Thomas Yeh

Thomas Yeh asked about the OTT subscriber momentum, retention patterns for subscribers acquired through shows like Spartacus and Power Book IV Season 3, and how the content slate is structured to support retention. He also sought an update on Distribution partnership progress, particularly bundled partnerships. Lastly, he inquired about the timeline to achieve 60%+ slate ownership, whether international sales would be concurrent with this ramp, and if ancillaries would build thereafter.

Answer

Jeffrey Hirsch, President and CEO, explained that a strong, connected slate throughout the year (Kanan, P-Valley, Fightland, Outlander finale, Blood of My Blood) combined with longer-term annual offers is designed to improve retention and ARPU. Alison Hoffman, President of STARZ Networks, highlighted Starz's leadership in bundling, noting that bundles expand TAM, drive net new additions, are revenue accretive, and improve retention. Mr. Hirsch confirmed that international sales are expected to ramp concurrently with increased slate ownership, citing four originals in production, partnerships with Plan B and Sky, and Lionsgate handling international sales for Fightland, all contributing to improved unit economics and international revenue.

Thomas Yeh inquired about subscriber retention patterns following major content premieres like Spartacus and Power Book IV Season Three, and how the current slate and offers are designed to improve churn. He also asked for updates on distribution partnerships and bundling initiatives, and the timeline for international sales to align with the ramp-up to 60%+ slate ownership.

Answer

President and CEO Jeffrey Hirsch explained that the 2026 slate is structured for consistent engagement, complemented by longer-term annual offers that improve retention and ARPU. President of STARZ Networks Alison Hoffman highlighted that bundling is a key focus, expanding TAM, driving net new additions, and improving retention. Jeffrey Hirsch confirmed that international sales are expected to ramp up concurrently with increased slate ownership, citing the Sky co-commission and Lionsgate's international sales efforts for Fightland.

Thomas Yeh of Morgan Stanley questioned how the owned-IP strategy would impact cash content spending and inquired about potential consolidation opportunities for the newly independent company.

Answer

CFO Scott Macdonald projected that cash content spending would decrease, targeting approximately $700 million in calendar 2026 with an ultimate goal of $650 million. President & CEO Jeffrey Hirsch addressed M&A by stating that while he wouldn't discuss specifics, STARZ's tech platform creates opportunities for partnerships or commercial deals with other brands targeting similar demographics.

Thomas Yeh of Morgan Stanley asked for details on future cash content spending levels given the shift to an owned slate, the expected working capital impact, and potential strategic M&A opportunities for the standalone company.

Answer

CFO Scott Macdonald projected cash content spending to drop to around $700 million in calendar 2026, with an ultimate goal of $650 million. President & CEO Jeffrey Hirsch added that while not detailing specific M&A, Starz sees opportunities for partnerships or commercial deals with other brands focused on similar demographics, leveraging its strong tech and data platform.

Thomas Yeh asked for further elaboration on the 'uneven consumer environment,' seeking evidence of a K-shaped recovery within the portfolio and an update on Q1 2026 attendance pacing, considering weather and Easter timing shifts. He also inquired about the company's land monetization initiatives, particularly how sale-leaseback interest is weighed against other development opportunities.

Answer

CEO Marc Swanson acknowledged Q1 weather challenges and Easter timing shifts, emphasizing in-park per capita spending as a key gauge of consumer health and the strategy to tailor products for all income levels. Interim CFO and Treasurer Jim Forrester noted that demographic surveys do not show significant shifts in guest income levels. Regarding land monetization, Mr. Swanson reiterated significant real estate opportunities, including sale-leasebacks and various development types, highlighting board collaboration and external recognition of asset value.

Thomas Yeh inquired about United Parks & Resorts' perspective on the 'uneven' consumer environment, seeking evidence of a K-shaped recovery within the portfolio and an update on Q1 2026 core attendance pacing, including Easter timing shifts. He also asked about the company's land monetization initiatives, specifically weighing sale-leaseback interest against other development opportunities.

