Stephen Laszczyk

Stephen Laszczyk asked about F1's margin, specifically confirming the expected 200 basis points of operating leverage for team payments in 2026, and inquired about other factors that could influence F1's margin growth over the next three to five years beyond team payments.

Answer

Brian Wendling, CAO and Principal Financial Officer, confirmed the approximate 200 basis points leverage for team payments in 2026, noting potential variability. He also discussed leverage from primary revenue streams and the balance between growth and investment in the business. Carmelo Ezpeleta, CEO, MotoGP Sports Entertainment Group, added that costs are connected to marginality growth and long-term promoter deals enable further investment.

Stephen Laszczyk requested a more detailed breakdown of TKO's 2026 guidance, specifically regarding revenue and Adjusted EBITDA growth across the core UFC and WWE businesses, and how this compares to the expected performance of IMG, considering called-out one-time items. He also asked about the key drivers and white space for partnership growth in 2026, noting new broadcast inventory and recent signing momentum.

Answer

Andrew Schleimer (CFO, TKO Group Holdings, Inc.) indicated a 21% revenue and 43% Adjusted EBITDA growth at the midpoint for 2026, with margins approaching 40%. He specified $170 million in Milan Olympics revenue (with LA pre-spend offsetting positive EBITDA) and a $75 million Adjusted EBITDA contribution from the World Cup. Growth in UFC and WWE is primarily driven by media rights step-ups, global partnerships, and Financial Incentive Packages (FIPs), including three Saudi WWE events. Mark Shapiro (President and COO, TKO Group Holdings, Inc.) highlighted the underestimated growth potential of the partnerships division, exceeding targets and raising the 2030 goal to $1.2 billion, driven by TKO's ability to reach coveted young male and healthy female audiences.

Stephen N. Laszczyk asked for a more detailed breakdown of the 2026 financial guidance, specifically regarding revenue and Adjusted EBITDA growth across UFC, WWE, and IMG, and sought insights into the key drivers and white space for partnership growth in 2026.

Answer

Andrew Schleimer, CFO, indicated TKO expects 21% revenue growth and 43% Adjusted EBITDA growth at the midpoint of the 2026 guide, with margins approaching 40%. He noted a $170 million revenue contribution from Milan Olympics and a $75 million Adjusted EBITDA contribution from the World Cup, with LA pre-spend being an EBITDA drag for IMG. Mark Shapiro, President and COO, highlighted that partnership growth has consistently exceeded expectations, with a raised 2030 target of $1.2 billion, driven by strong engagement with young male and female audiences, and contributing significantly to the projected margin expansion.

Stephen Laszczyk asked for details on the specific areas driving the outperformance that led to raised 2025 guidance and inquired about the ongoing growth opportunities for WWE sponsorships beyond major PLEs.

Answer

Andrew Schleimer, CFO, attributed the strong performance to live events, site fees, and partnerships, highlighting WWE's impressive 59% operating margin in Q2. Nick Khan, President of WWE, stated that growing sponsorships is a top priority, noting significant potential due to WWE's family-friendly and diverse audience. Mark Shapiro, COO, President & Director, added that any ad inventory secured in new media deals would further fuel this growth.

Stephen Laszczyk asked for more detail on the specific areas of outperformance in the core UFC and WWE businesses that led to the raised guidance and questioned the pacing of the $2 billion share repurchase program.

Answer

CFO Andrew Schleimer attributed the Q1 outperformance and raised guidance to strength in live events and global partnerships, with continued tailwinds from a strong WrestleMania. Mark Shapiro, President and COO, added that while they are not being overly conservative, they are being responsible given market uncertainty. Regarding buybacks, management stated the plan is market-driven and could be opportunistic, but the company is currently accumulating cash and keeping its "powder dry."

Stephen Laszczyk of Goldman Sachs asked for an update on the sponsorship business opportunity for the next 12 months, including the potential for new major sponsors. He also inquired about the economics and future opportunities for multi-property 'TKO Takeover' events, like the one announced for Kansas City.

Answer

President and COO Mark Shapiro confirmed TKO is on track to hit its $375 million sponsorship target for the year, expressing optimism about cross-selling opportunities across UFC, WWE, and PBR. Both Shapiro and CFO Andrew Schleimer explained that the Kansas City Takeover, which includes a meaningful incentive package, serves as a successful model for future multi-event weekends that can be monetized through site fees and sponsorships, with plans to expand the concept.

Stephen Laszczyk asked about the evolution of marquee UFC events following the Sphere spectacle and requested details on the financial profile and strategic implications of On Location's extended partnership with the NFL.

Answer

President and COO Mark Shapiro noted the Sphere event was 'one and done' but that TKO will continue creating spectacles at new high-tech venues. CFO Andrew Schleimer confirmed the long-term NFL deal for On Location is highly beneficial but declined to share specific economics, promising greater financial transparency for acquired assets going forward.

