Barton Crockett is a Managing Director and Senior Research Analyst at Rosenblatt Securities, specializing in Internet and Media sector research with active coverage of companies such as Paramount Global, Magnite, Snap, Sirius XM, Comcast, Roku, and Amazon. He has issued over 900 stock ratings across 41 companies, holding an average price target met ratio of 63.4% and an average return of 4.9% per recommendation, with standout calls such as a 14% profit on Paramount Global in April 2022. Crockett began as a journalist before transitioning to equity research in 1999, holding senior analyst roles at JP Morgan, Lazard Capital Markets, and B. Riley FBR prior to joining Rosenblatt in April 2022, and also founded DCFstocks. He is FINRA-registered with Series 7 and 24 licenses, and is a two-time recipient of The Wall Street Journal’s 'Best on the Street' analyst ranking.
Barton Crockett followed up by asking for clarification on what Nexxen considers its 'normal level of growth,' specifically if it refers to double-digit growth.
Sagi Niri, CFO of Nexxen International, confirmed that 'normal growth' refers to lower double-digit growth, specifically around 10% in programmatic activity. He expressed confidence that this growth is achievable based on Nexxen's growth engines and ongoing 2026 budget planning.
Barton Crockett sought clarification on why the DSP impact is considered a one-quarter phenomenon for the guidance, asking if lost Q4 revenue would return in Q1 or if other revenue sources would offset the negative impact. He also asked if Nexxen's 'normal growth' expectation is double-digit.
CFO Sagi Niri clarified that the Q4 DSP impact is not expected to carry into 2026 because Nexxen is acknowledging the new, lower spending base from that DSP and is not factoring in a rebound. He emphasized that other growth engines (in-app, self-serve, data, VIDAA) are expected to drive Nexxen's usual growth. Sagi Niri confirmed that Nexxen aims for lower double-digit programmatic growth, around 10%.
Barton Crockett from Rosenblatt Securities inquired if Nexxen was experiencing the same SSP-related headwinds cited by a peer and sought clarification on whether Q3 was showing a tangible acceleration to support the H2 outlook.
CEO Ofer Druker stated that Nexxen is not witnessing the same SSP issues due to its differentiated end-to-end model, which includes its own DSP, a direct sales force, and a robust enterprise self-service business, making it less reliant on any single external DSP. Regarding H2, he noted that while Q4 is typically strongest, current trends are in line with expectations and their diversified model provides confidence in meeting full-year targets.
Barton Crockett questioned Nexxen's growth trajectory, noting its 8% contribution ex-TAC growth is below peers despite share-gainer commentary, and asked what would drive acceleration. He also asked if the Tubi partnership's Q1 strength was a non-recurring benefit from the Super Bowl.
CEO Ofer Druker explained that growth is ramping up following the major Amobee integration and rebranding in 2024, and he expects acceleration over the next 1-2 years as execution improves. He dismissed the Super Bowl as a material one-off driver for Tubi, stating that overall content consumption trends are stable and not dependent on single events.
Barton Crockett questioned Nexxen's growth potential, noting its contribution ex-TAC growth of 8% is slower than peers like The Trade Desk, and asked what would drive acceleration. He also asked if the Super Bowl on Tubi provided a material, non-recurring benefit in Q1.
CEO Ofer Druker explained that growth is ramping up following the major integration of Amobee and the company-wide rebrand, which were completed in early 2024. He expressed confidence that improved execution, messaging, and talent acquisition will lead to accelerated growth in the coming years. Regarding Tubi, he stated that they do not see major shifts in overall content consumption and expect viewing trends to remain stable, minimizing the impact of single events.
Barton Crockett of Rosenblatt Securities asked for Viant's perspective on the competitive environment, particularly the threat from Amazon and other walled gardens, and clarified if the $250 million pipeline figure was gross ad spend.
CEO Tim Vanderhook assessed that Amazon's competitive threat is primarily limited to verticals with strong transaction data like CPG, suggesting the broader concern is overblown. COO Chris Vanderhook emphasized Viant's 'buy-side only' model as a key differentiator against all walled gardens. He also confirmed the $250 million figure represents gross ad spend, not contribution ex-TAC.
Barton Crockett asked for broader market evidence of the shift to incrementality measurement, sought confirmation of the full-year margin expansion outlook, and questioned if Google's proposed antitrust concessions would be helpful without a full breakup.
