Q3 2025 Earnings Call Transcript

Ladies and gentlemen, welcome to the Warner Bros. Discovery Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Additionally, please be advised that today's conference call is being recorded. I would now like to hand the conference over to Mr. Andrew Slabin, Executive Vice President, Global Investor Strategy. Sir, you may now begin.

Good morning, and thank you for joining us for our Q3 earnings call. Joining me today from Warner Bros. Discovery's management is David Zaslav, President and Chief Executive Officer; Gunnar Wiedenfels, Chief Financial Officer; and JB Perrette, CEO and President, Global Streaming and Games. This morning, we issued our Q3 earnings release, shareholder letter and trending schedule, and these materials can be found on our website at www.wbd.com.

Today's presentation will include forward-looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may include statements about the benefits of the separation transaction we announced in June, including future financial and operating results, the separate company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations from Warner Bros. Discovery's management and are subject to significant risks and uncertainties outside of our control that could cause actual results to differ materially from our current expectations.

For additional information on factors that could affect these expectations, please see the company's filings with the U.S. Securities and Exchange Commission, including, but not limited to the company's most recent annual report on Form 10-K, and its reports on Form 10-Q and Form 8-K. I will turn the call over to David for some brief remarks, after which we will take your questions. Though before doing so, I would kindly request that analysts limit their questions to topics related to our Q3 results and related business and financial topics.

As noted in our shareholder letter, management will not be taking questions regarding our recent announcement of the Board's evaluation of strategic alternatives for Warner Bros. Discovery. And with that, I'll turn it over to David.

Good morning, everyone, and thank you for joining us. When we formed Warner Bros. Discovery in April of 2022, 3.5 years ago, our focus was on taking an incredible foundation of assets, world-class production capabilities, a century's worth of beloved storytelling franchises and IP and a roster of some of the most iconic brands in media and build them back up and transform Warner Bros. Discovery to thrive and win in the modern entertainment business.

We built a creative culture that's attracting the best talent, and Warner Bros. Discovery is now where creatives want to be. Transforming and rebuilding Warner Bros. Discovery has been hard work.

It has taken time and investment and the process has not been without setbacks. But as you could see from our third quarter results, we're delivering on our promise and Warner Bros. Discovery is back, global and stronger than ever. As we've said consistently, our transformation and rebuild has been guided by 3 principles: First, returning our studios to industry leadership.

When we brought Warner Bros. Discovery together, our Motion Picture Group had half a dozen or fewer movies on its slate and was stuck in last place. We were determined to invest in the motion picture business and to rebuild and regain our place as the leading motion picture studio. 3.5 years later, we're there. Right now, we're leading the 2025 box office domestically, we're leading it internationally, and we're leading it globally.

Not only are we in first place, but we are the only film studio to have crossed $4 billion in 2025 box office revenue thus far. And we've done it with a significant amount of original stories. That leadership was on full display in the third quarter. In Q3 alone, we successfully launched a new era for the DC Studios, Superman.

We showed our exceptional horror genre expertise yet again, with Weapons and The Conjuring: Last Rites, which have together grossed more than $750 million in ticket sales. And we reinforced our commitment to producing great original works by great filmmakers with Paul Thomas Anderson's One Battle After Another. As we look ahead, '26 and '27 will be a robust and strong slate of motion pictures. I'm excited to announce that we are adding a new Gremlins film that will be released in theaters on November 19, 2027. Steven Spielberg returns to executive produce for Amblin Entertainment, and Chris Columbus is coming back to both direct and produce.

We're also leading the industry in making television. Warner Bros. Television was recently recognized with 14 Emmy awards, including outstanding drama series for The Pitt, and 9 Emmy wins for The Penguin. And WBTV remains Hollywood's leading supplier of television to both streaming and network platforms.

Based on our results to date, we expect our studios to meaningfully exceed $2.4 billion in EBITDA this year, and we are making strong progress towards our $3 billion EBITDA goal. Our second guiding principle has been to scale HBO Max globally. 4 years ago, HBO Max was a subscale streaming service that was primarily available in the U.S. We had a vision for HBO to be a global offering with broader and more local content, including sports in some regions, and that HBO could serve as a long-term profit engine. We are committed to that global vision.

