News Corporation (NASDAQ:NWSA) Q1 2022 Earnings Conference Call November 4, 2021 5:00 PM ET

Company Participants

Mike Florin – Senior Vice President & Head of Investor Relations
Robert Thomson – Chief Executive Officer
Susan Panuccio – Chief Financial Officer

Conference Call Participants

Entcho Raykovski – Credit Suisse
Alexia Quadrani – JP Morgan
Craig Huber – Research Partners
Brian Han – Morningstar

Operator

Good day and welcome to the News Corp First Quarter Fiscal 2022 Conference Call. Today's conference is being recorded. [Indiscernible] will be on a listen-only basis. At this time, I would like to turn the conference over to Mike Florin, Senior Vice President and Head of Investor Relations. You may begin, sir.

Mike Florin

Thank you very much, Bobby. Hello, everyone, and welcome to News Corp 's fiscal first quarter 2022 earnings call. We issued our earnings press release about 30 minutes ago, and is now posted on our website at newscorp.com. On the call today are Robert Thomson, Chief Executive, and Susan Panuccio, Chief Financial Officer. We will open with some prepared remarks, and then we'll be happy to take questions from the investment community. This call will include certain forward-looking information with respect to News Corp's business and strategy. Actual results could differ materially from what is said.

News Corp's Form 10-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to diver contain cautionary statements regarding forward-looking information. Additionally, this call will include certain non-GAAP financial measurements, such as total segment EBITDA, adjusted segment EBITDA, and adjusted EPS. The definitions and GAAP to Non-GAAP reconciliations of such measures can be found in our earnings release. With that, I will pass it over to Robert Thomson for some opening comments.

Robert Thomson

Thank you, Mike. We are journeying through the contours of our complex commercial landscape that has been a staling test of the metal of companies and countries. For us, the first quarter was the most profitable of its kind since the relaunch of News Corp in 2013. Continuing the trends that were evidenced in the last financial year and building on those rapid rates of growth. And we continue to have much confidence in our immediate and long-term prospects. I would like to honor the work done by our employees around the world.

They have cut with extraordinary exigencies and provided a prevalence service to their customers and to their communities that the Company's purpose has endured and indeed thrive through such challenging times is a tribute to repute and Lachlan Murdoch and the culture they created and have curated. Revenues for the quarter were $2.5 billion, an increase of 18%, while our profitability rose 53%. I should repeat that figure for clarity, profitability rose 53%. It is worth bearing in mind that this increase follows a 21% increase in profitability in the first quarter last year. Every one of our key operating segments posted significant revenue expansion and strong segment EBITDA growth.

I would like to reiterate that our Board authorized $1 billion stock repurchase program in September. As we previously indicated, we have refrained from executing on the buyback during this quiet period, but that period officially ends in coming days. It is a very different buyback to that which was approved in 2013, when we were unsure about share dislocation at the time of the separation from Fox. We now have confidence in our performance, our resilience, our ability to generate cash for our investors, and our potential.

Bolstering that confidence is the fact that our recent acquisitions are exceeding our expectations and our core segments are thriving. We now have an optionality across the businesses and significantly more flexibility in our ability to return capital to our investors. One note where they saw in that optionality is our ability to capitalize on the Peyton success of the Foxtel streaming strategy, which was highlighted during the Foxtel strategy day. We have been working through the potential permutations and will continue to provide updates as appropriate. In the meantime, it is worth noting that subscription video services segment EBITDA, rose a rather healthy 46% in the First Quarter.

As for our campaign to hold big digital accountable, clearly there have been pronounced and profound developments in recent times. We are pleased with the agreements we have reached and the work it has progressed on revaluing content. But we have always regarded the digital ad market as a separate issue. And the release of an underacted compliant by the Texas Attorney General last month, has highlighted the extent of the problem. The manipulative language was deeply concerning. We are obviously considering our position on this important matter and want to ensure that in the future, the Admark properly recognized the value of our audience and of our inventory.

Now, turning to the first quarter. Dow Jones recorded a 15% increase in revenues compared to the same quarter last year, with segment EBITDA surging 32%. That profitability was a record for the first quarter. Revenue at Risk & Compliance grew 26%, meaning that we have had 25 consecutive quarters of double-digit growth. Overall, the Professional Information Business experienced a solid 13% increase in revenues. And that should expand when we complete the acquisition of OPIS, which is expected to close early next calendar year. The past few weeks have highlighted the importance of intelligence about energy and carbon markets. and we fully expect to become a world leader in that area.