CEO Tim Vanderhook and COO Chris Vanderhook cited Meta's open-sourcing of its incrementality model and high-profile brand case studies as evidence of the market shift. CFO Larry Madden confirmed the full-year outlook for margin expansion remains intact. Both Tim and Chris Vanderhook asserted that any concessions from Google short of a full breakup would be ineffective, as Google's integrated structure allows it to stifle competition.
Barton Crockett from Rosenblatt Securities probed the basis for expecting Google antitrust behavioral remedies during an appeal, the potential timing for civil litigation, and whether Magnite's strong DV+ performance is already benefiting from Google's issues.
Chief Legal Officer Aaron Saltz stated it's a "very realistic possibility" that a court would want remedies implemented quickly, even pending appeal. CEO Michael Barrett clarified that he does not believe the strong DV+ performance is correlated with Google's issues, attributing the growth to internal execution and share gains from direct competitors.
Barton Crockett from Rosenblatt Securities inquired about the Q3 organic growth outlook, the timeline for the Las Vegas Convention Center construction, future revenue contributions from recent acquisitions, and the overall impact of the macroeconomic environment.
CFO David Doft confirmed that Q3 organic growth is expected to be negative, which was anticipated in the full-year plan due to event mix and construction at the Las Vegas Convention Center. CEO Hervé Sedky stated the construction should conclude by year-end, normalizing conditions for 2026. Doft also detailed that both This Is Beyond and InsurTech have additional events in the second half of the year, contributing further revenue. Regarding macro headwinds, Sedky described the impact as 'small overall,' noting that while China and Canada are soft, other regions are offsetting this, and 99% of the international revenue target is already secured.
Barton Crockett of Rosenblatt Securities questioned the impact of trade tensions on international attendance and whether the strong Q1 EBITDA suggests a potential beat on full-year guidance.
CEO Herve Sedky and CFO David Doft confirmed that while expected revenue declines from China and Canada are materializing, they are being offset by growth in other regions like Turkey, Brazil, and the UAE. Doft explained that strong Q1 EBITDA was driven by the InsurTech acquisition and a favorable event schedule shift, keeping them on track for their full-year guidance, albeit potentially at the higher end of the range.
Barton Crockett of Rosenblatt Securities asked for more detail on the acquisition math, questioning if the guided EBITDA was pre- or post-synergies and seeking clarity on the potential size of deferred payments. He also inquired about the expected free cash flow conversion in 2025 following the refinancing and acquisitions, and asked about the strategic opportunity in the travel sector, including potential for future launches or M&A.
CFO David Doft clarified the guided EBITDA is pre-synergies, with any cost savings likely materializing in 2026. He explained that performance-based earn-outs are structured to lower the acquisition multiple as the businesses grow. He projected free cash flow of '$50 million plus' for 2025, highlighting improved leverage from the refinancing. Executive Herve Sedky positioned the 'This is Beyond' acquisition as being in the luxury sector as much as travel, and emphasized the acquired team's entrepreneurial strength as a key driver for future event launches under Emerald's accelerator strategy. He noted that while not focused solely on travel, Emerald's rich M&A pipeline could include other strong assets in that sector.
Barton Crockett of Rosenblatt Securities inquired about the reasons for the reduced 2024 EBITDA guidance despite discontinuing unprofitable shows, the level of confidence in the 2025 pacing data compared to the prior year, and details regarding the company's new engagement with the Blockchain Futurist event.
CEO Herve Sedky and CFO David Doft addressed the questions. Herve Sedky explained the EBITDA guidance reduction was due to three factors: 1) SG&A costs for the discontinued events were already incurred in 2024, with margin benefits expected in 2025; 2) unexpected softness in the high-margin Content business; and 3) the financial impact of a hurricane-related event cancellation, with the timing of the insurance recovery being uncertain. Regarding 2025 pacing, Sedky expressed confidence, noting that growth for H1 2025 is not only stronger but also more broad-based across more events than at the same point last year. David Doft clarified that the Blockchain Futurist engagement is part of a new 'acqui-hire' strategy to accelerate new launches and reduce the EBITDA burn associated with the Xcelerator unit, a point Herve Sedky reinforced by confirming it is part of their accelerated launch strategy.
Barton Crockett asked for an update on the materiality of the Roku Ads Manager, noting that management's tone seems more excited now compared to previous quarters when it was described as not yet material.