Today, HBO Max is available in more than 100 countries. We've added more than 30 million new streaming subscribers in 3 years. Our Streaming segment will contribute more than $1.3 billion in EBITDA to our bottom line this year versus losing $2.5 billion 3 years ago. And we still have launches in some of the biggest markets in the world, like Germany, Italy, the U.K. and Ireland coming in 2026. By the end of next year, we will have more than 150 million total streaming subscribers.

We're delivering those results by investing hard and continuing to distinguish our offering through quality. I said in the beginning of this journey, it's not how much, it's how good. And that belief continues to guide everything we do. HBO really embodies that standard.

And Casey and the team have done a superb job. Our successes earlier in the year with series like The Pitt, The White Lotus and The Last of Us, carried forward into Q3 with shows like Task and Gilded Age, both of which have averaged more than 10 million viewers per episode. HBO was recognized with 30 Emmy Awards this summer, tied for the most of any network or platform. Just recently, HBO debuted It: Welcome to Derry, to a resounding audience response.

The series premiere was the third most watched in HBO history behind only The Last of Us and House of the Dragon and has been watched by almost 15 million viewers in its first week. This is further evidence that in its long history, HBO has never delivered a steadier, more consistent pipeline of titles that subscribers circle in their calendars to watch. In Q3, we also saw movies like Sinners, Final Destination: Bloodlines and Superman arrive on HBO Max and drive strong engagement. With Weapons now also available and The Conjuring: Last Rites and One Battle After Another on their way in Q4, we will end 2025 with more Warner Bros. pay-one movies in HBO Max's top 20 titles than ever before.

After years of development, the balance of content we envision for HBO Max with Warner Bros. extensive TV library, HBO Original Series and Warner Bros. pay-one movies, a 1, 2, 3 combination that's very powerful. It has finally come into full form. The value proposition for subscribers is only growing stronger. Having rebuilt Warner Bros. to the #1 studio in the world is proving to be a big win, not just in the box office, but across HBO Max, where our great films are driving record engagement and growth globally well after its theatrical window.

Finally, our third principle has been to optimize our linear networks. The headwinds facing the linear television business are well understood. But for all that's been said about the disruption confronting these businesses, not enough has been said about their resilience. Networks like TNT, TBS, CNN, Discovery, TLC, HGTV, Food Network and many others continue to be indispensable to tens of millions of subscribers worldwide, which is why our networks remain such a powerful cash flow contributor.

As our Global Networks investment is extending their brands digitally, we see a long and profitable runway ahead. Through it all, we've also dramatically reduced our debt, with our net leverage ratio now down to 3.3x our EBITDA, including paying down $1 billion from our bridge loan facility in the third quarter. Thanks to the work we've done, we're on track to create 2 strong, well-capitalized businesses that can each create significant long-term shareholder value. The team is hard at work, both on the separation transaction and on following the Board's direction to evaluate strategic alternatives.

You've all seen media reports as to potential interested parties, and I won't comment on anything specific. But it's fair to say that we have an active process underway. When you look at our films like Superman, Weapons and One Battle After Another, the global reach of HBO Max and the diversity of our networks offerings, we've managed to bring the best, most treasured traditions of Warner Bros. forward into a new era of entertainment and new media landscape. I'm thrilled with our progress in Q3, and welcome your questions.

[Operator Instructions] Your first question comes from Jessica Reif Ehrlich of Bank of America Securities.

Two questions, if it's okay. One on the library and one on sports. David, could you give us more color? You kind of alluded to the library, but you've grown organically and through -- also through multiple acquisitions over the last few decades.

And you have quality -- you have quantity, but also obviously great quality. How do you think about mining the deep catalog? And can you give us some color on what's in Discovery Global Networks or the soon to be named Discovery Global Networks, like within Cartoon Network, Discovery, et cetera? And because you don't talk about that, that much.

And then on sports, in the release talks about launching a stand-alone sports streaming app. Can you talk a little bit about how you feel about the sports portfolio today? Are there assets in there that you think are underappreciated? Are there opportunities to strengthen the portfolio?

