The New York Times Company (NYSE: NYT) has reported a robust first quarter for 2024, with its digital subscription business propelling significant growth in adjusted operating profit (AOP) and steady revenue increases. The addition of 210,000 net new digital subscribers marks a step closer to their 15 million subscriber target. Despite a slight decline in total advertising revenue, the company has seen a rise in digital advertising and expects advertiser demand to increase in the second quarter. The New York Times remains focused on cost discipline, expecting another year of enhanced profitability and strong free cash flow.
Key Takeaways
- The New York Times added 210,000 digital subscribers in Q1, aiming for a 15 million subscriber goal.
- Over half of new digital subscriptions came from bundle and multiproduct offerings.
- Digital advertising revenue grew by 3%, while print advertising performed better than anticipated.
- Licensing, affiliate revenues, and Wirecutter revenues saw an approximate 8% increase.
- Adjusted operating costs rose by 2.2%, reflecting strategic resource reallocation.
- Adjusted diluted earnings per share (EPS) increased from $0.19 to $0.31.
- Q2 forecasts include 6-8% growth in total subscription revenues and 11-14% in digital-only subscription revenues.
Company Outlook
- Subscriber base expected to surpass 50% in bundle and multiproduct subscriptions by end of next year.
- Strong earnings growth anticipated for 2024, with the company on track to meet midterm targets.
- Q2 expectations: Subscription revenues to rise by 6-8%, digital-only subscription revenues by 11-14%, and overall advertising revenues to increase by low-single digits.
Bearish Highlights
- Total advertising revenue experienced a slight decline.
- Cost of revenue increased by approximately 3% due to investments in journalism.
- Adjusted operating costs are projected to rise by 4-5% in Q2.
Bullish Highlights
- Digital subscription business continues to drive significant AOP growth.
- Digital advertising revenue and other revenues exceeded expectations.
- Sales and marketing costs decreased by approximately 3%.
- Adjusted general and administrative costs decreased by about 4%.
Misses
- The company recorded a severance charge of approximately $4 million.
Q&A Highlights
- The company's core digital ad business, based on premium ad canvases and first-party data targeting, is primarily high CPM.
- The New York Times sees potential for standalone pricing and will continue to use pricing as a lever for monetization.
- Organic traffic growth and expected leverage on sales and marketing costs over time.
- Clarification that a small content licensing item on the press release represents intercompany licensing between The New York Times and The Athletic, not impacting consolidated figures.
InvestingPro Insights
The New York Times Company (NYSE: NYT) has showcased a promising start to 2024, with their digital subscription base playing a pivotal role in their financial performance. Here are some key InvestingPro Insights to further inform investors about the company's recent market activity and financial health:
- The company's market capitalization stands at a solid $7.68 billion, reflecting the market's valuation of the company.
- With a price-to-earnings (P/E) ratio of 30.9, and an adjusted P/E ratio for the last twelve months as of Q1 2024 at 28.26, The New York Times is trading at a premium compared to its near-term earnings growth.
- The revenue growth for the last twelve months as of Q1 2024 was 5.64%, indicating a steady increase in the company's top-line performance.
InvestingPro Tips for The New York Times highlight that the company has raised its dividend for 5 consecutive years, signaling a commitment to returning value to shareholders. Additionally, two analysts have revised their earnings estimates upwards for the upcoming period, suggesting a positive outlook on the company's financial prospects. For investors looking to delve deeper into the company's performance and potential, InvestingPro offers additional tips, including insights on stock volatility, dividend consistency, and trading positions relative to 52-week highs.
For a more comprehensive analysis and to access further InvestingPro Tips, interested readers can visit: https://www.investing.com/pro/NYT. Plus, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a total of 10 additional InvestingPro Tips for The New York Times Company.
Full transcript - New York Times (NYT) Q1 2024:
Operator: Good morning and welcome to The New York Times Company's First Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Anthony DiClemente, Senior Vice President of Investor Relations. Sir, please go ahead.
Anthony DiClemente: Thank you, and welcome everyone to The New York Times Company's first quarter 2023 earnings conference call. On the call today, we have Meredith (NYSE:MDP) Kopit Levien, President and Chief Executive Officer; and Will Bardeen, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call. These statements are based on current expectations and assumptions, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties that are described in the company's 2023 10-K and subsequent SEC filings. In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliations to the most comparable GAAP measures in our earnings press release which is available on our website at investors.nytco.com. In addition to our earnings press release, we have also posted a slide presentation relating to our results, on our website at investors.nytco.com. And finally, please note that a copy of our prepared remarks from this morning's call will be posted to our investor website shortly after we conclude. And with that, I will turn the call over to Meredith.