Answer

CEO Marc Swanson addressed Q1 pacing, noting weather challenges in January and February but emphasizing March's importance, with Easter timing shifts and other calendar impacts likely offsetting. On per capita spending, Mr. Swanson highlighted consistent in-park spend growth and the need to tailor products for all income levels. Interim CFO Jim Forrester added that demographic surveys do not show significant shifts in guest income levels. Regarding land monetization, Mr. Swanson reiterated significant real estate opportunities, including sale-leasebacks and various development types, emphasizing collaboration with the board to maximize asset value, which he believes is not fully appreciated by public markets.

Thomas Yeh inquired about underlying consumer trends, asking if the company was observing value-consciousness similar to peers. He also sought more detail on the two expected international MOUs and the potential capital intensity of future hotel projects.

Answer

CEO Marc Swanson stated there are no materially obvious signs of a consumer pullback, pointing to nearly flat in-park spending and record-setting pace at the high-priced Discovery Cove park. He confirmed the two Memorandums of Understanding (MOUs) are for international park opportunities and are expected to be structured in a capital-light manner, similar to the Abu Dhabi project. On hotels, he noted discussions with partners continue across a variety of potential structures.

Thomas Yeh asked about the strategy to capture a share of the growing Orlando visitor market, questioning if the focus would shift to attendance growth over per capita spending. He also inquired about expectations for marketing expenses and labor wage dynamics for the upcoming year.

Answer

CEO Marc Swanson clarified that the primary goal is driving total revenue, which may at times involve promotional activity to boost attendance, but the long-term objective remains to grow pricing. He noted their differentiated product and value proposition give them confidence. Regarding expenses, Swanson explained that the company's cost-saving initiatives are designed to offset inflationary pressures like wages, allowing for reinvestment in other areas or for savings to drop to the bottom line.

Thomas Yeh from Morgan Stanley requested more context on the double-digit growth in 2025 forward ticket sales, asking about typical lead times. He also asked for clarification on how the total season pass base could be flat while the new premium pass program is seeing double-digit growth.

Answer

CEO Marc Swanson described the advance ticket sales as a positive but not majority indicator of future attendance. Regarding the pass base, he explained that the flat overall number reflects a favorable mix shift, with strong sales of new high-value premium passes offsetting declines in lower-tier products like Fun Cards, which is a positive trend for total revenue.

Thomas Yeh asked if there were any early signs of incremental market traffic due to Epic Universe and whether the company planned to adjust its promotional strategy to capture this opportunity. He also inquired if licensing revenue, such as from Abu Dhabi, has been a net tailwind to in-park per capita spending.

Answer

CEO Marc Swanson responded that while there are no specific early signs, the core opportunity is the expected increase in visitors to the market, which they will target with their own differentiated offerings and flexible marketing tactics. He clarified that the new sponsorship revenue is mostly still ahead and that the Abu Dhabi licensing revenue has not provided a material year-over-year increase to per caps.

Thomas Yeh from Morgan Stanley inquired about the sustainability of the strong per capita spending observed in Q4 2025, considering it's a shoulder season. He also asked for details on season pass uptake, including units and blended pricing, given the new regional pass architecture. Additionally, he sought insights on optimizing marketing spend for the new season, specifically addressing whether past issues were due to allocation, creative quality, or external factors like weather.

Answer

CFO Brian Witherow noted encouraging pass uptake, with guests migrating to higher-priced regional products, and strong Q4 per caps driven by late-season promotions and in-park spending, reinforcing consumer health. President and CEO John Reilly cautioned against modeling Q4 per caps directly due to "noise" from reduced events and operating days. Regarding marketing, John Reilly outlined plans to evaluate spend timing, improve creative quality, and shift focus from awareness to conversion marketing to maximize ROI.