I've been talking at Dow Jones expanded a first quarter record of 29%, with digital advertising climbing 38%. Meanwhile, Subscription growth remains robust with a 19% increase across our consumer products to approximately 4.6 million with circulation revenues rising approximately 13%. The ongoing transformation of Dow Jones continues to pace, with digital now accounting for 75% of the segment's revenues. Digital Real Estate Services was again, a source of express growth with move, the operator of realtor.com, seeing revenue surge 30%. The U.S. housing market is sturdy with price rises moderating, more properties coming to the market, and longer listing times, all of which work in our favor.

As for the house flipping flip-flop by Zillow, we have always been focused on the digital markets, not on bricks-and-mortar and certainly not on sorting out the septic tank or papering over wall cracks. We concentrated on our core competency and never took on excessive Balance Sheet risk or chased what appear to us to be very low margin returns. It appears Zillow now finally understands what we always news to -- knew to be true. And that said, as an open platform, we do see opportunities to be a marketplace for the industry, including iBuyers such as Open-door, providing them with the same kind of dependable and trusted information that agents and consumers alike have valued.

In Australia, REA had a remarkable First Quarter with revenues burgeoning 62%. That is correct, 62%. Australia has slowly been emancipated from severe lockdowns, and access to homes for sale has been limited. So, we believe that positive market conditions will largely continue as the country returns to a semblance of normalcy. One Harbinger is that site traffic was strong in Q1 was 129 million average visits, up 13% year-over-year. That is essentially an average of five visits for every person in the country. That book business is thriving and even more so, with the successful integration of HMH.

Excluding the $50 million contribution of HMH, book sales have reset in the post-pandemic period, to around 22% higher than the same period in 2019. There has been a resurgence of interest in printed books as their tactility and talismanic quality is increasingly important at a time when many people have screen fatigue. We sold notable success in Q1 with the Bridgerton Series, The Authoritarian Moment by Ben Shapiro, and the Cellist by Daniel Silva.

In the months ahead, we have high hopes for the Pioneer Woman Coke super-easy by Ree Drummond. The storyteller by Dave Grohl, and Gangster Granny strikes again by David Williams. In subscription video services, the first quarter built on the significant progress made in FY '21 in reshaping the Foxtel group as a streaming LED business, would improve revenues, profitability, and cash generation.

For the second consecutive quarter, growth in Kayo and Binge revenues clearly offset the not-unexpected modest decline in Retail Broadcast revenues. As of September 30, total subscribers were approximately 4 million, up 18% year-over-year. This includes a record 2.2 million total streaming subscribers, up 68% thanks to Kayo and Binge. While there will always be a certain seasonality in sports viewing in Australia, Kayo is quickly establishing itself as a year-round provider as it now offers 50 sports in total, and is furnishing and gauging off-season programming for the football [Indiscernible] ahead of the new season early next year.

Foxtel 's appeal was further broadened with the launch of the Flash Streaming News Service, featuring a [Indiscernible] collection of 20 local and global news sources with content for all political persuasion. That breadth combined with a cutting-edge world-class user interface adds to the luster of Foxtel, and is indicative of its [Indiscernible]. We're now obviously in a position to be even more ambitious. So, Foxtel and are always seeking to maximize its undoubted potential. News Media was a strong contributor to News Corp profitability this quarter with segment EBITDA of $34 million in the quarter after a loss in the same period last year.

That is a tribute to Rebekah Brooks, Michael Miller, and Sean Giancola (ph.), and their talented committed teams. There transformation was in part due to the benefits of our deals with the major tech platforms, notably Google and Facebook. Together, these deals will contribute annual revenues in the 9-figures to News Corp, clearly putting our News businesses on a more profitable path. Despite the successive lock-downs, our Australian business is faring well, showing significant improvement in profitability thanks to cost initiatives and rising digital advertising revenues, and used milestones subscription, which improved to 850,000, up 24% year-over-year.

News U.K. performed admirably, particularly in advertising. Both digital and print and in subscriptions. The Times and Sunday Times, contributed meaningfully to profits and their digital paid subscriptions have now reached 380,000. Wireless and radio network increased its revenue and profit contribution with exclusive football broadcasts, drawing large audiences and increased advertising. Wireless reported record rates of 6 million unique listeners per week according to the most recent, rage our survey.

