Fox - Q4 2023

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Q4 fiscal year 2023 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to emphasize that the functionality for the question-and-answer queue will be given at that time. If you should require assistance during the call, please press Star then 0. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Gabrielle Brown (EVP and Chief Investor Relations Officer)

Thank you, operator. Good morning, and welcome to our fiscal 2023 Q4 earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer; John Nallen, Chief Operating Officer; and Steve Tomsic, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter. Then we will take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filing. Additionally, this call will include certain non-GAAP financial measures, including Adjusted EBITDA or EBITDA, as we refer to it on this call.

Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. With that, I'm pleased to turn the call over to Lachlan.

Lachlan Murdoch (Executive Chair and CEO)

Thanks, Gabby, and thanks to everyone for joining us this morning. With this morning's earnings release, we close out a very strong fiscal 2023, fueled by successes across every aspect of our business. While Steve will cover the details of the Q4 in just a moment, for the full year, we generated record annual revenue and EBITDA. Notably, we reported revenue growth of 7%, including 12% advertising growth, supported by major tentpole events like the midterm election, Super Bowl LVII, and the FIFA Men's World Cup, as well as outstanding growth at Tubi, and 3% affiliate growth, led by the first third of our distribution renewal cycle.

These results demonstrate that Fox's differentiated strategy continues to deliver engaged audiences at scale for our advertising and distribution partners across our sports and news verticals, while also driving exceptional growth across our digital businesses. In a world of increasing audience fragmentation, Fox's collective linear and digital viewership was up 8% year-over-year. The on-screen reflection of that strategy was clearly apparent throughout fiscal 2023 across our networks and platforms. Fox's broadcast of Super Bowl LVII was the most-watched TV show of all time. Our Thanksgiving Day game was the most-watched NFL regular season game of all time, and the US-England match was the most-watched US Men's World Cup match of all time.

Fox News maintained its lead as both the top-rated national cable news channel, as well as the top-rated network across the entire cable ecosystem. It ranks as the number 2 national network in all of U.S. television. On the streaming front, Tubi made its debut in Nielsen's The Gauge, growing total consumption in fiscal 2023 by 79%, making it the number 1 AVOD player with consumption levels equal to a top 5 cable network. Tubi's fiscal 2023 was nothing short of spectacular, underpinned by growth in total view time, which in turn powered revenue growth. It was a year of increased awareness and engagement for Tubi, whether that was being recognized by Nielsen as America's most-watched AVOD service, its expanding content library and TVT metrics, or the 5 Cannes Lions Awards bestowed upon Tubi's Super Bowl spot.

Each quarter during the year saw successive gains of Tubi, and the fiscal Q4 was its most impressive of all, with revenue growth of 47%, driven by strong engagement, with total viewer time growing by 65%. Each month of the quarter set new records for monthly viewers. With Tubi's revenue and engagement accelerating in fiscal 2023, we are looking to further strengthen Tubi's position in fiscal 2024. To that end, we are very excited to welcome Anjali Sud as the new CEO of Tubi and look forward to seeing Tubi flourish further under her leadership. At Fox News Media, we continue to lead both in ratings and engagement.

The Fox News Channel ended the Q4 as the most-watched cable network in total day for the ninth consecutive quarter, while maintaining its lead as the most-watched cable news network, beating CNN and MSNBC in both total viewers in the demo for both prime time and total day. Fox News debuted its tweaked prime time lineup last month. We are pleased with the initial results and are confident that our deep bench of talent will continue to set the standard for all news services as we move towards the 2024 presidential election. This past year, Fox News' leadership position was never at risk. We sustained double-digit advantages in total viewership over our nearest competitors for the entire fiscal year... even during the period where our prime-time lineup was in transition.

In fact, since its mid-July debut, Fox News' new prime-time lineup is up over 35% in total viewers and up over 40% in the 25 to 54 demographic versus the June schedule. Meanwhile, the Fox Business Network ended the quarter as the most-watched business cable news network, beating CNBC in total viewers during the business day for the fifth consecutive quarter. Across at Fox Entertainment, we had a solid year, notching multiple wins, including the number one entertainment telecast with Next Level Chef, the number one new drama of 2023 with The Accused, and the number one new unscripted series with Special Forces: World's Toughest Test. Our local TV station group delivered a record midterm election sales cycle that was just shy of the last presidential cycle.

