AMC Networks Inc. (NASDAQ:AMCX) Q3 2024 Earnings Call Transcript

AMC Networks Inc. (NASDAQ:AMCX) Q3 2024 Earnings Call Transcript February 9, 2024

AMC Networks Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and thank you for standing by. Welcome to the AMC Networks Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. And I would now like to hand the conference over to your speaker today, Nick Seibert, Vice President of Corporate Development and Investor Relations. Please go ahead.

Nick Seibert: Thank you. Good morning, and welcome to the AMC Networks fourth quarter and full year 2023 earnings conference call. Joining us this morning are Kristin Dolan, Chief Executive Officer; Patrick O’Connell, Chief Financial Officer; Kim Kelleher, Chief Commercial Officer; and Dan McDermott, President of Entertainment and AMC Studios. Today’s press release is available on our website at amcnetworks.com. We will begin with prepared remarks, and then, we’ll open the call for questions. Today’s call may include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ.

Please refer to AMC Network’s SEC filings for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward-looking statements made on this call. Today, we will discuss certain non-GAAP financial measures. The required definitions and reconciliations can be found in today’s press release. With that, I’d like to turn the call over to Kristin.

Kristin Dolan: Thanks, Nick, and good morning, everyone. It’s been nearly a year since I joined AMC Networks as CEO, and I’m proud of the progress we’ve made in a fast changing and challenging environment, both internally and in the way we engage with viewers and our commercial and creative partners. In the fourth quarter and across 2023, we continue to see success in the areas that will drive this company forward, programming, partnerships and profitability. I’m encouraged that we were able to grow streaming revenue, strengthen our subscriber base and expand our consolidated AOI margin to 25%, while meaningfully growing our free cash flow. In a moment, Patrick will provide a detailed look at our financial results for the most recent quarter and the full year, including our enthusiasm for the free cash flow potential of this business going forward.

There has long been a saying in this industry that content is king. We believe that if content is king, cash is queen, and we are on a path that prioritizes both. In discussions around media and content companies these days, it’s hard to miss the fascination with scale. From our perspective, we see strength in being nimble and independent and value the flexibility this provides us in the marketplace. We have opportunities that are frankly not possible for non-vertically integrated programmers who are tied to broadcast networks, or large distribution businesses. We truly can dance with anyone and are enthusiastic about using the structural advantage that comes with this independence to better serve viewers and our commercial partners. With the introduction late last year of an ad supported version of AMC+, we now have a fully ad supported distribution ecosystem that includes our five linear networks, several targeted streaming services and programming carriage of approximately 100 channel feeds on partner fast and CTV platforms.

Our presence in all of these places is important for several reasons. Number one, we’re able to reach viewers and make our content available wherever and however they might choose to watch. Secondly, and very much in line with that first objective, we use viewership insights and library management to Window our shows and films across these brands and unique audiences to expand viewership and engagement in a cost effective and responsible way. And third, we seamlessly work with our commercial partners across all of these platforms, which delivers value and functional benefits that wouldn’t be possible if our presence was limited, either to just linear or just streaming. We continue to be very bullish on new offerings like Xumo from Comcast and Charter that converge linear and streaming consumption at scale, with dedicated customer service and technical support for viewers.

The companies behind this new offering are some of our most important and long-standing commercial partners. We’re pleased to [indiscernible] them on Xumo from the beginning and see great opportunity as they continue to roll out this new offering. In other affiliate news, we recently completed an agreement with Philo that will launch early this year. It will make the ad supported version of AMC+ part of Philo’s based video offering. Just another example of how the ad supported tier gives customers additional flexibility but also boosts our commercial revenue partnerships and potential for bundling, while getting our shows and films in front of more viewers. It’s early days, but we are very pleased with the response to the ad supported version of AMC+, and we have an established runway for growth as more partners add the option this year.

We still put high-quality original shows on AMC every Sunday night of the year and increasingly rare approach that drives value for our traditional affiliate partners. But importantly, this is not the only place we put these shows are the only way we work with our partners. Yes, we ended the year with five of the top 20 dramas on cable, and three of the top six new cable dramas. But just as importantly, the cable companies that are seeing the benefits of that linear performance also carry AMC+ on their own systems as an integrated offering to their customers. We drive viewership in both places. We were happy with results of our content partnership with Max late last year. Our shows performed well on their platform, and we saw associated viewership increases on AMC+ as well.