A broadcast expertise is assisting our other media properties in the UK and will complement Talk TV, which is scheduled to launch in the early months of 2022 with Piers Morgan taking a global role across our broadcast and news properties. We believe Talk TV will be contemporary, low-cost, and high impact. In the U.S. the New York post, once legendary loss-making, is now contributing to segment profitability. And is an increasingly important voice in the national political divide.

Its digital network reached 151 million unique users in September, almost half of the U.S. population, according to Google analytics. Digital Advertising revenue was 28% higher compared to the same quarter last year. And print advertising increased 62%, recovering from the COVID related lows of last year. The Company built on its momentum from last fiscal in the first quarter, and we remain optimistic about growth prospects going forward.

Clearly, there are macroeconomic pressures affecting certain companies, but our increasingly digital orientation has bolstered our ability to weather the pandemic and deal with the economic uncertainty in some of our markets. We are confident in our employees, confident in our businesses, and very confident in our prospects. And now, for further detail -- for further details and invaluable insight, I cede the floor to Susan Panuccio.

Susan Panuccio

Thank you, Robert. As Robert mentioned, strong operation dimension that, made last year so successful has continued into our first fiscal quarter results. Fiscal 2022, first quarter total revenues, were over $2.5 billion up 18% marked by higher revenue growth across all our key segments, notably at Digital Real Estate Services. Total segment EBITDA, was $410 million up 53% versus the prior year. The highest quarterly growth rate since 2017, despite the challenges from the lockdowns in Australia and comparing against 21% total segment EBITDA growth in the prior year.

Excluding acquisitions, currency fluctuations, and other items disclosed in the release, adjusted revenues and adjusted total segment EBITDA, rose 10% and 47% respectively. Reported EPS were $0.33 as compared to $0.06 in the prior year. Adjusted earnings per share were $0.23 in the quarter compared to $0.08 in the prior year. Moving on to the results for the individual reporting segments, starting with Digital Real Estate Services, segment revenues were $426 million, an increase of 47% compared to the prior year, on an adjusted basis, revenues increased 29%. Segment EBITDA rose 16% to a $138 million or 21% on an adjusted basis.

Despite the higher investment spending at move and REA, and tough comparisons against the prior year cost declines implemented to counter the impact of COVID. Move 's revenues were $180 million, a 30% increase year-over-year, with real estate revenues rising 39% and accounting for 87% of total revenues. Revenue growth was again led by the traditional lead-generation business benefiting from strong agent demand and improved sell-through and yields. We're also seeing early success with the roll-out of Market VIP, a hybrid product offered to Move's top-performing agents.

The referral model saw strong revenue growth, and accounted for approximately 32% of revenues driven by record high in values and increased transaction volume. Revenue growth was partially offset by the divestiture of Top Producer in March, negatively impacting revenues by $5 million or 4%. We time prices at record highs and supply limited, lead volumes fell approximately 18% compared to over 40% growth last year, all be it, with lead still around 15% higher than pre -pandemic levels.

Encouragingly, new listings are up from their recent lows and we have seen moderation of lead volume declines in September and October. Pricing remains robust given strong agent demand. REA had an exceptional quarter with revenues rising 62% year-over-year to $246 million including $7 million of 3% positive impact from currency fluctuations. Results benefited from $43 million of contribution from the Mortgage choice acquisition and $8 million from the consolidation of Elara, which is being re-branded to REA India.

The underlying performance was very encouraging, with Australian residential revenue growth driven by an increasing penetration, price increase, and favorable product mix. The revenue growth was also driven by an 11% increase in new buy listings despite lock-downs across multiple states, including restrictions on physical inspections in Melbourne. Melbourne listings rose 79%, while Sydney fell 7%. Financial services also benefited from highest settlements and submissions.

Please refer to REA 's earnings release and their conference call following this call for more details. Turning to the Subscription Video Services segment, revenues for the quarter were $510 million up 3% versus the prior year benefiting from higher streaming revenues and the modest benefit from positive currency fluctuations, partially offset by lower broadcast and commercial subscription revenues. On an adjusted basis, revenues were flat. Total closing paid subscribers across Foxtel reached nearly 3.9 million as the quarter end up 17% year-over-year, with total subscribers including trialists approximately 4 million.