Jessica, it's Gunnar. Let me take those 2 maybe with an eye towards Discovery Global going forward. So I'll start with the sports question. As you've heard from us, we feel very good about the composition of our sports portfolio right now.

We're going to begin to see some real benefits from the transition off of the NBA towards a portfolio of other rights that we acquired as a replacement. You're going to see hundreds of millions of dollars of benefit next year from that transition. The team has done a phenomenal job restructuring our portfolio. That said, we're going to continue executing the same strategy as before.

We're going to be disciplined in the space, but we also acknowledge that sports is going to be one key pillar of our strategy going forward. That is the case for Discovery Global as it was for Warner Bros. Discovery. And I do think there is going to be more opportunity -- opportunistically as we look ahead over the next 3 to 5 years.

The important change that we're working on and making great progress is the development of our stand-alone sports streaming app. We will need that in the U.S. market as HBO Max stops the utilization of our streaming rights in the spin-off scenario. The team is making great progress, and that will put us in a position to have a compelling stand-alone offering, but also something that will allow us to partner and bundle with our own products and others in the market.

As we've stated before, it will be working differently in the U.S. and outside the U.S. Outside the U.S. that all of the sports content will be available to HBO Max, and we'll be offering it on HBO Max or as an add-on. There's some sports that will only be on HBO Max. And we have found that all of our movies and scripted series together with local content and local sport is a very compelling offering outside the U.S. and it's a driver of real growth, and it's quite differentiated.

Here in the U.S., we didn't find that we were so robust in our storytelling that we didn't find that these sports were providing enough value for us in terms of incremental subs, which was -- we didn't get that many. There was some engagement. But the view is, for us, that HBO Max is much stronger as being a motion picture and storytelling product, not dependent on rental sports. And so I think it works out very well, and [indiscernible] we'll be able to take advantage of that with this new app.

Right. And then on the library, Jessica, you're right. I mean we're looking at tens of thousands of hours of beloved content that we're reaching more than 1 billion people with everywhere in the world. This is going to be one of the focus areas for the future Discovery Global leadership team to revitalize some of those content brands with different focus areas in different parts of the globe.

We are adding thousands of hours every year to that library, a lot of which comes from our strong free-to-air presence outside of the U.S. And that is going to be one of the big strengths as we set sales with Discovery Global, and we will be fully focused on figuring out the best way to monetize not only the fresh content, but also the enormous library with less exclusivity for HBO Max...

JB, you should talk to -- you're going to be -- all the content that we -- that you thought was valuable domestically and around the world will be -- will continue. You should just speak to that.

Jean-Briac Perrette: Yes. I mean we'll continue, Jessica, to have access on HBO Max to kind of what we call the best of the Discovery Global assets that continue to be a healthy engagement contributor to HBO Max. And so the good news is even in the separation, we'll continue to have access to that domestically. We'll have access to that internationally, including obviously, a lot of the free-to-air content that is bigger and broader, particularly in Europe from some of our free-to-air channels and networks across that market. So the good news is HBO Max will continue to have access to the content that it has seen, and our subscribers have seen to be valued even in the separation.

And that will be the case if, in fact, HBO Max goes ahead and splits as planned or if Warner is acquired as Warner. And obviously, if the company is acquired in whole, then they'll have access to everything.

Your next question comes from Kannan Venkateshwar of Barclays.

So maybe a couple of questions on the streaming side. So Gunnar, on the Discovery side, when you think about the CNN streaming app or the TNT Sports app, it feels like the process over the last few years has been for streaming apps to consolidate. And this feels a little bit of a reversal of that process where different genres are basically disintegrating it to different apps, which comes with its own operating costs and so on. So I just wanted to get the thought process behind that instead of maybe leaning more into licensing some of these rights and monetizing it in a more, I guess, cost-light manner.

So some thoughts on that would be useful. And then on the linear side, the decline rate when it comes to linear distribution, seems to be a little different from your peers in the sense that your 2% affiliate increases are a little lower than what most of your peers seem to be talking about and the subscriber rate decline rates also seem to be higher. Is this because of some kind of a reset? And does this become a comp benefit as you go into next year and beyond, which starts to benefit you?