Founder, Chairman & CEO Anthony Wood expressed excitement due to the large, untapped market of performance advertisers that traditionally did not use TV. CFO Dan Jedda added that while not yet individually material, the product is on a typical new product ramp, with advertiser count and revenue growing every month. He highlighted the potential of this self-service tool for small and medium-sized businesses.
Barton Crockett asked about the health of Roku's relationship with The Trade Desk and other DSPs, and inquired about the potential risks from trade wars or tariffs on its device manufacturing and ad revenue.
CEO Anthony Wood and President of Roku Media Charlie Collier described the relationship with The Trade Desk as a mutually beneficial partnership, while emphasizing a broader strategy of deep integration with all major DSPs. On tariffs, President of Devices Mustafa Ozgen and CFO Dan Jedda stated the impact would be minimal due to a diversified manufacturing footprint and would be immaterial to device gross margin.
Barton Crockett of Rosenblatt Securities noted the volatility in net new business, which slowed in Q2 after doubling in Q1, and asked about the trajectory for the second half of the year. He also inquired about a potential spin-off of the Marketing Cloud.
Chairman and CEO Mark Penn responded that the available new business pipeline continues to grow. He characterized the Q1 performance as 'exceptional' and stated that hitting over $100 million per quarter is a solid benchmark. Penn added that the pitch season is heaviest in the fall, supporting the second-half outlook. On the spin-off, he noted it was not an immediate consideration and depended on further growth.
Barton Crockett from Rosenblatt Securities asked for context on the scale of the 50% growth in podcasting revenue and its potential to impact the overall advertising line, and requested an update on the development of programmatic ad tech capabilities.
CEO Jennifer Witz clarified that while Pandora represents 55-60% of total ad revenue, podcasting has significant room to grow its share, driven by new talent and expanded distribution. She noted that while Pandora RPMs face pressure from the macro environment and CTV inventory, the company is focused on positioning audio to extend advertisers' reach through improved targeting and measurement, highlighting a new partnership with Innovid.
Barton Crockett requested more detail on why management sees no significant risk from tariffs on the auto market and asked for recent updates from automaker partners on sales expectations.
CEO Jennifer Witz explained that a near-term drop in new car sales typically reduces vehicle-related churn. Furthermore, she stated that any decline in new car sales is expected to be partially offset by the used car market, where SiriusXM has a strong and growing presence. This provides confidence in their metrics for this year and next. Regarding automakers, she said they are monitoring the same public data, which shows strong recent sales, possibly due to consumer pull-forward.
Barton Crockett inquired about the environment for gross additions from new and used car markets and asked for elaboration on the sources of pressure on trial conversion rates.
CEO Jennifer Witz expressed confidence in the auto market funnel, highlighting that used cars now represent about 50% of trial starts. She attributed conversion pressure to newer, younger consumers and competition from projection technologies, but noted that the company is focused on stabilizing rates through 360L rollouts, new pricing packages, and improved marketing capabilities to ultimately improve yield.
Barton Crockett of Rosenblatt Securities asked about the slight deceleration in organic sales decline in Q2 versus Q1, the financial impact of a lost grocery client, and the sales trend outlook for Q3. He also sought clarification on asset sales, their inclusion in guidance, and the potential for the USPS to implement CPI-capped rate increases.
J. Joel Quadracci, President, CEO, Chairman & Director, explained the lost grocery client represented about 3% of annual revenue. He attributed the Q2 sales trend to normal seasonality, as it is the lowest volume quarter, and confirmed the full-year outlook remains within the 2% to 6% decline range. He stated that the $5 million from the Sacramento facility sale was received in Q2 and that future asset sale estimates are factored into year-end debt guidance. Regarding postal rates, Mr. Quadracci noted that while the process is complex, there is significant industry momentum to return to a more sustainable, CPI-based model.
Barton Crockett of Rosenblatt Securities asked for clarification on the Q2 sales trend deceleration, the financial impact of a lost grocery client, current trends for Q3, details on recent asset sales and acquisitions, and the potential timeline for implementing CPI-capped postal rate increases.