Meredith Kopit Levien: Thanks, Anthony, and good morning everyone. As our Q1 results demonstrate, we're off to a strong start this year. Our strategy to become the essential subscription for every curious person seeking to understand and engage with the world is working as designed and is positioning us to sustain our growth through dynamic media environment. Let me describe how. First, our world-class news destination combined with our distinctive products in games, sports, cooking and shopping advice are attracting large and passionate audiences in giant spaces. Each of these complementary products addresses a different need in people's lives, meaning there's always a reason to seek out the time; second, our subscribers are deeply engaged. The share of subscribers spending time on our site and app each week is now at its highest point since the surge we saw during the pandemic. That's a clear sign that we're delivering value to users and increasing their likelihood of building long-term relationships with The Times; third, the high level of engagement we see reinforces our conviction that we can grow digital only ARPU year-on-year as we use our multiple pricing and monetization levers. And fourth, we've strategically designed our diverse product portfolio to also power multiple revenue streams beyond subscription, in advertising, affiliate and licensing, each of which we expect to deliver growth in 2024. In sum, our portfolio of products creates many paths for The Times to reach big audiences and drive the type of deep engagement that grows subscribers and revenue. That makes our business more resilient and positions us well to take advantage of new opportunities even in a rapidly changing media landscape. With focused execution and disciplined cost management, we expect that our essential subscription strategy will propel another year of improving profitability and margin expansion as well as strong free cash flow generation. Turning now to our first quarter results. We had a quarter of steady revenue growth and significant AOP growth, powered largely by our digital subscription business. We added 210,000 net new digital subscribers in the quarter, making further progress on the path to our next milestone of 15 million subscribers. Volume growth in the first quarter was driven by bundle and multiproduct subscribers as well as single product subscribers with our bundle and multiproduct subscribers accounting for over half the digital starts in the quarter. Bundle and multiproduct subscribers now represent 43% of our subscriber base and we expect to surpass 50% by the end of next year. Forward to driving subscriber growth is having products that deliver unique value. That starts with news, where just this past Monday, The Times was recognized with three Pulitzer Prizes, our industry's highest honor. The awards showcase the many ways our journalism impacts society. Investigative reporter, Hannah Dreier was honored for documenting the pervasive exploitation of migrant children in unsafe working conditions, a series that led to sweeping reforms in business and government. Katie Engelhart, the contributor to The Times Magazine won for her intimate portrait of a mother's dementia and her family's ensuing legal, emotional and ethical struggles. And we received the International Reporting Prize for our investigative work into the origins and aftermath of the Israel-Gaza War. This is a recognition of the importance of our ongoing and extensive coverage of the war, which has included thousands of articles and photos, hundreds of videos and real time reporting from around the world. Beyond illuminating the most urgent stories of the day, we're continuously expanding our report, making it more accessible and evolving how our journalism comes to life. That includes producing more personally relevant reporting into science backed health and wellness. And it includes experimenting more ambitiously with audio by introducing the ability to listen to much of our report via AI powered automated voice and also by introducing a new listen tab in our core news app. The performance of games in the quarter provides further evidence for how creating more valuable products translates into user and business impact. We now have two puzzles, Wordle and Connections with 10s of millions of weekly users and another homegrown hit in Strands, our daily word hunt game released in March. Our growth here means we have lots of opportunities to deliver more value to more people. As one example, we're unlocking the ability for subscribers to play the full archive of a 1,000 plus Wordle puzzles. Given the very strong engagement with games and our focus on continuing to add product value, we expect to be able to increase monetization over time. We're also adding value at The Athletic, where we've been deliberate about building awareness and it's paying off. Audience levels were up again in Q1, both year-on-year and quarter-on-quarter, helping fuel advertising growth and keeping us on track to profitability by next year. The Athletic is making the most of major moments of fan interest like the Super Bowl and March Madness and excelling in its always on coverage of coaching changes, free agency, drafts and other news impacting teams. We're as excited as ever about the giant opportunity we see in sports and making steady progress on our ambition to become a top destination for sports news globally. We delivered another quarter of the modest year-on-year ARPU growth we've been