The increase was driven by continued growth in paid streaming subscribers, partially offset by a decline in broadcast subscribers and commercial subscriptions, which were exacerbated by the impact of the lockdowns in Australia. [Indiscernible] end of the quarter with approximately 1.1 million and 885,000 total subscribers respectively. In the aggregate, total paying streaming subscribers were up more than 69% to nearly $2.1 million and total streaming subscribers including trialist reached over $2.2 million.

Streaming products in the aggregate reached approximately 54% of Foxtel 's total paid subscriber base. Broadcast turn improved declining to 14% from 14.6% last year and 17.1% in the fourth quarter. Broadcast ARPU increased 4% from the prior year to $82 Australian, mitigating subscriber volume declines consistent with Foxtel strategy of focusing on higher ARPU subscribers and fewer low cost offers. Foxtel continues to see an improvement in subscriber mix as a percentage of higher-valued long continued subscribers continue to rise with a corresponding decline in churn rates.

Net declines for residential broadcast subscribers moderated sequentially with 1.6 million broadcast subscribers at quarter end, commercial subscribers were down over 30% from the fourth quarter to 162,000. And we do anticipate a recovery for commercial subscribers in the second half with the easing of restrictions. Product innovation continued with the launch of iQ5 and IP-enabled set-top box, the announcement of plans to partner with Comcast and Sky on the launch of Sky Glass, and the launch of a third streaming product slash, a dedicated live news streaming service featuring more than 20 local and global live new services. Segment EBITDA in the quarter was a $114 million, up 46% compared to the prior year.

The improvement was primarily driven by $34 million of lower sports costs benefiting from the $36 million of negative impact seen in the First Quarter of fiscal 2021, related to deferred sports costs from the Fourth Quarter of fiscal 2020. Adjusted segment EBITDA increased 42%. Moving onto Dow Jones, Dow Jones delivered revenue of $444 million up 15% compared to the prior year with digital revenues accounting for 75% of total revenues this quarter, up 2% points from the prior year. Adjusted revenues, which notably excludes the impact of IBD, rose 9%. As Robert mentioned, both revenues and profitability with the highest First Quarter results since this acquisition.

Circulation and subscription revenues increased 12%, including 13% circulation revenue growth, primarily reflecting the acquisition of IBD and the continued strong volume gains in digital-only subscriptions. Dow Jones subscriptions to its consumer products increased to an average of approximately 4.6 million in the quarter, up 18% from the prior year. Off that, over 3.6 million were digital-only subscriptions, up 24% year-over-year. IBD accounted for 100,000 digital-only subscriptions, and a 128,000 in total subscriptions. Professional information business revenues rose 13% accelerating from the prior quarter. Revenue growth. From Risk & Compliance increased 26% driven by a higher entry rate and strong growth across the Americas, Europe, and Asia. We also saw modest improvement at [Indiscernible]. Advertising revenues, which accounted for 20% of revenues this quarter, grew 29% to $90 million, the highest First Quarter growth rate since acquisition.

Digital Advertising trends remained robust, up 38% on top of 14% growth in the First Quarter of the prior year an accounted for 61% of total advertising revenues. All categories performed above expectations, most notably in technology and finance, and we continue to see improving yields. Print advertising revenues were robust, rising 17% year-over-year, partially benefiting from the COVID-19 comparison. Dow Jones segment, EBITDA for the quarter rose 32% to $95 million with EBITDA margins improving by almost 3% points to 21%, despite an 11% increase in total cost, which included IBD and higher employee costs.

On an adjusted basis, segment revenues and EBITDA for the quarter rose 9% and 24% respectively. At book publishing, HarperCollins posted 19% revenue growth to $546 million and segment EBITDA rose 20% to $85 million. Adjusted revenue and EBITDA rose 7% and 10% respectively versus the prior year. Despite a difficult prior-year comparison, book consumption levels remain elevated, overall consumption across the industry remains higher than pre -pandemic levels and materially above the historical low single digit type revenue growth. This quarter benefited from a rebound in Christian Publishing, which was more exposed to the closure of retail stores in the prior year and higher sales in the UK.

General Books saw healthy growth benefiting from new releases coupled with higher backlist sales from the Bridgerton series by Julia Quinn. Digital sales raised 5% this quarter and accounted for 21% of consumer sales. The Barclays represented 62% of revenues, up 2% points from last year, underscoring the importance of the steady high-margin revenue stream and a key factor behind the acquisition of HMH. HMH integration continue to progress well, and is in the process of being integrated into a full imprint structure within HarperCollins.