Let me start with CNN, and then Gunnar, why don't you take over the others. We've been very quietly. Mark Thompson has hired a whole team, including a big group from the New York Times when he was there, where he rebuilt the New York Times as a digital business. This CNN product is the -- it's the first of many, but it's quite compelling, and we see it as a stand-alone.

That doesn't mean that it wouldn't be bundled with multiple other products. But we had it on Max and HBO Max and people look to the news, but this is a very compelling proposition that anywhere -- it's now here in the U.S., but very soon, it will be anywhere in the world you go, you can subscribe to CNN, where you could see CNN Live. So if anything is happening in the world, if you wake up and tanks are rolling in Russia and you want to know anywhere in the world what is going on, when those events happen, CNN is on in every President's office and every Prime Minister's office. And it's when -- because we're the only real global news operation, Mark and Alex have built a product around this idea that people everywhere in the world need to know from the most trusted source in news, what is really happening from journalists on the ground that they can trust.

And so this will be -- if you have it, you'll see it. It's a terrific everyday product with robust opportunity to get nourished with all kinds of news other than the live feed or to have multiple live feeds. But in a world of AI and in a world of so many voices of what is really going on to be able to be anywhere in the world at any time and hear something is happening and be able to go to this, we're very bullish on this as an independent product that will be of real scale, but also really important for society that we have this and making use of everything that's been built at CNN. And again, that could be packaged with almost anybody, but it's off to a very good start.

And Kannan, the only thing I would add is don't think of it as sort of completely separate stand-alone products and technology stacks. JB and the team have built a phenomenal platform over the past few years. And to some extent, we're -- these are skins on essentially the same product platform. So there is very limited incremental operating cost.

And also from a consumer perspective, think of it more as sort of modules that you could activate together. And what we've seen in virtually every market globally where we have experimented with news and sports, we've seen the greater commercial success by offering sports as a buy-through as opposed to making it available more broadly to an entire sort of completely bundled or completely integrated product. So that's the rationale behind this. On the distribution decline rates, it is true that in 2025, we're working through a transition period here.

We have given greater flexibility in the recent round of renewals as others have as well to some extent across the industry. And I do believe that we're seeing some of those benefits come through already. If you look at how Charter has consistently reported their video subscribers with definitely a positive trend for the industry. So I do think we're doing the right thing here as an industry and as a company, and I certainly expect a slightly better trajectory in the near to midterm for us.

Your next question comes from Robert Fishman of MoffettNathanson.

Can you share more on your confidence to gain global scale with HBO Max ahead of your next wave of international launches? And any updated thoughts on how HBO Max's scale is able to best compete with the other larger SVOD platforms and how that will translate into streaming revenue growth maybe accelerating next year? And then shifting over just to your content spending and budgets as you think about next year. Can you just help us think about the right balance of investing in new IP versus leaning into your franchises?

Where do you think you create the most amount of value, clearly seeing the momentum in the studio, thinking about DC Comics here versus new IP that you've created across the platforms?

Okay. Thanks. JB and Casey have really established a very unique product with the largest motion picture and TV library together with the robust original content together with Motion Picture. And as you go outside the U.S., local sport and local content, all adding up to a market position of highest quality streaming service, which is, as you go around the world, is in all of the surveys is how we are seeing.

And we're starting to see that there's a real advantage in us having a differentiated view within the marketplace as being high quality. We think it gives us opportunity for real growth. It also gives us an opportunity over time with economics. And we're starting to be seen in a meaningful way and known with HBO Max as a brand, and that acceleration is beginning.

JB, why don't you take them through what you're seeing on the ground?

