Discovery, Inc. ( NASDAQ: WBD) Q4 2022 Earnings Conference Call February 23, 2023 4:30 PM ET Company Participants Andrew Slabin - Executive Vice President, Global Investor. #inclusion #performerswithdisabilities #Disabilityawareness And we continue to track above our internal plans. And the response from consumers has been overwhelmingly positive. MACON RUSH CALL BACKGROUND Casting Notice *Warner Bros FEATURE FILM: "The Color Purple-The Musical' LOCATION: Macon, GA By Kevin P. King - April 7, 2022 487 0 Advertisements On Location Casting *RUSH CALL* - TODAY! This year, we celebrate the storied Warner Bros. Studios 100th anniversary with a deepened commitment to telling quality, diverse stories, with the power to entertain, inspire, and when we are at our best, impact or even change the culture. Wizarding World is the new official home of Harry Potter & Fantastic Beasts. Please. Warner Bros. So we do see subscriber scale as one part of the revenue growth story. I saw it and loved it. And we hit this year with a full leadership team in place. And on the traditional side, we renewed agreements representing 30% of our U.S. affiliate revenues. We're going to be releasing 12 films, 6 games. In recent weeks, we signed new deals with a number of the most prolific and celebrated creatives in the industry, including Greg Berlanti, Baz Luhrmann, M. Night Shyamalan, Akiva Goldsman and Zach Cregger with more to come. And having some of that content appear on our platform and sell it nonexclusively to others is very economically beneficial. First for David, as part of the upcoming D2C relaunch, can you just talk a little bit about how you plan to balance protecting the HBO brand while at the same time, leaning on the HBO premium content to help drive the new service going forward? . You probably know that, because we've kept the lights on at TBS for the last five years.". Discovery, Inc. Fourth Quarter 2022 Earnings Conference Call. from casting calls to the lure of the red-carpet award season. Clearly, as we have pointed out as a key risk since the summer, underlying advertising trends, particularly in the U.S., have continued to soften through the fourth quarter, and that was further exacerbated by general entertainment audience declines. The Hogwarts game, we took several additional months to rework it, to get it right. Casey and the team continue to fuel critical and audience acclaimed with globally resident content, driving improvements in engagement and churn, which is setting up a nice tailwind into the relaunch. We're excited about JV's product relaunch in the second quarter, but those are uncertain factors that's very early in the year. So we're excited about the fact that we're going to take all of the Discovery content and put it together with the HBO Max content in a much better platform. And now you see a very soft scatter market. Every week, a new episode comes out and by the time the next one airs a week later, tens of millions of people have watched the last episode. Discovery, Inc.. The studio is looking for young people to play five new roles in the film, including teenage incarnations of Newt Scamander, Leta Lestrange, Gellert Grindelwald and Albus Dumbledore. The studio is the flagship producer of live-action feature films within Warner Bros. I'm confident that we will get there, particularly with some of the operational and content-driven initiatives implemented by Kathleen Finch and her team. And on the potential for the balance sheet, the balance sheet improvement is very encouraging. It's -- those three of the tentpole products that when someone's at dinner anywhere in the world, and they look at their watch at 8:00 and you mention Batman, Superman, Wonder Woman, Harry Potter, Lord of the Rings. The Last Of Us, for example, grew its Sunday premier night viewership by about 1 million with each episode over the first 4 weeks. https://forms.gle/pSmy15EJENw7foXi9 Advertisements And I think our diversity, we have all these different assets that have -- that are different. But curation, creating content at a time when people can watch it, creating a community conversation. And we've lapped that now, and we're seeing some growth now. Here through this post, we are also providing complete necessary details about the Warner Bros Pictures Casting Directors Dates Roles. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. So there was 60% that was hardly being viewed. No previous acting experience is necessary, but applicants need to be eligible to work in the UK (meaning they must be a UK, Irish or EU passport holder), and be available for filming between August and November 2017. We've already seen more than $850 million in retail sales, and we still have more platforms launching over the next few months. Yes. I would now like to hand the call over to Mr. Andrew Slabin, Executive Vice President of Global Investor Strategy. All U.S. extremist mass killings in 2022 linked to far right, . And where does the WBD fit in that? We have the largest maker and seller of content in the world, and while we've got lots more to do, we are increasingly seeing positive traction and strong proof points. Acting students missing out on their final year of school can submit their interest to the Warner Bros. Television casting department. So that storytelling IP. We have an exceptional leadership team that is truly aligned across a common set of strategic, operational and financial goals and metrics. Distribution revenues on the whole were impacted primarily