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  • Comcast makes sweet $65 bn offer for Fox’s entertainment assts

    Comcast makes sweet $65 bn offer for Fox’s entertainment assts

    Let the games begin. That’s the clarion call that Comcast CEO Brian Roberts has given by making an offer of $65 billion to acquire the Murdoch-owned Fox entertainment assets. Priced at $35 a share, the Comcast “superior” offer is at a 19 per cent premium over what Disney’s Bob Iger  made last year at $28 per share or $52.4 billion in an all-stock transaction.  The deal is undergoing regulatory approval and includes Fox’s movie studios, networks Nat Geo and FX, Asian pay-TV operator Star TV, and stakes in Sky, Endemol Shine Group and Hulu, as well as regional sports networks.

    Comcast is already taking steps to clearly stake its claim to the prized 21C Fox assets.  Roberts in a letter addressed to Rupert, Lachlan and James Murdoch stated that his company was going ahead with filing a preliminary proxy statement with the Securities Exchange Commission (SEC) in opposition to the Disney merger proposal. He added that Comcast had been “advised this is necessary to be in a position to be able to communicate with your shareholders directly regarding the votes they are being asked to cast on 10 July We hope this is precautionary only, as we expect to work together to reach an agreement over the next several days.”

    The Comcast  offer comes a day after a US district judge Richrd Leon  approved AT&T’s $85 billion bid for Time Warner. Leon emphatically thumbed down the government’s claim that AT&T/Time Warner would be anti-competitive and harm consumers. Roberts who had already announced last month that his company would make an offer post the regulatory go ahead from the US law makers for the AT&T- Time Warner transaction.

    Most observers are expecting The Walt Disney Co to up the ante by bettering its bid possibly flagging off a bidding war.

    Roberts in a conference call with investment analysts said that Fox’s assets are financially attractive. “Fox is an outstanding company which has done an outstanding aggregating content and distribution on a global basis,” he said. “This transaction offers a good chance to add these complimentary assets to our existing NBC Universal portfolio laying the foundation for many group opportunities. We have a proven track record of integrating companies, investing in them and growing them. And we can do that for Fox assets.”

    Roberts was quite confident that Comcast’s proposed transaction will obtain all necessary regulatory clearances in a timely manner and that “the transaction is as or more likely to receive them than the Disney transaction. Accordingly, we are offering the same regulatory commitments as the ones 21CF has already obtained from Disney, including the same $2.5 billion reverse termination fee agreed to by Disney. To further evidence our commitment, we also are offering to reimburse the $1.525 billion break-up fee to be paid by you to Disney, for a total cost to Comcast of $4.025 billion, in the highly unlikely scenario that our transaction does not close because we fail to obtain all necessary regulatory approvals.”

    During the conference call. Roberts added that the acquisition of Fox’s assets would expand Comcast’s core businesses to new markets and give it leadership position in four of the markets of the US, the UK, India and Latin America. Also the third most valued media company’s  international revenue contribution to its top line would rise from nine percent to 27 per cent following the digestion of Fox assets. Distribution platforms  such as Tata Sky, Sky, Fox and X1 would accrue to its portfolio giving the company a collective customer relationship of 53 million. Additionally, OTT platforms such as Hotstar, Hulu, NowTV,and Fox Plus would help give it more content and revenue leverage.

    Roberts has urged the Murdochs to make haste as its merger proposal with Disney is coming up for shareholder vote on 10 July. And he has pointed that  “there should not be any meaningful difference in the timing of the U.S. antitrust review between a Comcast and Disney transaction.”

    Comcast CFO Michael Cavanagh told investment analysts that the media gianthad enough financial muscle on its balance sheet to be able to finance and see through the transaction quickly- within 12 months of signing. He pointed out that he expected cost synergies of $2billion to be realised post merger, keeping in mind that Comcast will acquire 100 per cent of Sky, He explained  that he expected the deal to add to the proforma company’s free cash flow per share and earnings per share. Cavanagh expected the company’s debt to be at four times net debt EBIDTA in 2019.

