Peter Supino

Peter Supino questioned the guidance's implied incremental margin, which seemed low for high-flow-through revenue, and asked about TKO's long-term growth algorithm beyond the current media rights renewal cycle.

Answer

Andrew Schleimer, CFO, reconciled the margin by pointing to factors like event mix shifts, the absence of a prior-year high-cost/high-revenue event like UFC at the Sphere, and the deferral of a Saudi PLE to 2026. Mark Shapiro, COO, President & Director, outlined a multi-pronged long-term growth strategy focused on integrating recent acquisitions, capitalizing on the Netflix partnership, expanding margins, and launching the new boxing venture as a fourth major sports asset.

Peter Supino asked for guidance on how to model the IMG segment's growth and incremental EBITDA margins across its various subcomponents like media, live events, and sponsorships.

Answer

CFO Andrew Schleimer directed investors to new KPIs in the 10-Q for the acquired businesses, noting that Q1 is typically the most profitable quarter for IMG due to the Super Bowl. He explained the balance of the year will be impacted by pre-spend for the Milan Olympics, which was factored into the normalized numbers provided at the deal announcement. Mark Shapiro, President and COO, added that early activity for the Milan Olympics and FIFA World Cup is in line with expectations.

Peter Supino of Wolfe Research questioned the implied incremental margins in the 2025 guidance, noting they seemed lower than expected given certain 2024 headwinds. He also asked how TKO plans to translate the growing engagement from the Netflix deal into increased revenue in the U.S.

Answer

CFO Andrew Schleimer explained the 2025 margin guidance is healthy and reflects the timing shift of a high-margin Saudi PLE into 2026 and the strategic decision to host more international events instead of at the lower-cost Apex facility. President and COO Mark Shapiro detailed that monetization comes from focusing on core KPIs: media rights renewals, ticket sales, premium hospitality, consumer products, site fees, and sponsorships, all of which benefit from increased viewership and demand.

Peter Supino challenged TKO's free cash flow conversion guidance as potentially conservative and asked for an update on the talent hiring and retention environment, noting competitive concerns have subsided.

Answer

CFO Andrew Schleimer defended the current cash flow guidance, citing onetime impacts, but reaffirmed a normalized conversion target above 60% long-term. President and COO Mark Shapiro credited TKO's creative leadership for building brands that top talent aspires to join, ensuring a stable and cost-effective talent pipeline.

Peter Supino questioned the nature of Verizon's cost opportunities and the perceived inconsistency between a slow organic fiber expansion (650k homes) and an aggressive external acquisition (Frontier for $10 billion), asking for reconciliation and an ideal organic expansion rate.

Answer

CFO Tony Skiadas addressed fiber, highlighting Verizon's 20-year history, the Tillman deal for capital-light expansion outside existing footprints, and continued organic build (650k prems passed), emphasizing ongoing expansion. CEO Dan Schulman addressed costs, stating the goal is market leadership requiring significant investment, fully funded by cost reductions and redeployment, aiming for a more nimble, agile, and efficient organization, with more details promised in January.

Peter Supino of Wolfe Research asked about the nature of Verizon's cost reduction opportunities, seeking common themes despite Verizon's apparent productivity. He also questioned the perceived inconsistency between Verizon's slow organic fiber expansion (650,000 homes annually) and its aggressive $10 billion acquisition of Frontier, asking for reconciliation and an ideal organic expansion rate.

Answer

CFO Tony Skiadas explained that fiber is not new for Verizon, highlighting the Tillman deal as a capital-light partnership to expand beyond the pro forma footprint with good economics, leveraging the Verizon brand. He confirmed being on track with 650,000 premises passed organically. CEO Dan Schulman stated that cost reductions would be a "way of life" to fund significant investments in market leadership, aiming for the most efficient company in the industry by scrutinizing all OpEx and CapEx.

Peter Supino of Wolfe Research, LLC asked about medium-term opportunities for cost efficiencies beyond headcount reductions and questioned the underlying cause of current churn levels, wondering if it necessitates less aggressive pricing in the future.

Answer

Chairman and CEO Hans Vestberg stated that he sees more cost-saving opportunities now than in a long time, driven by AI solutions, and declined to comment on future pricing strategies. EVP & CFO Tony Skiadas reiterated that cost efficiencies are being driven by AI, network modernization like copper decommissioning, IT platform consolidation, and disciplined deal management.