by subscriber declines in the U.S. and lower affiliate rates in certain European countries, while larger contractual rate increases in the U.S. and premium sports packages in Latin America helped to offset part of this impact. Discovery in which we took some pivotal initial steps. And we're curating now in a way that's having an impact on America. We haven't done new Harry Potter content in over a decade. This is some of the most recognized and beloved storytelling IP in the world, and we're excited to tell even more of those stories. So that is having some impact on us versus others that were -- that took a much bigger position in the upfront. . How much do you feel like is more reflective of some of the underlying trends that just have to do with ratings declines or core cutting and those types of trends? First, let me say, this promises to be a very exciting year for our company. "We are looking for: single women and men between the ages of 23-35," the official Warner Bros casting call reads. Please disable your ad-blocker and refresh. We want to tell the best stories, share them with the broadest audience possible, and we do that by working together as 1 team, 1 company. And curating content so that people can watch it and have a shared experience is a very big piece of the Warner Bros. And while this is indeed encouraging, we're hesitant to forecast any meaningful near-term revenue improvement. In addition to less activity in home entertainment, given the leaner theatrical release schedule in 2022, which was very much a result of deliberate decisions we made about specific titles and overall release dates. And we take advantage of all the content that we have. Keep one thing in mind, the entire last year was impacted by this headwind from coming off of Amazon. J.B., anything to add to that? With that, I'll turn it over to Gunnar, and he'll walk you through the financials for the quarter. And so we want to optimize that as a unified strategy for the company. Let me start with the second question. We have storytelling and games with Hogwarts, which is really off to a tremendous start for us. They want -- they want to have an opportunity for their content to be seen, to be talked about, and they want to feel respected. Is this happening to you frequently? Our final question comes from John Hodulik with UBS. And so I think of the investments that you make in live sports content on Turner, live content on CNN, are those types of things definitely are or they structurally not able to be put on the service? The sequel to Fantastic Beasts and Where to Find Them is slated for release 16 November 2018, and filming begins this summer. "I was in the movie 'Grown Ups'. So I think that's something that's really resonating with the creative community that their content is seen, it's curated and it's elevated and that's part of the cultural conversation, both in the theater and on the platform. We have a great hand and we're doing a lot right. Obviously, successful films will help your Studio segment earnings. The product will offer compelling content for every member of the household. It's not about getting it out for a certain date. Number two, partnering with our business leaders to embrace a more rigorous analytical framework through which capital allocation decisions will be viewed, particularly as we refine how our content is monetized and windowed. Is there any of your content that's definitely off the table to be included in that service? The 50 Best Movies of 2022, According to 165 Critics from . If there is interest in pursuing an application further, the applicant will hear back within 14 days of their original submission. Hello, everyone, and thank you for joining us. Kathleen is doing a lot of work, getting the enormous value of our library on screen. We've gone through a couple of the puts and takes here. WarnerMedia Equity + Inclusion announces the WarnerMedia Access Talent Spotlight, a new talent training program for aspiring actors looking for professional development and resources. We continue to be the place creators are choosing to bring their visions to life. And so we -- as the largest owner and producer of content in the world, we'll -- we want to super serve effectively our streaming service, which is a top priority as well as an AVOD service so that we could reach everyone in every country, everywhere in the world. But as David said, we've got sports and news that today are really untapped in the streaming world, and those are optionality for what we might be willing to do in the future, and we'll share more of that on the 12th with you with more detail. We must get it right. Partially offsetting revenue headwinds were lower content expenses, distribution fees and marketing costs. Our next question comes from Kutgun Maral with RBC Capital Markets. Today, with direct-to-consumer, more and more people are joining the party. And Lord of the Rings, which is a fantastic franchise, Andy Jassy was pushing on it at Amazon with a lot of success, but we own those movie rights. On the advertising side, it's kind of a complex answer. It's working. Use the form below to submit your basics and we'll reach out to you when the next big film casts! 