Warner Bros. Discovery, Inc. (NASDAQ:WBD) Bernstein's 40th Annual Strategic Decisions Conference May 30, 2024 8:00 AM ET
Company Participants
David Zaslav - President and Chief Executive Officer
Conference Call Participants
Laurent Yoon - Bernstein
Laurent Yoon
All right, let's get started. And hello, everyone. Thank you for joining us this morning. I am Laurent Yoon, I cover U.S. Media and Telecom at Bernstein. It is my great pleasure to introduce to you the CEO and -- President and CEO of Warner Brothers Discovery, David Zaslav. Thank you for making the time to be here this morning.
David Zaslav
Thank you, Laurent.
Laurent Yoon
Since Warner Brothers Discovery is a media company, we'd like to do this a little bit differently. We would like to start with a video to show you all the great things that Warner Brothers Discovery has, right?
[Video Presentation]
Question-and-Answer Session
Q - Laurent Yoon
Alright, that's pretty awesome. Yes, so the first time I watched this, something like this, a few years back, I was kind of amazed with the plethora of content that the company has. And obviously this is not just one company, this is actually in the past four years, the two companies have come together, two big companies coming together to be even a bigger company. You're managing two companies with kind of different focus in the type of content that we're doing, I'm sure very different cultures and different history. The first I'd like to start off with, what is it, how has it been, right? Putting the two big companies together with some priorities perhaps in the past?
And obviously you and your management team have been very busy, right? Streaming lining the plate, making sure they capture all the cost efficiencies and growth and all that. But going back, what is it like to kind of combine the two companies. How do you incentivize the [Technical Difficulty] your team with different set of businesses, some growing, some not. You have to make trade-offs across the organization. What has it been like?
David Zaslav
Well, it's been a little over two years. I think what you were able to see there is just a little of what we do. Warner Bros. Discovery is probably the greatest storytelling company in the world. That's all we do. We're just a storytelling company. But over the last two years, we've set on this journey of multi-year plan to transform this company for the future. How do we take all this great content, all these great creatives, and rebuild this company as if we started today, the world that we're living in. And we're making a lot of progress. We're making a lot of progress on our balance sheet. We're making a lot of progress on the creative side.
And I think our greatest strength is the diversity of great content that we have. And it's a mantra within the company. Our philosophy is the best content wins. And if we have the greatest content, our job is to get it around the world to make sure everyone can see it. And that's been our focus.
Laurent Yoon
Got it. Speaking of content, I think industry overall, especially in the past couple of years, had challenges creating great content. Maybe one of your editors in particular have talked about how it's been very challenging with the storytelling. Warner Bros. Discovery, especially the [Technical Difficulty] the company has produced very high quality content day in day out. We got Succession, we got Game of Thrones, The Last of Us, Harry Potter, DC Comics, this is quite impressive. We had Barbie last year. It's very consistent. One question that comes up quite often is how is your company able to consistently produce high quality content, while some of your competitors have had that trouble, especially in recent years?
David Zaslav
Well first it starts with the quality of people. Casey Bloys and the whole team at HBO and Max are having an extraordinary run. House of the Dragon is launching next week, The Last of Us, Succession, White Lotus. So it really starts with a great creative team. But we have a big advantage. The company's been around for a 100 years, and we have some of these tentpole IP storytelling content that people know everywhere in the world. So whether it's Superman or Batman or Wonder Woman, our whole DC franchise that James Gunn is really driving, or whether it's Harry Potter or Lord of the Rings or Game of Thrones, we sit with content.
And the good news for us is a lot of it has been underused. So really deploying Harry Potter for 10 consecutive seasons, which will launch in ’25. So getting back to making movies with Peter Jackson, we put in a great team at Warner Brothers and taking advantage of the fact that we have certain content and that may only be a third of what we do. A lot of it is creating Ted Lasso or Shrinking or Abbott Elementary. But when you look at our company, it isn't just that we have great people. We've hired some of the best people working for Warner Brothers Television.
So Warner Brothers Television is the biggest and most successful quality maker of television, but we have Bill Lawrence working for us, Chuck Lorre, Mindy Kaling, JJ Abrams. So I think being the place that people want to come is key to us. And I think the fact that we're just a storytelling company, whether it's on -- in the theaters or whether it's on HBO or whether it's content that we create and sell to Netflix or Apple or Amazon. That's the culture that's really going to have, I believe, going to make us a global winner.