Peter Supino questioned if ARPA growth expectations need to moderate given recent churn experiences and asked when the multiyear Fixed Wireless Access (FWA) expansion might begin to pressure CapEx.

Answer

CEO Hans Vestberg clarified that the FWA growth plan to 8-9 million subscribers by 2028 is incorporated into the standard C-Band rollout and will not create undue pressure on the multiyear CapEx plan. Consumer Group CEO Sowmyanarayan Sampath outlined multiple levers for sustained wireless service revenue growth, including higher volumes, myPlan migration, premium mix, perks, FWA growth, and the turnaround in the prepaid business.

Peter Supino asked about AT&T's ambitious 60 million fiber home target, potential competition from other fiber builders, and how AT&T plans to manage overbuild risks. He also inquired about the implications of the declining DSL base for AT&T's broadband strategy and competitive outlook.

Answer

Chairman and CEO John Stankey highlighted AT&T's strong broadband results and scalable fiber build engine, emphasizing their deliberate strategy to deter competitors by aggressively penetrating markets. He noted that AT&T recalibrates capital deployment when facing overbuilds and is confident in achieving necessary market share even with minor overlaps. Stankey confirmed the deliberate strategy to transition from legacy copper and DSL, replacing it with fixed wireless (AT&T Internet Air) where fiber isn't planned, and leveraging mid-band spectrum for enhanced wireless-first solutions.

Peter Supino asked about AT&T's 60 million fiber home target, potential competition from other fiber builders, and how AT&T would respond to insurgents. He also inquired about the impact of the declining VDSL base on AT&T's broadband strategy and competitive outlook.

Answer

Chairman and CEO John Stankey highlighted AT&T's strong broadband results and scaled build engine, emphasizing a deliberate approach to deter competitors and recalibrate plans when necessary. He expressed confidence in AT&T's ability to penetrate markets effectively. Regarding the DSL base, Stankey explained the strategy to transition away from legacy copper, replacing DSL with fixed wireless where fiber isn't available, and leveraging converged offers. He also noted the mid-band spectrum acquisition would enhance fixed wireless capabilities.

Peter Supino from Wolfe Research, LLC asked if the current churn outlook should prompt AT&T to reconsider the velocity of its price increases. He also questioned whether the long-term guidance for acquisition budgets is a limiting factor, especially if significant spectrum assets become available.

Answer

Chairman & CEO John Stankey responded that he does not view pricing as the primary issue driving churn, stating that past pricing actions have been in line with expectations. He affirmed that the company's 2.5x net debt to EBITDA leverage target provides the financial flexibility to pursue strategic asset acquisitions, such as spectrum, without altering commitments to shareholders. Stankey noted that a newly active FCC creates a more disciplined and predictable spectrum market, which benefits their planning.

Peter Supino of Wolfe Research asked about AT&T's potential reaction to increased phone costs from tariffs and the company's expense reduction strategies in a slower growth environment.

Answer

CEO John Stankey explained that any tariff-related cost increases on handsets would likely be passed through to consumers, similar to past device cost inflation, using creative plans and financing. He also noted that AT&T has significant cost-cutting opportunities beyond Consumer Wireline, including in call centers and IT, giving them confidence in their 2025 guidance. CFO Pascal Desroches added that Q1's organic expense performance was particularly strong when excluding launch costs for the AT&T Guarantee.

Peter Supino asked about the average age of phones in the postpaid base and whether it's approaching an inflection point for upgrades. He also inquired about the postpaid business's sensitivity to potential changes in U.S. immigration statistics under the new administration.

Answer

CEO John Stankey stated he sees no data suggesting a fundamental shift in how long customers hold devices, attributing upgrade rates to market offers rather than phone age. On immigration, he noted AT&T is likely less sensitive than the industry due to its current market share in that segment but affirmed that smart immigration is beneficial for overall economic growth and, consequently, for AT&T.

Peter Supino of Wolfe Research, LLC inquired about progress in driving higher utilization at Madison Square Garden and asked about potential new residencies to fill the void left by Billy Joel's long-running engagement.

