Versant Media (VSNT) Q4 FY25 earnings call: guidance and Q&A

How confident is management in achieving the 1/3 non-pay TV revenue target, and what key product launches will drive this?

Management expressed high confidence, citing organic growth in GolfNow and Fandango, new direct-to-consumer platforms for CNBC and MS NOW, and strategic tuck-in M&A like INDY Cinema Group. They expect high single-digit organic revenue growth for platforms in 2026.

“We're really confident in our platforms business. As we mentioned earlier, though the results for 2025 were a little bit impacted by a slightly softer film slate for the industry. And Anand mentioned, we expect high single-digit revenue growth for 2026, which is consistent with the history that we have with these businesses.”

asked by Michael Ng · answered by Mark Lazarus

Can management provide an update on the SportsEngine strategic review and clarify their M&A approach regarding tuck-ins versus larger deals?

Anand Kini stated they are evaluating value-maximizing alternatives for SportsEngine, noting consolidation in the youth sports market. For M&A, they are open to tuck-ins like INDY Cinema, which offer immediate value and synergies, and potentially larger deals, but with very high thresholds for brand fit and premium returns.

“So as we discussed, we're evaluating kind of value-maximizing alternatives for that business. So just to be very clear, we see a lot of consolidation in youth sports market-wide. So we think it's the right time for this review, but we haven't made a decision yet.”

asked by Michael Ng · answered by Anand Kini

What is the company's philosophy on buybacks – opportunistic or regular – and is a 10b5-1 program in place?

Mark Lazarus indicated that the company plans to be opportunistic with buybacks and will consider the total capital allocation program holistically, without confirming a 10b5-1 program.

“At this point, we're going to be opportunistic. We're going to be thinking through the total capital allocation program sort of holistically, and we'll handle it that way.”

asked by Brent Penter · answered by Mark Lazarus

Can management update on their confidence in the affiliate fee trajectory and current discussions with distribution partners?

Mark Lazarus noted successful execution of deals last year on favorable terms and anticipates productive discussions for upcoming renewals. He emphasized the value of their live news and sports portfolio in current linear television viewing.

“Well, we were able to execute a bunch of deals last year when we were long announced as a stand-alone company, and we were able to do that on terms that work for us and work for the distribution partners.”

asked by Brent Penter · answered by Mark Lazarus

What is the size of the linear pay TV audience for news and sports, and how do D2C economics work, including potential third-party streamer partnerships?

Mark Lazarus highlighted reaching 100 million people monthly, with MS NOW averaging 1.2 million daily viewers and high engagement. Anand Kini confirmed that D2C build-out is not capital intensive due to existing infrastructure and expressed openness to distributing D2C content through other partners for scale and value.

“On the D2C programs on the economic profile, we feel very confident that we already have an infrastructure. So the build-out of these is not a massive capital -- not massively capital intensive.”

asked by Peter Supino · answered by Mark Lazarus

Can management provide color on the current advertising market and levers to improve trajectory, and how will their sports strategy evolve given expensive NFL renewals?

Mark Lazarus stated NBCUniversal will represent them for two more years for ad sales, after which they will evaluate future strategy. For sports, he anticipates a 'rebalancing' of portfolios due to NFL renewals, creating opportunities for Versant to acquire new properties, particularly with USA Network's broad reach.

“As it relates to advertising, I'll start out. I mean, I think we're still -- for the next 2 years, NBCUniversal is representing us. That has been a very strong and proven go-to-market strategy, not just for us, but for them to have the scale of our assets and their assets under one umbrella.”

asked by Jessica Reif Ehrlich · answered by Mark Lazarus

Are there offsets to industry-wide linear distribution headwinds, particularly regarding affiliate fees for networks like MS NOW, and what are the expectations for 2026 linear distribution revenue growth?

Mark Lazarus highlighted the strategic advantage of having both news and sports networks in new packaging. Anand Kini noted good visibility for 2026, with 84% of subscribers not up for renewal, and assumes the pace of cord cutting remains stable, offset by contractual rate increases.

“And on the 2026 question, we have pretty good visibility here. We have actually very good visibility, I should say. I think we've mentioned that we have about 16% of our subscribers are up for renewal, but obviously, that means 84% are not that we have kind of security on that.”

asked by Kutgun Maral · answered by Anand Kini

What is the anticipated library availability for the Fandango AVOD service, and will there be exclusive content?

Mark Lazarus stated the library would be a combination of owned and licensed content, including from Universal, utilizing windows meant for linear networks. Anand Kini added that exclusivity is not always paramount for AVOD success, emphasizing brand, user experience, and customer knowledge as key advantages for Fandango.

“Yes. It will be a combination of content we own, content we license. As part of our linear deals, we have licensed content from a lot of different studios, in particular, Universal and where we will be able to use part of our windows that we -- that were met for the linear networks to run on our -- on the new AVOD service.”

asked by David Joyce · answered by Mark Lazarus