Jean-Briac Perrette: Yes, Robert, on the scaling point, what makes us -- partly makes us confident, a, is we've seen data points, obviously, with things like the Australian launch this year of markets where our content has been in market maybe through a license partner or distributor for years. And we know the success of the content in those markets. We've seen it. We have the data on the performance, and that's partly what gives us high confidence, particularly in these 3 big European markets, U.K., Germany and Italy, of what the content can do once it comes out of those license agreements and into our stand-alone HBO Max service, number one. Number two is all the product is the content. And at the end of the day, the slate that we have coming in '26, building into '27 and launching into a decade of Harry Potter, we feel better than ever about the quality, both in terms of the performance of that content as well as an increasing volume, both of U.S. originated content as well as some local OP, local original productions in select markets. And then as David said, look, no consumers anywhere in the world right now are asking for more content. Many consumers are sort of drowning in the more. We feel better and better about where we've landed over the last 12, 24 months in differentiating our proposition, all based on, as David said, quality. And it's really starting to resonate. And you see that from every hit that Casey and the team have been producing with the numbers growing not only in absolutes, but also week-to-week this year between The Pitt growing week-to-week, Last of Us, now we're starting to see that. We saw that with Task. And so our marketing content and product improvements give us a lot of confidence that we can continue to see great penetration and growth as we scale. And the total 150 million subs that David referenced earlier, a bunch of those we have through partnerships that we have locked in. And so we have good visibility towards both revenue and the scaling of subscribers in that time, and we can't wait to get after it. 2026 should be for us the biggest year of growth that we've seen in a long time for HBO Max.

Next question comes from Ben Swinburne of Morgan Stanley.

I have 2 questions. David, when you look at how well Mike, Pam, Channing and the team have done over the last couple of years, but especially this year at the studio, it's obviously very encouraging. You have a $3 billion -- I believe, a $3 billion EBITDA ambition at the studio. I'm wondering if you could talk about the bridge from what we're seeing in 2025 to that level of profitability, which I don't think we've ever seen from the Warner Bros. business in the past.

And then, Gunnar, I don't know if you want to answer this, but can you talk a little bit about any tax implications should you guys change the structure that you talked about in the strategic review press release, specifically selling Warner Bros. and spinning Discovery Global? And is there a point at which the process you're running puts -- the tax-free nature of the separation that is still Plan A at risk? It would be helpful for us to understand how that all works.

Ben, let me start with the second question. The answer is no, I don't want to provide any more color on that process. And David, do you want to start with the $3 billion ambition?

Yes, sure. And remember, the objective is get to the $3 billion and then get a real growth rate off of that, which we believe that we could do. And it started with really getting back to basics on the fact that we have such a huge advantage with all the known IP and the talent within this company, new line making horror films and for a price together with comedies that you'll start to see coming next year also for a price. On top of that, we have DC with James and Peter off to a great start with Superman.

Supergirl has already been shot. Clayface has already been shot. The script for the next Superman has already been written. Batman 2 with Matt Reeves is terrific.

And then we have Warner Animation with Bill Damaschke. Mike and Pam are doing really a terrific job in this 4-part strategy, where we really use tentpoles and then mini tentpoles, whether it's Lord of the Rings, Batman, Superman, Wonder Woman, that we use the tentpoles that we have that are known all around the world and then the mini tentpoles, which might be Gremlins and Goonies and Practical Magic and then original. And we -- with a lot of discipline, we think that's going to be and is very strong. And our content, I've been saying for a long time, has been underused.

We haven't seen Superman for 13 years. You haven't seen Harry Potter for 14 years. You haven't seen Lord of the Rings for over a decade, and Peter Jackson has been working hard with us on that film that you'll see in '27. And so we're very excited about mining and the original together. We also have the biggest TV and motion picture library in the world, which generates a lot of the economics of the studio.

And we've been very, I think, judicious about how we do that. We could be generating another $1 billion or $2 billion if we decided to sell a lot of the most important IP that we have. But you've seen that we've been very precious about selling content from HBO because we really believe that -- and it's starting to pay off now that if you want to see the highest quality content, if you want to see The Wire, if you want to see Game of Thrones, if you want to see series like Task or White Lotus, you don't get to see that anywhere else. And so that is working.

Channing's team has never been stronger. We have the best writers and directors working for us, over 70. We have over 80 shows in production at a time when everyone else is declining because less money is being spent, where the studio is just -- has never been stronger. And we're just coming off of a load of Emmy nominations and a lot of Emmy wins. And so we -- that business is going very strong.

We then have experiences where that's an area that we've been building by launching Harry Potter in Shanghai. And then we have a number of other Harry Potter facilities that we're going to be launching around the world, together with a whole team that is now working on monetizing the additional value through merchandising of our IP. And it's something that we haven't done particularly well. Disney has done really well.