Laurent Yoon
Got it. So I think one thing we -- that often also comes up is recognizing that Warner Bros. Discovery does have an amazing slate of content and an IP, library of IP that you can leverage. Perhaps one disadvantage that you may have is scale, right? So you have your competitors, who may not be producing with high quality content, but they do have kind of okay-ish content that's introduced. There's something always new to watch. How do you solve that problem, because you kind of need to have both, right, to make sure that you have custom client consumers who want to be on the platform and what really drives that is the engagement. How do you solve for the evening part of that equation?
David Zaslav
Well, scale is very important. And as we look at our business, the first thing we needed to do on our Max HBO product was rebuild the actual product itself, build an algorithm. But right now, we're primarily U.S. We have 100 million homes, but this is a real catalyst opportunity for us. The DNA of our company is international. When I was at Discovery, I got there, we were three channels, we grew it to about 14, but then we launched channels everywhere in the world. And then we launched sports around the world. And so, we're in 185 countries, we're in every language, we have content that we produce or sports that we have in every country, and it's been very effective for us as a company. We're the number one global company in the world.
But we hadn't launched Max globally. If you look at a lot of these services that have bigger scale than us, thirds of their subscribers come from outside the U.S. So in the last month we launched in Latin America and we just launched in Europe. The big kickoff will be, we have the Olympics in Europe, that you get all the Olympics, the only place to get all the Olympics will be Max, and then our product will roll out. And so I think the next 12 to 24 months for us is going to be very exciting, because we got our product right, we have I think a really unique advantage in that we have local content and local language with libraries, we have the breadth of HBO and Max, we have local sports, and we're bringing all of that now to Latin America and to Europe. And it’s exciting because I think it gives us a chance to really scale.
In our models, we expect that at least two-thirds of our subscribers over the next several years as we grow will come from outside the U.S. So we still think that there's growth left in the U.S., but the U.S. is relatively mature. We can still grow subs, we can still grow ARPU, but the real growth engine for us is to be global. And when I look at media companies, I think it's very difficult to be a U.S. only company. The real success of Discovery was that we were global. And I think this next step for us, we're fully global, on linear and free to air. Having a real service that people can access on all devices, it's going to be a -- will be a big advantage to us and I think a big growth engine for us.
So by having more subscribers, it's something in the U.S., but to your point, it's in the term market, having more subscribers outside the U.S. market will drive perhaps not more engagement on a per subscriber basis, but the total engagement across the globe will increase. Where does bundling come into that picture, right? It's obviously been a hot topic since the earnings and the announcement, the bundling with Disney. There's a lot of optimism around that, like what it may look like and what it may do for both of your platforms, right? How does that help drive overall engagement and subscription growth going forward?
Well, I've said -- I’ve been talking about bundling for the last two years. The real focus of our company in terms of driving this transformation and this multi-year plan has been that this is a generational disruption. The disruption is not as much around content. People are watching more content than they ever have, and quality content is more important I think than it ever has been. But the way that they receive it, the distribution method, whether they get it on their device, whether they get it from one app, the -- it’s a right now it's a really challenging environment for consumers. So if you hear about a show, you hear about a sport, you got to Google it. Where is it? What platform is it on? And so, the consumer experience is challenged. We've got used to it, but over time, I'm convinced and we're convinced that, that experience will get better. And we need to drive it to a better consumer experience, which will get us better economics and a better product.
So one, we think bundling provides a better consumer experience. We have two initiatives that will be rolling out in the next month or in the next three months. One, is our sports venture, which will roll out this fall, which is Disney, Fox and us. It's a very contemporary product. It's an app. If you want to see hockey, you can see all the playoffs in one place. You can see all the baseball in one place. It's a different approach, we think it will be very attractive and it will be a better consumer experience, a real contemporary consumer experience.