Stephen Laszczyk asked about the building blocks for Live Nation's double-digit AOI growth outlook in 2026, including segment contributions and confidence despite headwinds like Ticketmaster and Venue Nation's pre-opening expenses. He also inquired about the quality and early demand indicators for supply across stadiums, amphitheaters, and arenas, both domestically and internationally, comparing it to the previous year's outlook.

Answer

CFO Joe Berchtold detailed expectations for sponsorship (double-digit AOI growth, 70% booked), ticketing (mid-single-digit underlying growth, one-time secondary headwinds), and concerts (solid double-digit growth driven by robust global demand and increased show counts across large venues, arenas, and stadiums, particularly internationally). CEO Michael Rapino added that the global business continues to grow across all venue segments and geographies, with no new trends beyond the consistent growth seen in recent years, driven by increased artist supply and fan demand.

Stephen Laszczyk inquired about the building blocks and segment contributions driving Live Nation's double-digit AOI growth outlook for 2026, seeking insight into the company's confidence despite anticipated headwinds in Ticketmaster and Venue Nation's pre-opening expenses. He also asked for a finer point on the 2026 supply outlook, including quality, early demand indicators across various venue types and geographies, and how current trends compare to 12 months prior.

Answer

Joe Berchtold, President and CFO, detailed the outlook by division: Sponsorship is expected to be up double digits AOI, with over 70% booked. Ticketing is projected for mid-single-digit underlying growth but with one-time secondary market headwinds. Concerts are anticipated to deliver solid double-digit growth, supported by robust global demand and increased show counts across large venues, amphitheaters, arenas (especially U.S.-driven), and stadiums (driven by international, particularly UK and Europe). Michael Rapino, President and CEO, emphasized the consistent global growth across all venue segments, driven by increasing artist supply and fan demand, projecting high single-digit industry growth.

Stephen Laszczyk asked for a breakdown of the concert segment's AOI growth in Q3, specifically regarding the impact of Venue Nation attendance, new capacity, increased stadium activity, and pressure on amphitheater and arena attendance. He also sought an update on Live Nation's dialogue with the FTC and DOJ regarding regulatory matters and any common ground established.

Answer

Joe Berchtold, President and CFO, detailed that concert segment AOI grew by approximately $40 million, driven by 120 more stadium shows (U.S. and international) and increased activity in operated venues like Estadio GNP and Rogers Stadium, offsetting 250 fewer amphitheater shows. Regarding regulatory matters, he noted no real action from the FTC post-shutdown, reiterating confidence in Live Nation's legal case against what they view as an 'expansionist' view of the Bots Act. For the DOJ, discovery is largely complete, with a trial date reaffirmed for March 6th, and the Google search case remedy decision validated their view against a Live Nation/Ticketmaster breakup.

Stephen Laszczyk asked for a breakdown of the concert segment's AOI growth in Q3, considering factors like Venue Nation attendance, new capacity, increased stadium activity, and pressure on amphitheater and arena attendance. He also sought an update on Live Nation's dialogue with the FTC and DOJ, and whether common ground has been established.

Answer

President and CFO Joe Berchtold explained that the concert segment's AOI grew by approximately $40 million, driven by 120 more stadium shows, particularly in operated venues like Estadio GNP and Rogers Stadium. He noted 250 fewer amphitheater shows and flat arena activity, offset by growth in operated European arenas. Regarding regulatory matters, Joe Berchtold stated that there had been no significant FTC action post-government shutdown, expressing confidence in Live Nation's legal position against what they view as an 'expansionist view' of the Bots Act. He confirmed the DOJ case is procedurally advanced, with discovery complete and a March 6th trial date reaffirmed, adding that the Google search case remedies decision validated their view against a potential breakup.

Stephen Laszczyk asked for an update on the OCESA partnership and the broader Latin America strategy, and also inquired about the Q3 outlook for the Concerts segment, including supply, demand, and margin trends.

Answer

President and CEO Michael Rapino described the OCESA relationship as a 'home run' and highlighted significant growth opportunities in Mexico and Brazil. President and CFO Joe Berchtold projected a strong Q3, with double-digit AOI growth in Ticketmaster and Sponsorship, and continued growth in Concerts driven by a strong stadium quarter and robust consumer demand, evidenced by record on-site spending at recent festivals.

Stephen Laszczyk inquired about the latest developments with the OCESA partnership, the broader Latin America strategy, and the outlook for the Concerts segment in Q3, including supply, demand, and margin trends.

Answer

President & CEO Michael Rapino described the OCESA deal as a "home run," highlighting partner confidence and significant growth potential in Mexico and Brazil through venue development and Ticketmaster expansion. President & CFO Joe Berchtold projected strong Q3 performance, with double-digit AOI growth in Ticketmaster and Sponsorship, and continued growth in Concerts driven by a high volume of stadium shows and strong consumer spending.

Stephen Laszczyk asked for an update on the pacing of new Venue Nation openings and their expected AOI contribution, and also requested the latest on the DOJ regulatory case.