Thomas Yeh of Morgan Stanley inquired about the sustainability of the strong per capita spending growth observed in Q4 2025, acknowledging mixed factors in the shoulder season. He also asked for insights on season pass uptake improvements, specifically how units and pricing are pacing on a blended basis relative to last year, given the new regional pass products. Finally, he asked about planned marketing spend optimization, seeking to understand if past issues were due to allocation, weather, or other factors, and how the company plans to approach marketing for the new season.

Answer

CFO Brian Witherow noted encouraging signs in season pass sales, with increased volume and migration to higher-priced regional pass products, but cautioned that it's a small sample size. He attributed strong Q4 per caps to late-season changes in promotions and pricing, and continued in-park spending, reinforcing that the consumer is healthy. CEO John Reilly, while acknowledging the intact revenue engine, expressed caution about modeling Q4 per caps directly due to "noise" from reduced events and operating days, but expects growth in in-park spending for 2026. Regarding marketing, Reilly outlined three areas of focus: optimizing the timing of spend for higher ROI, improving the quality of creative, and shifting the mix from awareness marketing to dedicated conversion efforts, leveraging the high unaided awareness of their brands.

Thomas Yeh of Morgan Stanley asked if the initial 2026 season pass pricing is lower on a like-for-like basis and whether it's a promotional move or a reaction to pressure on low-end consumers. He also sought clarity on whether the "normalized weather" assumption for the second half accounts for last year's exceptionally good October.

Answer

CFO Brian Witherow clarified that pass pricing is generally flat-to-up versus last fall, with the main incentive being value-adds like the All Park Pass, not price cuts. He explained that the second-half guidance assumes a weather environment comparable to last year's, not necessarily ideal weather, and noted that adding operating days provides some insurance against poor weather on key weekends.

Thomas Yeh asked about the progress in unifying the season pass strategy, particularly behavioral shifts on the legacy Six Flags side, and its contribution to recent sales momentum. He also inquired if there is still room for attendance to grow above historical trends.

Answer

CEO Richard Zimmerman stated that while harmonizing programs at a high level has begun, the full potential will be unlocked once all parks are on a single ticketing system. CFO Brian Witherow added that despite a later start, season pass unit sales in April were up mid-single digits. He noted the focus is on the critical May-June sales window and that the larger volume opportunity resides with the legacy Six Flags parks. Regarding attendance, he confirmed there is potential for full-year growth to exceed 2%, depending on performance in key months like June and July.

Thomas Yeh asked for an update on the attendance opportunity related to optimizing the operating calendar and inquired about the season pass pricing strategy for the legacy Six Flags parks.

Answer

CFO Brian Witherow explained that the company is shifting operating days to more valuable periods in Q2 and Q3 from lower-margin days in Q4. CEO Richard Zimmerman added that the strategy is to drive volume while taking price where the capital lineup provides power. He noted they are 'retraining' legacy Six Flags markets on a more consistent pricing program, supported by an encouraging 3% lift in early pass sales.

Thomas Yeh asked about the drivers of season pass momentum, the strategy for the partnership park buyouts, and whether structural issues would prevent legacy Six Flags' visitation per passholder from reaching legacy Cedar Fair levels.

Answer

CFO Brian Witherow noted they are pleased with both unit and price growth in season passes, which provides a tailwind for dynamic pricing. CEO Richard Zimmerman affirmed the partnership parks are 'great assets' and 'built-in M&A' that they intend to acquire. He stated there is 'no structural reason' they cannot increase passholder visitation rates at legacy Six Flags parks, especially with targeted investments in valued attractions like water parks.

Thomas Yeh sought further clarification on the 4% organic growth explanation, specifically whether it included the incoming IPG assets on a pro forma basis. He also asked for more color on the specific areas contributing to the observed acceleration in growth, beyond the upward bias from planned dispositions, particularly within Media and Advertising segments.