We remain in discussions with a wide variety of potential partners and believe we will see additional bundling activity in the future. Across the industry, we really do need to make things easier and more cost effective for our customers. The current environment is confusing, expensive, and essentially forces consumers to recreate the cable bundle on their own at twice the price. We saw an example of new thinking on bundling and partnerships just this week with the announcement from major industry players on a new sports bundle. I believe this industry will continue to find new approaches that will better serve consumers, distributors and content companies. Turning to advertising, we’ve been very focused on driving new technology and capabilities that both benefit us and change how the industry does business.

In the fourth quarter, we became the first programmer to enable programmatic ad buying on linear networks. This fall at our first of its kind deployment of fully addressable spots in our national linear programming feeds. These advances make our linear and digital inventory much more valuable and effective. Going to market with a programmatic first approach, and a fully converged linear and digital offering lets us enter into broader and more meaningful advertising partnerships. Some of the early advertisers using our programmatic linear capabilities are seeing conversion rates that are four or five times that of linear traditional campaigns, with significant boost in incremental unduplicated reach from their conventional ad buys. For the first time on linear television, advertisers can buy audience segments instead of broad demos tied to time slots with custom attribution results delivered post campaign.

This is real differentiation we can bring to this year’s up front and beyond. Another area of focus for us is a technological overhaul and consolidation of our backend systems and shift to one platform supporting all of our streaming services. This development work will carry forward in 2024 and will improve our service to customers and maximize efficiencies. Leading this effort is Stephanie Michko, who recently joined the company as our Head of Global Media Operations and Technology. Stephanie and I worked together at Cablevision where she did award winning work around content discovery and helped develop and deploy the industry’s first cloud-based DVR. She then went on to become CTO and CEO of Kayden where she was immersed in the world of ad tech, and most recently served as CTO of Charter.

We’re thrilled she’s here with us and leading this important evolution. As always at AMC Networks, everything we do ties back to the shows and films we’re able to make and put in front of viewers. I want to close my remarks today with some results from 2023 that demonstrate our strong audience momentum and also provide a look ahead at 2024. The fourth quarter of last year was our most watched quarter ever across our streaming portfolio, which as you know is designed to super serve fans of specific genres and content categories. AMC+ and HIDIVE achieved their number one quarters ever in terms of viewership and Shudder and Acorn TV also showed significant strength close the year. Programming achievements included first season of The Walking Dead: Daryl Dixon, which is now the most watched season in the history of AMC+, and that includes the final season of The Walking Dead itself.

VHS 85 is Shudder’s most watch film ever. THE EMINENCE IN SHADOW Season 2 is HIDIVE’s the most watched season ever, and Toya & Reginae is All Blacks number one new series of all time in both viewership and customer acquisition. We had a lot of success with our shows and films last year, and the year ahead looks just says exciting. Earlier this week we brought a slate of new shows to the twice Annual Meeting of the Television Critics Association or TCA. Even in the wake of two strikes that shut down production for six months, I don’t believe we’ve ever presented a more compelling and eclectic collection of shows than we did this week. These shows included monster speed, a critically acclaimed series starring Clive Owen as the immortal detective Sam Spade.

Parrish, which is premiering at the end of March with Breaking Bad and Better Call Saul, Giancarlo Esposito in a leading role, and the second season of the popular Anne Rice’s Interview with the Vampire, which returns to AMC and AMC+ on May 12. The latest addition to our expanding universe around the Walking Dead, The Walking Dead: The Ones Who Live premieres on February 25, and is focused on fan favorite characters Rick and Michonne. As we entered the final weeks of our promotional campaign, we’re seeing enormous fan interest in anticipation in this continuing story. The final trailer for the series just dropped and generated 16 million plays in its first 24 hours, and nearly 33 million plays in a single week. We’re also bringing Rick and Michonne into Activision’s Blockbuster video game franchise Call of Duty, proving the enduring allure of these beloved characters across the media landscape.

This is meaningful indication of the continued advantage for this universe, which is important to us, given that we have second seasons of the two other character driven spin offs, Dead City and Daryl Dixon on the way. In a world in which a premier is when a viewer first decides to watch something, as opposed to when a network first decides to show it, we see a very long tail and incredible value in this beloved and expanding franchise. As I look back on 2023, I’m proud of the progress our internal teams have made in transforming the company to adapt and thrive as this competitive and fast changing environment continues to take shape. We enter 2024 very much focused on programming partnerships and profitability, as our three principal drivers of the company and its continued success.