The Disney bundle is another example where we think it should provide first and foremost a better consumer experience. You get Hulu, Disney+, and Max. And if it works, and Disney and we are really going to drive it here in the U.S., it should reduce churn. Two of us will be marketing one product. And because we're doing it directly, the ARPU could be quite compelling for us. So I think it's the beginning of this transition from people going to 10 different apps. Eventually, I think there's going to be four or five. And we're convinced with the best content, the best quality content in the world, and maybe more global content than anyone else, it will be one of those. And as the bundling happens or as the consolidation around the world happens, I think that the economics around the business will get better and better.
Laurent Yoon
So I'd like to peel the onion a little bit on both the sports venture and your partnership with Disney. On the sports venture, just based on what's on the press, if I think about how Fox, the partner of Fox, is thinking about that. It is a -- what they have expressed is the opportunity to reach consumers who may not have a sports package today through traditional pay to [Indiscernible] offer. On the other hand, maybe Disney on the other hand, maybe their perspectives is not so much about the incremental opportunity, but just making sure that there are different tiers of products that are available across different price points. I think relative to the two companies, I think your company has been, I wouldn't say silent, but less vocal about the potential benefits of it? Where do you stand? Do you think this is more about how Fox is thinking about it as in, in terms of incremental subscribers, reaching customers who may not have a package today, or is this more about how Disney is thinking about as having all the product tiers available for customers with different budgets for these packages?
David Zaslav
In the end, the consumers are going to decide what they love and what they're willing. I'm excited about this, because I think it's a great product and this whole idea of what channel it will sport on goes away. It's all there for you. And so -- and that experience is as good as we think it's going to be, and we'll listen to the consumer and build on that. And I think it could be a very big business for us. And it's critical for us to work to create products that are contemporary.
To your point, we have a business called Bleacher Report in House of Highlights, between 30 million and 40 million people a month to comment. It's a sports product. But 80%, it's very young, below 30 is the average demo. And about 80% of those that are on Bleacher and House of Highlights are not signing up for cable, and yet, they're very interested in the content that we have. So by building these bundles, by creating a sports product, I think we’re creating a great invitation for the next generation to come on to a contemporary, exciting new product and see the sports that they love, and we'll learn a lot from it.
Laurent Yoon
So moving on to that Disney+ Max bundle. You mentioned something interesting on how you describe the product. So you mentioned today, there are different prices to [Technical Difficulty] you have content in one place you could come and experience it. Does it imply that for example, like creation, you want to release just I'm getting two different products at a discounted price, but I still need to open, let's say, two different apps to get to the product or the content? Or are you talking about combine new experiences is something perhaps not in line in terms of experience?
David Zaslav
Well, for the bundle really to be effective, it needs to be that when you go there, you can move across the full program offering. So my grandkids might be watching a Disney+ movie, but then when they're finished, they would want to watch Harry Potter. And then at night, you might want to watch Succession. And so the seamlessness of it is important, and that's what would drive about it.
Laurent Yoon
Okay. It's a seamless experience [Technical Difficulty]. Okay, so at the upfront a couple of weeks ago, I went to every single one of them. And in every single one of them, there is a funny comedian who would kind of talk about -- making fun of the bundle, right? The basic table coming back and et cetera. Maybe to some degree, that may be true, but how would -- how -- do you envision the streaming bundle in terms of the consumer experience to be different? Or is this like, over time, something that we've seen with the pay TV offering in the past?
David Zaslav
Well, first, one of the issues with the streaming services is that the churn is too high. People are coming in and then moving from product to product. And so one of the things that's really challenging the long-term economic and economic growth is churn and scale. We're addressing the issue of scale by launching globally and really attacking the globe with what we think is very compelling content in language with teams on the ground, try and build the scale that should really drive the economics both in term and drive the subscribers and prove out that Max is a very compelling growth business. But separate from that is the issue of churn.
And by bundling together, that will be -- we have found that if we bundled together with other content that more people in the family like. On a very basic level, the more often you watch a product, the more people in the family that watch the product, the lower the churn. And as we talk to consumers, one of the biggest issues though, is finding the content that they like. And so when you do bundle, if you're bundling with the right players, I think Disney, the idea of Warner Bros. Discovery and Disney together, it's a very compelling offering, we think that will provide a more nourishing and better consumer experience.
The other thing that started to happen, which is -- which makes us really optimistic in terms of a new vein of growth is, as we're launching outside the U.S., a number of the traditional distributors that were broadband and cable or broadband and mobile, their overall philosophy was they were in the broadband business and they're in the multichannel for the home business. And the whole idea of the channel store was Roku or Apple or Amazon.