    Roberts told investors that he was waiting for a revert from the Murdochs and the Fox board. He also stated that he has known them for a long time and that “there was disappointment when 21CF decided to enter into a transaction with The Walt Disney Company, even though we had offered a meaningfully higher price.”

    Meanwhile, late in the day, Fox acknowledged that it had received a new offer from Comcast and in keeping with its fidicuary duties the Fox board said it will carefully review it.

    It added that it hasn’t decided whetther it would postpone or adjourn the 10 July meeting to vote on the Disney proposal. 

    It’s over to the Murdochs and The Walt Disney Co. 

  • 21CF special meet on Disney merger issue on July 10

    21CF special meet on Disney merger issue on July 10

    NEW DELHI: Is the Disney-21st Century Fox merger a done deal? The twists and turns in real life probably match a Hollywood corporate thriller produced by the media company. Second suiter Comcast hasn’t yet given up even as the Rupert Murdoch family-promoted company said on Wednesday that on 10 July 2018 a special meeting has been scheduled for vote on the merger agreement with The Walt Disney Company.

    In a statement put out, 21CF said the special meeting of its stockholders would, among other things, “consider and vote” on a proposal to adopt the previously announced merger agreement with The Walt Disney Company and certain of its subsidiaries.

    21CF’s board of directors recommends that stockholders vote in favour of the proposal to adopt the Disney Merger Agreement and the other proposals to be voted on at the special meeting.

    Comcast in recent times has said that it’s preparing a new bid for 21CF to counter the Disney offer, which if okayed by both the companies’ shareholders and boards, and regulators, would go on to create a global behemoth straddling most streams of media and entertainment sectors. It would also decide the roadmap for India’s biggest (unlisted) media company, Star India.

    The official statement from the Murdoch company said: “21CF is aware of the press release of Comcast Corporation of 23 May 2018, in which Comcast states that ‘it is considering, and is in advanced stages of preparing, an offer for the businesses of Fox that Fox has agreed to sell to Disney’. Under the Disney Merger Agreement, if any event occurs that 21CF determines, after consultation with outside legal counsel, is reasonably likely to require under applicable law the filing or mailing of any supplemental or amended disclosure, 21CF may postpone or adjourn the special meeting of its stockholders to allow reasonable additional time for the filing, mailing, dissemination and review by its stockholders of any such disclosure prior to the special meeting.”

    21st Century Fox is one of the world’s leading portfolios of cable, broadcast, film, pay TV and satellite assets spanning six continents across the globe. Reaching more than 1.8 billion subscribers in approximately 50 local languages every day, 21st Century Fox is home to a global portfolio of cable and broadcasting networks and properties, including FOX, FX, FXX, FXM, FS1, Fox News Channel, Fox Business Network, FOX Sports, Fox Sports Network, National Geographic Channels, Star India, 28 local television stations in the U.S. and more than 350 international channels.

    The portfolio also includes film studio Twentieth Century Fox Film, television production studios Twentieth Century Fox Television, 50 per cent ownership interest in Endemol Shine Group, apart from approximately 39.1 per cent of the issued shares of Sky, Europe’s leading entertainment company, which serves nearly 23 million households across five countries.

    Also Read :

    With Star India, Disney emerges as India’s largest M&E firm

    Lachlan Murdoch to lead New Fox after Disney sale, James is out

    Uday Shankar becomes president of 21st Century Fox, Asia

    Disney expected to announce 21 CF buyout tomorrow: media reports

  • Disney must bid for Sky after Fox deal: UK Takeover Panel

    Disney must bid for Sky after Fox deal: UK Takeover Panel

    MUMBAI: If Disney’s proposed acquisition of Fox proceeds, the former has to make a mandatory offer to the holders of ordinary shares in Sky, according to the UK’s takeover code. The UK Takeover Panel has informed Disney, Fox and Sky of its ruling.