We are very pleased with fiscal '23, a year where Fox again delivered best-in-class results and further differentiated itself from its peers. We enter fiscal '24 from a position of strength, despite headwinds facing our industry and the lingering effect of some macroeconomic uncertainty. We will renew the next third of our distribution agreements and navigate a variable ad environment, supported by solid results from the recent upfront for our unique content offering, which distinguishes itself in any marketplace. You've heard me say this many times: Fox's focus strategy is different from our peers. It's uniquely good. Nowhere is that more evident than in the current environment, where Fox's leadership position is proven. In this year's upfront, we believe Fox led the market in both price and volume across our live sports and news offerings.

While it's early in the quarter, underlying ad trends have shown signs of improvement over last quarter. We are seeing an uptick in scatter, driven largely by sports. National news is solid. At Tubi, we saw further momentum in both revenue and TVT growth in July. This promises to be another strong year for Fox as we wrap up the Women's World Cup in a few weeks with stellar advertising support before kicking off American football in early September with the Big Ten and the NFL. We're already seeing our live sporting events continue to break records with the Women's World Cup broadcast. The U.S. versus the Netherlands on Fox was the most-watched Women's World Cup group stage match ever on U.S. English-language television. We'll also broadcast our first UEFA European Championship later this year.

We expect that our relaunched news lineup will continue its momentum as we head into the presidential election cycle, which will also be a boon to our local stations. Of course, we expect Tubi's growth and scale to extend even further. Underpinning all of this, we can't forget our balance sheet, which remains robust even after this year's legal costs. We ended the quarter with $4.3 billion in cash and approximately $7.2 billion in debt, giving us a net leverage ratio of roughly 1 times, the best balance sheet in the business. We have said it time and time again, our mix of assets puts us in a uniquely stronger position than our peers.

With this strength and our relentless focus on our core business, we are committed to delivering value for our shareholders in a thoughtful and disciplined manner as we look forward to 2024. With that, I'll turn it over to Steve to take you through the operating details of the quarter and full year.

Steve Tomsic (CFO)

Thanks, Lachlan. Good morning, everyone. Fox delivered strong financial results for fiscal 2023, with total company revenue growth of 7% and record EBITDA. Advertising revenues across the company were up 12%, led by a 17% increase at our television segment, made all the more impressive when comparing against revenues generated from last year's broadcasts of Thursday Night Football. This growth was driven by a banner year of events, including the record-breaking Super Bowl LVII, FIFA Men's World Cup, and the midterm election cycle, along with the considerable momentum we are driving at Tubi. We completed approximately one-third of our distribution re-renewals this year, supporting the lift in our total company affiliate fee revenues of 3%. As signaled previously, the impact from these initial renewals primarily benefited our television segment, leading to an 8% increase year-over-year.

Total company other revenues saw a 5% increase, a result of the full-year impact of MarVista, TMZ, and Studio Ramsay Global, which were acquired in fiscal 2022, along with the higher Fox Nation subscription revenues. From a bottom-line perspective, this robust company-wide revenue growth was the key driver of the 8% increase in full-year EBITDA to $3.19 billion. Net income attributable to stockholders was $1.24 billion or $2.33 per share, up versus the $1.21 billion, or $2.11 per share, reported in fiscal 2022. As you may recall, other net was impacted this year by charges associated with the Fox News Media litigation and the gain associated with the change in fair value of the company's investment in Flutter.

Excluding this impact and other non-core items, full-year Adjusted Net income increased 17% - $1.87 billion, with adjusted EPS up 26% - $3.51 per share. Turning to our fiscal Q4 results, Fox delivered total company revenues of $3.03 billion, which is consistent with the amount reported in Q4 fiscal 2022. Quarterly EBITDA was $735 million, down from $770 million in the prior year. This was largely due to the cyclical comparison with the prior year's midterm election and advertising impacts on our Fox News and Fox Entertainment businesses, along with a modest increase in overall expenses. Total company affiliate revenues grew 3% in the quarter as the pricing benefits from our recent renewals were partially offset by the impact of industry subscriber declines.

