Time Warner Earnings Call INSIGHTS: Double-Digit Affiliate Fee Growth, Cable Networks
Double-Digit Affiliate Fee Growth
Michael Nathanson – Nomura Securities: I have two quick ones Doug, one is just to follow-up on Jeff’s comments on double-digit affiliate fee growth at Turner, is that on a contract-by-contract basis or you are saying that’s going to be the reported growth on the P&L. So, give us some clarity on what you meant by that?
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John K. Martin – Chief Financial and Administrative Officer: Michael, it’s John. Let me take that. The comment was meant to indicate that – well, just to take a half a step back. Jeff just wanted to remind everybody that our affiliate renewal rate cycle really is about to begin and for sometime mid next year. So to try to clarify and provide a little bit more concreteness with respect to expectations from the beginning of the affiliate rate renewal cycle till the end of the affiliate rate renewal cycle, which is the end of ’16, our expectations are to achieve double-digit domestic affiliate revenue increases, subscription revenue increases and so just to give you a sense. If you look at the cable networks line which is Turner and HBO. The comments that Jeff made were specific to Turner, so double digit at Turner, HBO continued to have expectations of rate going up mid single digits as Jeff said hopefully we are going to get some unit increases there as well, and just to give you a sense at Turner, domestic affiliate revenues are about 80% of the total, so 20% of that is international. So hopefully that provides a little more clarity.
Michael Nathanson – Nomura Securities: Then the other follow-up question will be quick, you gave us 250 of SVOD this year any sense of where that was last year. So what’s the year-over-year change for you guys SVOD money, rose to 250 this year?
John K. Martin – Chief Financial and Administrative Officer: So the 250 up this year is essentially a full year figure of those deals that we’ve already inked. So we’d be hopeful that, that number is actually even going up, from those levels, but just wanted to at least give you a sense of where we were to-date. We’ve bought year-to-date this year approximately $100 million of that. Last year’s full year figure for SVOD was less than 250, somewhere around 225. Those are the consolidated revenue figures for SVOD, those do not include the revenues recorded by the CW. We expect revenues recorded by the CW to be somewhere around, $80 million, $85 million this year. So just as a reminder we owned 50% of that.
Spencer Wang – Credit Suisse: A two part question on cable networks one for Jeff and one for John. First for Jeff. You mentioned that the ratings softness at CNN and news, I think there were some management changes that have been going on there. Can you just talk a little bit about what the strategy is to reinvigorate ratings at CNN? And secondly, for John, in terms of the ad growth in the fourth quarter from an acceleration standpoint, if you had high single digit CPM increases in the upfront, plus the benefit from the NBA coming back, is it possible that ad growth is double digits in the fourth quarter? Thanks.
Jeffrey L. Bewkes – Chairman and CEO: Hey, Spencer, I will start with CNN. I think, as we all know it’s a great brand. It’s got the biggest reach in the news category and it’s very strong overseas (indiscernible) domestic, and very strong in online. Having said that, obviously we’re not satisfied with the ratings. They do fluctuate with the news cycle, but we’re going to do a better job putting on programming that will hold the audience. We’ve got more people coming, but not staying as long as we would like, and so we think there is very strong demand. If you ask where are we aiming, how do we plan to do that, strong demand for objective, comprehensive non-partisan coverage, really covering all the partisan views as well. But we need to do it in a very compelling, more engaging way than we’ve been doing off late, and so that’s really what we’re going to focus on next.
John K. Martin – Chief Financial and Administrative Officer: Hey, Spencer, it’s John. So, let me talk about fourth quarter, I think, I would say it’s too early to tell right now, and let me just give you a few of the things. I mean, I went through them in my proactive remarks. We clearly expect to benefit from the strong upfront results that we had. We’re going to benefit from some of the sports timing shifts. We expect to have improved ratings overall, and we have some easier comparisons, and all of that should really drive much, much better advertising revenue growth. Some things that you just bear in mind from the reported standpoint though is just obviously we’re in a situation now where FX translation is a headwind for. It was a couple hundred basis points of what was actually for international was about 500 basis points of negative growth there in the quarter. Again that can be very volatile and move around. So, we don’t know exactly where that’s going to shakeout. We also have the – because of the shutdown in Turkey and Imagine that was – in terms of advertising revenue that was about $30 million in the second half of last year that we’re going to have to comp against. So that’s – again that’s – we don’t have the ad revenues, but we’re going to have improved profitability by virtue of not having those networks operating. So, I think, it’s a little too early to predict with a certainty, level of specificity, but we feel much better about the advertising trends going into the fourth quarter and frankly as we progress into 2013.