    Disney, the owner of Walt Disney Studios, has made a $66 billion bid to take over 21st Century Fox, which owns 39 per cent stake in Sky. According to the rules of the Takeover Code, Disney will be required to make the mandatory offer to the holders of ordinary shares in Sky as a result of Fox’s stake of approximately 39 per cent in Sky.

    Within 28 days of completion of its acquisition, Disney would have to make a bid of 10.75 pounds a share. Disney can evade the bid in certain circumstances; one if Fox acquires 100 per cent of the ordinary shares of Sky or any other third-party acquires more than 50 per cent of the ordinary shares of Sky. Comcast Corporation already announced earlier it was considering making an offer for Sky.

    “At this stage, Sky Shareholders are advised to take no further action.  Further advice to Sky shareholders will be announced in due course,”  Sky said amid this complexity.

    Also reads: 

    No specific instance of paid news on private TV channels yet: MIB

    TRAI bats for issuing DTH licences for 20 years

  • Comcast topples Murdoch’s offer for Sky with $31 bn bid

    Comcast topples Murdoch’s offer for Sky with $31 bn bid

    MUMBAI: The big-name mergers are getting bigger in value with Comcast dropping a bomb that it is ready to pay $31 billion to takeover Sky. Its offer was 16 per cent higher than that of rival 21st Century Fox that had wanted to acquire 61 per cent in Sky.

    “We think Sky is an outstanding company. It has 23 million customers and leading positions in the UK, Italy and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team,” said Comcast Corporation chairman and CEO Brian L Roberts.

    The acquisition will help Comcast for better distribution and technology leadership and expand its international reach to new territories.It believes that together they can create compelling opportunities for growth and innovation.

    Sky’s company secretary Chris Taylor noted that the company had got an offer from Comcast. It called it a ‘possible offer’ and because there was nothing firm, it will make an announcement later.

    Comcast said it will pay all cash for the deal to get a firm hold on the huge UK pay TV market. Fox said that it stays committed to the offer it previously made.

    Last year Comcast bet $60 billion to buy Fox, ultimately losing to Disney.

    Sky reaches 23 million homes in Britain, Ireland, Germany, Italy and Austria.

    Also Read :

    Now, Comcast in talks to buy 21st Century Fox

    Murdoch pledges funding to Sky News

    Comcast may renew bid for 21st CF

  • 21st CF spins-off into new live news & sports co Fox

    21st CF spins-off into new live news & sports co Fox

    MUMBAI: After the blockbuster acquisition of 21st Century Fox by The Walt Disney Company, the former has announced that it will spinoff into a new brand Fox’ that will seek to replicate its own success in the newly focussed verticals of live news and sports brands.

    Using fiscal 2017 as a base, the new Fox is expected to have annual revenue of $10 billion and EBITDA of $2.8 billion. The company will have an investment grade balance sheet conservatively levered with a maximum of $9 billion of new gross debt or under 3 times net leverage on day one.

    Fox will hold iconic branded properties Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network (BTN). It will also include the company’s studio lot in Los Angeles and equity investment in Roku.

    This new entity will own the top cable news channel in the US and the most-watched business news channel, as well as a station group, which is present in nine out of the 10 largest metro areas. Under sports, it holds the rights for NFL, MLB, World Cup Soccer and NASCAR.

    Fox will have a strong financial profile, supported by peer-leading growth and differentiated free cash flow generation, and will be positioned to continue to deliver consistent growth driven by affiliate rate increases, retransmission growth and strong advertising demand for its live content and entertainment product.

    21st Century Fox executive chairman Rupert Murdoch said: “The new Fox will draw upon the powerful live news and sports businesses of Fox, as well as the strength of our broadcast network. It is born out of an important lesson I’ve learned in my long career in media: namely, content and news relevant to viewers will always be valuable. We are excited by the possibilities of the new Fox, which is already a leader many times over.”