Answer

CFO Phil Angelastro clarified that the one month of IPG ownership in December was included in the 4% organic growth calculation. Chairman and CEO John Wren added that the $2.5 billion in companies for disposition were primarily Omnicom entities, and their exclusion had a mixed but not material impact on the aggregate organic growth. Mr. Angelastro highlighted strategic areas like Media, Precision Marketing, Commerce, Data, and the holistic platform organization, along with healthcare businesses, as key growth drivers. Mr. Wren emphasized the long-term strategic focus of the acquisition on future client needs.

Thomas Yeh sought further clarification on the 4% organic growth explanation, specifically asking if it excluded incoming IPG assets or was pro forma for both. He also asked for more color on the specific segments and areas contributing to the acceleration in growth, beyond the upward bias from dispositions.

Answer

Chairman and CEO John Wren clarified that the one month of IPG ownership was included in the 4% organic growth calculation, and the $2.5 billion in companies identified for disposition were primarily legacy Omnicom businesses, with their pros and cons excluded from the calculation. CFO Phil Angelastro added that growth was focused on strategic areas like media, precision marketing, commerce, data, and the holistic platform organization, including content and creative solutions, and the combined healthcare businesses.

Thomas Yeh inquired about the encouraging trends in subscriber universe declines, the potential impact of new skinny bundles on affiliate revenue, and AMC Networks' strategic positioning. He also asked for clarification on the decline in cash content spend in 2025 and the expected cash spend perspective for 2026, considering the EBITDA and free cash flow guidance.

Answer

CFO Patrick O'Connell noted encouraging signs in the broader landscape, particularly with partners like Charter bundling ad-supported AMC+ and the company's success in renewing affiliate agreements with full carriage. Regarding content spend, he stated that while cash spend was slightly down in 2025, investment in premium programming remains heavy and is expected to remain fairly constant in 2026 from both a P&L and cash perspective. CEO Kristin Dolan emphasized the high caliber of the 2025 and 2026 content slate, while Chief Content Officer Dan McDermott highlighted the production team's efficiency and use of tax incentives.

Thomas Yeh from Morgan Stanley inquired about the trends in subscriber universe declines, the impact of new skinny bundles on network carriage and affiliate revenue outlook, and the company's cash content spend, particularly its decline in 2025 and the expectations for 2026 within the context of EBITDA and free cash flow guidance.

Answer

CFO Patrick O'Connell expressed encouragement regarding green shoots in the broader landscape, noting AMC's partner-centric model with innovative deals (e.g., Charter) to expand reach. He affirmed the company's success in renewing affiliate agreements with full carriage due to a strong value proposition. Regarding content spend, Patrick O'Connell stated that while cash spend was slightly down in 2025, the company continues to invest heavily in premium programming, expecting levels to remain fairly constant in 2026 for both P&L and cash, while still generating healthy free cash flow. CEO Kristin Dolan emphasized the high caliber of the 2025 and planned 2026 slate, confirming that efficient production still yields high-quality content that meets or outperforms expectations.

Thomas Yeh inquired about the drivers behind the increased free cash flow guidance, the outlook for advertising and affiliate revenue, and the specifics of the company's AI partnership with Runway.

Answer

EVP & CFO Patrick O’Connell attributed the free cash flow upside primarily to cash tax savings and secondarily to programming efficiencies. CEO Kristin Dolan and President of Entertainment Dan McDermott clarified that the Runway partnership is a tool for creative visualization and cost-effective post-production, not an IP-sharing arrangement, and operates within all guild parameters.

Thomas Yeh inquired about the uptake of streaming subscribers from bundled video packages like Spectrum TV, the potential for cannibalization of a la carte services, the revenue model for these affiliate deals, and the outlook for advertising revenue declines throughout the year.

Answer

CEO Kristin Dolan reported that the Charter integration is tracking to expectations. CFO Patrick O'Connell added that the company views these partnerships as a long-term strategy to create a healthier video ecosystem with upside from upselling and new ad revenue, noting that the economics are bespoke for each deal. O'Connell also stated that while the linear ad market remains challenged by ratings, Q1's overall advertising underperformance was driven by softness on the digital side due to increased market supply.

