Fox Corporation

11/02/2026 | Press release | Distributed by Public on 11/02/2026 08:08

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Readers should carefully review this document and the other documents filed by Fox Corporation ("FOX" or the "Company") with the Securities and Exchange Commission (the "SEC"). This section should be read together with the unaudited interim consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended June 30, ("fiscal") 2026 as filed with the SEC on August 6, 2026 (the "2026 Form 10-K"). The Unaudited Consolidated Financial Statements are referred to as the "Financial Statements" herein.
INTRODUCTION
Management's discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company's financial condition, changes in financial condition and results of operations. This discussion is organized as follows:
•Overview of the Company's Business-This section provides a general description of the Company's businesses, as well as developments that occurred during the three months ended September 30, 2026 and 2025 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.
•Results of Operations-This section provides an analysis of the Company's results of operations for the three months ended September 30, 2026 and 2025. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.
•Liquidity and Capital Resources-This section provides an analysis of the Company's cash flows for the three months ended September 30, 2026 and 2025, as well as a discussion of the Company's outstanding debt and commitments, both firm and contingent, that existed as of September 30, 2026. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company's future commitments and obligations, as well as a discussion of other financing arrangements.
•Caution Concerning Forward-Looking Statements-This section provides a description of the use of forward-looking information appearing in this Quarterly Report on Form 10-Q, including in Management's Discussion and Analysis of Financial Condition and Results of Operations. Such information is based on management's current expectations about future events which are subject to change and to inherent risks and uncertainties. Refer to Part I., Item 1A. "Risk Factors" in the 2026 Form 10-K for a discussion of the risk factors applicable to the Company.
OVERVIEW OF THE COMPANY'S BUSINESS
The Company is a news, sports and entertainment company, which manages and reports its businesses in four operating segments: Cable Network Programming, Television, Credible and the FOX Studio Lot with the following two reportable segments:
•Cable Network Programming, which produces and licenses news and sports content distributed through traditional cable television systems, direct broadcast satellite operators and telecommunication companies ("traditional MVPDs"), virtual multi-channel video programming distributors ("virtual MVPDs") and other digital platforms, primarily in the U.S.
•Television, which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising-supported video-on-demand ("AVOD") service Tubi, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network and 11 are affiliated with MyNetworkTV. The segment also includes various production companies that produce content for the Company and third parties.
The Credible and the FOX Studio Lot operating segments do not meet the criteria under U.S. generally accepted accounting principles ("GAAP") to be separately reported as a reportable segment or aggregated with other operating segments, and as such are presented as part of Corporate and Other, which is not a reportable segment. Corporate and Other principally consists of FOX One, the Company's direct-to-consumer subscription
streaming service, Credible, the FOX Studio Lot and corporate overhead costs. Credible is a U.S. consumer finance marketplace. The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space, studio operation services and includes all operations of the facility.
We use the term "MVPDs" to refer collectively to traditional MVPDs and virtual MVPDs.
Roku Transaction
On June 14, 2026, the Company and Roku, Inc. ("Roku") entered into a definitive agreement (the "Merger Agreement") under which the Company has agreed to acquire Roku for a combination of cash and FOX Class A Common Stock (the "Roku Transaction" or the "Merger"). Upon the terms and subject to the conditions of the Merger Agreement, FOX will pay $96.00 in cash and 0.9693 shares of FOX Class A Common Stock for each share of Roku Class A Common Stock and Roku Class B Common Stock outstanding immediately prior to the effective time of the merger. The exchange ratio and per share cash amount are subject to adjustment as set forth in the Merger Agreement in certain circumstances relating to Roku stockholders who properly exercise appraisal rights in accordance with Delaware law. Following the completion of the Merger, Roku will be a wholly-owned subsidiary of FOX.