What we've started to see now, particularly in Europe, is the idea that those distributors, we're having discussions with them now about they don't want the younger consumer or the younger consumer and the family to leave their multichannel environment or leave their company. And so we're doing deals now that's hard bundling maxed with distributors. So for instance, Canal Plus. We're on their platform as a traditional multichannel provider with multiple channels in free-to-air. They have broadband. But then everybody that gets their broadband gets Max.
We did a similar deal with Telefonica. And those -- because they're hard bundled, you're picking up significant subscribers, whether it's 1 million or 2 million incremental subscribers. In some cases, It's less, in some cases, it could be more. Gaining those subscribers provide real economic value, the ARPU was quite compelling. You don't have the churn. We're still in France, and we're still in Spain now that we're going to be promoting directly to consumers. But if you're a customer of Telefonica, we're getting paid on every one of those. It feels a little bit like the old model sturdy, low churn and you don't need to spend as much in marketing because of that.
So as we launch outside the U.S., it's bundling. One is we think our product is the right product at the right time. And we -- this is who we are and what we do. We're on the ground in every country in every language. But bundling with other providers that have great content that complement ours, together with this idea of hard bundling with distributors that are looking to have a bigger play in this new world and who want to have a content environment on their broadband is a potential real growth opportunity for us.
Laurent Yoon
So after watching the video, perhaps I got a little too excited and jumped right into the questions. There's a sort of overarching question that I forgot to address, and I want to address it now so that we don't miss it. So one quick context here. For those of you who already know that David has been around in the industry for a long time. He started as an attorney in the industry, the senior executive at NBC [Technical Difficulty], which is now part of Comcast where, where I used to work a t and he became the CEO of Discovery. And of course, now he's the CEO of Warner Bros. Discovery, the combined entity. So I'd like to say we have an adult in room and I have an overarching question in the industry.
So the question is about industry disruption in general. And again, one context for some of the generals here, is that the media industry has already gone through many disruptions over the past century, right? And obviously, the Warner Bros. Discovery has been around over the past century. It's been around for a long time, not you, but the company has been around for a century and it has gone through multiple transitions, right? You went from plant to video went from black and white to color, then from TV broadcasting to Pay TV in every one of the East whenever that happened, there was a pretty significant disruption in the industry, right?
And obviously, Warner Bros. Discovery has outlived it and here we are this one that we're going through now, the disruption through streaming feels a little different. It seems perhaps because we're [Technical Difficulty] large companies, very well capitalized and [Technical Difficulty] businesses in it was really challenging for the core media companies [Technical Difficulty] what has -- it happened in that two-part question here.
The first part is how do you compete, right? How do you stay young as an organization to continue to compete against these companies that are throwing billions and billions of dollars, right, and perhaps not, I don't want to say careless, but maybe don't care as much about the unit economics of those businesses, how do you compete long run?
David Zaslav
Well, I think we stay true to who we are. We're a pure story telling company. And as long as we're making the best content, and we're attracting the best creative talent in the world, and when we tell a story, it's a story that you want at the home and you want to put the TV set on or you want to go into the theater and watch we're going to be a very healthy company. And in terms of that box, we're the biggest producer of quality television. You look at the quality content we're producing at HBO and Max. And so over the last two-plus years since we took over, really had two focuses [Technical Difficulty] is a generation disruption.
Laurent Yoon
Yes.
David Zaslav
And so we need to restructure this company for the future. Talking a look at each business, what does this business look like if we were going to start it today? What do we need? What content is working for us? What is it? And so we were quite aggressive over the last two years. When we took the company over on a trailing basis, it was losing $3 billion. Max itself was losing $2.5 billion. So one was, we need to get this business healthy and restructured for the future. What does this business look like, so that we have the best chance of succeeding.
And here we are 2.5 years in, last year, we had over $6 billion in free cash flow. Part of being healthy is having a healthy balance sheet. So we've paid down over $15 billion in debt. We look at our capital structure now is a real asset. We went into the market last week and did a tender where we bought back -- we had $2.6 billion, and we were able to buy back $3.4 billion in debt, because our debt is so low in terms of interest rate that we were -- that it's really an asset for us.