We remain on track with our savings target of $20 million to be delivered within the first 2 years. Overall, HMH contributed $50 million in revenue, and $6 million in segment EBITDA this quarter. Turning to News Media, revenues for the quarter were $576 million up 18% versus the prior year, benefiting from the continued recovery in the advertising market, strong growth in circulation and subscription revenues, and a $25 million or 5% positive impact from foreign currency fluctuations. Within the segment, revenues at News UK and News Corp Australia increased 18% and 14% respectively.

Wireless Group and the New York post also showed strong top-line growth. Adjusted revenues to the segment increased 13% compared to the prior-year. Circulation and subscription revenues rose 16%, which included a $30 million or 5% benefit from currency fluctuations, strong digital subscriber growth, incremental revenues from our platform agreements, and cover price increases. Advertising revenues increased $39 million or 21% compared to the prior year. Benefiting from the COVID-19 comparison with particular strength in digital across our businesses.

On a reported basis, advertising revenues in Australia rose 5% or 2% in local currency, despite the negative impacts from the lockdowns. While News U.K. advertising revenues rose 36% or 28% in local currency. In the U.S., the trends remained strong with the New York Post posting 32% advertising revenue growth. Segment EBITDA of $34 million increased $56 million compared to the prior year, reflecting higher revenues, cost savings at News U.K. and News Corp Australia, and a modest positive contribution from the New York Post. Adjusted segment EBITDA increased $52 million to $30 million. I would now like to talk about some themes to the upcoming quarter.

Notwithstanding our strong results in the prior year, we remain encouraged by overall trends. Like many companies, we are closely monitoring supply-chain issues, particularly in book publishing in our mastheads as well as the impact of wage inflation on talent and retention. At Digital Real Estate Services, Australian residential listing through October rose 16% and we are encouraged those restrictions on physical inspections, notably Melbourne [Indiscernible] east.

At move, we continue to see strong yield improvement despite the neat-term challenge on lead volume given the ongoing supply issues, like the first quarter, we expect to continue to reinvest in Move as we drive the core business and expand into relevant adjacencies. The rate of cost increase year -- one year in the first quarter was exacerbated by the COVID-19 savings initiatives in the prior-year across headcount and marketing, we expect more moderate year-over-year cost increases for the balance of the year.

In subscription video services, we remain pleased with the ongoing performance of Kayo and BINGE and the efforts to improve broadcast ARPU and Churn. We do expect seasonality in Kayo given the end of key winter codes, but look forward to our summer schedule with the Ashes and the Cricket World Cup in the second quarter. Costs are expected to be higher in the second quarter, most notably for entertainment and sports rights, as well as some higher marketing to support the launch of Flash, the new streaming offering. Overall, we continue to expect cost for the full year to be relatively stable in local currency.

At Dow Jones, overall trends across the business remains strong with advertising and subscriptions growth continuing to perform well. In book publishing, overall trends remained favorable despite lapping the benefits from COVID-19. We have a strong release lineup in the Second Quarter including titles from Ree Drummond [Indiscernible] At News Media, we continue to expect the segment to show profit improvement, partially benefit from the recent content licensing revenues.

We do expect some additional costs in the UK as we expand more into video content and leverage our key brands and mastered. CapEx was modestly higher in the first quarter, and we continue to expect full-year CapEx to be up a $100 million versus the prior year. And finally, we remain focused on driving strong and positive free cash flow generation for the year, with the first quarter free cash flow impacted by the timing of working capital payments. With that, let me hand it over to the Operator for Q&A.

Question-and-Answer Session

Operator

Thank you. [Operator instructions]. If you're using a speakerphone, please make sure the mute function is turned off to allow your signal to reach our equipment. [Operator instructions]. Please limit your questions to one at a time. We will pause for just a moment to allow everyone an opportunity to signal for questions. Our first question comes from Entcho Raykovski with Credit Suisse.

Entcho Raykovski

Hi Robert. Hi Susan. I've got one question, one just very quick follow up. Basically, you comment on maximizing value at Foxtel. Obviously, this has been widely reported in the press, but is an odd [Indiscernible] option you considering. And what's the potential timing on whatever considerations do you have? And then secondly, just, I know Robert you mentioned, [Indiscernible] winding down. They [Indiscernible] model. Do you expect to see any impact on Move? I mean, could that perhaps get [Indiscernible] closer to some agent to perhaps an indecent franchise bio Move, any comments would be helpful.