And so we've built a whole new team that's going after that. And so overall, we're very bullish. We have the #1 TV studio. The motion picture business is doing great.

Richard Brenner at New Line had an unbelievable year for us, and we're excited about the next 2 years and what he has going. And we can't wait to launch Cat in the Hat with Bill Damaschke. But the real stability is our library, and Channing's ability to be -- the fact that she's distinguished herself as the quality producer in television. And we're using a lot more of her content now within our own company, which has provided real value to us.

And David, maybe just 2 more points on that last point because I think it's important for people to understand. We have pretty significantly shifted from external monetization of our library to internal monetization of our library. And that means that we have, over the past few years, pretty significantly eliminated intercompany profits. Those profits are sitting on the balance sheet or waiting to bleed back into the business.

In other words, it's going to support our profitability going forward since we're now at a much more steady state across those roughly $5 billion of content licensing. The second point is Channing, I think, has also with her team, done a phenomenal job managing the transition from a broadcast-focused production system to an SVOD-focused system. It has an immediate short-term benefit of obviously sort of the cost-plus model has had the disadvantage of licensing terms being longer, but we're also on the backside of that. Over the next 3 to 5 years, a lot of those early streaming shows are going to come back and replenish the library and sort of reinvigorate that sales business as well.

So Channing has done a phenomenal job and set us up, I think, for another big cycle of strong growth.

Your next question comes from Steven Cahall of Wells Fargo.

David, I was wondering if you could talk a little bit about HBO and its content process. You were just speaking a lot to Ben's question about the value of IP at Warner Bros. and how much value you've done in mining that. And I think what makes HBO unique is not mineable IP, but this ability to kind of reinvent with new originals all the time. So if we think about HBO either as something that you'll own or maybe someone else could own in the future, what is really unique to it that can't be found anywhere else and separates it from other streaming services from a content development standpoint?

And then, Gunnar, just on sports. I mean, you talked about meeting some opportunity in sports over the next 3 to 5 years and how important it is to linear. Do you think that those opportunities will exist with rights that come available to market? Or do you think you may need to think somewhat inorganically as well about ensuring that, that business has sufficient sports rights?

I'll take that last one right quick. I was primarily thinking about opportunities coming up in the market on an organic basis, Steve.

Well, let me talk to HBO because this business that we're in about telling stories and the magic of it is all about the best creatives behind the screen and in front of the screen. And we all know it starts with script, but it's also the ability to work with the best creatives to tell the best stories. And if you just look at the track record of Casey Bloys and Amy Gravitt and Franny and Sarah Aubrey, Nina Rosenstein and Nancy and Lisa and [ Docs ]. This team has been together for almost 15 or 20 years.

They love what they do. They wake up every day and fight for the most compelling story and people love to work with them because there's a shared passion. There's also -- at HBO, when you're working with Casey and Amy and Franny and Sarah and that -- we get that series. We fight globally that everyone -- that everyone should see it, that we believe in it.

And we'll -- this idea of community of putting that on every Sunday night or every Monday night or every Thursday night and having a real community conversation about story. It feels old-fashioned, but it's extremely powerful, whether it's Gilded Age or whether it's Task or whether it's White Lotus for the 8 weeks or 12 weeks or The Pitt, 15 weeks, it becomes something that we can all talk about. And in that process of selecting the most compelling stories and then fighting when we put it on HBO to have -- to really cherish these shows that it's also when people are thinking where they want to go, we get a lot of the best product for less money because they want to be on HBO and they want to be seen.

And so I think it's all about Casey and Amy and Franny and Sarah. They're exceptional. Their teams are exceptional. And even the Docs, we get a huge viewership of our documentaries.

And when we do research, a lot of times, people say, I didn't love Billy Joel, but it was an HBO documentary, so I watched it. And wow, was that great. And so this idea of fighting for real quality and telling the best stories is something that is best exemplified by HBO. And we added Channing and the whole team to it.