Each of the Boards of Directors of FOX and Roku unanimously approved the Roku Transaction, and in October 2026 FOX and Roku received the requisite stockholder approvals for the transaction. The Roku Transaction remains subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Merger Agreement contains customary termination rights and provides that each party will be required to pay the other party a termination fee of approximately $866 million if the Merger Agreement is terminated in certain circumstances. In addition, FOX will be required to pay Roku a termination fee of approximately $1.2 billion if the Merger Agreement is terminated under certain circumstances related to the failure to obtain certain regulatory approvals or upon the entry of a permanent restraint under certain antitrust laws or investment screening laws.
The Company expects to fund the cash portion of the Merger consideration with a combination of debt and cash on hand. In connection with the Merger Agreement, in June 2026, the Company entered into a commitment letter under which the lenders provided $12.0 billion of commitments ($11.0 billion of which is available as of September 30, 2026) to provide senior unsecured bridge loans (the "Bridge Facility") and a term loan credit agreement under which the lenders committed to provide a $1.0 billion senior unsecured term loan facility (the "Term Loan Facility") (See Note 5-Borrowings to the accompanying Financial Statements).
RESULTS OF OPERATIONS
Results of Operations-For the three months ended September 30, 2026 versus the three months ended September 30, 2025.
The following table sets forth the Company's operating results for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025:
For the three months ended September 30,
2026 2025 Change % Change
(in millions, except %) Better/(Worse)
Revenues
Distribution $ 2,084 $ 1,915 $ 169 9 %
Advertising 2,081 1,412 669 47 %
Content and other 406 411 (5) (1) %
Total revenues 4,571 3,738 833 22 %
Operating expenses (2,363) (2,121) (242) (11) %
Selling, general and administrative (567) (552) (15) (3) %
Depreciation and amortization (118) (98) (20) (20) %
Restructuring, impairment and other corporate matters (17) 8 (25) **
Equity losses of affiliates - (1) 1 100 %
Interest expense, net (80) (50) (30) (60) %
Non-operating other, net (143) (125) (18) (14) %
Income before income tax expense 1,283 799 484 61 %
Income tax expense (326) (190) (136) (72) %
Net income 957 609 348 57 %
Less: Net income attributable to noncontrolling interests (14) (10) (4) (40) %
Net income attributable to Fox Corporation stockholders $ 943 $ 599 $ 344 57 %
** not meaningful
Overview
For the three months ended September 30, 2026 and 2025
The Company's revenues increased $833 million or 22% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, due to higher distribution and advertising revenues, partially offset by lower content and other revenues. The increase of $169 million or 9% in distribution revenue was due to higher average rates per subscriber of approximately $95 million and the approximately $75 million impact of a higher average number of subscribers. The increase of $669 million or 47% in advertising revenue was primarily due to sports programming led by the broadcast of the Fédération Internationale de Football Association ("FIFA") Men's World Cup partially offset by the timing of National Football League ("NFL") games. Also contributing to this increase was higher political advertising revenue principally due to the November 2026 U.S. midterm elections and continued digital growth led by the Tubi AVOD service.
Operating expenses increased $242 million or 11% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, primarily due to the approximately $120 million impact of higher sports programming rights amortization and production costs led by the broadcast of the FIFA Men's World Cup partially offset by lower NFL costs, driven by the timing of games. The remaining increase of approximately $120 million was primarily due to higher digital content costs, partially offset by lower entertainment programming rights amortization.
Selling, general and administrative expenses increased $15 million or 3% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, primarily due to higher employee costs, partially offset by lower legal costs.
Depreciation and amortization-Depreciation and amortization expense increased $20 million or 20% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, primarily due to amortization related to the Company's Federal Communications Commission ("FCC") licenses which began on July 1, 2026 (See Note 1-Description of Business and Basis of Presentation to the accompanying Financial Statements under the heading "Critical accounting policies and estimates").
Restructuring, impairment and other corporate matters-See Note 11-Additional Financial Information to the accompanying Financial Statements under the heading "Restructuring, Impairment and Other Corporate Matters."
Interest expense, net-Interest expense, net increased $30 million or 60% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, primarily due to lower interest income as a result of lower interest rates and lower average cash and cash equivalent balances.
Non-operating other, net-See Note 11-Additional Financial Information to the accompanying Financial Statements under the heading "Non-Operating Other, net."