Total company advertising revenues decreased 4%, which was primarily a result of lower political advertising revenues at our television stations, especially when compared to our record June quarter last year, along with the impact of a softer direct response marketplace at Fox News Media. The momentum we have seen at Tubi throughout the fiscal year accelerated in our Q4, with revenue up 47% on the back of increased engagement and stable pricing. Total company other revenues were essentially unchanged from the prior year. Growth in total company expenses was held to 1% and includes investments at Tubi, albeit at a slower rate than Tubi's revenue growth, and the expansion of the USFL, as well as higher programming rights, amortization, and production costs at Fox Sports.

Net income attributable to stockholders of $375 million, or $0.74 per share, was up versus the $306 million, or $0.55 per share, reported in the prior year quarter. The EBITDA movements just described, along with the restructuring and other below-the-line costs, were more than offset by the mark-to-mark increases of our investment in Flutter. Excluding non-core items, Adjusted Net income in the quarter increased to $443 million, and adjusted EPS increased 19% - $0.88 per share. Turning to the quarterly results of our main operating segments. At Cable Networks, Q4 revenues saw a 3% decrease year-over-year. Cable affiliate fee revenues were down 2% in the quarter, as pricing gains from our affiliate renewals were more than offset by net subscriber declines of approximately 8%.

Cable advertising revenues fell 11%, largely on the back of a softer direct response marketplace at Fox News, while Cable other revenues increased 7%, led by revenues generated by the second season at the USFL. Quarterly Adjusted EBITDA at Cable was down 7% as these revenue impacts were partially offset by lower expenses, led by lower digital and newsgathering costs at Fox News Media, partially offset by higher costs associated with the USFL. Our television segment reported 4% growth in quarterly revenues. This was led by a 9% increase in television affiliate fee revenues, with healthy growth in pricing across Fox owned and operated, and Fox-affiliated stations continued to outpace the impact from subscriber declines.

Television advertising revenues fell 1%, as the strong growth at Tubi was offset by lower off-cycle political revenues and a slower rebound in the base market at the FOX Television Stations and lower ratings at Fox Entertainment. Television other revenues grew 8% in the quarter, primarily a result of increased activity at our, at our entertainment production companies. Quarterly Adjusted EBITDA at our television segment remained flat compared to the prior year quarter, as the increase in revenues was offset by higher expenses, where we had higher programming rights amortization and production costs at Fox Sports. Costs at Tubi were also higher than the prior year. However, this was outpace- outpaced by the rate of revenue growth to deliver improved EBITDA in the quarter.

During the full year, we generated free cash flow, which we define as net cash provided by operating activities less Capex, of $1.4 billion, inclusive of legal settlement payments. Before we get to capital allocation and balance sheet, it is worth noting some key items for fiscal 2024. We will, of course, be comparing to the marquee events of fiscal 2023, including the Super Bowl and the midterm election cycle, as well as transitioning to the first year of our NFL rights renewal and broadcasting our first UEFA European Championship. At the Cable Sports Networks, we expect margins to improve in fiscal 2024, reflecting our disciplined approach to college sports rights renewals, net of sublicensing income. In terms of affiliate revenue, we make no predictions on industry subscriber volumes.

However, as we've previously indicated, we have another third of our total company distribution revenues up for renewal this year and expect to see the benefit of those renewals towards the back half of the year and skewed towards our television segment. We expect to continue to invest in our growth initiatives. Here, Tubi will be the focus of investment spend, with the collective portfolio expected to deliver EBITDA in line or better than fiscal 2023. From a cash flow perspective, we expect Fox will be subject to the new corporate alternative minimum tax beginning this fiscal year. This will not impact our P&L tax provision, but will likely elevate our cash taxes in the near term. However, we still expect to realize the full benefit of our cash tax asset over time. Returning to capital allocation.

Over the course of fiscal 2023, we returned $2 billion of capital through the repurchase of 46 million Class A shares and 7.5 million Class B shares. This includes the cash impact of our previously announced $1 billion accelerated share repurchase transaction. This buyback activity was supplemented by over $260 million in dividend payments in the year. Underlining our continued commitment to shareholder returns, today, we announced an increase in our semiannual dividend to $0.26 per share.