Answer

David Collins, EVP & CFO, acknowledged that The Garden's utilization was just over 65% in fiscal 2025 and that the company sees real upside. He stated they are in the late planning stages for a new residency for the next calendar year, which would include a substantial number of dates and could drive concert growth at The Garden in fiscal 2027.

Peter Supino asked for an update on concert cancellations, which were elevated last quarter, and inquired about the potential for further value extraction from dynamic pricing for the Christmas Spectacular.

Answer

Interim CFO Lee Weinberg confirmed that concert cancellations have returned to normal levels after a spike in the previous quarter. Regarding dynamic pricing for the Christmas Spectacular, he explained that the company is getting smarter by using data to build schedules and start pricing efforts earlier. He believes significant opportunity remains to increase yield, as the show is still priced well below comparable Broadway productions.

Peter Supino inquired about the long-term market size for the Garden, asking if the trend of artists graduating from the company's smaller theaters to the arena is accelerating and how this impacts the long-term supply outlook.

Answer

Michael Grau, EVP and CFO, affirmed this is a key internal strategy, citing the unique portfolio of venues (Beacon, Radio City, the Garden) that allows them to 'shepherd' artists up the ladder. He highlighted recent successes like Olivia Rodrigo and Noah Kahan as proof of the strategy's effectiveness and agreed it promises to create more supply for the arena over the long term.

Peter Supino from Wolfe Research asked about MSGS's potential participation in a future NBA-led national RSN solution after its current local deal expires and inquired about the anticipated impact of scheduled changes to the tax deductibility of compensation in 2027.

Answer

COO Jamaal Lesane stated that while they monitor the evolving media landscape, they would not comment on hypotheticals, emphasizing their strong position as a rights holder for two marquee franchises. EVP, CFO & Treasurer Victoria Mink noted they are assessing the tax changes, which become effective for their fiscal year 2028, but had nothing further to share.

Peter Supino of Wolfe Research, LLC asked about the company's potential participation in a future national RSN model for the NBA and the long-term evolution of the RSN business, as well as the impact of upcoming tax deductibility changes.

Answer

COO Jamaal Lesane commented that while they monitor the evolving media rights landscape, they believe local coverage is valuable and will continue to assess from their position as a rights holder for two marquee franchises. EVP, CFO & Treasurer Victoria Mink noted they are assessing the tax changes, which would be effective for their fiscal year ending June 30, 2028, but have nothing further to share.

Peter Supino from Wolfe Research asked about the company's initiatives to drive organic revenue growth in the upcoming year and beyond, separate from the impact of the new NBA media rights deal.

Answer

COO Jamaal Lesane outlined several key growth areas. These include opportunistic pricing for new and group tickets despite holding prices for renewing season ticket holders, new sponsorship deals, capitalizing on strong demand for premium hospitality, and benefiting from the expansion of the event-level club space and renovations of several suites at Madison Square Garden.

Peter Supino asked a series of questions about future content strategy, including whether it would be based on owned or licensed IP, how AI impacted the production of 'Wizard of Oz', and the rationale for its higher ticket price compared to 'Postcards from Earth'.

Answer

Executive Chairman & CEO James Dolan stated that the company is indifferent to owning versus licensing IP, focusing instead on show quality and IP cost. He credited AI as essential for producing 'Wizard of Oz' and expects future AI-driven productions to be easier. The higher ticket price for the new show was justified by the venue's proven success and competitive positioning against other major Las Vegas shows.

Peter Supino of Wolfe Research asked about the global expansion plans for Sphere, specifically if discussions are primarily with non-U.S. parties and if geopolitical tensions have impacted sentiment.

Answer

Executive Chairman and CEO James Dolan confirmed they are in worldwide discussions for new Spheres. He also revealed a key initiative to design a smaller, cheaper, and faster-to-build Sphere model to accelerate deployment in markets both inside and outside the U.S., which he expects to discuss more by year-end.

Peter Supino asked about the residency business, questioning what the company learned that allowed it to host more shows in the first half of 2025 and whether the creation of produced content is the main long-term constraint on event volume.

Answer

Executive Chairman and CEO James Dolan attributed the increase in residencies to strong artist demand, driven by the venue's superior sound and the favorable economics of a residency versus a traditional tour. He clarified that the primary limiting factor for more concerts is not content creation, but the internal competition for venue days against other high-AOI events like the new Sphere Experience and corporate functions.