2023 will be a year of building and off we go. So I think we're very well positioned. David, if James and his DC strategy is successful, which I'm sure is your expectation, what does that mean for the company overall over the long term? Photo: Kevin Dietsch/Getty Images. And we're doing it in a very tasteful way by putting it on the very front end. I have one for David and then one for J.B. or Gunnar. More Earnings Resources from MarketBeat Earnings Tools: Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Moreover, we're analyzing our pricing strategy in a number of key international markets, particularly in LatAm, where we believe our service has significant pricing upside. What's in there for upside, which is something that you didn't really talk about that much, but it's new? Storytelling content is most powerful when you're watching it and then you're with others, either in a theater, or you're able to talk about it either online or with your friends, that's the power of content, not when you're viewing content alone. ET Follow HBO Max Go to Site Follow HBO Go to Site Follow Warner Bros. Go to Site Follow HGTV Go to Site Follow Discovery Go to Site Follow discovery+ Go to Site Follow CNN Go to Site Follow TBS Go to Site Follow Food Network And so -- which -- where we pivoted and said we were going pushing to move all of our films back out with real windows in order to optimize those products. He presented that to you and the press about a month ago. Really trying to understand how much of the ad impact that you're seeing is kind of coming from the macro environment? John Oliver in season nine of "Last Week Tonight With John Oliver." Paula Lobo/HBO. The forward-looking statements include comments regarding the company's future business plans, prospects and financial performance. As the only studio scaled in gaming, we see it as a meaningful differentiator with substantial opportunity. And then if you loved it, you can come up and you could then pay for on ad-lite or in subscription. While visibility remains limited, we are seeing revenue trends very modestly improving sequentially in certain pockets. Discovery, Inc. (WBD) is an American multinational mass media and entertainment conglomerate headquartered in New York City.It was formed after the spin-off of WarnerMedia by AT&T, and its merger with Discovery, Inc. on April 8, 2022.. While every applicant will be considered, only those passing the initial consideration round will be contacted. Warner Bros. And then for Gunnar or JB, can you maybe just expand upon your fast strategy and why you chose to do the deal with Roku and Tubi and maybe how that might impact the launch or timing of your own fast service? The casting of their teenage incarnations as well as those of Newt and Leta will be sure to intrigue Harry Potter fans, and drive further speculation about the next films story. We took bold decisive action over the last 10 months and the bulk of our restructuring is behind us. I do believe, as JB said, and we do believe, as a company, that we'll sort of recreate this -- the streaming service, which is ad free, then which -- then there'll be ad-lite. Thank you, Jessica. We expect 2023 pro forma adjusted EBITDA to be in the low to mid $11 billion range, representing growth of low to mid-20%, against pro forma adjusted EBITDA of $9.2 billion in 2022. - David Spade, 'Nothing Personal' 2022. But -- and I know it's a tough question to put numbers around. Discovery, we believe we have the strongest hand in the industry, with the most complete portfolio of assets and globally renowned franchises, personalities and storytelling IP, across sports, news, nonfiction and entertainment, in virtually every region of the globe and in every language. An open casting call has gone out for three actors between the ages of 13 and 16 to play young versions of Newt, Leta, and another character called Sebastian. Discovery's Q4 Earnings Call. No, I was just going to say that as David has said before, I think the industry obviously was at a scale at any cost. That's the power of curation. I'll just take a swing at it, Gunnar, you can follow. To apply for the Fantastic Beasts open casting call, email [emailprotected] with a recent colour photograph, (i.e., taken within the last two months), contact telephone number, your home address and date of birth. Passionate about supporting Creatives to develop, produce . Casting for teenage Dumbledore follows on from the news that Jude Law will play the adult character in the Fantastic Beasts sequel. Required fields are marked *, Warner Bros.-Seven Arts, Inc.(19671970), Toby Emmerich(Chairman, Warner Bros. Pictures Group), Walter Hamada(President, DC-based Film Production), studiofacilities.warnerbros.com/studio-operations-inquiry-form/. And in fact, we're -- we use news and sports quite effectively in Europe, and we've learned a lot about when it does work and when it doesn't. Discovery. Note that merger and integration-related cash costs totaled nearly $150 million in Q4 and nearly $800 million for the year, in addition to a nearly $350 million headwind from securitization and factoring since the closing of the deal in early April. The Voice, the #1 most watched unscripted show on network TV. Accordingly, we expect free cash flow in the first quarter to be negative. International markets continue to perform relatively better, stronger markets such as Poland and Italy were in part offset by weaknesses in the UK, Nordics and certain Latin American countries. MACON Advertisements RUSH CALL BACKGROUND Casting Notice *Warner Bros FEATURE FILM: "The Color Purple-The Musical' LOCATION: Macon, GA Discovery CEO David Zaslav has doubled down on the groundwork being laid out for James Gunn and Peter Safran's DCU plans. 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