    The remaining business of the company has been combined with Disney in a $52.4 billion acquisition including all its film and TV studios, cable entertainment networks and international TV business. Disney will also acquire FX Networks, Fox Sports Regional Networks, Fox Networks Group International, Star India, and 21st Century Fox’s interests in National Geographic Partners, Hulu, Sky, Tata Sky and Endemol Shine Group.

    Murdoch said that the deals are crucial to paving way for a new Fox and a better Disney. “We have always made a commitment to deliver more choices for customers; provide great storytelling, objective news, challenging opinion and compelling sports. Through today’s announcements, we are proud to recommit to that promise and enable our shareholders to benefit for years to come through ownership of two of the world’s most iconic, relevant, and dynamic media companies. They will each continue to be leaders in creating the very best experiences for consumers.”

    The spin-off transaction will be taxable to 21st Century Fox, but not to its shareholders.  The new Fox will receive a step-up in its tax basis commensurate with the amount of the corporate tax relating to the spin-off that will generate annual cash tax savings over the next 15 years.

    Following the spin-off, Fox expects to continue to pay shareholders a strong regular dividend, with the initial rate to be determined prior to the completion of the spin-off. Prior to completion of the spin-off, new Fox will pay an $8.5 billion cash dividend to 21st Century Fox, representing an estimate of such tax liability. If the final tax liability of 21st Century Fox is less than such amount, the first $2 billion of that adjustment will be made by a net reduction in the amount of the cash dividend to 21st Century Fox from new Fox. The amount of such tax liabilities will depend on several factors, including tax rates in effect at the time of closing as well as market values of Fox following the closing.

    Upon closing of the spin-off transaction, 21st Century Fox’s shareholders would receive one share of common stock in new Fox for each same class 21st Century Fox share currently held.  Following the separation, new Fox would maintain two classes of common stock: Class A Common and Class B Common Voting Shares. Details of the spin-off transaction distribution will be included in the registration statement that will be filed with the Securities and Exchange Commission.

    As part of the definitive agreement with Disney announced today, 21st Century Fox shareholders will receive 0.2745 Disney shares for each 21st Century Fox share in the merger.  The per share consideration is subject to adjustment up or down for certain tax liabilities arising from the spinoff and other transactions related to the acquisition. Terms of the transaction call for Disney to issue approximately 515 million new shares to 21st Century Fox shareholders, representing approximately a 25 percent stake in Disney on a pro forma basis. The transaction values the merged 21st Century Fox business at $28 per share using a reference Disney share price of $102 and at nearly $30 per share based on Disney’s closing share price on December 13, 2017. This equates to a total enterprise value of approximately $69 billion.

    The merger is subject to customary conditions, including regulatory and shareholder approval.

    Combining with Disney are 21st Century Fox’s critically acclaimed film production businesses including Twentieth Century Fox, Fox Searchlight and Fox 2000, which together offer diverse and compelling storytelling businesses and are the homes of Avatar, X-Men, Fantastic Four and Deadpool, as well as The Grand Budapest Hotel, Hidden Figures, Gone Girl, The Shape of Water, and The Martian– and its storied television creative units, Twentieth Century Fox Television, FX Productions and Fox21, who have brought The Americans, This Is Us, Modern Family, The Simpsons, and so many more hit TV series to viewers across the globe.

    New Fox Assets

    Fox News Channel (FNC): 24-hour all-encompassing news service dedicated to delivering breaking news as well as political and business news. FNC has been the number one cable news channel in the country for 63 straight quarters, and more recently has been the top basic cable network.  FNC is available in approximately 90 million homes and dominates the cable news landscape, routinely notching the top ten programs in the genre.