Answer

President and CFO Joe Berchtold stated that 4 of the 20 new venues are expected to open by year-end, with a partial AOI benefit next year and a full run-rate impact in 2027. Regarding the DOJ case, he noted the process is ongoing with a March 2026 court date, and they are currently in the discovery phase with no material updates.

Stephen Laszczyk asked about consumer demand trends for the large slate of stadium shows and the impact of this mix shift on Concerts segment margins and AOI growth for the upcoming year.

Answer

President and CEO Michael Rapino confirmed continued strong demand, noting that stadium show sell-through rates are higher than any previous year. President and CFO Joe Berchtold added that 2025's performance will be similar to 2023, with stadium volume driving strong revenue growth, particularly for Ticketmaster and Sponsorship. He clarified that while stadium shows have attractive returns, the company does not capture ancillary revenue (like concessions and parking) as it does in its own venues, which will influence the balance between revenue and AOI growth.

Stephen Laszczyk asked about the 2025 outlook for the sponsorship business, including potential high-growth verticals, and sought details on the Q4 Concerts segment AOI, particularly regarding marketing spend for upcoming on-sales.

Answer

President and CEO Michael Rapino stated that sponsorship is expected to continue its double-digit growth trajectory, driven by global expansion and the secular shift to experiential marketing. President and CFO Joe Berchtold added that while Q4 will see a double-digit rise in marketing spend, he expects full-year 2024 concert margins to be similar to 2019 levels.

Stephen Laszczyk asked for Cinemark's latest thoughts on the competitive landscape for 2026 and whether recent market share gains are structural and sustainable. He also requested more specific guidance from Melissa Thomas on the expected magnitude of margin expansion in 2026, assuming box office performance aligns with expectations and considering various expense factors.

Answer

Sean Gamble, President and CEO, acknowledged growing competition but affirmed Cinemark's ongoing efforts to enhance competitiveness. He reiterated confidence that at least 100 basis points of market share gains since pre-pandemic levels are sustainable and that the company continues to push for further expansion. Melissa Thomas, CFO, stated that anticipated box office and attendance growth in 2026 should support margin expansion, leveraging fixed costs and continued growth in average ticket prices and per caps. She noted that variable expenses would fluctuate, and factors like inflation, film rental mix, and elevated utilities/deferred maintenance would influence margins, while productivity initiatives remain a focus.

Stephen Laszczyk asked about Cinemark's competitive outlook for 2026, confidence in the structural nature of recent market share gains, and the expected magnitude of margin expansion in 2026 given anticipated box office performance and expense factors.

Answer

Sean Gamble, President and CEO, noted growing industry competition but expressed confidence in Cinemark's ability to compete, believing at least 100 basis points of market share gains since pre-pandemic are sustainable. Melissa Thomas, CFO, stated that margin expansion in 2026 is expected, primarily driven by anticipated box office growth and attendance, which will provide leverage over fixed costs, particularly in the U.S. She also mentioned ongoing inflation impacts on wages and concessions, film rental variability, and elevated utilities/other expenses due to deferred maintenance and rising electricity costs, while emphasizing continued productivity initiatives.

Stephen Laszczyk inquired about market share trends in the third quarter so far for both North America and international markets. He also asked about the company's flexibility in managing labor costs during Q2 and the potential for further efficiencies.

Answer

CEO Sean Gamble stated that H1 market share exceeded expectations and that while Q3 has been performing well, he expects Q4 share could temper due to a high volume of blockbuster releases. CFO Melissa Thomas highlighted strong labor productivity, with domestic labor hours rising significantly less than attendance. She credited internal tools for this flexibility and confirmed the company continues to pursue further productivity initiatives.

Stephen Laszczyk from Goldman Sachs asked for thoughts on industry M&A and Cinemark's interest in consolidation. He also asked for details on the increase in 'Utilities and other expense'.

Answer

CEO Sean Gamble said that while more consolidation was expected, it hasn't materialized, but Cinemark remains a prudent potential buyer focused on quality assets. CFO Melissa Thomas attributed the rise in 'Utilities and other expense' to tougher property tax comps, a planned increase in repairs and maintenance for the year, and higher credit card fees from online ticket sales.

Stephen Laszczyk requested more detail on the 2025 market share outlook, specifically the drivers of expected pressure, and clarification on why higher film rental expenses are expected to 'dynamically persist'.

Answer

CEO Sean Gamble clarified that while they expect to maintain their structural 100 bps market share gain versus pre-pandemic, the incremental gains from 2024 may temper due to a more diverse slate and increased capacity constraints, which he views as a sign of high productivity. CFO Melissa Thomas explained that film rental rates will be higher year-over-year in 2025 because the slate has a greater concentration of high-grossing blockbuster films compared to the strike-impacted 2024, a dynamic that will fluctuate quarterly with the slate.

Stephen Laszczyk asked for an outlook on the industry's competitive dynamics as the film slate improves and how competition influences Cinemark's pricing strategy.