And I’m energized by this work, our people and the road ahead. And now I’ll turn the call over to Patrick.

Patrick O’Connell: Thank you, Kristin. I’ll start by providing a high-level review of our financial results. And then I’ll discuss our outlook for the year and then we’ll open the call for Q&A. For 2023, we are pleased to report that we achieved our full year guidance, including consolidated revenue of $2.7 billion consolidated adjusted operating income of $670 million, and most importantly, free cash flow of $169 million, excluding the impact of the $113 million, one-time cash restructuring payments, as well as the $50 million tailwind related to the Unwind of our Hulu licensing agreement, our normalized free cash flow would have been $231 million, a base which we believe we can grow in 2024. Looking back over the year, we’re very pleased with the progress we’ve made and quickly reorienting the business around free cash flow generation, while balancing critical investments and programming.

We’ll have more to say on this when we get to our guidance for 2024. Before I jump into our financial results, I would like to quickly address one housekeeping item. In December, we sold our interest in 25/7 Media, which in 2023 generated $91 million in revenue, and $4 million in AOI within our international and other segments. Beginning in the first quarter of this year, this segment will be solely comprised of AMC Networks International, including visibility into this important business. In addition, going forward, our consolidated content licensing revenues will clearly reflect the traditional core licensing revenues generated by AMC Studios, as well as our film distribution businesses. Without the lower margin production revenue we divested.

Prior to the completion of the sale, we recorded a non-cash impairment charge of $20 million. Moving to our results, for the fourth quarter, consolidated revenue was $679 million. Adjusted operating income was $100 million and we generated $66 million of free cash flow. I’ll now briefly touched on our segment financials. Domestic operations revenues decreased 13% to $2.3 billion for the full year and decreased 32% to $582 million for the fourth quarter. The decrease in revenues for the full year was attributable to lower advertising, content licensing and affiliate revenues, partly offset by streaming revenue growth. Next, I’ll break down the individual components of revenue. Full years streaming revenue increased 13% to $566 million. For the quarter, streaming revenue increased 4%.

We continue to remain disciplined in our marketing spend, and we are pleased with the results of our efforts to acquire and retain higher lifetime value subscribers. Advertising revenues declined 20% for the full year and 23% in the fourth quarter, and reflect difficult year-over-year comparisons with Q4 2022 when we had the incredible finale of The Walking Dead, as well as lower linear ratings. Our advertising revenues also reflect actions we took to reduce volumes of original programming, the net result of which drives higher levels of profitability. Digital growth remains robust and continues to partially offset these headwinds. That said, like our peers, we continue to experience a challenging advertising environment, particularly for scatter and direct response.

Content licensing revenue was $343 million for the full year and $96 million for the fourth quarter, versus $300 million in the fourth quarter last year, when we recognized $126 million of revenue related to SILO declaimed AMC studios series we produce for Apple TV, as well as significant revenues associated with the delivery of certain The Walking Dead universe titles. Affiliate revenue performance in the quarter was driven by continued declines in the basic subscriber universe and the 4% impact from the non-renewal of fubo. At the end of the fourth quarter, we fully lapped this impact, therefore fubo will not be a headwind to our year-over-year comparisons going forward. Domestic operations adjusted operating income was $713 million for the full year, and $124 million for the quarter.

Continued expense management yielded margin improvements for both the full year and the fourth quarter, with margins of 31% and 21%, respectively. The year-over-year decrease in AOI was largely attributable to lower revenues, which are partly offset by lower programming and marketing expenses. The results of continued cost discipline across the business. Looking at our international and other segment, for the full year revenue decreased 9% to $404 million, excluding 25/7 media revenues declined 2%. Adjusted operating income was $61 million for the full year. Moving to the balance sheet, we ended the year with net debt of approximately $1.8 billion and a consolidated net leverage ratio of 2.7x. We have substantial financial flexibility, with approximately $1 billion of available liquidity, including $571 million of cash on the balance sheet and our undrawn $400 million revolving credit facility.