    Fox Broadcasting Company (FOX): Home to some of the highest-rated and most acclaimed series on television as well as the most sought after sports properties, it is viewed by nearly 100 million households each month, airing 15 hours of primetime programming a week, as well as major sporting events and Sunday morning news.  Through the Fox Now app, Fox viewers can watch full episodes of their favourite Fox shows on a variety of digital platforms, while enjoying enhanced interactive and social capabilities around those shows.

    Fox Business Network (FBN): Financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street, Fox Business Network has been the number one business network for four consecutive quarters. FBN launched in October 2007 and is available in more than 80 million homes in major markets across the United States. The network has bureaus in Chicago, Los Angeles, Washington, DC and London.

    FOX Television Stations Group: One of the nation’s largest owned-and-operated network broadcast groups, comprising 28 stations in 17 markets and covering over 37 per cent of US television homes. This includes a presence in nine out of the 10 largest metro areas in the US including seven duopolies in the top 10 markets: New York, Los Angeles, Chicago, Dallas, San Francisco, Washington, DC and Houston; as well as duopolies in Phoenix, Minneapolis, Orlando and Charlotte. 

    FS1 and FS2: FS1 is a popular sports cable network launched in 2013 in approximately 90 million homes boasting nearly 5,000 hours of live event, news and original programming annually. FS1 has several pillar sports: college basketball and football, MLB, NASCAR, NFL (ancillary programs), international soccer, Bundesliga, UFC, Premier Boxing Champions (PBC) and USGA. Major events televised on FS1 include the US Open, MLB Postseason, the FIFA 2018 and 2022 World Cup and the FIFA Women’s World Cup in 2019. FS2 was founded in 2013 and is focused on extreme sports, including skateboarding, snowboarding, wakeboarding, motocross, surfing, mixed martial arts, BMX and FMX. FS2 is available in approximately 50 million homes.

    Big Ten Network: The first internationally distributed network dedicated to covering America’s most storied collegiate conferences. Covering over 1,000 sporting events each year, including football, basketball, Olympic sports and championship events and award-winning original programming, in-depth studio analysis and classic games. The network is in approximately 50 million homes across the United States and Canada, including carriage by all the major video distributors.

    Also read:

    With Star India, Disney emerges as India’s largest M&E firm

    Disney to buy 21st Century Fox assets for $52.4 billion

    Disney expected to announce 21 CF buyout tomorrow: media reports

    Now, Comcast in talks to buy 21st Century Fox

     

  • Fox-Sky deal: CMA to examine how it impacts plurality, standards, 21CF expects constructive review

    Fox-Sky deal: CMA to examine how it impacts plurality, standards, 21CF expects constructive review

    MUMBAI: UK’s Competition and Markets Authority (CMA) has set out more details about what it intends to examine in its investigation into the proposed takeover of Sky Plc by 21st Century Fox, which owns STAR India.

    21st Century Fox (21CF) has welcomed the publication by the CMA of the Issues Statement. “We look forward to the CMA process and engaging in a thorough and constructive review,” it stated in a press release.

    On 20 September, Karen Bradley, the Secretary of State for Digital, Culture, Media and Sport referred Fox’s proposed takeover of Sky to the CMA on public interest grounds.

    The CMA will now examine how the deal would impact media plurality and broadcasting standards in the UK.

    The issues statement sets out the proposed approach to assessing the impact of the merger. Anyone wanting to provide submissions is invited to do so based on the areas and questions outlined in the issues statement.

    The CMA is required to report to the Secretary of State with its recommendations within six months of opening the investigation.

    Anne Lambert, Panel Chair, said: Today (10 October) we set out the scope of our investigation and the issues on which we will focus. We now invite submissions on these specific matters so we can thoroughly examine the relevant evidence.

    The CMA will use its extensive experience of investigating different issues in a wide range of sectors to thoroughly and impartially investigate the proposed takeover.

    “Once the investigation is complete we will report back to Karen Bradley for her to make a final decision,” Lambert stated.