targeting since 2022. Our ability to successfully transition subscribers on promotional prices to higher prices is a durable driver of ARPU expansion and the primary reason we're confident we'll see continued ARPU growth this year. Total advertising revenue came in slightly better than guidance, thanks to print declining less than expected. We continue to feel the impact of some marketers avoiding certain hard news topics last quarter. Even still, we are seeing a pickup in advertiser demand so far in Q2 and we're steadily expanding our high performing ad products across the entirety of our product portfolio, which together give us optimism. Revenue beyond subscriptions and advertising exceeded guidance driven by a strong quarter for licensing and Wirecutter. We believe the value of Wirecutter's rigorous research backed recommendations will keep increasing and we're investing to cover more products in more categories, which should build an even bigger business over time. We remain disciplined on costs and are aggressively reallocating investments to strategic areas. This discipline together with capable execution resulted in another strong quarter of AOP growth and healthy free cash flow. I'll wrap by reminding you of what we're trying to do every day, build scaled products so valuable to people that they will be sought out, asked for by name and worthy of direct relationship and daily habits. The combination of our world-class news destination, plus market leading lifestyle products means we have complementary offerings in big spaces, each with multiple growth levers fueling multiple revenue streams. Together, we believe these make our business more resilient and well positioned for continued value creation. Now let me turn it over to Will for more details on the quarter.
William Bardeen: Thanks, Meredith, and good morning, everyone. As Meredith stated, our Q1 financial results demonstrate a strong start to the year and position us to deliver another year of AOP growth, margin expansion and healthy free cash flow generation. Our portfolio of market leading news and lifestyle products is working as designed to grow our subscriber base, increase subscriber engagement, and strengthen our multiple revenue streams. As our subscriber base has scaled, we've moderated our overall expense growth driving operating leverage even as we continue to prioritize strategic investments that help position us for long-term value creation. We grew overall revenue in the first quarter by approximately 6% as increasing digital subscription, licensing, affiliate, and digital advertising revenues more than offset ongoing declines in print. Combined with slower than expected cost growth, AOP grew by approximately 41% year-over-year and quarterly AOP margin expanded by approximately 320 basis points to 12.8%. Our free cash flow generation continues to be strong and consistent with our broader expectations for capital allocation we returned $51 million to shareholders in Q1. This included approximately $32 million in share repurchases and $19 million in dividends. Now, I'll discuss the first quarter's key results, followed by our financial outlook for the second quarter of 2024. Please note that all comparisons are to the prior year period, unless otherwise specified. I'd also like to note that there was one additional day in the first quarter of 2024 compared with the first quarter of 2023 as a result of 2024 being a leap year. I'll start with the discussion of our subscription business. We added approximately 210,000 net new digital subscribers in the quarter with growth coming from multiple sources across our portfolio of products. As Meredith mentioned, bundled and multiproduct subscribers now make up 43% of our total base along the path to exceeding 50% by the end of next year. Total digital only ARPU grew 1.9% percent year-over-year to $9.21 as we continue to step up subscribers from promotional to higher prices and raise prices on tenured non-bundled subscribers. The promising bundle monetization we're seeing at step up points combined with the increasing number of bundled subscribers transitioning to higher prices throughout the year suggest a tailwind to APRU in the back half of the year. Additionally, as Meredith highlighted, we continue to improve the products in our portfolio and are seeing that value reflected in higher levels of subscriber engagement. This pattern is increasing our confidence in the ability to improve monetization through single product pricing over time and is one driver of the modest year-over-year ARPU expansion that we continue to target for the mid-term. As a result of both higher digital subscribers and digital only ARPU in the first quarter, digital only subscription revenues grew approximately 13% to $293 million and total subscription revenues grew approximately 8% to $429 million both were in line with the guidance we provided last quarter. Now turning to advertising. Total advertising revenue for the quarter was $104 million, a decline of 2.4%. This was slightly better than our guidance of mid-single digits decline as print advertising performed modestly better than expected. Digital advertising results were within our guidance range in the quarter increasing approximately 3% to $63 million. Other revenues exceeded our guidance increasing approximately 8% to $61 million as licensing and Wirecutter affiliate revenues continue to be strong drivers of growth in Q1. Adjusted operating costs came in better than our guidance