Thomas Yeh inquired about the drivers behind the 2025 free cash flow outlook, specifically questioning if the lower cash programming spend is due to timing or increased efficiency. He also asked for a breakdown of streaming subscriber growth drivers between bundled partnerships and the Netflix licensing deal, and sought clarification on how the Charter deal is reflected in the 2025 revenue guidance.

Answer

CFO Patrick O'Connell explained that lower cash programming spend stems from production efficiencies and the timing of tax credit receipts, not a change in strategy. He attributed strong streaming subscriber momentum to low churn and successful bundled partnerships, noting the 2025 guidance for low to mid-teens streaming revenue growth already incorporates the Charter deal. CEO Kristin Dolan added that the company is optimizing production costs via international tax efficiencies and leveraging wholesaler data for sophisticated subscriber retention marketing.

Thomas Yeh inquired about the subscriber mix of the ad-supported streaming tier, the collective advertising inventory strategy across FAST and AVOD, and the strategic plan for the original 'The Walking Dead' catalog rights upon their return to AMC.

Answer

Chief Commercial Officer Kimberly Kelleher stated that the ad-supported tier is seeing fast growth and that AMC maintains a 'first sales position' for its inventory across all platforms, driving consistent digital revenue growth. CEO Kristin Dolan added that the company is comfortable with the subscriber split between ad-supported and premium tiers. Regarding 'The Walking Dead,' President of Entertainment Dan McDermott explained the rights return in approximately two years and will be strategically monetized as part of the complete universe library to maximize value.

Thomas Yeh asked about the evolution of the video journalism initiative, from reporter explanations to a more Linear TV-style product, and how this fits into investment needs. He also requested more color on the drivers of strong non-news single product subscriber growth, specifically across games and The Athletic.

Answer

Meredith Kopit Levien, President and CEO, highlighted video as a significant long-term opportunity to establish The Times as a preferred brand for watching news. She noted the scaling of formats like reporter videos, Visual Investigations, and converting hit podcasts into video shows, playing out in the new Watch tab and off-platform. She added that strong net subscriber growth in the quarter was driven by the multi-lever strategy, with all products contributing to subscriber growth and audience engagement.

Thomas Yeh inquired about the evolution of The New York Times Company's video journalism initiative, from current reporter explanation videos to a potential 'linear TV' style, and how this aligns with investment needs. He also sought further color on the drivers behind the strong non-news single product subscriber growth observed in the quarter, specifically across games and The Athletic.

Answer

President and CEO Meredith Kopit Levien highlighted video as a significant long-term opportunity, with a focus on scaling production of formats like reporter videos, Visual Investigations, and converting hit podcasts into video shows, playing out in the new Watch tab and off-platform. She noted that strong net adds growth in the quarter was due to the multi-lever strategy, with all products contributing to subscriber growth and audience engagement.

Thomas Yeh asked about the opportunity surrounding the New York Times' video push, including its impact on advertising and potential incremental investment needs. He also inquired about the family plan's rollout stage, its weighting towards Games versus the bundle, and any plans to restrict sharing on non-family plans.

Answer

Meredith Kopit Levien stated that video is a significant, early-stage opportunity to boost engagement on and off-platform, with advertising potential being long-term. Regarding the family plan, she noted its success in market penetration, revenue addition due to premium pricing, and benefits for engagement and retention, clarifying it's not weighted towards Games but performing well across both bundle and Games offerings.

Thomas Yeh asked about the opportunity surrounding the company's video format push, specifically its impact on advertising and potential incremental investment needs. He also inquired about the Family Plan's rollout stage, its weighting towards games versus the bundle, and any plans to restrict sharing on non-family plans.

Answer

Meredith Kopit Levien, President and CEO, stated that video presents a significant opportunity for engagement on and off-platform, with advertising potential still in early stages. She expressed enthusiasm for the Family Plan, highlighting its role in market penetration, subscription revenue growth, engagement, and retention, clarifying that its success spans both the bundle and games.