    The 21CF release added: Reference is made to the announcement made on 15 December 2016 by the 21st Century Fox Board and the Independent Committee of Sky that they had reached agreement on the terms of a recommended pre-conditional cash offer by 21st Century Fox for the fully diluted share capital of Sky which 21st Century Fox and its Affiliates do not already own. The full terms and conditions of the Acquisition are set out in the announcement which was published on 15 December 2016.

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    Star India’s ent. prog costs & De-Mon impact 21st CF even as revenue beats expectations

  • Sky buy: Fox disappointed at US secy’s statement, hopes for closure by 30 June

    Sky buy: Fox disappointed at US secy’s statement, hopes for closure by 30 June

    MUMBAI: 21st Century Fox (21CF) notes the statement by the Secretary of State for Digital, Culture, Media and Sport that she intends to refer the combination of 21st Century Fox and Sky plc to the Competition and Markets Authority (CMA) on the grounds of both media plurality and genuine commitment to broadcasting standards.

    21CF had written to the Secretary of State expressing disappointment that she had changed her mind and decided not to follow the advice of the independent and expert regulator Ofcom regarding broadcasting standards, but informing her that it did not intend to make further representations and encouraged her to make a prompt referral.

    “We now, therefore, look forward to engaging constructively with the CMA, as independent authority, and hope that the findings of this process will be respected by the Secretary of State,” 21CF stated.

    “Subject to any further delays in the decision-making process, we anticipate that the transaction will close by 30 June, 2018,” 21CF added.

    ALSO READ :

    Fox-Sky deal: UK to assess implications by 29 June

    Star India’s ent. prog costs & De-Mon impact 21st CF even as revenue beats expectations

    Fox Asia appoints Mike Rich as EVP, Dawes departs

  • Star India’s ent. prog costs & De-Mon impact 21st CF even as revenue beats expectations

    MUMBAI: Even in the absence of Fox News’ star Bill O’Reilly, 21st Century Fox earnings for the year and quarter ended 30 June, 2017, have beaten expectations, narrowly missing revenues, however.

    International affiliate revenue increased seven per cent driven by strong local currency growth at both FNG International channels and STAR, partially offset by a four per cent adverse impact from the strengthened U.S. dollar. International advertising revenue decreased three per cent due to the effect of the Indian government demonetisation initiatives on the general advertising market, a lower volume of cricket matches broadcast in the current year at STAR and the negative impact of foreign exchange, partially offset by local currency growth at FNG International. Annual OIBDA at the international cable channels increased four per cent reflecting higher affiliate revenues at both FNG International and STAR and lower sports programming costs at STAR due to lower volume of cricket matches broadcast in the current year.

    The increase in expenses was primarily due to higher domestic sports programming costs driven by higher professional team rights costs at the regional sports networks (“RSNs”) and increased MLB and National Association for Stock Car Auto Racing (“NASCAR”) rights costs at FS1, higher programming and marketing costs at FX Networks and National Geographic and higher entertainment programming costs at Fox Networks Group International (“FNG International”) and STAR India (“STAR”).

    The Company continued the expansion of its video offerings by introducing non-linear packages in Europe, Asia and Latin America under the labels FOX+ and FOX Premium, all tailored for specific markets and offering consumers more choice, and re-launching its domestic suite of authenticated entertainment apps through a unified FOX NOW app, and through further penetration and engagement of its Hotstar platform in India, where watch time has increased over the prior year by 300 per cent.

    The Company reported annual income from continuing operations attributable to 21st Century Fox stockholders of $3.00 billion ($1.61 per share), compared with $2.76 billion ($1.42 per share) in the prior year. Excluding the net income effects of Impairment and restructuring charges, Other, net and adjustments to Equity losses of affiliates1, adjusted annual earnings per share from continuing operations attributable to 21st Century Fox stockholders2 was $1.93, a 12 per cent increase compared to the adjusted year-ago result of $1.73.

