Risk Factors Update Summary

• We derive substantial revenues from the sale of advertising, and a decline in advertising revenues has had, and could continue to have, an adverse effect on our business, financial condition or results of operations. Our advertising revenues have been and may continue to be adversely impacted by changes in consumer behavior, advertising market conditions, changes in consumer behavior, and deficiencies in audience measurement. The advertising market can fluctuate reflecting the impact of general macroeconomic conditions as well as the economic prospects and spending priorities of specific advertisers or industries, and may continue to decline. Our ability to generate advertising revenue is also dependent on demand for our content, the viewers in our targeted demographics, advertising rates, and results observed by advertisers. Natural and other disasters, pandemics, acts of terrorism, political uncertainty, or hostilities could also lead to a reduction in domestic and international advertising expenditures as a result of disrupted programming and services and economic uncertainty. Major sports events, such as the Super Bowl and the NCAA Division I Men’s Basketball Tournament, and state, congressional, and presidential elections cycles, may cause our advertising revenues to vary substantially from year to year. Political advertising expenditures are impacted by the ability and willingness of candidates and political action campaigns to spend funds on our advertising and the competitive nature of the elections affecting viewers in markets featuring our content.
• The unpredictable and constantly shifting nature of consumer behavior, as well as evolving technologies and distribution models, have affected, and could continue to adversely affect, our business, financial condition, or results of operations. Our success depends on our ability to anticipate and adapt to shifting content consumption patterns, evolving technologies, and distribution models. Our ability to maintain attractive brands and to adapt to shifting content consumption patterns, evolving technologies, and distribution models is crucial for our success both in the U.S. and internationally. Declines in the expected popularity of the content we distribute, including sports for which we have acquired rights, could have a significant adverse effect on our business, financial condition, or results of operations. Evolving technologies and distribution models, changes in consumer behavior, and an acceleration in subscriber declines for our broadcast and cable networks could negatively affect the demand for our content, financial condition, or results of operations.
• We face substantial and increasing competition to attract creative talent, produce and acquire the rights to high-quality content, distribute our content and services on a variety of third-party platforms. Our ability to compete effectively in attracting creative talent, producing and acquiring high-quality content, distributing our content, and services on various third-party platforms is crucial for our business. The loss of affiliation and distribution agreements with a limited number of distributors could have a significant adverse effect on our revenues. These agreements generally have fixed terms that vary by market and distributor, and there can be no assurance that these agreements will be renewed in the future or renewed on favorable terms, including those related to pricing, programming tiers, and the types of rights we grant to distributors. The loss of existing packaging, positioning, pricing, or other marketing opportunities and the loss of carriage or the vertical integration of distributors in the cable and broadcast network businesses have provided more leverage to these distributors and could increase their negotiating leverage. Competitive pressures and consolidation among television station group owners could increase their negotiating leverage.
• Our ongoing investments in new businesses, products, services, technologies, and other strategic activities could have an adverse effect on our business, financial condition, or results of operations. We have made, and expect to continue to make, changes to our business strategy to effectively respond to market and consumer changes that are subject to execution risk, and there can be no assurance they will produce anticipated benefits. As part of our business strategy, we have invested in, and expect to continue to invest in, new businesses, products, services, technologies, and other strategic initiatives, including through acquisitions, strategic partnerships, and investments, and enter into restructurings, cost savings, and other transformation initiatives. These investments and initiatives may involve significant risks and uncertainties, including difficulty integrating acquired businesses, failure to realize anticipated benefits, unanticipated expenses and liabilities, potential disruption to our business and operations, diversion of management’s attention, difficulty managing expanded operations, the loss or inability to retain key employees and creative talent, unanticipated challenges to or loss of our relationship with new or existing users, viewers, advertisers, suppliers, distributors, and licensors, legal and regulatory limitations, insufficient revenues from such investments to offset any new liabilities assumed and expenses associated with new investments, and failure to successfully develop an acquired business or technology. Many of these factors are outside of our control, and because new investments are inherently risky, and the anticipated benefits or value of these investments may not materialize, there can be no assurance such investments and other strategic initiatives will not adversely affect our business, financial condition, or results of operations.