Thomas Yeh of Morgan Stanley inquired about whether traffic headwinds from AI-driven search results have intensified and what actions are being taken to support top-of-funnel growth. He also asked about the strategy behind varying the length of promotional pricing for the bundle.

Answer

CEO Meredith Kopit Levien acknowledged that changes by tech companies are reducing publisher traffic but emphasized that The Times' long-standing strategy of building direct, habit-based relationships provides resilience. CFO William Bardeen explained that varying promotional lengths (e.g., six vs. twelve months) is a standard tactic to appeal to the entire demand curve and effectively step-up subscribers to higher prices as they recognize the product's value.

Thomas Yeh asked about the news-only subscriber base, noting its reduced attrition and questioning the opportunity to convert these users to the bundle, and also asked about the company's appetite for standalone product price increases.

Answer

EVP and CFO Will Bardeen stated that the stability in the news-only base reflects the strategy working as designed, which includes targeted price increases for tenured subscribers. He affirmed the primary marketing focus remains on the bundle and expressed confidence in the overall ARPU trajectory, driven by product value enhancements and strong subscriber engagement.

Thomas Yeh of Morgan Stanley inquired about the strategy to grow the "engaged pool" of users, asking if it's a top-of-funnel focus and how it impacts investments. He also asked about the philosophy behind the Q4 marketing expense increase and the expected timing for ROI.

Answer

President and CEO Meredith Kopit Levien explained that growing engagement is a focus across the entire funnel, driven by multi-format journalism in News, new game development, and building top-of-funnel audience for The Athletic. EVP and CFO Will Bardeen clarified that while most subscriber growth is organic, the company opportunistically increases ROI-focused media spend when attractive returns are available, as seen in Q4. He noted this ROI is realized over multiple quarters.

Thomas Yeh asked about the role of the news cycle in subscriber additions versus the broadening effect of the bundle, and questioned the drivers behind the forecasted Q4 acceleration in digital subscription revenue.

Answer

Meredith Kopit Levien, President and CEO, explained that the model is designed to harness demand from any source, with a broad news product and format innovation driving engagement, which is at its highest since 2020. William Bardeen, EVP and CFO, stated the Q4 revenue guidance reflects the strategy working as designed, with growth from both subscriber volume and monetization rates, including bundle step-ups and price increases.

Thomas Yeh inquired about the progress of new streaming bundle initiatives, specifically ESPN Unlimited sign-ups and their adoption drivers, and requested an update on Hulu integration plans and key steps for the year.

Answer

CEO Bob Iger noted significant progress in making streaming profitable, citing technology improvements and global programming. He outlined components of growth including exceptional international content, technology advancements, a unified app experience, and new features. He stated that the integrated Disney+/Hulu experience has reduced churn, and the one-app experience is expected by the end of the calendar year.

Thomas Yeh asked about the progress of new streaming bundle initiatives, specifically ESPN Unlimited uptake and the drivers of future adoption, and requested an update on Hulu integration plans and key steps for the current year.

Answer

CEO Bob Iger highlighted significant progress in making the streaming business profitable, improving technology, and developing international content. He outlined future growth drivers including exceptional international content, technology advancements, a unified app experience, and new features like vertical videos and Sora-generated content. Iger noted that the integrated Disney+ and Hulu experience has already reduced churn, and a fully integrated one-app experience is targeted for the end of the calendar year.

Asked for details on the drivers of near-term leverage changes and long-term targets for both entities, and inquired about the cost-saving strategies for Starz to achieve its 20% margin goal.

Answer

The temporary near-term leverage increase is due to post-strike content spending and EBITDA cadence, with a year-end target of ~3x for both businesses. Starz's margin improvement will be driven by resetting content costs with new shows, savings from exiting international markets, and optimizing non-original content spend.