In the fourth quarter, we redeemed all of our 2024 Senior notes outstanding and also repurchased 25 million principal amount of our 2025 Senior notes in the open market. We continue to remain focused on maintaining the health and flexibility of our balance sheet, or reducing gross debt over time. Regarding capital allocation, our philosophy remains unchanged. First, we look to support the business by creating and acquiring compelling programming that resonates with our audiences, while maintaining healthy levels of profitability and cash flow generation. Second, we look to improve our balance sheet by reducing gross debt and proactively addressing upcoming maturities. Third, strategic M&A and returning capital to shareholders remain further down our current priority list.

Our 2023 results, including a healthy 34% normalized free cash flow conversion ratio, and a reduction of gross debt of approximately $460 million, a reflections of these priorities which we’re carrying into 2024. Moving to our outlook for 2024. We are pleased to say that we expect to grow our free cash flow year-over-year over the normalized $231 million we generated in 2023. And over the next two years, we expect to generate cumulative free cash flow of approximately $0.5 billion. In 2023, we reaped the benefits of the difficult decisions we undertook to right-size our expense base at the end of ’22. This gives us additional confidence in our ability to manage the business in a fiscally prudent manner going forward. Moving on to revenue, excluding $91 million in 2023 revenue from 25/7 Media and $56 million of revenue related to SILO deliveries in 2023.

We expect 2024 consolidated revenue to decline approximately 6% as compared to the prior year, implying total revenue of approximately $2.4 billion. Now we’ll unpack the details that underpin our revenue outlook. Prudent streaming growth will continue to be a focus in 2024. And we expect year-over-year streaming revenue growth in the high single-digit to low double-digit range driven by broader distribution of our offerings, selected price increases, as well as disciplined acquisition marketing efforts. With respect to advertising revenue, for the linear environment continues to be challenging, the programming schedule and volume headwinds evident in 2023 will subside. We expect year-over-year domestic advertising revenue declines in the high single digit area for 2024.

With respect to affiliate revenue, the traditional video ecosystem continues to evolve rapidly, and we’re leaning into efforts by traditional distributors customer-centric solutions, such as Charter and Comcast Zumo. With that said, our near-term expectation regarding linear subscriber trends for this year remains unchanged. And we expect full year domestic affiliate revenue to decline approximately 10% compared with 2023. Content licensing remains a priority for us and we continue to be innovative, aggressive and discipline regarding this crucial revenue stream. In 2024, we don’t expect shows like The Walking Dead, and Fear the Walking Dead to contribute as much as they have in the past to our content licensing revenues. Nor do we expect material production revenue from projects like SILO for Apple TV.

Taking account of these year-over-year dynamics, we expect domestic licensing revenue to be in the $225 million area for 2024. And while content licensing revenues are notoriously lumpy and often impacted by shipping delivery schedules, this level of revenue reflects our current level of production and as such a good baseline going forward. Owning the content we produce comes with significant optionality. And we look forward to the opportunity around the return of international rights to shows like The Walking Dead in 2025. Moving on to our international segment, as we have divested 25/7 Media business, this segment will consist solely of our AMC Networks international business. For AMC Networks International, excluding 25/7 Media, we anticipate declines in distribution revenue to be partly offset by advertising revenue growth, yielding approximately $300 million in revenue on our international segment for 2024.

While our guiding metric remains free cash flow, adjusted operating income is still a very important measure of profitability. And we continue to focus on maintaining healthy AOI margins. Despite the revenue headwinds, in 2023, we actually increased our AOI margin to 25%, the first year-over-year increase in margins since 2017. For 2024, despite the expected decline in revenue, our continued cost measures and prudent investments lead us to expect only a slight decline in margins to 2022 levels up 23% to 24%, implying consolidated adjusted operating income of $550 million to $575 million. Driving our 2024 AOI expectations for the revenue headwinds and our linear businesses offset by continued growth in streaming and digital advertising, as well as disciplined expense management.

We also expect programming amortization to be similar to 2023 levels. Despite a reduction of cash programming spend from 1.1 billion in 2023, to approximately 1 billion in 2024. We will continue to be extremely disciplined on expenses, including the calibration of marketing spend to drive prudent streaming growth. Before we open it up for Q&A, I would like to reiterate what I said in the past regarding our overarching financial approach and managing through this rapidly evolving media environment. AMC Networks is employing a back to basics approach that emphasizes broad distribution of our content across available platforms, and prioritizes near term monetization, while at the same time, taking advantage of our unique position as a nimble and innovative premium programmer.