Income tax expense-The Company's tax provision and related effective tax rate of 25% for the three months ended September 30, 2026, was higher than the statutory rate of 21% primarily due to state taxes and a valuation allowance recorded against capital losses on investments.
The Company's tax provision and related effective tax rate of 24% for the three months ended September 30, 2025 was higher than the statutory rate of 21% primarily due to state taxes partially offset by other permanent items.
Net income-Net income increased $348 million or 57% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, primarily due to higher Segment EBITDA (as defined below), partially offset by a change in fair value of the Company's investments in equity securities and amortization related to the Company's FCC licenses (See Note 1-Description of Business and Basis of Presentation to the accompanying Financial Statements under the heading "Critical accounting policies and estimates"). These changes resulted in higher income before income tax expense and a corresponding higher provision for income tax.
Segment Analysis
The Company's operating segments have been determined in accordance with the Company's internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measure is Segment EBITDA (defined below). Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain assets, revenues and expenses. Intersegment transactions principally relate to the sublicensing of sports content, direct-to-consumer streaming services and rental of studio and administrative space, which are recorded consistently with the recognition of transactions with third parties and are eliminated in consolidation.
Segment EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Segment EBITDA does not include: Depreciation and amortization, Restructuring, impairment and other corporate matters, Equity earnings (losses) of affiliates, Interest expense, net, Non-operating other, net and Income tax expense. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company's operating segments because it is the primary measure used by the Company's chief operating decision maker, the Chief Executive Officer, to monitor actual versus budget and prior fiscal year financial results, forecast future periods and perform competitive analyses to evaluate performance and allocate resources.
The following tables set forth the Company's Revenues and Segment EBITDA for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025:
For the three months ended September 30,
2026 2025 Change % Change
(in millions, except %) Better/(Worse)
Revenues
Cable Network Programming $ 1,803 $ 1,662 $ 141 8 %
Television 2,713 2,050 663 32 %
Corporate and Other 246 89 157 **
Eliminations (191) (63) (128) **
Total revenues $ 4,571 $ 3,738 $ 833 22 %
For the three months ended September 30,
2026 2025 Change % Change
(in millions, except %) Better/(Worse)
Segment EBITDA
Cable Network Programming $ 859 $ 800 $ 59 7 %
Television 934 399 535 **
Corporate and Other (152) (134) (18) (13) %
Adjusted EBITDA(a)
$ 1,641 $ 1,065 $ 576 54 %
** not meaningful
(a)
For a discussion of Adjusted EBITDA and a reconciliation of Net income to Adjusted EBITDA, see "Non-GAAP Financial Measures" below.
Cable Network Programming (39% and 44% of the Company's revenues for the first three months of fiscal 2027 and 2026, respectively)
For the three months ended September 30,
2026 2025 Change % Change
(in millions, except %) Better/(Worse)
Revenues
Distribution $ 1,200 $ 1,090 $ 110 10 %
Advertising 373 345 28 8 %
Content and other 230 227 3 1 %
Total revenues 1,803 1,662 141 8 %
Operating expenses (793) (703) (90) (13) %
Selling, general and administrative (151) (159) 8 5 %
Segment EBITDA $ 859 $ 800 $ 59 7 %
For the three months ended September 30, 2026 and 2025
Revenues at the Cable Network Programming segment increased $141 million or 8% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, due to higher distribution, advertising and content and other revenues. Distribution revenue increased $110 million or 10% primarily due to higher average rates per subscriber and an increase in the average number of subscribers. The
increase of $28 million or 8% in advertising revenue was primarily due to higher sports advertising revenue including the broadcast of the FIFA Men's World Cup, partially offset by lower digital news advertising revenue.
Cable Network Programming Segment EBITDA increased $59 million or 7% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, due to the revenue increases noted above, partially offset by higher expenses. Operating expenses increased $90 million or 13% primarily due to higher sports programming rights amortization and production costs led by soccer rights, including the broadcast of the FIFA Men's World Cup, and higher news programming costs. Selling, general and administrative expenses decreased $8 million or 5% primarily due to lower legal costs.