Answer

President and CEO Sean Gamble explained that as the box office grows, increased seating capacity constraints could temper market share gains, which he described as a 'good problem to have.' He emphasized that Cinemark's strategy is to stay competitive through consumer-facing initiatives and that its pricing is guided by sophisticated, theater-level data analytics to optimize attendance and revenue, rather than by simply reacting to competitor moves.

Stephen Laszczyk asked about the expected evolution of Mattel163's strategy post-acquisition, including potential changes in studio output or game types, and whether additional investments are needed for the studio's capabilities.

Answer

Ynon Kreiz (Chairman and CEO, Mattel) explained that mobile games require relatively low capital investment for development, with user acquisition being performance-based and measurable. He expects the acquisition to increase output beyond the current 1-2 games per year, providing scale, resources, and expertise. He emphasized that this aligns with the new brand-centric organization for holistic brand management, creating a virtuous cycle between digital and toy businesses, and that the deal is immediately accretive strategically and financially. Stephen Laszczyk also inquired about the expected trajectory of Mattel's margins throughout 2026, specifically regarding gross margin. Paul Ruh (CFO, Mattel) reiterated the expectation for Adjusted Gross Margin to return to approximately 50% in 2026, driven by OPG savings, cost discipline, and margin-accretive digital games, partially offset by product cost inflation and tariff impacts. He also noted expectations for profitable growth acceleration in 2027 and beyond from investments.

Stephen Laszczyk asked about the anticipated evolution of Mattel163's strategy post-acquisition, including potential increases in game output or new game types, and whether additional investments would be required for the studio's capabilities. He also requested more color on the expected margin trajectory for 2026.

Answer

Mattel's Chairman and CEO, Ynon Kreiz, explained that the acquisition will increase output, provide scale, resources, and expertise, and enable holistic brand management to create a virtuous cycle between digital and toy businesses. He emphasized the capital-light nature of mobile game development and the measurable ROI of user acquisition. Mattel's CFO, Paul Ruh, guided for an adjusted gross margin of approximately 50% in 2026, driven by OPG savings and accretive digital games, partially offset by inflation and tariff costs, with profitable growth expected in 2027 and beyond.

Stephen Laszczyk from Goldman Sachs asked about Mattel's strategy for implementing price increases in response to tariffs and the resulting outlook for consumer demand.

Answer

CFO Paul Ruh stated that necessary pricing actions have already been implemented in the U.S. in collaboration with retailers, and no further increases are expected this year based on current tariff information. CEO Ynon Kreiz added that point-of-sale (POS) data was positive across all regions, and the toy industry remains strong, though broader economic uncertainty persists.

Stephen Laszczyk asked about Mattel's confidence in its ability to pass on pricing to major retailers and for more detail on the range of potential consumer demand outcomes being considered.

Answer

CEO Ynon Kreiz expressed confidence due to close retailer collaboration and a focus on value, noting that 40-50% of U.S. products will remain priced at $20 or less. CFO Anthony DiSilvestro explained that while demand is hard to predict, their scenario planning considers both macroeconomic risks and potential upsides, such as gaining shelf space if competitors face shortages.

Stephen Laszczyk asked about the key drivers providing confidence in the 2-3% top-line growth outlook for 2025, feedback from retail partners on demand, and the specific assumptions regarding tariffs embedded in the guidance.

Answer

CEO Ynon Kreiz cited expected momentum in Hot Wheels and UNO, new doll products tied to Disney's 'Snow White' and 'Wicked', and improving trends for Barbie. CFO Anthony DiSilvestro added that the 2025 guidance includes the anticipated impact of new tariffs and mitigating actions, such as leveraging Mattel's diversified supply chain, where less than 40% of production is from China, and potential pricing adjustments. He also noted Q1 headwinds from a later Easter and slightly elevated retail inventory.

Stephen Laszczyk asked for details on the investment size for the new Global Design Center and the long-term CapEx outlook. He also inquired about the pace of share repurchases and how they are balanced with other capital priorities.

Answer

CFO Anthony DiSilvestro explained the new design center replaces a leased facility and is the reason for the slight increase in CapEx guidance, with some build-out costs expected next year. Regarding buybacks, he stated the current pace is appropriate and consistent with capital allocation priorities, funded by free cash flow, with $268 million repurchased year-to-date.

Stephen Laszczyk inquired about the key drivers behind Monopoly Go!'s better-than-expected performance through year-end 2025 and the expectations for its top-line contributions in 2026.

Answer

CFO Gina Goetter expects Monopoly Go! to remain stable in 2026, planning for a $12 million-$14 million monthly run rate, with decay rates in line with expectations and reduced user acquisition expenses. CEO Chris Cocks also noted Scopely's adeptness at value capture within the game experience.

Stephen Laszcyk asked for Chris Cocks' views on how AI impacts the video game industry, including its effects on cost curves, barriers to entry, and consumer gameplay expectations, and how Hasbro is positioning itself as a newcomer. He also inquired about the key drivers behind Monopoly Go!'s better-than-expected performance into year-end and the top-line contribution expectations for 2026.