Robert Thomson

Entcho, on Foxtel. Look, it's inappropriate at this moment to discuss specific to the review. But clearly, we and our partners at Telstra recognized that the prospects of Foxtel have changed fundamentally and that we have a streaming success story. Look, we've had cutting edge world cost tech and we have a user interface. But as vastly improved and we have a team led by Patrick and [Indiscernible], and they will drive further success most surely. Think about how the narrative has changed over the past two years.

As you recall, we had been asked about the skeptics whether we would need to put more money into the Company. And let's examine what happened. We took a majority stake because we believed more clarity, more responsibility, more decisiveness was necessary. We've used our media platforms to complement and promote the quality of Foxtel. Our team made some tough decisions to rationalize, made some smart decisions on streaming and systems and here we are today. So, whatever we do we will not be naive, naivety is not now [Indiscernible].

And as for Zillow, obviously, we had discussed ourselves getting into bricks-and-mortar but we had a very clear sense of the digital priorities. Don't forget that we had revived -- renovated the distinctly unfashionably realtor.com. We bought it on the cheap net about $700 million. What's it worth now, $6 billion [Indiscernible] What will it be worth in 5 years as the inevitable digital march continues [Indiscernible] $20 billion [Indiscernible] So we've been very focused, diligently so to service for vendors, buyers, and realtors.

As for Zillow, look, the idea that it was simple to find a great plumber plus or a plan or a planter, the idea, the process was not variable and subject to vicissitudes, the idea that holding inventory was not itself costly. To me, those were rather strange ideas. I'm not sure what impact Eventually when Zillow makes up its mind on what type of businesses it is, they will have on the market. But I can talk from my macro perspective. First of all, very confident in REALTOR 's prospects, but also very confident in the U.S. real estate market generally.

It's a marketing transition and the laws of supply and demand still apply. Prices are too high; 2 things will happen. Buyers will start hesitating, more sellers will appear on the market, is the immutable way of the world. And I suspect we're very much in a moment of such transition which is good for REALTOR. Of course, interest rates will be a factor, but over the foreseeable future, we're still talking about either historic lows or near historic lows. And more significantly for us, we're seeing a more enduring trend starting to take hold. And it was a myth that millennials would not want to our own their own home.

That there would be a WeWork version of home, WeHome, or that car sharing meant that we wouldn't mind sharing bathrooms and lounges. Will that myth have been well and truly debunked? COVID coziness not really a thing. Work from home implies that you have a home. And I do recommend a sage article this week in barons on that subject. So, some of the myth of this suppose share economy has certainly been shattered. So, price increases of moderating, interest rates are relatively low in the USC eviction moratorium is mostly overtime on the market gradually increasing. Our massive increases in audience traffic 30% to 40% more than pre-Covid and leads 15% to 20% above pre -pandemic levels all tell us that there is deep demand. And in short, we are rather excited about REALTOR 's prospects now and far into the future.

Mike Florin

Thank you. And Joe, Bobby, we'll take our next question please.

Operator

Thank you. Our next question comes from Alexia Quadrani with JP Morgan.

Alexia Quadrani

Thank you. In the news Media business, I was wondering if you could sort of pontificate or give us an idea of what you think the overall opportunity is even longer-term from licensing fees, from tech platforms over time. And then just a quick follow-up on Foxtel, with some of the streaming platforms, the S5 players launching their own platforms in Australia. Do you see that as incremental competition or how should we be that?

Robert Thomson

First of all, on News Media, what you're seeing is really a transformation led by our chains, as Susan mentioned. Whether it be ad revenue, which shouldn't -- in the UK was up 36%, Australia 5%, New York Post, 32%. SEC revenues overall up 16%, in the UK 13%, Australia 9%. You're seeing a lot of hard work done by our teams in being very diligent about costs, but also being focused on growth. Certainly, the big digital deals will make a difference to all of our publications.

And frankly, all we can say given the constraints of confidentiality, is it the deals mean that comfortably over 9-figures are flowing into the News companies in return to the highest quality new services in 3 separate continents. Though unfortunately we are yet to reach agreement with Facebook, or the artist formerly known as Facebook in the UK. We are watching closely the evolution of possible legislation there that channels the Australian legislation, which would be handled. With Google as well, it's not just about payments. It also means working together on new products in audio and video.