Along the way, we’ll preserve capital to ensure we maintain a healthy balance sheet remained extremely disciplined on expenses and balance appropriate levels of programming investment against the available monetization opportunities. We remain pleased with the progress we’ve made on these fronts and look forward to delivering the strongest content slate AMC Networks has had in years in 2024. Operator, please open the line for questions.

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Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of David Joyce with Seaport Research Partners.

David Joyce: Appreciate your commentary for the outlook this year. We’re also interested in digging more into your advertising offering. Could you please help to differentiate how your programmatic approach compares and contrasts with other linear networks efforts that have been moving digital? And also, if you could layer on to — digging into the fourth quarter, which was one that saw an acceleration of advertisers applying some of their budgets to the streamers adding tiers, how are you also going to market with that backdrop? Thank you.

Kim Kelleher: Hi, David. It’s Kim Kelleher. Thanks for your question. I think as an industry, we continue to be an absolute leader in national linear addressable advertising. We’re taking this difficult time, and really leaning into innovation and investment in our technologies to serve better solutions to our partners. We believe this upfront is going to be heavily leaning towards data targeted audience solutions and buys. And we couldn’t be more well positioned to take full advantage of that. On your specific question regarding programmatic, we successfully developed and enabled the first biddable programmatic buying capabilities within our linear inventory. This is the first time in the industry, our company has been able to successfully do this.

So as Kristin mentioned, we had a number of partners debut this product with us in fourth quarter, and the results were beyond promising. In particular, L’Oreal has quoted that, they saw increases of over 10% from expected performance. So also last year, we launched audience plus at our upfront event. Audience plus combined all of the development we’ve done for the last three years to ready for this moment. That brings our partners the most advanced targeting capabilities seamlessly. It really simplifies the transaction and offers a true cross platform targeting with all of our inventories live linear VOD, and CTV all together. So we see a huge opportunity to automate the sale of addressable going forward and thinks this will be an area of large growth and yield.

On Q4 specifically, it was a difficult quarter, but I think you’re seeing the same headwinds, most of our competitors are reporting. Yes, we’re seeing revenue move into streaming categories. And we launched AMC+ ad supported right at the right time. So we launched in late September, and that product is up and running on one large partner platform, and we are adding platforms every single month. So we anticipate to be able to pace with those trends.

Kristin Dolan: I would just add, David, it’s Kristin. On your question about programmatic on linear, like, essentially, what it means is that, the traditional digital advertisers, people that have solely bought digital or dabble in traditional television, they can now purchase our national linear inventory programmatically. So they’re basically using the buying platforms that they always used on digital to buy linear television, which for us, and I think for most people in the business is a huge opportunity to finally swing the pendulum back from digital first to shared purchase of traditional television as well as digital to support the advertisers efforts.

Operator: Thank you. Our next question comes from the line of David Karnofsky with JPMorgan.

David Karnofsky: Patrick, thanks for the [two years] [ph] on free cash flow. I wanted to see if you could walk through some of the puts and takes [indiscernible] out year and any assumptions that are built into that around programming spend or anything else we should be aware of?

Patrick O’Connell: Yes, sure. Great. Thanks for the question, David. Listen, we took some tough medicine at the end of ’22 to right-size, our expense base, and obviously, we’re in the business of forward planning our production slate that being by far our largest expense. And so the pain that we took in ’22, paid dividends in ’23, we were able to essentially kind of double reported cash flow from about $140 million to $280 million this year. And as we look forward to planning in ’24, and ’25, with the slates we have for the 25 and 26 years, this gives us really good line of sight into our ability to generate this free cash flow. We’re going to be nimble and creative in terms of how those slates come together, you will have noticed, late last year, we announced the deal to buy some IP from Disney in the context of a show called Nautilus, which is really neat.

That being said, we continue to like our position as having ownership economics over our slate. So you’ll know that for the most part, we own most of the shows on AMC, and so that means we’ve got really strong optionality and success. And so, we like that model, we can be flexible. But given the medicine we’ve taken to drive free cash flow this year, we’ve got good line of sight in terms of our programming plan going forward and the rest of the expense base as well. So we feel really good about growing free cash flow year-over-year to 24. And that’s why we feel confident in giving you the two-year guide and generating approximately $0.5 billion over the next two years.