... With the payment of this dividend, we will have cumulatively returned over $6 billion of capital to our shareholders since the spin in 2019. This includes over $4.6 billion of share repurchases, including the ASR, representing over 22% of our total shares outstanding since the launch of the buyback program in November 2019. This is all supported by the strength of our balance sheet, where, as Lachlan mentioned, we ended the quarter with $4.3 billion in cash and approximately $7.2 billion in debt. Fiscal 2023 was another year of strategic focus and strong execution at Fox. That, combined with the most robust balance sheet in the industry, supports our ongoing commitment to capital returns as well as flexibility to pursue value-accretive investment.

With that, let's turn the call back to Gabby to get started with Q&A.

Gabrielle Brown (EVP and Chief Investor Relations Officer)

Thank you, Steve. Now we, we would be happy to take questions from the investment community.

Operator (participant)

Ladies and gentlemen, I'd like to emphasize the functionality for the question-and-answer queue. If you wish to ask a question, please press 1, then 0 on your touch-tone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by once again pressing the 1, then 0. If you're using a speakerphone, please pick up the handset before pressing the numbers. It has been requested that you limit yourself to 1 question. Once again, if you have a question, please press 1, then 0 at this time. 1 moment, please, for your first question. Your first question comes from the line of Phil Cusick from J.P. Morgan. Please go ahead.

Phil Cusick (Analyst)

Hi, guys. a couple quick ones, if I can. First, ESPN talking about looking for partners. You know, given your portfolio of sports rights, could a sports-centric JV make sense for Fox? Alternatively, would a league investment in a peer or competitor run into legal issues? Then second, can you just give us any update on the overall ad environment, including demand for linear and versus digital? Thank you.

Lachlan Murdoch (Executive Chair and CEO)

Hey, Phil. Good morning. Thanks for the, for the questions. You know, as, as regards, Fox Sports, and our sports portfolio and, and any sort of, a direct-to-consumer proposition, you know, I think the, the, the... Our business is, is fundamentally, you know, very similar to, to ESPN's. You know, we face the same, strategic, priorities, as they do, and probably looking at, you know, doing, you know, looking at similar paths forward, as we go forward with our, with our, our portfolio. The, the thing that we put first and foremost is really to protect our premium, sports content, and, and place it in front of consumers, wherever we can.

You know, at the moment, that premium content derives the most value from being behind, you know, a paywall within the traditional cable and satellite pay TV universe. And we think that that pay TV ecosystem, you know, continues to be of tremendous value for our businesses and, and really, drives, you know, the value of Fox Sports and that content, you know, and will for a long time to come. Having said that, as consumer demands change, consumer tastes change, you know, we will, we will endeavor to put our, our content and our brands in front of consumers in whichever manner makes the most sense for them.

Provided that it remains behind, you know, a, a paywall and, and we get, you know, full value for those rights and, and, and those brands. It's very important to say it's not a either/or proposition. It's not a. We, we don't envision it as a, a moment when you leave a pay TV universe and, and, and quickly transition to a direct-to-consumer universe. You know, we think you'll enter a phase, you know, where, where both are, are important, and you're not choosing between one or the other, or ultimately, the, the consumer might choose between one or the other, but, but we'll be well-positioned in, in, in, in any distribution mechanism.

I can't answer your question on the legal ramifications of having league investors in a platform, but I can give you an update on the, you know, broader advertising environment. We're very pleased with our upfront from a national advertising perspective. Our upfront results were very pleasing. We were able to drive both pricing and volume across, you know, our key categories of news and sports. Obviously, you've heard about the tremendous growth at Tubi this past quarter and in fact, all year.

Categories that really impacted the upfront were, like, positive and just for national, remaining with national. Automobiles, you know, very strong category for us. Travel in the upfront, very strong, and pharmaceuticals. From a local perspective, you know, if you look at a local pacing ex political, obviously, you've got a year-on-year comparison with very strong political year last year. Ex political, we're pacing, you know, flat to slightly up. That includes some of the local digital revenues. Those categories, you know, are similar. Auto is very strong, financial services strong, health, but offset by softness in sort of retail, telecom, and we know, as we've talked about in past quarters, wagering.