    The Company reported annual revenues of $28.50 billion, an increase of $1.17 billion, or four per cent, from the $27.33 billion of revenues reported in the prior year. This revenue growth reflects higher affiliate and advertising revenues at both the Cable Network Programming and Television segments partially offset by lower theatrical and home entertainment revenues at the Filmed Entertainment segment.

    Full Year Highlights

    The Company continued to grow its cable channel and television businesses through eight per cent growth in affiliate revenues and 5 per cent advertising gains while positioning these businesses for the future through the inclusion in the core bundles of new digital MVPD entrants.

    The very successful broadcasts of Super Bowl LI and the Major League Baseball (“MLB”) World Series, which delivered the most watched baseball game in a quarter century, grew Fox Sports broadcast viewership by approximately 25 per cent over the prior year driving a 20 per cent increase in television segment contributions.

    Fox News Channel was the most watched basic cable network over the last twelve months during which it achieved its highest-rated quarter ever in 24-hour viewership.

    The Company strengthened its core domestic cable brands with the successful first seasons of Taboo, Legion, and Feud on FX and the global event series Mars and Genius on National Geographic.

    The Company continued the expansion of its video offerings by introducing non-linear packages in Europe, Asia and Latin America under the labels FOX+ and FOX Premium, all tailored for specific markets and offering consumers more choice, and re-launching its domestic suite of authenticated entertainment apps through a unified FOX NOW app, and through further penetration and engagement of its Hotstar platform in India, where watch time has increased over the prior year by 300 per cent.

    The box office successes of Logan, an extension of the X-Men franchise, and Hidden Figures underscore the range and quality of what the Company’s studio brings to its audiences.

    Twentieth Century Fox Television production studio produced the number one show on five different networks, including Empire on FOX, American Horror Story: Roanoke on FX, Modern Family on ABC, This Is Us on NBC, and American Dad on TBS.

    Fox Television Stations sold broadcast spectrum in the Federal Communications Commission’s completed reverse auction for which the Company received approximately $350 million in proceeds in July 2017.

    The Company reached an agreement with Sky plc (“Sky”) on the terms of an offer to acquire the Sky shares which the Company does not already own, which the Company believes will result in enhanced capabilities of the combined company, underpinned by a more geographically diverse and stable revenue base, and an improved balance between subscription, affiliate fee, advertising and content revenues. The acquisition of Sky remains subject to certain customary closing conditions, including approval by the UK Secretary of State for Digital, Culture, Media and Sport and the requisite approval of Sky shareholders unaffiliated with the Company.

    Commenting on the results, executive chairmen Rupert and Lachlan Murdoch said: “We delivered strong financial and operational momentum in fiscal 2017 driven by an acceleration in affiliate revenue growth which fueled fourth quarter cable segment OIBDA growth of 19 per cent. The investment we have made in our video brands, and in programming that truly differentiates, is proving to be the right strategy. It is driving the value of our brand portfolio across both established and emerging distribution platforms and reflects our deep commitment to creative excellence across all of our entertainment production businesses. In addition, the outstanding performance of our live news and sports programming drove advertising growth for the year and continues to set our business apart. What we achieved in 2017 sets us up well for this year and beyond.”

    Full Year Company Results

    Full year income from continuing operations before income tax expense of $4.69 billion increased $535 million from the $4.15 billion reported in the prior year. Full year total segment operating income before depreciation and amortization (“OIBDA”)3 of $7.17 billion, was $576 million, or 9 per cent, higher than the amount reported in the prior year. The OIBDA growth was driven by higher contributions from the Company’s Cable Network Programming and Television segments partially offset by lower contributions from the Filmed Entertainment segment. The adverse impact of foreign exchange rates impacted annual OIBDA growth by $105 million, or 2 per cent in total.

