corresponding quarter of the prior year. Turning now to cash flow. Over the first six months of fiscal 2020, the company generated negative free cash flow of $366 million, which we calculate as net cash used in operating activities plus cash invested in property, plant, and equipment. As a reminder, this anticipated use of capital reflects the typical seasonality you should expect to see in the business. Here, the first half of our fiscal year is impacted by the working capital deficit that results from the concentration of our annual sports rights payments and the recognized but yet to collect peak advertising revenues that are associated with our sports and entertainment programming in the full broadcast season. These factors are reversed in the second half of our fiscal year, as we harvest cash from the collection on prior quarters' advertising revenues, and payments for sports rights subside, resulting in a significant cash surplus. On a full-year basis, we all benefit from the natural low working capital usage of our business along with our cash tax benefit and will therefore convert a significant percentage of the company's EBITDA to free cash flow. From an overall balance sheet perspective, we ended the quarter with just under $2 billion in cash and $6.8 billion in debt. As Lachlan mentioned earlier, we have completed the initial $500 million stock repurchase goal that we outlined three months ago, comprising $350 million of Class A shares and $150 million of Class B shares. You'll also have seen that we just declared our semi-annual dividend of $0.23 a share. Finally, as part of our balanced approach to capital allocation, we closed on the acquisition of a 67% stake in Credible Labs in early October. With regulatory approval now secured, we expect to see and close the previously announced Nexstar television stations transaction at a net purchase price of approximately $300 million. And with that, I would now like to turn the call back to Joe.

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

I have a two for anyone who wants to take it. So first one is when you guys separated this new company out, the assumption was you’d have more bargaining clout with distributors because you have less channels to defend. As Lachlan said you achieved your goals in these negotiations just happened. Could you give us a sense of what those goals were and maybe how the goals have changed given the change in terms of landscape or cord cutting? And then secondly, I believe you still own a 5% stake in Roku. Could you talk about how that asset fits in with your capital allocation scheme, especially in light of what happened last week with the impacts you guys had with Roku? So thanks.

Michael, thank you very much for the question. Two questions. John, do you want to address our success with affiliate fees, and I’ll address Roku.

Yes. So, Michael, thanks. I would say the first six months of the year was unprecedented for us with the amount of renewals that we had, all of which were successful against our internal plans. And you're right when we said in the separation that our goals were different than we were at 21CF. It was because we now had the opportunity to use the full power and leverage of the FOX Network and FOX News on a pricing standpoint and on a full distribution standpoint. Your term of bargaining clout, as Lachlan referred to earlier, are the two most successful television channels in America right now. We were able to use that to achieve multi-year pricing for those channels at levels that were at or above what we planned and distribution fully with our distribution partners. So I think those are the two that we were really focused on.

In light of that, Michael, you know I think we can say that—I know we can say that, you know, our announced expectation that we will do $1 billion of additional affiliate revenue by calendar 2022, we are absolutely still expecting to hit that number and cross the hurdle. So and that's factoring in the subscriber volume declines. So I think we're really doing a terrific job in driving those affiliate fees. In regards to Roku, as you know, sort of widely reported last Friday, our distribution deal with Roku was expiring. We went through frankly a very normal course sort of negotiation with them not unlike the negotiations we have with all of our distributors. What happens in these negotiations, and often this is what becomes public, is both sides prepare for a non-resolution of the issues, but ultimately they, like all of our distributors and platforms, saw the value of the Fox brands and content on their platform, and we were able to resolve our differences and agree to a new agreement really, I think to mutual benefit. Throughout it all, it was very professional. We have a huge regard for Anthony Wood and his management team at Roku. We think they're doing a tremendous job, positioning the company to really be one of the leading, if not the lead beneficiary of over-the-top streaming, and we are happy shareholders in the company.

I think we're ready for the next question.

On FOX News, you've seen such a great rebound, which, given the news environment, looks like this momentum will continue. I guess my question is how well can you capitalize on the ratings growth from an advertising perspective? Do you have enough inventory to sell? And then just a follow-up on the NFL; any color you could give us in terms of when you think the discussions for renewal might really kick in?

So, on advertising. So, you're right. We're obviously doing well because of our rating strength, and not just at the FOX Network, but at FOX News as well. As I mentioned in my earlier comments, we see that ratings strength really continuing. In fact, last night over the State of the Union broadcast, I think—I know because I’ve seen the numbers, maybe many of you have already—but FOX News ratings were double the ratings of CNN and MSNBC combined. So it really is a tremendous performance. What we've been doing, and I think others have followed our lead, is working to build in as many advertising units as we can. This includes using the innovative use of sort of squeezing back advertising and having sort of a split-screen experience where you can cover some of the breaking news while also showing the ad or the ad break. So we are gathering as much of that revenue as possible. I think the important note though around FOX News advertising is really the expansion in the number of marketers and partners that we have on FOX News. There's a growing sense in the market that if you want to reach Middle America, there's no better place than placing your brand, your advertising than on FOX News. So, the advertising team is doing a tremendous job, and we expect to capture a significant amount through the upside revenue as we run to this political season. That's not to say, none of them have mentioned the local stations. Obviously, in California, we have two markets; in Texas, where we have three markets; North Carolina; Virginia; Minnesota; and now with the addition soon of Wisconsin. Now we are very well placed in swing states. A significant amount of our advertising spend will be towards this election.

Second part of the question.