J. Joel Quadracci, President, CEO, & Chairman, clarified that the Q2 sales trend was influenced by seasonality, as it is their lowest volume quarter, and some volume shifted into Q1. He confirmed the lost grocery client represented about 3% of annual revenue. Regarding asset transactions, he stated the $5 million from the Sacramento facility sale was received in Q2, and the Onur acquisition involved a $16 million upfront payment. He also listed remaining properties for sale. On postal rates, Quadracci explained that a return to CPI-capped increases is a complex process under review by the Postal Regulatory Commission, but there is significant industry momentum for a more sustainable pricing model.
Barton Crockett from Rosenblatt Securities asked about the sales trend deceleration in Q2 versus Q1, the materiality of a lost grocery client, and the outlook for Q3. He also sought clarification on the financial impact of recent asset sales and acquisitions, and the potential for the USPS to implement CPI-capped rate increases.
J. Joel Quadracci, President, CEO, Chairman & Director, attributed the Q2 sales trend to seasonality, as it is typically the lowest volume quarter, and some volume shifting into Q1. He confirmed the company is trending toward the better end of its full-year guidance. Regarding transactions, he noted the $5 million cash from the Sacramento sale was received in Q2, while the Onur acquisition involved a $16 million upfront payment. He stated that the potential for CPI-capped postal rates is a complex, ongoing process but would be a return to a pre-pandemic structure, which the industry is advocating for.
Barton Crockett of Rosenblatt Securities asked about the sales trend deceleration in Q2 versus Q1, the financial impact of a previously lost grocery client, and the outlook for Q3. He also sought clarification on the cash flow impact from recent asset sales and acquisitions, and the potential timing and probability of the proposed CPI-capped postal rate increases.
J. Joel Quadracci, President, CEO, Chairman & Director, clarified that the lost grocery client represented about 3% of revenue. He attributed the Q2 sales trend to normal seasonality, as it is the lowest volume quarter, and noted the year-to-date performance remains within guidance. He confirmed the $5 million cash from the Sacramento facility sale was received in the quarter and detailed that the Onur acquisition involved a $16 million upfront payment with future earnouts. Regarding postal rates, Mr. Quadracci stated that while the timing for a CPI cap is uncertain, there is significant industry momentum for a more sustainable pricing model.
Barton Crockett of Rosenblatt Securities asked about the slight sales deceleration in Q2 versus Q1, the outlook for Q3, the financial impact of recent asset sales and acquisitions, the status of remaining properties for sale, and the likelihood and process for implementing CPI-capped postal rate increases.
CFO Tony Staniak clarified that the Q2 sales trend was affected by seasonality and some volume shifting into Q1, but the full-year outlook remains on track. J. Joel Quadracci, President, CEO, Chairman & Director, confirmed the $5 million cash from the Sacramento sale was received in Q2 and detailed the $16 million upfront payment for the Onur acquisition. He noted that estimates for future asset sales are factored into the year-end net debt guidance. Regarding postal rates, Quadracci explained that a return to CPI-capped increases would be a reversion to a pre-pandemic system and that while the process is complex, there is significant industry momentum for a more sustainable pricing model.
Barton Crockett of Rosenblatt Securities questioned the expected revenue deceleration in the second quarter, given the company will be lapping a significant client loss. He also asked about client visibility for the holiday season amid potential tariff-driven supply constraints, Quad's exposure to de minimis retailers like Temu, and the practical impact of the company's AI collaboration with Google Cloud.
CFO Anthony Staniak clarified that the expected Q2 slowdown is primarily due to normal business seasonality, with early summer being a low point, rather than a new tariff-related impact. Chairman, President and CEO J. Joel Quadracci addressed visibility, stating that clients lack a playbook for the current tariff situation and are awaiting more clarity. He confirmed Quad has minimal exposure to de minimis retailers. Regarding AI, Quadracci explained that the collaboration enhances their 'Audience Builder 2.0' tool, which leverages Quad's unique data stack to improve audience targeting and is already showing strong performance in case studies.
Barton Crockett of Rosenblatt Securities asked for clarity on the revenue trend for Q1 2025, the expected timing and cash proceeds from pending asset sales, the rationale behind the net debt leverage target, and the potential impact of Canadian tariffs and the Postmaster General's resignation on the business.
CFO Tony Staniak projected a high single-digit revenue decline for Q1 2025, improving thereafter, and confirmed the European asset sale is expected to close in early 2025, with proceeds factored into the year-end 1.5x leverage target. He explained the leverage target preserves 'dry powder' for share buybacks or M&A. CEO J. Joel Quadracci stated that the company has mitigated short-term tariff risk by buying paper forward and noted that while the Postmaster General's resignation is a long-term positive, the upcoming postal rate hike is still expected to proceed.