So one was how do we get this company looking toward the future? And we've built a great team and we have a long-term plan. It's going to take time. We have a long-term plan for D.C. We're now this idea of taking Max globally. We've been working on it for over two years. We're finally going to be driving Max around the world. But I think [Technical Difficulty] is to really get in there early and recognize that things aren't going to be the same.
And the second is we need to have the best creative content in the world. We need the best creatives with us. So we've been fighting as we've been restructuring the company to get the best creative people with us. Wayne Kugler is back at Warner Bro. Tom Cruise is back at Warner Bros. Clooney, well Thomas Anderson. So we have great creative people. We want the best creative people with us.
But disruption is not new. When I started at NBC, I was part of the team that launched CNBC, but at that time, it was a huge disruption. We'll adjust the broadcast and we'll be a real business. And we were so unsure that it would be a business that Jack Welch felt like we can't do this ourselves. So we partnered with Chuck Dolan and we launched AMC, Bravo, IFC, CNBC, MSNBC, News 12 Long Island, Sports channels. Four years in, they were all losing money. But we had a fight and will them to success, and then we had to scale them up. It's not that different.
And during that time, a lot of people felt it's not going to make the turn. I feel that same way now about where we are. We have got Max profitable. We have a great bouquet of content. We've learned a lot about what works and what doesn't. And as we take this around the world, I think we have a real opportunity. Because in order to be successful in this business, we've been committed to global in our traditional business, but in order to really be successful, we need to be global. And this is a good moment for us.
Laurent Yoon
So speaking of the need to be global, and also, actually, I would like to touch on the global part a little later. But the history of linear, the transition over to Pay TV and now the transition over to SVOD, and the disruption that has caused that we're witnessing now, it has caused so much disruption that one may describe the industry as a set of special situation companies, right?
And the question is -- obviously, the migration to streaming will continue. However, the linear market is still, especially in the advertising market, still the vast majority of video advertising so on linear. So it has to coexist going forward. So if we're to, so this is not so much about Warner Bros. Discovery, question but more industry level question around if we roll the type, let's say, three to five years, what would that look like? What would that coexistence look like? And do you think will eventually lead to some kind of a temporary equilibrium?
David Zaslav
Well, I think there's likely going to be some consolidation. There are a lot of players. There're a lot of players that are losing a lot of money. One of the reasons why we really thought to drive our free cash flow and pay down our debt is to be in a position as we roll out globally as we fight to build our business that we're a healthy company. And over the next two to three years, I expect that there's going to be some opportunities. There'll be some players that want to get out of the business. That will look to consolidate their streaming businesses with others. And so I think we will look to be opportunistic during that time. And so I think, over time, there'll probably be fewer players.
I expect that there'll be four or five global streaming players that will -- that if we were here three or four years from now. I think in order to be, as I said, to be successful, I believe you need to be global. If we create Harry Potter content, the ability to put that in every language everywhere in the world, that is scale, and that's formidable. And so I think that the global nature of this business is going to be -- is going to require a number of players to decide whether they want to go alone.
And our job has been to really focus on the fact that we're stable and strong and to roll out around the world and then to focus on others in an opportunistic way that can maybe help us along the way, whether it's through bundling, like Disney, whether it's through bundling with Fox and Disney or whether it's hard bundling with distributors or whether, over the long-term, some of the smaller players in streaming will end up wanting to be part of a bigger global organization.
Laurent Yoon
So maybe pushing the envelope a little bit, I'd like to give it a try. So you mentioned there's likely to be consolidation, a fewer players down the line, you're getting your balance sheet healthier, are you suggesting that potentially down the line at some point, you may be looking to do an interesting acquisition?
David Zaslav
Well, consolidation could happen in a lot of different ways. In some markets in Europe, the consolidation is almost like a Hulu consolidation. The companies are staying separate, but instead of three or four people create -- three or four companies creating streaming services, they're coming together to create one that has a broader breadth of local content. I do think that some companies will be for sale. We're going to be very disciplined. I really like the content, the broad content that we have. We feel that we're in a good position right now, and we can be opportunistic, but we're going to be very disciplined.