Operator: Thank you. Our next question comes from the line of Robert Fishman with MoffettNathanson.

Unidentified Analyst: Hi, [indiscernible] on for Robert. Thanks for taking our question. I want to know if you had any other color share on the experiment with putting certain titles on Max and the quick effects of our news in the future. And also then furthermore, more generally, how you guys are thinking about growing licensing revenues, bouncing building a roster exclusive, exclusive for AMC+ versus renting out to third parties.

Kristin Dolan: Hey, it’s Kristin. I’m going to let Dan take the second question. And then we’ll go back to the Max partnership. Your second question around content was around — sharing content between AMC+ and AMC? Is that’s the question, I’m sorry.

Unidentified Analyst: AMC+ [versus] [ph] licensing out?

Dan McDermott: Yes. I’ll start with the second question, Robert. So with respect to licensing, look, we’re focused on, this is Dan, by the way. We’re focused on generating the best possible return, from our content investments, and we appreciate the strategic advantages and optionality that our studio model has, for us, obviously, our owned IP, and beloved franchises are very desirable and sought after. So, we seek to monetize them as efficiently as possible. We have five linear platforms, seven streaming platforms. So we window through our ecosystem, in the interest of maximum revenue and profit generation. As far as whether or not we’ll produce for third parties, like we did with SILO for Apple. We look at ourselves as being very opportunistic, and highly selective and tactical, when we take on those, those opportunities, we’ll do it when the risk reward makes sense.

And we typically develop a lot of content, that maybe not all of it is suitable for AMC Networks. So we do have deep and long relationships with all other platforms. So we will be out in the market, and we’ll sell to third parties when appropriate. It’s not our primary business. So we’re not we’re not in a situation where we have to chase, you know, other platforms and are dependent upon that.

Kristin Dolan: And just to follow up on the Max partnership, I think it was a learning experience for both we were thrilled with the increases in viewership that our content received, both on Max, but then also the associated lift in the more current seasons. And for the series that we shared with Max, when we have more current seasons on AMC+. So we shared a lot of information in a privacy compliant way between the two companies. And I think they were pleased with hopefully some, you know, positive retention and engagement on the Max side. And we were certainly pleased with the learnings and the increased viewership that we got on AMC+ for those series.

Dan McDermott: Yeah. I will just add one thing, which is that what that experiment showed us was that when we get onto a larger distribution platform and a bigger ecosystem, our content scale scales significantly, and is as appealing and more so than then even, in our own ecosystem.

Operator: Our next question comes from the line of Thomas Yeh with Morgan Stanley.

Thomas Yeh: Thanks. I wanted to ask about the domestic linear affiliate revenue trends. I think adjusting out the fubo headwind, it did look like core revenue declines kind of accelerated sequentially. Was that maybe some noise? I think on a going forward basis, it sounded like you still expect the subscriber trends to remain similar to what you were seeing this quarter. But any color on rate versus volume and some of the components there would be helpful.

Patrick O’Connell: Hey, Thomas. It’s Patrick, thanks for the question. Yes, I would point at Q4 as being something of an anomaly domestically, believe revenue declined 16%. If you look at the full year, the revenue decline was kind of 13%. But recall, we had sort of the 3% impact from fubo. So going forward, you know, stripping out that 3% impact that informs our 10% Guide on Domestic affiliate revenue. Going into 2024, obviously, the vast majority of that is just the universe, there’s a little bit of price in there as well, but we hold serve, most of the time.

Kristin Dolan: I would just add, it’s also worth noting that in the past 12 months, we renewed more than half of our affiliates subscriber footprint. And there were some big wins in their dish sling charter. Altis. Media calm, Wow, Philo, Bell, we did a Roger show deal in Canada, amongst others. And then, also obviously, we partnered with Comcast on the now TV offering. And then we launched AMC+ plus with Charter, as you know, plus the aforementioned Philo deal. So we’re feeling really positive about our relationships with distributors. And as Patrick said, pretty comfortable with how we’re moving forward on the partnership side.

Thomas Yeh: Great. And then just a second one with the sale of the 25/7 Media. Patrick, you mentioned, I think, shedding a little bit more light on the international core. Can you maybe talk a little bit about the future of where you see that business? I think there were some expectations that you maybe have some selective avenues of OTT launches internationally? How do you think about the balance of that relative to maintaining the core International Network?