And that's the content side. And those are productive discussions [Indiscernible] ideal, and it applies to both companies is the ad tech conundrum. We have always kept the ad tech issue to one side as I strongly believed that there were 2 components in need of resolution: the value of content and digital ad dysfunction. I was fairly confident there would be document discovery and the Texas Attorney General 's complaint has revealed some of the rather disturbing details. And I have little doubt that the Department of Justice will add to that detail in coming days. Now, how we resolve these issues does indeed remain to be seen.

Susan Panuccio

And Alexia, on your second question you asked about the SFUAD competition within Australia. And I think the Foxtel team did a great job of talking about this at the strategy day. Around -- basically the great content they have within sports, particularly the AFL and our own quicker contracts that they have.

They had long-term relationships with the studios and have developed a very good working relationship with them. And there is great aggregator of the services down there. So, I think, while there is clearly competition that is coming into that marketplace down there, they are operating very well within that current environment.

Alexia Quadrani

Thank you.

Mike Florin

Thank you, Alexia. Bobby, we'll take our next question, please.

Operator

Our next question comes from Craig Huber with Huber Research Partners.

Craig Huber

Yes. Hi. My first question, you talked about, like in relation to a question from one of the guys on the phone that you will -- on the ongoing review of Foxtel from strategic standpoint. I'm just wondering for the rest of the Company is there any other reviews going on and then obviously, a lot of investors view rightly or wrongly that the Company is overly complicated as if I'm wondering if there's any other ongoing reviews going on with the Company? And my other just nitpick question usually tell us what the changes year-over-year in EBITDA at realtor.com, can you provide that for the quarter, please. Thank you.

Robert Thomson

Craig, as a simplification, kindly we are constantly reviewing our structure. As you know, we've sold quite a few companies along the way. The local newspaper business at Dow Jones, which we presumed would struggle and that didn't turn out to be the case. Amplify which found a bit of home. News America Marketing was less meaningful to us as sprint sales declined somewhat. unruly, which has found a welcome home elsewhere and within we still have a relationship. But Ad-tech let say is for others.

So, we will constantly be institutionally introspective, reviewing our structure with Foxtel or Digital Real Estate, or -- as we have done to designate Dow Jones as a separate segment so that you can see not only the potential there but also to be clear about the very positive progress that the team is making in news media. We've made many changes. Those changes have been productive and profitable, and we will never stop questioning or challenging ourselves.

Susan Panuccio

And Craig, just on your question in relation to REALTOR, as you know we don't give the EBITDA number but the year-on-year difference was up $6 million negative in relation to REALTOR. And one of the main reasons for that is the continuing investment in growth in that business within marketing and headcount.

Craig Huber

Thank you

Mike Florin

Thank you, Greg. Thanks, Greg. Bobby, we'll take our next question, please.

Operator

And our next question comes from Brian Han with Morningstar.

Brian Han

Hi. 2 very quick questions if I may. On capital management, are there any technical or legal impediments to increasing your annual dividend amount, or do you feel that buyback just gives you more flexibility down the track. And secondly, enrolled -- let me try this again. But can you please comment on how much EBITDA was booked in the first quarter from the licensing deals with the big digital platforms.

Robert Thomson

Clearly, we've focused on the buyback and we're now in a position to begin the buyback, as we've had to wait until the earnings announcement, given the regulatory restrictions in the quiet period. That quiet period, is almost over and you will soon hear the sound of buyback. The pacing depends on being rational about the trends in the market, but this is a very different buyback to that initiated the time of the split. As you know well, at that moment, we were worried about unexpected share dislocation.

And what are the provision to intervene if and when necessary, during that unprecedented unpredictable period. Now, we're on an entirely different epoch. The Company patently has momentum. We are confident about our cash generation potential, our ability to both invest to grow, and to return capital. So, as I mentioned, now that the quiet period is almost over, you will soon hear the sound of buyback.

Susan Panuccio

And Brian, just in relation to your question on the content licensing, we haven't given out that number apart from saying it was going to be into 9 figures. And just in relation to how that's going to be pacing over the course of the year. We would expect to grow as more products within those particular contracts launched like for instance, showcase over here in the U.S. So, we would expect to see that build as we go throughout the year. And we talked previously in relation to that about a high-level allocation of switching between the News Media segment and Dow Jones.

Mike Florin

Thank you. Brian. Bobby, will take our next question, please.

Operator

No further questions at this time. I will turn the call back over to you for any closing remarks.

Robert Thomson

Great. Well, thank you, Bobby. And thank you for all participating. We look forward to talking to you soon. Have a great day. Take care.