Laurent Yoon
Got it. Okay. So turning to globalization, maybe the broader theme over globalization is distribution, right? So there's sort of two ways to play the game. On the one end, you have a distribution platform, say, Amazon Prime Video is more on the distribution side. Netflix certainly until more recently with more of the distribution plays a platform play, you have the pure play on the other side, producing content, right?
And in recent years, we could clearly see that the one with distribution build scale, have the money start producing content. Some of them are pretty good, but they definitely have the library of the content now. So what used to be distributed like platform companies have become platform plus content. If you are to this hypothetical situation, if you were to rebuild WBD from scratch, would you build as a platform company? Or would you build a content company?
David Zaslav
I think the content company is the most powerful. In the end, this idea of the best content wins. If you look at almost every business, in the end, the consumer finds the product they like the best, whether it's the best cookie, whether it's the best sandwich or whether it's the best storytelling. And so focusing on -- right now, the marketplace is not giving great value to the content side of the business. Right now, if you look at the overall multiples, the marketplace is giving much better multiples and much bigger value to the distribution side. And there's good reasons for that.
I think in the end, there's going to be real value for the distribution and the content side. We are driving our distribution, because part of it is we need to have a global platform…
Laurent Yoon
Absolutely.
David Zaslav
But in the end, if you look at how people are finding their way to whether it's -- whether it was finding their way to Barbie or finding their way to Wonka or finding their way to the great quality content on Max, where we score as the highest in quality, that's what we do, that's who we are, I think that's what we do better than anybody else. And I think that focus on having great content in every language everywhere in the world, and at the same time, now being in a position where we can drive that content on a platform globally is going to – will, I think, create a lot of shareholder value.
Laurent Yoon
All right. So I would like to address one elephant in the room and turn to sports. And just to kind of clear the table, no specific questions on the negotiation with the NBA, none of that. But I'd like to kind of have a -- take a slightly different angle to that. So generally, the general view in the market, and lot of the questions I get or commentary I get is WBD today, when it comes to NBA, is left with two option. And it's not a WBD issue, basically, all the players want the right. You can pay up what seems to be an exorbitant amount, or you may -- or give it up. Those are sort of the -- and both options don't see that appealing, right?
The question I have is around what would WBD, or maybe TNT specifically, what would it look like without the NBA rights? Because -- and I don't mean that in a negative way because at the end of the day, it's a capital allocation issue, right? So if you can make the case that you could spend up money to generate return on something else, maybe that is compelling as well, right? So what would that look like? What would be WBD and TNT look like without the NBA?
David Zaslav
Well, first, we're -- we continue to talk to the NBA. And our team does an extraordinary job on the NBA inside the NBA with Barclay and Shack it's maybe the best sports television show. I was just down in Atlanta. We've got a great team down there, and we love our experience with the NBA. But in general, we're a leader in sports around the world. And if -- we have the Olympics in Europe. With leading -- we have most of the football in the U.K. where TNT Sport, with a full buffet of content around the world. We have football in a number of markets in Europe and in Latin America. This is what we do for a living.
We're in the business of sport, and in sport, the deals come up and you have -- and you look at those deals and you make a decision about the overall quality of the full menu of content you have for each of your platforms. And our job, my job and our leadership team Louis is to be very strategic about what content we have on TNT and the U.K., what content do we have in Europe, what content that we have in Latin America and making sure that we have what we think is enough content to create real shareholder value.
And so we have been on a journey here in the U.S. We added -- after most of our deals were done, we added Hockey with Gary Bettman. We added a Summer of NASCAR. And we just added college football. When you put that together with March Madness and baseball playoffs and the U.S. soccer that we had, it has a very robust offering for consumers that they can watch on TNT in the U.S. all year round. And that is our job is to continue to look at how do we continue to nourish an audience that love sports on TNT? How do we continue to nourish an audience throughout Europe that love sports and in Latin America? And that's what we've been doing. We've been very strategic about adding sport to TNT over the last several years, and we feel really good about where we are.
Laurent Yoon
Okay. So to summarize, even without -- whatever happens with the NBA, the value proposition of [Technical Difficulty] is a good destination for a macro content in each of the relevant of markets that you play in?
David Zaslav
We feel very comfortable and we've been very strategically focused on making sure that we have a robust offering of sports for each our sports channels in the U.S. and around the world.