Overall, you know, we're very pleased with where we are, and we think we're going to have a pretty decent second half. Calendar second half, right? Yep.

Operator (participant)

Your next question comes from the line of Jessica Reif Ehrlich from Bank of America. Please go ahead.

Jessica Reif Ehrlich (Analyst)

Thank you. Just moving back to the balance sheet, I know you've commented in your prepared remarks, but litigation aside, you really do have the strongest balance sheet. At this point, it seems like there are attractive assets, possible attractive assets at depressed multiples. Can you give us a little bit more of your thought process in terms of what you know, what areas are interesting to you? Or is it really just about returning capital to shareholders? Then on content, you know, you mentioned the sports step up with the NFL. You know, but overall content spend, like both entertainment, are you rethinking how you're spending on entertainment? Will overall content spend be up or down in the coming years?

Lachlan Murdoch (Executive Chair and CEO)

Thanks. Thanks, thanks very much, Jessica. On the balance sheet, Steve can chime in, but, you know, we continue to agree with you wholeheartedly, that I think we have the best balance sheet in the business. It gives us tremendous flexibility moving forward in both how we return capital to shareholders, whether it's through dividends or share repurchases. I think, you know, Steve mentioned in his remarks, I mean, that we purchased $2 billion worth of our shares this past year. That's probably an elevated level because, you know, as we look across the landscape, we didn't see any attractive M&A opportunities this past year that particularly caught our attention.

Uh, we are always, um, uh, uh, looking for businesses, you know, that, that fit, um, our portfolio, and that, that are- that will, you know, uh, be attractive growth businesses, uh, uh, for the business. Um, but we take this with a, uh... What's the word? A dispassion- dispassionate kind of view in terms of what's gonna drive the best sort of long-term shareholder value. So, so we balance up, you know, return of capital and, and, uh, and, and sort of accretive value opportunities, you know, on, on pretty much a daily basis. So Steve, do you wanna add anything to that?

Steve Tomsic (CFO)

Yeah. No, I think, I think that's exactly right, Lachlan. I think with the, the balance sheet that we've assembled gives us the flexibility to, to look at everything. We'll, and we'll ultimately do what's- what delivers the ultimately the best value for shareholders. Jessica, just on your content spend question, next year's a bit of- the year-on-year change is heavily influenced by the fact that we don't have a Super Bowl running through the amortization line of, of our content costs. If you look sort of through that, we would expect content spend to increase. We've got increasing rights amortization costs of the sports business. The entertainment business from a linear perspective, probably hold steady. If you normalize for strike, it'll probably be down, given the strike. We're gonna continue to invest in, in content at Tubi.

Some of that is passive in the form of revenue share payments, but we'll also be active in terms of production and licensing costs, and use as a relatively sort of, low growth, but continued growth in increased spending content. Hopefully, that gives you enough color there.

Gabrielle Brown (EVP and Chief Investor Relations Officer)

Operator, next question, please.

Operator (participant)

Next question comes from the line of John Hodulik from UBS. Please go ahead.

John Hodulik (Analyst)

Okay, thanks. You guys recently announced that you'll be winding down FOX Bet. I guess three quick ones. Sort of, first, any financial implications to that? Has your view on the sort of sports betting opportunity in the US changed? Anything you'd tell us about your sports betting strategy going forward? Thanks.

Lachlan Murdoch (Executive Chair and CEO)

Thanks, John. Why don't I start back to front with the strategy and the shuttering of Fox Bet, or the joint venture at least, and Steve can jump in on the financial implications. Yeah, as, as we announced last week, or it was announced last week, that, you know, Flutter exercised its right to terminate the Fox Bet joint venture. You know, they had every right to do this. They were the operator and then really the entire funder of, of Fox Bet. When they reached a certain benchmark in investment, they had the right to cancel that joint venture. Really chose to focus on their other brand, FanDuel, which is America's number one sports wagering site.

You know, while, you know, it's fair to say we were, you know, disappointed by this outcome, ultimately, you know, we, we aspire to be operators of a wagering sports wagering business. We did anticipate it, and, you know, we... I can't stress more that we are extremely pleased with the financial outcome and the value, value creation through Fox Bet, you know, that we've generated for all of our, our, our shareholders. To explain that, I should just step back a moment and remind everyone of a couple of things. You know, Fox Bet, we didn't spend any capital in Fox Bet.