Barton Crockett asked for clarification on the implied fourth-quarter revenue decline, the financial impact of the European operations sale, and the revenue outlook for early 2025. He also sought details on the composition of asset sale proceeds, the annualized run-rate of cost savings, the future interest expense trajectory, and the timeline for the Google AI partnership to materially impact business results.
CFO Anthony Staniak confirmed an 8-9% Q4 revenue decline is implied in the full-year guidance and clarified the components of the asset sale proceeds, noting the European sale is not yet reflected in the cash flow statement. He stated the $60 million in cost savings realized in 2024 would create an incremental $15-$20 million tailwind in 2025. CEO J. Joel Quadracci added that it's too early for a 2025 outlook and expects the Google AI solution to begin impacting results into next year, starting with existing clients.
Barton Crockett of Rosenblatt Securities questioned why the full-year operating margin guidance is 30% despite strong Q2 results and a higher Q3 forecast, asking about timing or new spending.
CFO Spencer Neumann clarified that the guidance reflects timing, as the company manages to full-year margins. He explained that content and marketing expenses are expected to ramp up significantly in the second half of the year to support a heavy slate of major titles and live events.
Barton Crockett from Rosenblatt Securities questioned why Netflix's full-year operating margin guidance is 30% when Q2 showed upside and Q3 is forecast at 31.5%, asking if timing, FX, or new spending was the cause.
CFO Spence Neumann explained the guidance reflects timing issues. He stated that Netflix primarily manages to full-year margins and anticipates a ramp-up in content and marketing expenses in the second half of the year due to a heavy slate of major titles and live events. He also noted ongoing investments in building out ad sales infrastructure, but confirmed that year-over-year margin growth is still expected in every quarter, including Q4.
Barton Crockett of Rosenblatt Securities Inc. questioned why the full-year operating margin guidance is 30% when Q2 saw upside and Q3 is forecast at 31.5%, asking about timing, FX, or new spending.
CFO Spencer Neumann clarified that the difference is primarily due to timing. He explained that Netflix manages to full-year margins and anticipates a ramp in content and marketing expenses in the second half of the year to support a heavy slate of titles and live events, as well as investments in ad sales infrastructure.
Barton Crockett from Rosenblatt Securities asked about the future trend of content spending with Lionsgate, the logistics of producing original content without an in-house studio, and the potential impact of the macroeconomy.
President & CEO Jeffrey Hirsch expects the total spend with Lionsgate to remain 'flattish,' with the Pay 1 movie deal being the largest component. He clarified that STARZ has always had a development team and has a production services deal with Lionsgate, so there are no incremental costs to creating its own IP. On the macroeconomy, he stated they have not seen an impact, as consumers often turn to in-home entertainment during tough economic times.
Barton Crockett from Rosenblatt Securities inquired about the future trend of content spending with the now-separated Lionsgate, the operational feasibility of producing original content without an owned studio, and the business's sensitivity to the macroeconomic environment.
President & CEO Jeffrey Hirsch explained that spending with Lionsgate will remain significant due to the long-term pay-one movie deal and ongoing franchise spin-offs, expecting the total to be "flattish." He stated there are no incremental costs to developing their own IP, as they have an existing development team and a production services deal with Lionsgate. Hirsch also noted that Starz can be a value entertainment option for consumers in tough economic times.
Barton Crockett from Rosenblatt Securities inquired about the sustainability of revenue growth outpacing expense growth in the mixed-use and baseball segments, given the Q1 trend. He also asked for details on the P&L impact and disclosed cost of the Pennant Park acquisition.
CFO Jill Robinson clarified that while Q1 is highly seasonal, the company's annual goal is for revenue to grow faster than expenses. She noted the Pennant Park acquisition is not yet reflected in results but is immediately accretive and will drive future growth, with the purchase price disclosed in SEC filings.
Barton Crockett asked for commentary on the national MLB broadcasting rights environment, particularly the reported ESPN deal exit, and also questioned the team's quiet off-season and the outlook for player salaries.