Laurent Yoon
Okay. In the remaining five, six minutes, I'd like to just squeeze in three more questions. The next one -- maybe I'm too ambitious here. So the next one is on CNN. I know CNN obviously, it's a smaller part of WBD, but when I went to the upfront and saw Mark Thompson on stage, and when you've talked about all the compelling content, the storytelling that he's planning, it kind of reminded me of like NPR storytelling at scale. And I mean that in a very, very good way.
And for those of you who don’t know Mark Thompson, he was -- he headed up a BBC, what would call Proper British News. And also, he turned around your times with a typical first strategy. So it's very credible executive and his story was quite compelling. It's not just me, I think a lot of the investors have that impression. What is the future of CNN? Because it is -- it hasn't done so well. The ratings have suffered, but another way to kind of think about that is maybe there's only upside from where it is, especially with like Thompson. What's the future?
David Zaslav
Well, Mark is a great executive. CNN has actually done very well for us economically. It's a very strong asset in terms of EBIT and free cash flow. When we think about CNN, we think about the opportunity for CNN as a global brand. We're not looking as much at the ratings. We're looking at, is CNN -- what are the numbers around CNN as a trusted global brand for news. And those numbers are way up. And I think we're coming to what we believe is going to be a real opportunity in that there's very few news organizations around the world that have thousands of great journalists on the ground almost everywhere in the world documenting in real time what's going on.
And more and more, we think that's going to be more important. Could we get higher ratings by doing more advocacy in different areas? That's not who we are. We're a news organization with great journalists. And I think that gives us a chance, potentially, and Mark is very focused on this with Alex Macau, who he worked with at the New York Times, to create a very robust digital business.
That the idea, and particularly now with AI, when people kind of look at a video and not know if it's real. As human beings, when we would see something with our eyes, we would know it was real. Well, now we're not going to really know. But when the tank started to roll on Russia, and we had 28 people on the ground reporting, Clarissa Ward all of our -- a ton of our very credible, recognizable personalities. And then within 14 minutes, you have Christiane Amanpour behind the desk.
What's the result of that? The result is, every President, every Prime Minister everywhere in the world has one feed on, CNN. Most of the news organizations, they were at a desk. They're not a news organization the way we are. That currency of being a global trusted source of news, we're not just a U.S. source of news. We're the only true global, credible, trusted or maybe the most, we believe, trusted source of news. And that's our job. And that, I think, could be a very big business. And that's what Mark is driving towards.
What's the value and people want to know what's going on in a particular market. So we've got a great team there. We got the ability to this idea. We now have 150 [Technical Difficulty] people come to us a month. We need to get them to spend more time with us. We need them to spend more money with us, but they go to us because they want to know what's going on in the world. So I think that could be very big for us.
Laurent Yoon
So I'll move -- I just decided to cut one of the questions.
David Zaslav
Was it a hard one?
Laurent Yoon
It was a very difficult one. But actually, I think you addressed it along the way. So I don't think we need to revisit. But if were to -- if you could tell [Technical Difficulty] probably the investors here, one takeaway that you'd like to take home, what would that be?
David Zaslav
That Max going global with local support, local content in almost every market, and the great quality content that we have, that we've been producing for, whether it's the motion pictures or the great storytelling content, is going to be formidable. And that I believe it's going to provide most of the growth that we're going to see over the next couple of years. I think it could be a very big business.
Laurent Yoon
Right, so to close off, I have a word game here. So the rule is I have five words ready. And after each word, please let us know the very first word or thought that comes up in mind. First one paramount.
David Zaslav
Great storytelling heritage.
Laurent Yoon
Bundling.
David Zaslav
A big piece of the future of streaming and a big economic driver of value.
Laurent Yoon
M&A.
David Zaslav
A lot of opportunity lies ahead, but be careful, make sure you're buying smart.
Laurent Yoon
NBA.
David Zaslav
I love those knicks.
Laurent Yoon
Good answer. And lastly, 2025.
David Zaslav
A year of a real opportunity for us to show that we're a great storytelling company and that content really has value. Great content really has value.
Laurent Yoon
Alright. Thank you. Thank you for being here today.
David Zaslav
Thank you, Laurent.
Laurent Yoon
Thank you.