Asked about the reasons for the increase in residency shows and whether content creation is the main limiting factor for future growth in event volume.

Answer

The increase in residencies is driven by strong artist demand due to the venue's unique experience and favorable economics for artists compared to touring. The main constraint on hosting even more concerts is not content creation, but the internal competition for venue dates from other high-margin events like corporate takeovers and the Sphere's own shows.

Peter Supino questioned the revenue opportunity in Las Vegas, specifically asking if 75 residencies per year is the right target and what the company has learned about the availability of top-tier concert talent.

Answer

Executive Chairman and CEO James Dolan explained that the company focuses on maximizing revenue rather than a specific number of shows. He highlighted the key strategy of running "side-by-side" events, such as a Sphere Experience show and a concert on the same day, to maximize venue utilization. Dolan asserted there is no shortage of interest from major artists and that the primary challenge for 2025 is scheduling all the acts that want to perform at Sphere.

Peter Supino asked about the risks associated with building venues globally and any lessons learned. He also asked for an explanation of the company's year-to-date growth rate relative to historical norms.

Answer

President and CEO Michael Rapino downplayed venue development risk, citing the company's 'secret sauce' of local expertise and a selective investment approach. President and CFO Joe Berchtold explained that first-half growth was impacted by timing, with about $25 million of Ticketmaster AOI shifting to the second half due to deferred revenue, plus FX headwinds. He reiterated confidence in achieving double-digit AOI growth for the full year.

Peter Supino asked about the perceived risks in developing venues globally and how the company mitigates them. He also requested an explanation for the two-year compound annual growth rate trend off of 2023.

Answer

President & CEO Michael Rapino stated that venue development risk is low because the company relies on local expertise to identify opportunities, allowing them to be selective. President & CFO Joe Berchtold addressed the growth rate by breaking down segment performance, noting strong Concerts growth, timing shifts in Sponsorship, and temporary headwinds for Ticketmaster, including a $25M AOI shift from deferred revenue and $16M in FX impacts.

Peter Supino asked about the 2025 Venue Nation capital budget, specifically questioning the mix between U.S. and international spending and whether the company's appetite for investing in large 15,000-20,000 seat arenas has changed.

Answer

President and CEO Michael Rapino affirmed that opportunities in large international arenas are consistent and growing, and the company's appetite to invest remains 'very large.' President and CFO Joe Berchtold added that the general trend is for more capital to be deployed internationally, driven by the volume and attractiveness of those specific arena opportunities.

Peter Supino asked about the defensibility of Ticketmaster's competitive position, focusing on the technology investments being made to reinforce its leadership, such as those related to bots and demand generation.

Answer

President and CFO Joe Berchtold affirmed that significant capital is invested in Ticketmaster's technology. Key areas of focus include innovating enterprise products like pricing and marketing tools, enhancing high-demand on-sale capabilities, and advancing digital ticket technology to combat bots and fraud, ensuring its platform remains best-in-class.

Peter Supino from Wolfe Research requested details on the organizational changes tied to the cost savings program and asked about providing more specific disclosures on organic growth trends versus M&A.

Answer

CFO Armin Zerza explained the reorganization balances local A&R with scaled global services, with savings from tech leverage and reduced non-people spend. CEO Robert Kyncl defined organic growth as being driven by new release success, 'always on' catalog marketing, and stronger DSP deals, with M&A serving as an accelerator.

Peter Supino from Wolfe Research requested more detail on the organizational changes and largest opportunities within the new cost savings program. He also asked about the pros and cons of providing more specific disclosures on organic versus M&A-driven growth.

Answer

CFO Armin Zerza explained the reorganization balances local A&R expertise with scaled global services, enabled by technology investments, which will drive savings. CEO Robert Kyncl addressed the growth question, highlighting that strong organic growth from new releases and catalog marketing forms the foundation, with M&A acting as an accelerator, giving them extra firepower.

Peter Supino asked for an elaboration on the 'better together' view for DTC, specifically regarding the contribution of bundling to growth and churn, and how the Disney partnership has performed against expectations.