Answer

CEO Chris Cocks outlined AI's impact: short-term as a productivity boom (saving 1 million hours in 2026), mid-term transforming concepting and asset creation (10x speed for toy prototypes), and long-term opening new play categories. He emphasized Hasbro's human-centric, creator-led approach, combining deep IP and talent. CFO Gina Goetter stated that Monopoly Go! is expected to remain stable in 2026, with a $12M-$14M monthly run rate, consistent decay rates, and reduced user acquisition expenses. Chris Cocks added that Scopely has been adept at value capture.

Stephen Laszczyk from Goldman Sachs inquired about the record-breaking success of the Magic: The Gathering 'Final Fantasy' set, asking about demand versus expectations, production scalability, and the outlook for the Magic segment's growth in 2026.

Answer

CEO Chris Cocks highlighted that 'Final Fantasy' generated $200 million in revenue in a single day, far exceeding 'Lord of the Rings,' and that production was increased four times but still couldn't meet all demand. He attributed the success to strong IP adjacency and a gaming-native fanbase. CFO & COO Gina Goetter praised the team's agility in scaling production. Cocks expressed confidence in the 2026 and 2027 Universes Beyond pipeline to continue this momentum.

Stephen Laszczyk of Goldman Sachs inquired about the status of retailer conversations for the holiday season and the timing of order decisions, and also asked for an update on MONOPOLY GO's momentum and outlook.

Answer

CFO & COO Gina Goetter described retailer discussions as 'very fluid,' expecting a shift from direct import to domestic in Q2, leading to a down quarter for Consumer Products, with inventory shipments becoming more back-half loaded. CEO Chris Cocks credited MONOPOLY GO's success to Scopely's excellent execution and reiterated the outlook of approximately $10 million per month in revenue for Hasbro.

Stephen Laszczyk inquired about the key swing factors that could push medium-term margin expansion to the high or low end of the guided range. He also asked for details on the 2025 CapEx increase and the expected spending trajectory beyond that.

Answer

CFO and COO Gina Goetter identified the timing and monetization of video game launches as the primary swing factor for out-year margins. Regarding the $250 million CapEx for 2025, she explained it's a step-up, with about half for video games and the rest split between toy innovation and transformation initiatives, and does not expect dramatic increases in subsequent years.

Stephen Laszczyk asked CEO Robert Kyncl for details on the priorities advanced in Warner Music Group's renewed deal with TikTok and whether similar deals are on the horizon to further benefit artists.

Answer

CEO Robert Kyncl expressed satisfaction with the TikTok partnership and the new deal, which includes structural changes reflecting music's value, along with benefits in data, promotion, and insights. He clarified that TikTok revenue represents a lower single-digit percentage of the company's total. Kyncl stated there are no immediate similar deals on the horizon, with the current focus on advancing AI initiatives and enhancing value with existing DSP partners.

Stephen Laszczyk asked Robert Kyncl about the priorities advanced in Warner Music Group's renewed deal with TikTok and whether any other similar deals are anticipated in the near future.

Answer

CEO Robert Kyncl expressed satisfaction with the renewed TikTok partnership, noting structural changes that better reflect music's value, along with benefits in data, promotion, and insights. He clarified that TikTok's revenue contribution is in the lower single digits for the company. He stated no similar deals are immediately on the horizon, with the focus remaining on AI initiatives and current DSP partnerships.

Stephen Laszczyk followed up on the Spotify deal, asking if it provides WMG with greater control over wholesale pricing, and requested more clarity on the expected cadence of margin impact from foreign exchange throughout the year.

Answer

CEO Robert Kyncl did not comment on pricing specifics but stated the new deal provides 'certainty, not hope.' CFO Bryan Castellani reiterated that foreign exchange is the primary drag on achieving the 100 basis point margin expansion goal for the year and noted that the company's hedging programs impact results below the adjusted OIBDA line.

Stephen Laszczyk of The Goldman Sachs Group, Inc. asked about potential new forms of music monetization beyond social media that could emerge in the next few years, and inquired about any notable factors affecting free cash flow conversion heading into the next year.

Answer

CEO Robert Kyncl stated that he has '2 to 3 new revenue streams sketched out' but that it was premature to discuss them publicly. He expressed confidence that new monetization methods will emerge due to music's ubiquitous nature. CFO Bryan Castellani reaffirmed the full-year operating cash flow conversion target of 50% to 60%, stating that he expects it to be largely consistent year-to-year despite some seasonality from deal timing.

Stephen Laszczyk asked for more detail on A&R investments, including target genres and markets, and also requested an outlook on margins considering cost savings, reinvestments, and FX.

Answer

CEO Robert Kyncl explained that WMG's investment strategy is shifting to a 'repertoire lens' to evaluate the global value of local music. CFO Bryan Castellani noted that margins were impacted by revenue mix and reinvestments in technology and 'unproven A&R,' which is expensed and grew by double-digit percentages. He stated it was too early to provide updated margin guidance.