When we got here, Warner Bros. did not produce for HBO. And the relationship between Casey and Channing and the fact that they're working together with JK on Harry Potter and they work together on The Pitt and they work together on The Penguin and it is -- just elevates us. We're the biggest and best producer of TV and motion pictures in the world, and we're much more efficient about making sure a lot of that great content gets to Casey and that it gets nourished before it goes on the air.

Your next question comes from Rick Prentiss of Raymond James.

I want to look at ARPU trends in the streaming. There's been a lot of moving pieces there. But can you walk us through a little bit about how you see that playing out domestically and internationally? And then I want to circle back to the earlier question about the monetization of IP.

I think last quarter, you mentioned moved up from $0.22 to $0.30 versus like Disney doing $1. Can you lay out some of the items that you think you can achieve there? Because that might be part of the valuation gap, if you will, as far as where the unseen increased value in Paramount or other people might be missing as far as what you can really achieve even on your own. So ARPU streaming and that monetization question.

Jean-Briac Perrette: Yes. Rick, it's J.B. On the ARPU streaming side, obviously, in the near term, as we sort of disclosed on the second quarter call over the summer, on the U.S. ARPU trend, because of really 2 factors. One is the reset back to market rates of an affiliated party transaction that had happened starting in the back end of the second quarter this year flowing through to the second quarter of next year. We do see some pressure on ARPU in the U.S. for the next 3 quarters, but then have high confidence of returning back to ARPU growth starting in the back half of '26 in the U.S. The second component that is changing the dynamics of the ARPU a little bit, both internationally and in the U.S. is obviously, we're about 12 to 18 months into our rollout of our ad-supported SKU, which is particularly internationally, has been in the U.S. for a couple of years internationally, really only started rolling out in 2024. And in that build-out, naturally, you're going to see some ARPU pressure as that lower-priced distribution SKU ramps and rolls out and gains more share of our total subscriber base. And in the monetization, we're being -- on the ad piece of the monetization, we're being very judicious because we do see ourselves just like we talked about on the quality of content and storytelling side, we also see ourselves as a premium service and want to make sure we keep our premium rates in the marketplace. And so the opportunity and the good news there is we are seeing very good pricing across the globe, but we also are holding on and fighting for that premium pricing and not just throwing in the towel to drive volume. And so over time, as we increase fill rates, particularly internationally, we continue to see a good upward trajectory of ARPU internationally. Not to mention, obviously, that we are also continue to have a good cadence of price increases scheduled, both you saw one, obviously, in the U.S. recently. Internationally, the same will happen on a good regular cadence. And so the combination of better monetization on the ad sales side pricing increases and then continued enforcement on the password sharing side of the house, which both between the add-on member as well as generally just new subscriptions is going to drive further ARPU upside. And so a little noisy for the next couple of quarters because of those 2 points and then getting back to healthy growth in 2026.

And then, Rick, on franchise management and the opportunity there, I think the most important change is that for the first time now, we've had a team to oversee the coordination of everything -- every activity related to our content franchises across the company, not every franchise, but the most important ones and to make sure that we really leverage those brands and the content in the best way possible. We've got one phenomenal example. The company has always done a great job with Harry Potter. And you can see what's possible with the full coordination between licensing, consumer products, experiences, now soon a series, the films, et cetera.

So that's always been a stronghold. But the team has now sort of worked actively and systematically to prioritize the next set of franchises. DC is one example that you already see in real life with Peter Safran and James Gunn taking a fundamentally different approach soup to nuts from an integrated cannon for the storytelling, coordinated approach to what stories become theatrical, what stories become serial, what stories become interactive in the gaming space. and they're embracing all forms of monetization from the get-go, thinking consumer products during production already. And the team is already looking towards what the next priority franchises could be with Game of Thrones, with Hanna-Barbera, Looney Tunes.

It's just a fundamentally different approach than what the company has done historically. When we first came together as Warner Bros. Discovery, there was a complete disconnect and sometimes the consumer products team would read in the news about a release date changing for a film, which would throw a monkey wrench in their entire annual plan. So we've made a lot of process changes, brought in a new team, and I think this is going to pay dividends over many, many years to come.

Thank you. Ladies and gentlemen, there are no further questions at this time. That concludes today's conference call. Thank you for your participation. You may now disconnect.