News Class A Earnings Call Nuggets: FX Details and Underdeveloped Franchises
News Corporation Class A (NASDAQ:NWSA) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.
Michael Nathanson – Nomura: I have one for Chase and one for David. Chase you mentioned the strength of FX with a lot of the hit shows you guys have. You also have some of these shows on Netflix and I wondered, if you think having a Netflix is a benefit to the network and want to keep them on there to help the network or at some point do you put it behind (indiscernible) and drive more value that way? So how do you think about your FX hits had it gone to the web? The second one is, can you give a sense for both of you guys on startup costs associated with FOX Sports 1 and FXX in the first year or so, any additional costs we will have to think about the next year?
Chase Carey – President and COO: I think in terms of Netflix, we’ve been – certainly it’s been an important addition to our business, but I think we’ve been very thoughtful and very careful about sort of making sure we establish sort of appropriate parameters, I guess, form rules how we window the products to make sure every business is able to continue to grow profitably, successfully whether it’s content creation business or the network business. And I think in some ways, the proof continues to be there. (indiscernible) certainly FX, we’ve been – really it’s gotten stronger and stronger as it’s gone on through the year. I think we continue to – obviously we continue to monitor all these digital – Netflix, all these digital outlets. But I think that the availability of product on a Netflix is really in a timeframe that is very different than that on FX, and we think it gives FX plenty of room to continue to grow and differentiate itself, and continue to excite customers with that product. And in some ways, you get the library experience through Netflix. So, again, I don’t think it’s that – it’s sort of the next-generation of windowing that has existed in this business throughout; And I think we will continue to monitor, we will continue to evaluate, we will continue to make sure each of our businesses can grow and grow in a healthy way as these digital platforms emerge, but I think we feel pretty comfortable with sort of how we approached this, and we have a lot of flexibility in our agreements and these digital platforms give us a great feel of flexibility to control the product we put in and flexibility in determining what the appropriate windows and times that we want to do stuff. So, again, I think we feel pretty comfortable with that. I think in terms of the second question, this is sort of accumulation of I guess of FS1, we clearly have a number of initiatives going on right now. We do think that we can manage these in the context of maintaining short-term kind of solid profit growth, let’s say between FXX, FS1, the international networks we’re launching next year probably, looking sort of a couple of hundred million and change to grow those out. We do think in sort of that three to five year time frame those businesses become profitable, or actually become profitable at a rate – on an annual basis will exceed what we put into those investments and obviously for that evaluation that would be a mass evaluation that’ll be significantly higher. So, we think that’s the right way for us to approach it and as I said in the opening comments, we think it’s appropriate for us to balance, both, healthy, short-term and long-term story. Our priority ultimately at the end of the day is building long-term cash flow and value, and we want to build businesses not buy businesses. That’s what we’re doing in this case, and we have some unique opportunities and, we think these are all going to be exciting businesses and again, we can manage that investment and maintain the type of solid short-term growth that we’d like to do so, that we’d like to do.
Jessica Reif Cohen – Bank of America Merrill Lynch: I guess, whoever wants to answer it, but two questions also. You have very valuable real estate which you’re starting to monetize first with FOX Sports 1 and FXX. Just wondering if you could comment on the potential for any other under-monetized or underutilized networks to be converted and what you think about the upside in cable networks over the next few years – or maybe for the 21st Century FOX company? I don’t want to put words – at least what – is the biggest driver sports and nonfiction or is it something else? And the second question is, I was hoping somebody would comment on 21st Century FOX what your balance sheet objectives will be and how you guys are going to think about capital returns versus acquisitions?
Chase Carey – President and COO: Yeah, I mean, I think in the short term – I mean, we’ve actually, I think – I would say our short-term focus is really executing – I think really to be opportunistic – but I think our short-term focus in terms of your question, are there other underdeveloped franchises we can build on, I think realistically, our short-term focus will be to take the ones we’ve got and really the next year or two get them to where they should be yet again. If we see something, I think, we always want to be opportunistic. But the timing was such that we had a number of opportunities to take advantage of. Some of that’s timing of rights, some of that’s the timing of when our agreements come up with distributors, and some of that was opportunistic in the international markets. So, I think, with the combination of domestic, international and what we’ve done, I think the focus will really be in the very short term getting those businesses to where we want them to be, and we feel great about that path we’re on. I think, in general, we continue to look at the franchises we have, again I do think you’re in a period where it’s important that we do have somewhat of a shifting to sort of quantity to quality. So I think we want to make – we really want to build every network to a place where it can carry its own weight and really be an important network, some are narrower than others but it doesn’t mean every network appeals to the same breadth of audience. But we think it’s very important to have networks that really could each – been in a growth period, so certainly any network has to get up to speed, any new network. But some will get there faster than others, but every network is what we believe really can present that because as they carry its own life in the marketplace there. Again, they focus on building quality networks that really could be leader in each of the category. So the value is going to be in having leading networks get products, what have you. I think in a fragmented increasingly competitive world you want to focus on some of that again, networks or content products that could be, the best in the game and that’s what we’re striving to do. Not that there is a lot of that. I think on the balance sheet, we’re – as far as the 21st Century FOX balance sheet, it doesn’t really – I think that we’re going to look to that April, I mean that August Investor Day. We still again have not put the Board in place for the Company and I think we’ve looked to provide really our appropriate visibility to plans for the business, operating plans for the business and our priorities but equally, on issues around the balance sheet, return of capital to shareholders and the like. We certainly plan to continue to finish the buyback. We brought back as I said, with that done sort of with reenergizing that post the split. But I think clarity in terms of looking forward what are the philosophies and plans around return of capital to shareholders, whether it’s dividends or buybacks as well plans for the business. I think we really want to be that more holistically and with appropriate bodies in place like those so I think we’ll look to the August Investor Day to do that.
David F. DeVoe – CFO: Yeah. We sure would try to continue to maintain our balance sheet strength too. We can maintain a very strong credit rating to go forward.