Stephen Laszczyk from Goldman Sachs asked about the ongoing cost savings program, seeking more details on future opportunities for cost reduction and the high ROI investments being made through resource reallocation. He also inquired about CFO Zach Coughlin's perspective on leverage and capital allocation for the next year and longer term, including confidence in the low- to mid-3x leverage ratio and the expected evolution of capital allocation.

Answer

CEO Jennifer Witz deferred to Wayne Thorsen, who outlined three key investment areas: improving the go-to-market strategy (e.g., identity work, companion plans), enhancing the in-car experience, and better merchandising content (search, recommendations). CFO Zach Coughlin explained that cost reductions create capacity for these investments while improving free cash flow. He reiterated the capital return strategy: first, investing in strategic initiatives; second, deleveraging to a low- to mid-3x ratio by late 2026 (from 3.6x in 2025); and third, shareholder returns, currently weighted towards dividends, with additional opportunities opening once the leverage target is met.

Stephen Laszczyk from Goldman Sachs asked about the ongoing cost savings program, the opportunities for further cost reduction over the next year, and the high ROI investments being made by reallocating resources. He also questioned CFO Zach Coughlin on his thoughts regarding leverage and capital allocation for the next year and longer term, including confidence in the low- to mid-3x leverage ratio and the expected evolution of capital allocation.

Answer

CEO Jennifer Witz highlighted Wayne Thorsen's team's work on rationalizing product and tech spend, focusing on in-car subscriptions and ads. EVP and COO Wayne Thorsen detailed three investment areas: improving go-to-market (e.g., companion), enhancing in-car experience, and better merchandising content (search, recommendations). CFO Zach Coughlin outlined a capital return strategy prioritizing strategic investments, deleveraging to low- to mid-3x by late 2026, and then shareholder returns (currently dividends), with cost reductions creating capacity for both investment and free cash flow improvement.

Stephen Laszczyk of Goldman Sachs asked about the factors governing the rollout pace of the new ad-supported 'Play' subscription plan and requested an update on subscriber conversion trends across different vehicle types and demographics.

Answer

EVP & COO Wayne Thorsen explained the 'Play' rollout is beginning with targeted cohorts of historically low-converting customers and will expand to a target of 100 million vehicles by year-end, with ad inventory growing alongside the subscriber base. CEO Jennifer Witz noted that the decline in new car conversion rates is slowing, aided by 360L penetration. She emphasized that overall demand should be viewed beyond conversion rates to include new acquisition programs like 3-year OEM deals and enhanced used car data funnels.

Stephen Laszczyk asked about subscriber receptivity to recent price increases and the implications for future pricing cadence, as well as real-time trends in the advertising market post-tariff volatility.

Answer

CEO Jennifer Witz noted the recent $1-$2 price increase had a minimal negative impact, which she credited to the added value in those packages. She expects the ARPU trend to improve throughout the year. CFO Thomas Barry addressed advertising, noting softness in auto and retail but strength in pharma and telco, confirming the sales team is actively navigating the volatile environment.

Stephen Laszczyk asked about the ARPU outlook, the potential for a satellite radio price increase, and the opportunity to add more inventory in the off-platform advertising business through podcasting or third-party partners.

Answer

CEO Jennifer Witz detailed a strategy to enhance value and support a rate increase planned for March, which should improve ARPU trends after Q1. President and CCO Scott Greenstein explained that while SiriusXM sees all major podcast deals, the company remains economically disciplined, prioritizing deals that also create value for the core subscription service.

Stephen Laszczyk asked for an update on the advertising market heading into Q4 and early 2025, and for the latest thoughts on managing the trade-off between churn and ARPU, given the use of promotional pricing.

Answer

CEO Jennifer Witz outlined ad market headwinds including a flood of CTV supply and a shift to performance-based media, noting their focus is on programmatic and podcasting growth. CFO Tom Barry added these factors led to the reduced revenue guidance. On the churn/ARPU balance, Barry explained that promotional plans are used to maintain the subscriber base, creating future optionality. Witz added that the new $9.99 entry-level plan is designed to place customers in appropriate packages from the start, which could improve ARPU for subscribers who might otherwise seek deep discounts.

Stephen Laszczyk from Goldman Sachs inquired about the Christmas Spectacular's fiscal 2025 performance, focusing on pricing, sell-through, and audience demographic trends compared to prior years. He also asked about future growth opportunities, including potential for increased show count and pricing upside for next year's run.

Answer

David Collins, EVP and Chief Financial Officer, highlighted a mid-single-digit percentage increase in per-show revenue, driven by higher per-show ticketing revenue and record food, beverage, and merchandise per caps. He noted broad-based demand growth across individuals and groups, with international tourism being the only exception. Collins expressed optimism for increasing show count and average ticket yield in future seasons, citing the production's premium value and strategic pricing management.

Stephen Laszczyk asked about the Christmas Spectacular's pricing, sell-through, and audience demographic trends during the 2025 holiday season compared to prior years, and the future growth opportunities for the production, specifically regarding show count and pricing for next year's run.