Answer

President & CEO David Zaslav stated that bundling improves a 'clumsy consumer experience' and that the Disney bundle is performing 'much better than we thought.' He believes WBD's global scale makes it an attractive partner for regional players, leading to better churn, consumer satisfaction, and broader demographic reach. He anticipates further industry consolidation and bundling.

Peter Supino asked for David Zaslav's perspective on the 'better together' bundling strategy for DTC, the relative contributions of wholesale versus retail channels, and the performance of the Disney bundle partnership.

Answer

President & CEO David Zaslav reiterated his belief that bundling solves a clumsy consumer experience and positions WBD as a key global partner for other services. He stated the Disney bundle is performing 'much better than we thought,' citing benefits in consumer satisfaction and reaching new demographics, in addition to lower churn. He sees this as a model for future consolidation and partnerships.

Peter Supino asked about Warner Bros. Discovery's sports strategy on the Max platform, particularly regarding opportunities to license new sports intellectual property beyond its existing linear relationships.

Answer

President & CEO David Zaslav explained the strategy varies globally, with sports being a key differentiator internationally. CEO & President, Global Streaming and Games, JB Perrette elaborated that the company is experimenting with different models (e.g., add-ons vs. included tiers) to find a profitable streaming-only business model for premium sports. Zaslav concluded by emphasizing that owned IP like DC and Harry Potter are the company's core long-term assets, viewing sports as a 'rental business.'

Speaking on behalf of Peter Sapino from Wolfe Research, an analyst asked if NextNav anticipates field testing for unlicensed or tolling operations and questioned the potential costs associated with retuning tolls.

Answer

CEO Mariam Sorond stated that NextNav does not believe additional field testing is necessary for the FCC to issue an NPRM. Regarding costs, she referenced recent technical and economic reports showing that only a subset of tolls might need retuning at a minimal cost, with no need for expensive transponder replacements, and reiterated the company's commitment to reasonable accommodations.

Peter Supino asked about current engagement trends on Disney+ and Hulu and how DTC strategies might affect them. He also questioned if there's an opportunity to accelerate DTC content spending for market share once the 10% margin target is surpassed.

Answer

CEO Bob Iger said engagement is increasing post-Hulu integration and will be boosted by tech improvements. Future content spend increases will target select international markets. CFO Hugh Johnston added the goal is maximizing long-term OI through growth, not just cost management, and they don't intend to stop at a 10% margin.

Peter Supino sought clarification on the $30 billion expansion capital for U.S. parks, asking if it is intended to increase attendance capacity and how the company evaluates the incremental return on that capital.

Answer

CEO Robert Iger confirmed that a primary goal of the expansion is to add capacity, allowing more guests to visit without diminishing the guest experience. He emphasized that the company is allocating capital to the Experiences segment because its return on invested capital has been at 'record levels,' making it a stellar and highly attractive area for investment.

Speaking on behalf of Peter Sapino, an analyst asked about the drivers for the implied sequential gross margin improvement in Q4 and requested clarity on the timing and strategy for the new $400 million share repurchase authorization.

Answer

CFO Dan Jedda explained that the expected Q4 gross margin improvement is due to operating leverage on higher seasonal volumes, as some costs in COGS are fixed. Regarding the share repurchase, Jedda stated the new program will be incremental to the ongoing net share settlement program, which already offsets over 40% of dilution, and is part of a broader capital allocation strategy that includes strategic investments and M&A.

Peter Supino sought clarification on the 2025 revenue growth outlook, questioning why the company guided to 'growth' rather than 'acceleration,' and asked about the puts and takes for 2025 gross margins.

Answer

CFO Dan Jedda clarified that while he expects 'strong growth' in 2025, he is not guiding to consistent acceleration from the current run rate due to difficult comparisons against 2024's political ad spend and accounting adjustments. For gross margin, Jedda anticipates the 2025 platform gross margin will be 'relatively consistent' with the FY24 level (ex-606 adjustments) of around 52%, as strong brand advertising margins are expected to offset the negative mix impact from the challenged M&E vertical.

Peter Supino sought clarification on the calculation behind the multi-year tax savings benefit and asked about the performance of top-of-funnel customer acquisition and any potential shifts in strategy.

Answer

CFO Jessica Fischer confirmed the free cash flow benefit calculation is appropriate, noting it depends on future share count assumptions. President & CEO Chris Winfrey stated that for Internet, sales are up and voluntary churn is down, but the overall market is challenged by low housing move activity. He stressed Charter has no product or pricing issue but is refining its marketing to better communicate its value proposition.