increasing by 2.2%. Our underlying cost growth in Q1 continued to reflect our discipline of relentlessly reallocating resources to areas of highest impact. We also benefited in Q1 from some unexpectedly favorable compensation and benefits items that help drive the outperformance relative to our guidance range. Cost of revenue increased approximately 3% largely due to our continued investment into journalism. Cost of revenue was favorable to our expectations in part due to timing of content and hiring costs. Sales and marketing costs decreased approximately 3% largely due to lower subscriber acquisition costs as our products continue to drive the majority of starts organically. Product development costs increased approximately 11% as we continue to strategically invest into the product and technology teams enabling our digital subscriber growth. Adjusted general and administrative costs were down approximately 4% as we continued to drive efficiencies. I'd also like to note that in the first quarter, we recorded a severance charge of approximately $4 million due to targeted reductions in certain areas of the business. Our steady revenue growth and disciplined cost management in Q1 translated into strong earnings growth as adjusted diluted EPS increased $0.12 to $0.31. EPS growth in Q1 was also aided by higher interest income. Our tax rate in the quarter was approximately 27% close to our expected ongoing marginal tax rate of approximately 26%. I'll now look ahead to Q2 for the consolidated New York Times Company. Total subscription revenues are expected to increase 6% to 8% compared with the second quarter of 2023 and digital only subscription revenues are expected to increase 11% to 14%. Overall advertising revenues are expected to increase low-single digits, while digital advertising revenues are expected to increase high-single digits. As Meredith noted, we're seeing a pickup in ad demand so far in Q2 and are continuing to expand our first party premium ad products to more surfaces across our product portfolio. Other revenues are expected to be flat to increase low-single digits. Adjusted operating costs are expected to increase 4% to 5%, which reflects that we are investing for growth in a disciplined manner and that we don't currently anticipate the unexpectedly favorable comp and benefits cost performance to extend beyond Q1. I'll close by noting that due to our strong Q1 profit performance, we now expect our AOP and earnings growth in 2024 to no longer be back half weighted. With our essential subscription strategy working as designed, we remain on track to achieve our previously stated midterm targets for subscribers, AOP growth, and capital returns. With that, we're happy to take your questions.
Operator: Ladies and gentlemen, at this time, we'll begin the question-and-answer session. [Operator Instructions]. Our first question today comes from David Karnovsky from JPMorgan (NYSE:JPM). Please go ahead with your question.
David Karnovsky: Hey, thank you. Just two for me. Meredith, you spoke to very high engagement around your games product. Wanted to know how you think about translating this to registrations and ultimately to subscriptions or bundled sign ups? And can you also speak to the opportunity around building more advertising into games? And then for Will, on the adjusted costs in the quarter, growth was nicely -- the growth was nicely below your outlook. Wanted to follow-up here on what came in lower. Are there any shifts to remaining quarters to be aware of you noted some timing benefit, and just given the result in Q1 and the outlook, do you have any updated view on margin for the year? Thank you.
Meredith Kopit Levien: Thanks for the question, David. I'll start on games. I mean, the first thing to say is we have invested into a product people really love and we know that they love it, because they are deeply engaged. And I would just say broadly that engagement gives us monetization power over time, both in subs and in ads. In subs, I would say the games funnel, so people coming into the App Store and downloading the app or on the web, finding games is very effective entry point for someone just in their relationship with The Times that can be, they come in and we get them to register, that can be we come in and we sell them, a bundled subscription, we offer a bundled subscription or it can be they come in and we sell them game subscription. And if they buy that game subscription, we have potential to use that harness that direct paying relationship to introduce them to other things. And obviously with games, there's lots of surface area to do that. And then I'll just say, one of the things we've learned over time in the model is that high engagement and the continuous addition of new value can mean you have pricing power that you can exercise, because people love the products so much and engage with them so often. So we've got lots of optimism there. On ads, I would just say plenty of running room to introduce more ad product within games in a way that is friendly to sort of the broad proposition that we have free games, we have paid games. One of the places that will be focused in the back half of the year is in the games app, which is awesome and got a redesign. And so you'll see some ads there that you haven't seen before. And I would just say, there's lots of room for experimentation on the kinds of ad products, within games as well, because obviously the formats are different. So we're very excited about that.