Answer

David Collins, EVP and Chief Financial Officer, highlighted a mid-single-digit percentage increase in per-show revenue, driven by improved per-show ticketing revenue and record-high food, beverage, and merchandise per caps. He noted broad-based demand growth across individual and group tickets and all geographic categories except international tourism, which was down. Collins expressed optimism for increasing the Christmas show count and average ticket yield in future seasons, noting the production remains a premium entertainment product priced below comparable options.

Stephen Laszczyk of Guggenheim Securities inquired about the primary growth drivers for the upcoming Christmas Spectacular season and sought commentary on advanced ticket sales trends.

Answer

An MSG Entertainment executive explained that growth for the 2025 Christmas Spectacular is expected from increasing the show count to 211 (from 200 last year) and improving average ticket yields. The executive noted that advanced ticket sales are currently pacing up over 60% in gross revenue, reflecting improvements in both volume and price for group and individual sales.

Stephen Laszczyk asked for more detail on the pricing, demand, and audience demographic trends for the Christmas Spectacular and the potential for future growth.

Answer

Interim CFO Lee Weinberg detailed that the Christmas Spectacular's record performance was driven by strong individual ticket demand, fueled by recovering NYC tourism, with a notable increase in tourist attendance. He stated that this demand allowed for an increased show count and higher average ticket yields. Looking forward, he sees further opportunity to grow revenue through increased show counts and by narrowing the pricing gap with Broadway shows.

Stephen Laszczyk requested insight into the key variables that could push adjusted operating income to the high or low end of the new guidance range and asked for quantification of the costs associated with bringing sponsorship sales back in-house.

Answer

Michael Grau, EVP and CFO, identified concert booking pacing and Christmas Spectacular performance as the primary swing factors for AOI guidance. He noted that headwinds include booking softness and overhead from the sponsorship transition, while tailwinds include the Christmas show, special events, and marquee sports. Grau declined to quantify the specific costs of ending the Oak View Group agreement.

Stephen Laszczyk of Goldman Sachs asked for an update on cash flow conversion expectations relative to EBITDA for the current year and beyond, noting timing dynamics in the first half.

Answer

CFO Natasha Fernandes stated that cash flow conversion is trending towards pre-COVID levels of around 50%, with H1 operating cash flow up 25% YoY. She highlighted that incremental box office converts to cash at a high rate and expects a strong Q3 as cash from major Chinese films is collected.

Stephen Laszczyk of Goldman Sachs requested more detail on the mix of the 145-160 guided system installations for 2025, specifically the split between sales-type and joint revenue-sharing arrangements (JRSA), and the corresponding outlook for capital expenditures.

Answer

CFO Natasha Fernandes confirmed the 2025 installation mix is expected to be approximately 60% joint ventures (JVs) and 40% sales. She projected that this would translate to JV-specific CapEx of roughly $35 million to $40 million, which constitutes the majority of the company's total CapEx for the year. She framed this as a strategic use of funds given the strong upcoming film slate and higher returns from the JV model.

Stephen Laszczyk of Goldman Sachs inquired about the medium-term outlook for local language film supply and sought more detail on the expected growth CapEx for Q4 and 2025.

Answer

CEO Richard Gelfond projected that local language films will continue to represent around 20% of total box office, with potential upside as the Chinese market recovers. CFO Natasha Fernandes noted that Q4 is historically the highest CapEx period and that the company has the balance sheet to fund more growth, with annual growth CapEx historically ranging from $30M to $40M.

Stephen Laszczyk inquired about the current advertising market, asking for color on the lack of visibility and what is needed for it to return, and also questioned the path to further market share gains in the terrestrial radio industry.

Answer

Chairman and CEO Bob Pittman noted that larger national advertisers are remaining stable, as evidenced by the 2.1% growth in Premier Networks, while smaller businesses are more sensitive to economic news. President, COO, and CFO Rich Bressler emphasized that pacing data is just a point in time. Regarding market share, Pittman stated that radio's challenge is monetization, not audience size, and iHeart's scale makes it an essential partner for large advertisers. Bressler added that the company has a consistent history of gaining share.

Stephen Laszczyk asked about the specific drivers of expected growth in the podcasting business and for an explanation of why 2024 political ad revenue was below expectations, along with any implications for future political cycles.

Answer

Chairman and CEO Bob Pittman stated that podcasting growth is being driven by expansion across all fronts: product, audience, pricing, and advertiser demand, making it a 'must buy' category. Regarding political ad revenue, he explained that campaigns are increasingly data-driven and that the company must enhance its programmatic offerings for the political sector, a lesson they are applying for future elections. President, COO, and CFO Rich Bressler added that despite lower-than-expected political revenue, the Multiplatform Group still delivered strong 8% EBITDA growth in Q4.

Stephen Laszczyk asked for more detail on the advertising trends supporting the 2025 revenue guidance and questioned why more of the announced $150 million in net cost savings were not flowing through to the 2025 adjusted EBITDA forecast.