Television (59% and 55% of the Company's revenues for the first three months of fiscal 2027 and 2026, respectively)
For the three months ended September 30,
2026 2025 Change % Change
(in millions, except %) Better/(Worse)
Revenues
Advertising $ 1,708 $ 1,067 $ 641 60 %
Distribution 850 821 29 4 %
Content and other 155 162 (7) (4) %
Total revenues 2,713 2,050 663 32 %
Operating expenses (1,496) (1,385) (111) (8) %
Selling, general and administrative (283) (266) (17) (6) %
Segment EBITDA $ 934 $ 399 $ 535 **
** not meaningful
For the three months ended September 30, 2026 and 2025
Revenues at the Television segment increased $663 million or 32% for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, due to higher advertising and distribution revenues, partially offset by lower content and other revenues. The increase of $641 million or 60% in advertising revenue was primarily due to sports programming led by the broadcast of the FIFA Men's World Cup and higher pricing partially offset by the timing of NFL games and lower ratings. Also contributing to this increase was higher political advertising revenue principally due to the November 2026 U.S. midterm elections and continued digital growth led by the Tubi AVOD service. The increase of $29 million or 4% in distribution revenue was primarily due to higher average rates per subscriber at the Company's owned and operated television stations and a higher average number of subscribers. The decrease of $7 million or 4% in content and other revenues was primarily due to lower entertainment content revenue.
Television Segment EBITDA increased $535 million for the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, due to the revenue increases noted above, partially offset by higher expenses. Operating expenses increased $111 million or 8% primarily due to higher sports programming rights amortization and production costs led by the broadcast of the FIFA Men's World Cup partially offset by lower NFL costs, driven by the timing of games. Also contributing to this increase was higher digital content costs, partially offset by lower entertainment programming rights amortization. Selling, general and administrative expenses increased $17 million or 6% primarily due to higher employee costs.
Corporate and Other
For the three months ended September 30,
2026 2025 Change % Change
(in millions, except %) Better/(Worse)
Revenues $ 246 $ 89 $ 157 **
Operating expenses (251) (82) (169) **
Selling, general and administrative (147) (141) (6) (4) %
Segment EBITDA $ (152) $ (134) $ (18) (13) %
** not meaningful
For the three months ended September 30, 2026 and 2025
Revenues within Corporate and Other for the three months ended September 30, 2026 and 2025 include distribution revenue at FOX One and revenues generated by Credible and the operation of the FOX Studio Lot. Operating expenses for the three months ended September 30, 2026 and 2025 include costs of operating the FOX One streaming service and advertising and promotional expenses at Credible. Selling, general and administrative expenses for the three months ended September 30, 2026 and 2025 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio Lot and FOX One streaming service.
Corporate and Other EBITDA decreased $18 million or 13% for the three months ended September 30, 2026, respectively, as compared to the corresponding period of fiscal 2026, primarily due to intercompany FOX branded content and marketing costs at the FOX One streaming service, which more than offset related distribution revenue.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Depreciation and amortization, Restructuring, impairment and other corporate matters, Equity earnings (losses) of affiliates, Interest expense, net, Non-operating other, net and Income tax expense.
Management believes that information about Adjusted EBITDA assists all users of the Company's Financial Statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect Net income, thus providing insight into both operations and the other factors that affect reported results. Adjusted EBITDA provides management, investors and equity analysts a measure to analyze the operating performance of the Company's business and its enterprise value against historical data and competitors' data, although historical results, including Adjusted EBITDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).
Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company's financial performance. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
The following table reconciles Net income to Adjusted EBITDA for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025:
For the three months ended September 30,
2026 2025
(in millions)
Net income $ 957 $ 609
Add
Depreciation and amortization 118 98
Restructuring, impairment and other corporate matters 17 (8)
Equity losses of affiliates - 1
Interest expense, net 80 50
Non-operating other, net 143 125
Income tax expense 326 190
Adjusted EBITDA $ 1,641 $ 1,065
The following table sets forth the computation of Adjusted EBITDA for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025:
For the three months ended September 30,
2026 2025
(in millions)
Revenues $ 4,571 $ 3,738
Operating expenses (2,363) (2,121)
Selling, general and administrative (567) (552)
Adjusted EBITDA $ 1,641 $ 1,065
LIQUIDITY AND CAPITAL RESOURCES
Current Financial Condition
The Company has approximately $4.5 billion of cash and cash equivalents as of September 30, 2026 and an unused five-year $1.0 billion unsecured revolving credit facility (See Note 5-Borrowings to the accompanying Financial Statements). In addition, the Company can draw on the Term Loan Facility and commitments under the Bridge Facility to finance the cash portion of the Merger consideration (See Note 2-Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements). The Company also has access to global capital markets, subject to market conditions. As of September 30, 2026, the Company was in compliance with all of the covenants under the Company's facilities, and it does not anticipate any noncompliance with such covenants.
The principal uses of cash that affect the Company's liquidity position include the following: the acquisition of rights and related payments for entertainment and sports programming; operational expenditures including production costs; marketing and promotional expenses; expenses related to broadcasting the Company's programming; employee and facility costs; capital expenditures; acquisitions, including redeemable noncontrolling interests; income taxes, interest and dividend payments; debt repayments; legal settlements; and stock repurchases.
In addition to the transactions disclosed within Note 2-Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements, the Company has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses and assets. Such transactions may be material and may involve cash, the Company's securities or the assumption of additional indebtedness.
Sources and Uses of Cash
Net cash provided by (used in) operating activities for the three months ended September 30, 2026 and 2025 was as follows (in millions):
For the three months ended September 30,
2026 2025
Net cash provided by (used in) operating activities $ 616 $ (130)
The change in net cash provided by (used in) operating activities during the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, was primarily due to the FIFA Men's World Cup in the current year, higher political advertising receipts and lower entertainment programming payments, partially offset by higher sports programming payments.
Net cash used in investing activities for the three months ended September 30, 2026 and 2025 was as follows (in millions):
For the three months ended September 30,
2026 2025
Net cash used in investing activities $ (139) $ (255)
The decrease in net cash used in investing activities during the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, was primarily due to a decrease in the Company's investments partially offset by an increase in the Company's capital expenditures.
Net cash used in financing activities for the three months ended September 30, 2026 and 2025 was as follows (in millions):
For the three months ended September 30,
2026 2025
Net cash used in financing activities $ (146) $ (598)
The decrease in net cash used in financing activities during the three months ended September 30, 2026, as compared to the corresponding period of fiscal 2026, was primarily due to the absence of activity under the stock repurchase program and the purchase of noncontrolling interest in fiscal 2026.
Stock Repurchase Program
See Note 6-Stockholders' Equity to the accompanying Financial Statements under the heading "Stock Repurchase Program."
Dividends
The Company declared a semi-annual dividend of $0.29 per share on both the Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"), and the Class B Common Stock, par value $0.01 per share (the "Class B Common Stock") during the three months ended September 30, 2026, which was paid on September 23, 2026. The Company expects to continue to pay semi-annual dividends, although each dividend is subject to approval by the Company's Board of Directors.
Debt Instruments
Borrowings include senior notes (See Note 5-Borrowings to the accompanying Financial Statements).
Ratings of the Senior Notes
The following table summarizes the Company's credit ratings as of September 30, 2026:
Rating Agency Senior Debt Outlook
Moody's Baa2 Stable
Standard & Poor's BBB Stable
Revolving Credit Agreement
The Company has an unused five-year $1.0 billion unsecured revolving credit facility with a maturity date of June 2028 (See Note 5-Borrowings to the accompanying Financial Statements).
Bridge Facility
The Company has a commitment letter for the Bridge Facility which may be drawn on for the purpose of financing the cash portion of the Merger consideration (See Note 2-Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements).
Term Loan Agreement
The Company has a Term Loan Facility to fund the cash portion of the Merger consideration, which has a maturity date of two years after the closing of the Roku Transaction and the Term Loan Facility is funded (See Note 5-Borrowings to the accompanying Financial Statements).