William Bardeen: And David, on costs, we're quite pleased with the overall cost performance in the quarter, which at this core reflects the discipline that we've been discussing for some time. Now as I said in my remarks, the outperformance relative to our guidance range was also in part due to some unexpectedly low comp and benefits items in Q1 that we don't expect to extend beyond the quarter. So looking forward, our Q2 guide of 4% to 5% is what to focus on there, which we believe really reflects investing for growth in a disciplined manner. And maybe a couple of step back points to put the year in context. What we mean by disciplined growth there, we're focused on relentlessly reallocating our resources to areas of highest impact, in particular, our differentiated journalism and product and technology. These are the areas which sustainably fuel organic subscriber growth based on our strategy. And then in terms of sort of overall AOP growth and margin expansion, we're expecting that for the year strong free cash flow generation and we made the comment that we're just given the strong profit growth we saw in Q1, but we're no longer expecting the growth to be weighted to the back half of the year.
Anthony DiClemente: Great, thanks a lot, David. Operator, we will take our next question please.
Operator: Our next question comes from Jason Bazinet from Citi. Please go ahead with your question.
Jason Bazinet: I just had a very simple question. Would you guys just mind summarizing some of the promotions that you've done on the digital side? How those promotions have changed and what you're looking for as those promotions roll off? What are some of the key metrics you guys are going to be looking forward to measure success?
William Bardeen: Sure. I'll take that. I mean, overall, our promotional strategy is all about maximizing lifetime value of our subscriber base and we're modeling this very carefully. The general way to think about our promotions is that we bring the vast majority of our bundle subscribers which is the primary offering in on a dollar a week and then step them up over time to higher prices that is driven by a lot of data science that is measuring a variety of inputs into that. And what we're looking for as you can imagine at those step up moments is retention and monetization. And as we said last quarter and reiterating this quarter, we've been very pleased with what we're seeing on both of those fronts as we have increasing numbers of bundled subscribers coming in throughout the year.
Anthony DiClemente: That's great. Thank you, Jason. Operator, we'll take our next question please.
Operator: Our next question comes from Vasily Karasyov from Cannonball Research. Please go ahead with your question.
Vasily Karasyov: Thank you. Good morning. Meredith, I wanted to ask you to talk in a little more detail about the underlying trends in digital advertising. Maybe you could break down for us the growth that you had and you expect in Q2 by volume versus price because it looks like you're going to have a higher growth rate against tougher comps. So can you help understand maybe for both display and digital what is driving this variance in quarterly performance and if there are any comps that are coming up that are getting easier for you in terms of volume or price? So thank you very much.
Meredith Kopit Levien: Yes, good morning. I think the most important thing to say is just what I said in my prepared remarks, which is that demand, we're feeling demand pick up in Q2 and you see that in the guide. And I'll also say we are going to be sort of rolling out more ad supply continuously for the rest of the year. So we're bringing the high performing ad products to places in our portfolio, where we're seeing a lot of marketer demand, seeing that demand really grow like the games app and sports. And when I say, high performing ad products, I mean premium canvases with first-party data. We are still in a process of extending that to other parts of the portfolio with kind of more ahead than behind us. And that really makes the sort of pickup in demand, plus that. And then just the kind of broad appeal of The Times with multiple places for marketers to get a message out and multiple ways for marketers to put a big idea into the world. All of that gives us optimism in the ad business.
Vasily Karasyov: Thank you. And would it be fair to…
Meredith Kopit Levien: Let me add one more beat, which maybe with just the ads are efficacious. They work those premium canvases and first-party data are high performing in the context of a publisher ad offering. So we have a lot of confidence in them.
Vasily Karasyov: Thank you. And a quick follow-up. Would it be fair to say that the high performing ads, what you refer to as high performing ads, that they have much higher CPMs than display that you call out in the release?
Meredith Kopit Levien: The way we think about it, the sort of core of the digital ad business that we've been talking about for years now is premium ad canvases. We have an ad unit called Flex (NASDAQ:FLEX) Frame, which is like a large canvas unit that can do a lot of different things. And that plus targeting with our first-party data, which we've been building for years now, is sort of the core of the business that's what we're talking about, that's bought a lot of different ways. Mostly, directly, some programmatically, but that's what we're referring to and that is generally a high CPM business in the context of the publishing industry.
Anthony DiClemente: Thanks, Vasily. Operator, we'll take our next question please.
Operator: Our next question comes from Thomas Yeh from Morgan Stanley (NYSE:MS). Please go ahead with your question.