Oh, the NFL, sorry. I was too provoked for both on the first part of the question. NFL renewal conversations have early stages, but they certainly have begun. We obviously spent practically all of last week with the NFL, both the administration and many of the terrific families of the owners of the teams. We feel we're in a good place to work with them as our most important partner to renew our rights going forward. But it's early days in the conversations.

Operator, I think we can go to the next question.

On the affiliate revenue in fiscal second quarter, you guided to sort of a similar level to what you saw in the first. But you reported that acceleration. My question is can you parse that? Was it all virtual MVPD driven? Were there other parts? Did it have anything to do with your new renewals that you done? And is that an incremental tailwind as you move into the step-ups next year that will also be beneficial? And then just on the digital side, you’ve been clear about your partnerships with your traditional providers? You have left the door open to doing something digital. I believe that’s the case if or when that the time that would make sense. If you look at your current content base, do you have what you need to perhaps pursue that or are there specific places that you would still want to bolster to have a product ready? Thank you.

You want me to take that? I’ll take the affiliate.

So, Michael, in terms of the affiliate, the combination of what you just outlined. So we got the benefit of an increasing stub period in the final quarter of the calendar year with a couple of the renewals that we completed last calendar year. The other piece to it is just a little bit around subscriber mix where we obviously talk of the heightened level of growth with the digital MVPDs. Given the sort of more recent deal vintage there, the pricing is a little bit better than some of the older deals, and so we benefited from that. But it doesn't—as I said in my opening remarks, we continue to expect that we'll get progressive increases in cable affiliate growth going into this second half of our fiscal year.

Then, Michael, on the digital question, I think we're always going to play to our strengths, and our strengths are very clearly live news, live sports, and big event entertainment programming. If we—you asked do we have what we need to succeed in those sectors, whether it's on the broadcast or in a direct-to-consumer experience? We have the two of the most watched channels in America—the number one broadcast network and the number one cable channel. Clearly, our audiences are engaging with our content. They're engaging with our content today in a number of different forms, not just broadcast. I mentioned in my earlier remarks, I think it was 11.7 million people watched the Super Bowl via streaming. Our broadcast Super Bowl, our streaming, and 70%—which is actually a remarkable number—70% of that 11.7 million watched it on platforms that we own. I think we are already progressing down that path. I should also just call out Fox Nation, which is obviously a really excellent direct-to-consumer product out of Fox News. 80% of the people who sample Fox Nation and take a free trial, 80% of them convert to paid subscribers. December and January were the two highest months in history in terms of both subscriber acquisition and, just as importantly, in terms of engagement on the platform. We're really happy with how Fox Nation is progressing as well.

Operator, the next question please.

It's interesting to hear you mention investments in direct-to-consumer. So I just want to continue along that theme. Is this sort of an urgent priority for the company or something that you just want to lean into the next three years—a few years to capture growth? And I think what investors want to know is at what point would you take Fox Broadcast Network or Fox News, put them online a la carte, maybe a big premium to your wholesale rate? What has to happen in the broader environment for that to become an interesting pivot for the company? And if I could I was just going to ask John for an in-the-weeds question. He had massing around last year, the second half of the season as well, so you’re certain the comp year-over-year on that. But I imagine the ad rates this year are a little bit better than the ad rates last year. Any sort of color around sort of ad rate increase on that show would be super interesting? Thank you.

Look, it's something what we're always looking at, but we also have an eye on not damaging the current business model where we generate still a tremendous and growing amount of revenue from our cable subscribers. I think that we have the capability to go direct consumer. We took the technology that we built with us when we separated from Disney. We are running direct-to-consumer businesses with Fox Sports in pay-per-view, with Fox Nation, and in a different manner through Credible. So, we're happy where we are now, and we'll see what the future brings.

And Doug, just look, advertising, I think both Lachlan and Steve touched on that advertising. We just haven't seen markets like this for a while. Each of our products is leading into this, each of our shows and whether it's entertainment or sports. Just as you guys will remember, the upfront was up 10%, and scatter is now up over 20% on top of that. So it's not like massing. It was fully sold in the upfront, so we're enjoying the benefit of what is a very active market right now.

Okay. Operator, I think we have time for one more question.

Maybe for Lachlan, I'm following up on the political question and $200 million. Can you give us some more color on the sort of the pacing as you saw that in the last election cycle through the year and maybe the benefits you saw on the TV side versus the cable side? And then secondly, and this is maybe for Steve. You completed the $500 million buyback, obviously very low leverage. How should we think of the buyback pacing going forward?

I'll let John answer the buyback piece. But I mean, I don't want to steal your thunder, John. But I mean, we fully expect to spend the remaining amount of $1.5 billion that we have approval to buy back shares, so. But I’ll let John give some more detail on that.

Yes, thank you for your headline.

So, sorry, John. On the political pacing, it's really very strong, but we're at the very beginning of it. Obviously, we've seen from national advertising from both sides of the political spectrum. On the local side, we haven't seen any advertising yet locally from the President's reelection campaign. But of course, we’ve seen a lot of advertising already starting to come in from the democratic side. It's relatively short, and I think it was reported in the Bloomberg campaign that is expected to sort of double its advertising spend earlier this week. But the Bloomberg campaign is buying on a week-to-week basis, so it's hard to predict that out. Obviously, we expect it to be very strong, particularly in the markets of our local TV stations.

John, it's John. I'll end it on really something Lachlan said at the beginning. This is with respect to the buyback, which is our commitment to return capital to the shareholders as an integral element of the overall balance of capital allocation. We committed to a $2 billion authorization, and we're going to complete that.

Okay, 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.