Executive Terence McGuirk characterized the ESPN/MLB situation as a 'nonevent' for the Braves' economics and expressed confidence in the market for those national rights. Regarding player salaries, he affirmed the Braves expect to remain a top-10 spending team, have 'dry powder' available, and that President of Baseball Operations Alex Anthopoulos has the resources needed to field a championship team.
Barton Crockett questioned the potential impact of changes in the national MLB broadcasting rights environment, particularly with ESPN, and also asked about the team's quiet off-season trade activity and the outlook for player salaries.
Executive Terence McGuirk characterized the ESPN and MLB situation as a 'nonevent' for the Braves with no economic impact, expressing confidence in the market for those rights. Regarding player salaries, he affirmed the Braves expect to remain a top-10 spending team, have crossed the competitive balance tax threshold previously, and possess 'dry powder' for potential late free-agent signings.
Barton Crockett asked for a strategic overview on how the company creates value, the rationale for being a public entity, and whether there were plans to acquire other sports teams. He also followed up on the Diamond Sports bankruptcy and the ideal future structure for local TV rights.
President and CEO Terence McGuirk stated that the primary goal is winning a World Series, which is the greatest driver of value. Executive Derek Schiller added that growing top-line revenue through ballpark and media opportunities is a key metric and confirmed the company is 'laser-focused' on the Braves, not acquisitions. Regarding Diamond Sports, McGuirk noted they are monitoring the bankruptcy but are prepared for any outcome, viewing their large broadcast territory as an 'enviable position'.
Barton Crockett asked for a strategic overview of the company's value creation model (cash flow vs. asset value), the rationale for being a public company, and whether there were plans to acquire other sports teams. He also followed up on the Diamond Sports bankruptcy, asking about potential outcomes and the ideal future structure for local TV rights.
President and CEO Terence McGuirk stated that winning a World Series is the greatest driver of value. Executive Derek Schiller added that growing top-line revenue is a key metric, driven by projects at the ballpark, the Battery, and future media opportunities. Schiller confirmed the company is 'laser-focused' on the Braves and not pursuing acquisitions. Regarding Diamond Sports, McGuirk noted they are monitoring the bankruptcy but are prepared for any outcome, viewing their large broadcast territory as an 'enviable position' if rights revert to them.
Barton Crockett inquired about the Department of Justice and antitrust as a potential obstacle to consolidation and asked about the adoption of programmatic and impression-based selling in local TV.
Chairman and CEO Perry Sook stated that DOJ officials privately acknowledge the current advertising market definition is indefensible and does not see it as an impediment. He also confirmed Nexstar is actively working on impression-based selling to remove structural impediments for ad agencies. President and COO Michael Biard added that new ad-supported streaming services further undermine the old market definition.
Barton Crockett from Rosenblatt Securities asked about the prospects for eliminating the 39% national ownership cap and its potential as an M&A catalyst. He also inquired if Nexstar had any interest in acquiring traditional cable networks that may become available.
Executive Perry Sook described the elimination of the national ownership cap as a 'huge opportunity' and confirmed his team is actively lobbying in Washington D.C. to modernize the rules to preserve local journalism. He firmly stated that Nexstar has 'very little interest' in expanding its cable network portfolio, emphasizing that the company's clear preference is to invest in and grow its core broadcast television assets.
Barton Crockett asked about the potential to negotiate larger, regional media rights packages with global streamers, rather than focusing on single-country deals like the U.S.
CEO Derek Chang acknowledged that the media landscape is evolving and that large streamers prefer global rights. He stated that if a regional deal with a strong partner offers a greater sum than individual country deals, Liberty would "pursue those opportunity seriously." He cited existing multi-country deals with partners like Sky in Europe as a precedent for this type of arrangement.
Barton Crockett of Rosenblatt Securities asked about the potential for negotiating larger, regional broadcast rights packages with global streamers, particularly across the Americas, instead of focusing on single-country deals.
CEO Derek Chang acknowledged that this is an evolving space and that large streamers consistently express a desire for global or broad regional rights. He stated that if a regional deal offers a greater sum than individual country deals, Liberty would "pursue those opportunity seriously." He cited existing multi-country deals with partners like Sky in Europe as a precedent for this type of arrangement, depending on the partner's strength across a given region.
Asked for clarification on the dynamics of the TV production market correction and for an update on the progress of securing new financing for Starz ahead of the separation.