Answer

CEO Bob Pittman cited a post-election sentiment that is 'very good for business' and an increasing advertiser realization that reach is key, which benefits iHeart's scale. President, COO & CFO Rich Bressler explained the EBITDA guidance by noting that 2025 is a non-political year, which represents a significant revenue headwind of about $170 million. He added that the company is taking a conservative approach to its forecast given the recent pre-election advertising slowdown, despite projecting an up year for EBITDA which is unusual following a presidential election cycle.

Inquired about the revenue potential of new Sphere Experience shows and the pipeline for artist residencies in 2025 and 2026.

Answer

James Dolan expressed confidence that the new shows will be a better product than the first one, 'Postcard from Earth,' which should allow for higher ticket prices. Regarding residencies, he stated that demand from artists exceeds the available slots, and artists who have performed there are extending their runs. While not providing specific names, he confirmed the pipeline for future residencies is 'very full.'

Stephen Laszczyk of Goldman Sachs inquired about the revenue potential for new Sphere Experience shows and asked for an update on the artist residency pipeline for 2025 and into 2026.

Answer

Executive Chairman and CEO James Dolan stated that new shows are expected to be a better product, which would support higher ticket prices. Regarding residencies, he described the pipeline as 'very full,' with more artist demand than available slots and noted that current artists are extending their runs due to the positive experience.

Stephen Laszczyk inquired about the sponsorship business, asking for an update on the pipeline for the remainder of 2025 and an early outlook for growth potential in 2026.

Answer

Formula One CEO Stefano Domenicali highlighted a solid sponsorship strategy focused on quality partners and strong activation, noting a robust pipeline for 2025 and beyond. Liberty Media CEO Derek Chang added that he has observed significant energy from current and potential sponsors, with the entire sport, including the teams, expanding their commercial partnerships.

Stephen Laszczyk of Guggenheim Securities inquired about the Formula One sponsorship business, asking for an update on 2025 renewals and a preliminary outlook on the sponsorship funnel for 2026.

Answer

Formula One President and CEO Stefano Domenicali highlighted a strategy focused on 'quality over quantity' and strong partner activation, noting a robust pipeline for future years. Liberty Media President and CEO Derek Chang added that he has observed significant energy and excitement from both current and potential sponsors, underscoring the sport's growing appeal and the teams' expanding sponsor bases.

Stephen Laszczyk asked if learnings from the U.S. media rights talks influenced the outlook for international rights, and requested color on the magnitude of the Las Vegas GP's financial underperformance.

Answer

Formula One CEO Stefano Domenicali expressed confidence in international media rights, noting the growing fan base and the value of the F1 TV product. CEO Derek Chang added that each market is unique, but the demand from global streamers for worldwide rights is a positive trend. Regarding Las Vegas, CFO Brian Wendling confirmed that while specific numbers couldn't be shared, the "majority of the miss" in financial expectations was related to the Vegas race.

Stephen Laszczyk of Goldman Sachs asked if learnings from the U.S. media rights negotiations have influenced the outlook for international rights. He also requested more detail on the magnitude of the financial underperformance of the Las Vegas race.

Answer

CEO Derek Chang explained that learnings from the U.S. market are not necessarily correlated to other international markets due to their unique characteristics, but noted the trend of large streamers seeking global rights could drive demand. Formula One CEO Stefano Domenicali added that F1 TV is a relevant and valuable tool in all negotiations. Regarding Las Vegas, CFO Brian Wendling confirmed that the "majority of the miss" in financial expectations was related to the Vegas event.

Stephen Laszczyk of Truist Securities inquired about the key assumptions, headwinds, and tailwinds underpinning Funko's 2025 guidance. He also sought details on the long-term strategy and margin profile for the growing sports category.

Answer

CEO Cynthia Williams highlighted positive trends such as strong European POS growth, positive retailer feedback for Bitty City!, and a healthy inventory position that reduces the need for closeout sales. She expressed long-term optimism for the sports category, noting its financial impact would be more significant in H2 2025. CFO Yves Le Pendeven confirmed the guidance incorporates 20% tariffs from China and softer U.S. consumer sentiment, outlining potential upside from tariff delays and downside from further escalation. Williams added that the sports category's margin profile is similar to the core business, with Pop! Yourself sports items being higher margin.

Stephen Laszczyk inquired about the specific drivers for the third-quarter margin outperformance and the updated fourth-quarter outlook. He also asked about the performance of products tied to the recent and upcoming theatrical film slate.

Answer

Chief Financial Officer Yves Le Pendeven attributed the strong Q3 gross margin to better-than-expected inventory reserves, lower freight costs, and reduced duties. He noted Q4 margins would be slightly lower due to planned promotional spending. Chief Executive Officer Cynthia Williams highlighted that 'Deadpool' was a significant driver in Q3 and that the company is most excited about 'Wicked' for the Q4 slate, noting strong early interest in related products.