Commitments and Contingencies
See Note 8-Commitments and Contingencies to the accompanying Financial Statements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes to the accounting policies and estimates as described in Part II., Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in the 2026 Form 10-K, with the exception of the change related to the reassessment of the useful lives for the Company's FCC licenses (See Note 1-Description of Business and Basis of Presentation to the accompanying Financial Statements under the heading "Critical accounting policies and estimates").
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical or current fact are "forward-looking statements" for purposes of federal and state securities laws, including any statements regarding (i) the Roku Transaction; (ii) future earnings, revenues or other measures of the Company's financial performance; (iii) the Company's plans, strategies and objectives for future operations; (iv) proposed new programming or other offerings; (v) future economic conditions or performance; and (vi) assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words "may," "will," "could," "should," "would," "likely," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook" or any other similar words.
Although the Company's management believes that the expectations reflected in any of the Company's forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements. The Company's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the SEC. Important factors that could cause the Company's actual results, performance and achievements to differ materially from those estimates or
projections contained in the Company's forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions and the following factors:
•the impact of the Roku Transaction, which may be affected by various factors, including closing conditions, regulatory approvals, termination of the Merger Agreement, restrictions on the Company's ability to pursue alternative transactions, potential litigation, business disruptions while the transaction is pending, impacts on the Common Stock, increased indebtedness, and the Company's ability to successfully integrate operations and realize anticipated synergies and other benefits post-closing, as well as the risk that the transaction may be delayed or not completed at all;
•evolving technologies and distribution platforms and offerings and changes in consumer behavior as consumers seek more control over when, where and how they consume content, and related impacts on advertisers and MVPDs;
•declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy, evolving technologies and distribution platforms and related changes in consumer behavior and shifts in advertisers' expenditures, the evolving digital advertising market, major sports events and election cycles and the evolution of audience measurement methodologies;
•further declines in the number of subscribers to MVPD services;
•the failure to enter into or renew on favorable terms, or at all, affiliation or carriage agreements or arrangements through which the Company makes its content available for viewing through online video platforms;
•the highly competitive nature of the industry in which the Company's businesses operate;
•the popularity of the Company's content, including special sports events; and the continued popularity of the sports franchises, leagues and teams for which the Company has acquired programming rights;
•the Company's ability to renew programming rights, particularly sports programming rights, on sufficiently favorable terms, or at all;
•damage to the Company's brands or reputation;
•the inability to realize the anticipated benefits of the Company's other acquisitions, investments and other strategic initiatives, and the effects of any other combination or significant acquisition, disposition or other similar transaction involving the Company;
•the loss of key personnel;
•labor disputes, including labor disputes involving professional sports leagues whose games or events the Company has the right to broadcast;
•lower than expected valuations associated with the Company's reporting units, indefinite-lived intangible assets, investments or long-lived assets;
•a degradation, failure or misuse of the Company's network and information systems and other technology relied on by the Company that causes a disruption of services or improper disclosure of personal data or other confidential information;
•content piracy and signal theft and the Company's ability to protect its intellectual property rights;
•the failure to comply with laws, regulations, rules, industry standards or contractual obligations relating to privacy and personal data protection;
•changes in tax, federal communications or other laws, regulations, practices or the interpretation or enforcement thereof;
•the impact of any investigations or fines from governmental authorities, including FCC rules and policies and FCC decisions regarding revocation, renewal or grant of station licenses, waivers and other matters;
•the failure or destruction of satellites or transmitter facilities the Company depends on to distribute its programming and changes in the availability and use of satellite transmission spectrum;
•unfavorable litigation outcomes or investigation results that require the Company to pay significant amounts or lead to onerous operating procedures;
•changes in GAAP or other applicable accounting standards and policies;
•the Company's ability to secure additional capital on acceptable terms; and
•the other risks and uncertainties detailed in Part I, Item 1A. "Risk Factors" in the 2026 Form 10-K.
Forward-looking statements in this Quarterly Report speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference hereto speak only as of the date of those documents. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement made herein or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in our expectations, except as required by law.
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