It was entirely funded by Flutter, and we had the option to pick up 50% of Fox Bet upon licensing if we, if we became a licensed betting operator in the United States. While we didn't put any cash into the Fox Bet joint venture, I think we've derived... We was extremely successful, and we derived significant value from it. You know, one of the remaining elements of value going coming out of Fox Bet is the brand of FOX Bet Super 6, which is the most successful free-to-play wagering business in the United States and offers a tremendous funnel for wagering sites going forward.

This is a brand and an operation that we continue-- we will continue to operate. Of course, you know, we anticipated this potential outcome with, with Flutter moving away from Fox Bet, so we were able to negotiate our 18.6% option in FanDuel. As I mentioned, the number one site in the United States. If you just look at the value of DraftKings, the increasing value of DraftKings over recent times, you know, some people have put that value of our option in FanDuel of, you know, up to $2 billion. You know, we are very pleased with that outcome, and we wish FanDuel, you know, every continued success.

We also, as part of this journey, invested into the TopCo at Flutter, purchasing 2.5% of the business, for roughly $400 million. I think that investment now sits at a value of over $800 million. You know, importantly now, with, as we move forward, you know, we are now free to work with any of the other betting operators, and many of them have reached out to us already. We feel the, our existing sort of, performance in FOX Bet has been terrific.

We've built a tremendous amount of, of, of value, and we're really positioned well to continue to benefit from the emergence of sports wagering in, in the United States. That should give you kind of an overview of where we are. It's an important time, but Steve, do you want to mention any of the financial?

Steve Tomsic (CFO)

Yeah, that's a pretty comprehensive overview and financial overview. Financially, just to reiterate, as Lachlan mentioned, we weren't funding the business at all, so there's no, there's no change to us from that perspective. There were some pretty small sort of commercial payments between FOX Bet and Fox, which are immaterial to us in the grand scheme of things, and it's potentially ameliorated by the fact that we're now sort of free to look at other partnerships. From that perspective, I think it's, it's a bit of a push either way. As Lachlan mentioned, we absolutely preserve the value of the FanDuel option, which is, which is very valuable to us, as well as the value of our holding in the head stock. I think Lachlan covered it pretty well in his opening remarks.

Gabrielle Brown (EVP and Chief Investor Relations Officer)

Operator, next question, please.

Operator (participant)

Your next question comes from the line of Ben Swinburne from Morgan Stanley. Please go ahead.

Ben Swinburne (Analyst)

Thanks. Good morning. Lachlan, could you talk a little bit more about the long-term strategy around Tubi, particularly on the programming side, how you see that product evolving over a multiyear period? I don't know if I apologize if you guys have already talked about it, but any sense of sort of the impact from EBITDA Tubi, if that's still in investment mode, like, when you see that turning profitable? I was just curious if you could talk about the Big Ten quickly with the additional expansion, whether that's gonna have a notable financial impact as you guys go into the season, as the Big Ten becomes, I think, the Big Sixteen now. Thank you.

Lachlan Murdoch (Executive Chair and CEO)

Hey, thanks, Ben. Look, first on, on, on Tubi. The, you know, obviously, Anjali, she starts September first, we're looking forward to her adding her expertise and experience, you know, to the business. Obviously, with any incoming CEO, I'm sure she'll see it with fresh eyes and find, you know, fresh opportunities. If you look at the Tubi business today, you know, the TVT growth has really been everything. It's grown tremendously, rapidly and strongly. Then what that's done is then that's obviously driven advertising opportunities and revenue. TVT growth continues to grow at a faster pace than revenue.

you know, you see fill rate not actually keeping up to pace with TVT growth, which is a good thing because there's actually more opportunities to place clients' advertising than we can fill at the moment. That's really driven by, you know, the strong viewership growth. I think over time... I should also say, with the viewership growth, I think one of the key differentiators for Tubi, if you look across the AVOD market, is that it's primarily built on a on-demand platform. So our viewers are actively, you know, proactively clicking on content to watch.