Thomas Yeh: Thanks so much. Yes, just following up on the bundled graduation question. Can you help us just think through the cadence of the wave of eligible cohorts that are coming up for graduation? I think Will, you mentioned some greater back half opportunity on ARPU, just to kind of put a finer point on it. Is it right to interpret your comment as the year-over-year growth on subscriber ARPU should pick up in speed in the second half?
William Bardeen: So, Thomas, a couple of points there. I think that the only sort of color I'd say on sort of bundled cadence is that the cohorts are just getting bigger through the course of the year. So we're just seeing more and more coming through. And then, as you know, we don't guide on ARPU. I think there are a couple of things that I mentioned that are just giving us general confidence in what we have targeted, which is essentially modest year-over-year growth in total digital only ARPU. And those two things are that the experience we've been seeing so far on the bundled step ups is encouraging, retention and monetization. So, as that plays out with bigger and bigger cohorts, that's one of the things that is giving us confidence in ARPU trajectory. And then the second, as we mentioned single product subscribers and this is something that as we think overtime is also giving us a confidence, which is the increasing amount of engagement that Meredith has highlighted. And as we've found in the pattern, the more engagement that gives us pricing over -- pricing opportunities over time and also as a tailwinds monetization. So with those two among several levers, we feel good about the ARPU trajectory given the target we've sort of put out there the expectation for modest year-over-year ARPU expansion.
Thomas Yeh: Okay, makes sense. I mean on the standalone pricing front, I think last year you kind of pulled a lever for more of the tenured subs. Is it safe to say that there potentially is more appetite for that given the success of that rollout and the engagement that you spoke to?
William Bardeen: I think it's safe to say that as we continue to add value into the products and see that value reflected in increasing levels of engagement, meaning consumers are really experiencing that value. We're always looking at pricing and that's something that as a lever you should just continue to expect us to look at, and use as a way to continue to improve monetization over time.
Anthony DiClemente: Great. Thanks so much, Thomas. Operator, next question please.
Operator: Our next question comes from Doug Arthur from Huber Research Partners. Please go ahead with your question.
Douglas Arthur: Yes, good morning. Will, I was struck by the sales and marketing being down, I don't know 6% or something in the quarter. And your comment that the funnel of the organic traffic is driving more of the growth. Is that something, I mean obviously we've seen that before with NYT. Is that something you think the 2024 will benefit for the rest of the year? And then I got a follow-up.
William Bardeen: Yes, I think let me make sure I'm clear that I think we've always experienced and continue to expect to experience the vast majority of our subscribers coming in organically. I think on any given quarter that can fluctuate. We're very -- in terms of the amount of marketing we're actually spending, and so that sales and marketing line can fluctuate for a few reasons, but one of the main ones will just be how much media we're putting into the quarter. We're really ROI focused there. And we certainly consider leaning in when we see subscriber acquisition costs being particularly attractive. And that will -- so I think you can expect that to fluctuate around the quarter. Overall, as you've seen, this is a line given our strategy and everything we've said about the way our model works that we have seen leverage on and that we continue expect to get leverage on overtime.
Anthony DiClemente: Okay. Do you have a follow-up?
Douglas Arthur: Yes, I have just a nitpick. On Page 17 of the press release, you've got this content licensing item very small, 563,000. Is that A, is that new and B, is that an add back to adjusted EBITDA?
William Bardeen: Okay. So we're just making sure we understand what you were describing.
Douglas Arthur: I'm looking at the schedule on Page 17 with these -- what's broken out?
William Bardeen: Yes. So what that represents is essentially intercompany licensing between New York Times and The Athletic for use of athletic content at The Times.
Douglas Arthur: Okay. And I mean, it looks I mean, because you're laying out your costs here. So it looks like it's sort of a duplication add back. Is that in terms of normalized EBITDA, is that a fair way to think about it? We can deal with this later.
William Bardeen: It's expense to NYT Doug and then revenue to the athletic. So for the consolidated company wouldn't have an impact. If we're -- we can…
Douglas Arthur: Yes, we can follow on.
William Bardeen: We can follow on to make sure that we're talking about the same thing, but if we understand you right, that's the explanation.
Anthony DiClemente: All right. Well, with that, thank you all for joining us this morning. We look forward to talking to you again next quarter.
Operator: Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.
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