Peter Supino asked if the underlying sponsorship growth in Q1 was close to 50% when adjusted for fewer races, and also inquired about media rights opportunities related to streaming for casual fans and the lack of advertising.

Answer

CFO Brian Wendling cautioned against a simple calculation for sponsorship growth due to multiple variables and advised waiting for Q2 results for a clearer trend. On media rights, CEO Stefano Domenicali and CEO Derek Chang highlighted the strategy of using multiple platforms and content types to engage different fan demographics beyond the live race, acknowledging the unique opportunity this presents.

Peter Supino from Wolfe Research asked for clarification on the underlying sponsorship growth rate adjusted for the Q1 race calendar variance. He also inquired about the U.S. media rights opportunity, particularly regarding non-linear streaming and advertising potential.

Answer

Chief Accounting Officer Brian Wendling advised that Q2 results would offer a clearer year-to-date trend for sponsorship revenue. On media rights, CEO Stefano Domenicali and CEO Derek Chang emphasized the importance of a multi-platform strategy to engage various fan demographics, highlighting that the goal is to build a broad entertainment product that delivers content beyond just the live race itself.

Peter Supino from Wolfe Research asked when T-Mobile might incorporate recent and pending acquisitions like Lumos, Metronet, and UScellular into its long-term EBITDA guidance, and also inquired about the strategic view on cable assets.

Answer

CFO Peter Osvaldik explained that guidance will be updated as each transaction closes. CEO Mike Sievert added that Lumos is expected to be slightly accretive to service revenue and neutral to EBITDA in the current year. Regarding M&A, Sievert reiterated T-Mobile's strategic preference for pure-play fiber assets, citing them as a growth category and a superior product consistent with the company's operational approach.

Peter Supino asked for insight into T-Mobile's wholesale philosophy, particularly how it approaches bidding for and pricing new MVNO opportunities. He also inquired about the strategy for managing fixed wireless access in cells that become highly utilized yet continue to see strong consumer demand.

Answer

CEO G. Sievert explained that the wholesale strategy focuses on partners who can target audiences better than T-Mobile's own brands, with pricing designed to ensure a strong return on network capacity. Regarding fixed wireless, he noted that the business model is designed to prevent congestion by using a sophisticated algorithm to approve new customers only in sectors with sufficient long-term excess capacity, a model that has proven successful for 12 consecutive quarters.

Peter Supino from Wolfe Research asked for T-Mobile's long-term perspective on spectrum and RAN costs for the upcoming 6G cycle, and whether its business is positioned for a more efficient capital deployment than in past generations.

Answer

President and CEO G. Sievert expressed optimism that the 6G cycle could be fundamentally more efficient, driven by innovations like AI RAN and Open RAN, which could finally be realized at scale. He noted their goal is to continually extract more performance per CapEx dollar and per unit of spectrum. Sievert highlighted their partnerships with Ericsson, Nokia, and NVIDIA to invent the future of AI RAN, aiming to create disproportionate benefits for T-Mobile.

Peter Supino asked for the rationale behind removing the granular vintage penetration disclosures and how investors should evaluate marginal returns on capital going forward without that data.

Answer

CFO Scott Beasley explained that the company is simplifying its reporting now that it is in its fifth year of the fiber build. He stated that reporting on numerous quarterly cohorts had become too complex and that the new format, separating 'base' and 'expansion' footprints, better aligns with how the business is managed internally. He did not offer an alternative method for calculating marginal returns.

Peter Supino inquired about the characteristics of gross additions in mature, 45% penetrated markets, specifically their origin (movers vs. switchers) and ARPU profile. He also asked if there was an argument for accelerating the fiber build, potentially with a financial partner.

Answer

President and CEO Nick Jeffery reiterated that the vast majority of new customers come from cable competitors. CFO Scott Beasley added that intake ARPU remains healthy, with 60% of new customers taking 1 gig or higher speeds and a healthy portion adding value-added services. On build acceleration, Jeffery stated they are building as fast as is "sensibly" manageable for the whole company. Beasley noted that exploring financing options and partnerships to potentially build faster is part of the ongoing strategic review.