We, we, we know they're, they're engaged, and we know they're in front of their screens watch-watching that content. This is very different from just a FAST channel, where someone might tune into the channel and then leave it on, and it, and it autoplays in, in the, in the background. There's a, there's a absolute room and a place for FAST channels. Tubi has a FAST channel service within it, but I think 90% of its viewing is actually from video on demand, people proactively clicking on, on, on that content and coming up to us to watch that, that movie or that, or that TV show. The library of those movies and TV shows continues to grow.

I think, this time, last quarter, we had 55,000 titles. We now have 60,000 titles, which equates to roughly 200,000 hours of individual movies and TV shows for our consumers to enjoy. So that, that, that, that will, that will continue. I think one of the areas that we, that we'll be looking at is expanding the categories that we're strong in. You know, there's certain sort of content categories and verticals, you know, that, that we are super serving and other ones that, that we can continue to, you know, that are still low-hanging fruit to continue to monetize. Steve, do you want to talk the EBITDA investment?

Steve Tomsic (CFO)

Yeah, sure. Ben, I'm not sure if you caught it in the opening remarks. In terms of Tubi, the investment for the full year was sort of in the low to mid negative $200s range, which is similar to where we had it in fiscal 2022. The quarter, we were actually better. We're better by nearly $30 million. As we look to 2024, Tubi's an, an absolute shining light from our growth portfolio, our digital portfolio, and given the momentum we're seeing in the business, whether it be what we just saw in Q4 or what we're seeing already in, in July, it sort of behooves us to continue to invest in that business. So you, you should expect to see the same net investment level or, or even a bit more going into fiscal 2024.

That will be offset as we look at the broader growth portfolio by things like Nation, Weather, USFL, sort of coming back a bit in terms of investment. We're, we're pretty excited and, and, and sort of very convinced of Tubi, so we're gonna continue to, to maintain a leadership position there.

Lachlan Murdoch (Executive Chair and CEO)

Just finally on, on the Big Ten, as regards to University of Oregon and University of Washington coming into the Big Ten Conference. Look, we just think these additions will only strengthen our college football franchise across Fox Sports, but particularly our partnership, and it is a partnership, in the Big Ten Network. We think it's, you know, very positive for us across the board.

Gabrielle Brown (EVP and Chief Investor Relations Officer)

Operator, we have time for one more question.

Operator (participant)

Okay, that question comes from the line of Robert Fishman from MoffettNathanson. Please go ahead.

Robert Fishman (Senior Research Analyst)

Good morning, everyone. After seeing some of the news earlier this year with CBS and its affiliates negotiating with, with the vMVPDs, can you just help us think about how Fox's relationship is with affiliates today? With this backdrop, if you can talk about your confidence about continuing to grow affiliate fees despite the elevated levels of cord cutting. Thank you.

Lachlan Murdoch (Executive Chair and CEO)

Thank you very much, Robert. Look, our, our relation with the- with affiliates is, is, is, you know, very strong. We catch up with them regularly, and, you know, we understand, you know, the headwinds facing broadcast television and, and, and, you know, we're, with our, in our station group, right? We, we see, have all the same issues that they have. We're, we're simpatico, you know, with them- in both the, you know, both the opportunities and the risks or the headwinds in that, that business.

You know, we, you know, are, you know, pretty, what's the word, vocal or, or proud of the fact that, that we've protected our, our key, sports, franchises, you know, for, pay TV environment, but also the... for our affiliates, our distribution, our most important distribution partners. We don't take our NFL games and put them anywhere else. We keep them, you know, exclusive for our distribution partners, and I, and I think that's, that's understood and very w- well received. Because of that, I think, you know, we will be able to continue to drive, the sort of industry-leading, pricing, both in the, in the pay universe and a free, free universe.

That pricing will certainly continue to ameliorate or, or, or balance any reduction in in in subscriber erosion and, and subscribers across the universe. That's where we feel we are with our affiliates, and, you know, we're, I think we're in a pretty good place for them.

Gabrielle Brown (EVP and Chief Investor Relations Officer)

Great. At this point, we are out of time, but if you have any further questions, please give me or Daniel Carey a call. Thank you once again for joining today's call.

Lachlan Murdoch (Executive Chair and CEO)

Thank you.

Operator (participant)

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.