The TV market correction involves buyers seeking financial efficiencies through shorter orders or lower budgets, and also turning to library content, which benefits Lionsgate. The financing for both the Studio and Starz is progressing well, with over $1B in IP facilities secured for the studio and confident ongoing discussions for a Starz term loan, with all financing expected to be in place for the separation.
Inquired about eOne's contribution to the strong EBITDA results, the specific steps remaining for the full company separation, and the mechanics of the recent bond exchange.
Executives provided Q4 financial figures for eOne's contribution. They outlined the separation process, which involves a special committee determining share ratios followed by a shareholder vote. They affirmed the bond transaction was beneficial for all bondholders, as evidenced by a ratings upgrade, but declined to detail the allocation process.
Barton Crockett of Rosenblatt Securities Inc. questioned the basis for optimism on regulatory changes, given past issues with the Tribune deal under a prior administration. He also asked for an update on subscriber churn trends and the expected financial impact from the new Tennis Channel direct-to-consumer (DTC) launch.
President and CEO Christopher Ripley clarified that optimism stems from the fact that previous deregulation rules, which were upheld by the Supreme Court, were never fully implemented due to a change in the FCC. He expects the new environment to simply adjudicate based on current, more favorable rules. On churn, he noted it remains in the mid-single digits but was encouraged by better-than-expected results from Charter and Comcast. Regarding the Tennis Channel DTC product, he stated 2025 will be an investment year, but with no incremental content costs, it should become an incremental contributor quickly. COO Rob Weisbord added the DTC product will enhance viewership with features like multiview.
Barton Crockett from Rosenblatt Securities inquired about GCI's device subsidy strategy ahead of the potential AI-driven phone upgrade cycle and questioned the long-term necessity for Charter to adopt similar subsidies to compete in the wireless market.
Ronald Duncan, CEO of GCI, explained that as a mobile network operator, GCI must remain competitive with AT&T on device subsidies to maintain its 40% market share and is evaluating if an enhanced subsidy could drive share gains. Gregory Maffei, Liberty's President and CEO, stated that Charter's attractive bundled pricing currently negates the need for significant handset subsidies, and he does not foresee a change in this strategy.
Barton Crockett asked if there is an opportunity for Charter to invest more aggressively in its mobile business to accelerate its growth and make it more material to investors. He also inquired if Liberty Broadband sees an opportunity to consolidate other cable companies given depressed valuations.
Gregory Maffei, President and CEO, noted that Charter is already the most aggressive mobile pursuer among cable companies and is likely getting as much as it can from the business currently. On M&A, he said the door isn't closed, but pursuing roll-ups through Charter is generally preferred due to synergies, though a direct acquisition by Liberty Broadband is not impossible.
Asked about the potential to accelerate investment in mobile to make it more material for Charter, and whether Liberty Broadband sees an opportunity to acquire other cable companies at depressed valuations.
The executive stated that Charter is already the most aggressive cable company in mobile and is likely maximizing its opportunity currently. On M&A, he noted that while the door isn't closed, it would generally be more logical for Charter to pursue acquisitions due to synergies, rather than Liberty Broadband doing it directly.
Asked about the antitrust implications of new media streaming bundles, clarification on GCI's CapEx and tax rate guidance, and for a timeline on when fixed wireless will become less competitive.
Executives see potential for Charter to be a distributor for new bundles, which would be a net positive. They clarified the GCI CapEx figure is comparable year-over-year and stated the tax rate guidance for Charter sales is 'low double digits.' Regarding fixed wireless, they believe its competitiveness will wane over time due to growing bandwidth demands and network capacity constraints, rather than on a specific timeline.
Barton Crockett from FBR Capital Markets & Co. asked for clarification on the box office decline in premium formats versus the rest of the circuit and whether screens taken offline for reseating impacted per-screen metrics. He also inquired about the observed attendance lift from Atom Tickets and requested the latest ticket price breakdown for IMAX, 3D, and 2D formats.
Executive VP, CFO & Treasurer David H. Ownby detailed that large format screens were down 29% per screen, while the rest of the circuit was down only 9.5%, outperforming the industry benchmark. He provided specific ticket prices: IMAX at $16.36, 3D at $12.88, and 2D at $9.21. Chairman & CEO Amy E. Miles added that while it was too early for definitive data on Atom Tickets, initial tests showed a 'promising' lift in attendance.
Performance on expert-authored financial analysis tasks