    Fourth Quarter Company Results

    The Company reported quarterly income from continuing operations attributable to 21st Century Fox stockholders of $501 million ($0.27 per share), as compared to $567 million ($0.30 per share) reported in the prior year quarter. Excluding the net income effects of Impairment and restructuring charges, Other, net and adjustments to Equity earnings (losses) of affiliates4 adjusted quarterly earnings per share from continuing operations attributable to 21st Century Fox stockholders was $0.36 as compared to $0.45 reported in the same quarter of the prior year. The prior year quarter adjusted earnings per share included a tax benefit of $0.07 per share from the receipt of a favorable tax ruling.

    The Company reported total quarterly revenues of $6.75 billion, a $102 million, or 2 per cent, increase from the $6.65 billion of revenues reported in the prior year quarter. This revenue growth reflects higher affiliate and advertising revenue at the Cable Network Programming segment partially offset by lower content revenues at the Filmed Entertainment segment and lower advertising revenues at the Television segment.

    Quarterly income from continuing operations before income tax (expense) benefit of $815 million increased $269 million from the $546 million reported in the prior year quarter. Quarterly total segment OIBDA of $1.45 billion was consistent with the amount reported in the prior year quarter. Higher contributions from the Company’s Cable Network Programming segment were offset by lower contributions from the Filmed Entertainment and Television segments.

    CABLE NETWORK PROGRAMMING

    Full Year Segment Results

    Cable Network Programming annual segment OIBDA increased nine per cent to $5.60 billion, driven by a 7 per cent revenue increase led by continued growth in both affiliate and advertising revenues partially offset by a 7 per cent increase in expenses.

    Domestic affiliate revenue increased 8 per cent reflecting continued contractual rate increases, led by Fox News, FS1 and FX Networks. Domestic advertising revenue grew 6 per cent over the prior year led by higher ratings and pricing at Fox News and higher postseason baseball ratings at FS1. Domestic OIBDA contributions increased 10 per cent over the prior year led by higher contributions from Fox News, FS1 and FX Networks.

    Fourth Quarter Segment Results

    Cable Network Programming quarterly segment OIBDA increased 19 per cent to $1.44 billion, driven by 10 per cent higher revenue from strong affiliate, content and advertising growth, partially offset by a 7 per cent increase in expenses. The increase in expenses was primarily due to the broadcast of the International Cricket Council (“ICC”) Champions Trophy in the current quarter and higher programming and marketing costs at National Geographic.

    Domestic affiliate revenue increased 10 per cent reflecting higher pricing across all of our domestic cable brands, led by Fox News, RSNs, FX Networks and FS1. Domestic advertising revenue increased 6 per cent over the prior year period as the impact of higher ratings at Fox News and increases at National Geographic were partially offset by the absence of the prior year quarter broadcast of the Copa America soccer tournament at FS1 as well as a lower number of National Basketball Association and National Hockey League playoff games broadcast on the RSNs compared to the prior year quarter. Domestic OIBDA contributions increased 22 per cent over the prior year quarter led by higher contributions from Fox News, the RSNs and FS1.

    International affiliate revenue increased nine per cent driven by higher rates and subscribers. International advertising revenue increased 9 per cent from high double digit advertising increases at STAR, led by the current quarter broadcast of the ICC Champions Trophy. Quarterly OIBDA at the international cable channels increased 6 per cent from the prior year quarter primarily reflecting higher contributions from FNG International partially offset by lower contributions from STAR.

    TELEVISION

    Full Year Segment Results

    The Television segment generated annual OIBDA of $894 million, a $150 million, or 20 per cent, increase over the $744 million reported in the prior year. Annual segment revenues were 11 per cent higher than the prior year due primarily to strong sports advertising revenue growth led by the broadcast of Super Bowl LI, the MLB World Series, which benefited from strong ratings and two additional games versus last year, and the inclusion of one additional National Football League divisional playoff game. Higher local political advertising spending at the television stations and continued growth of retransmission consent revenues also contributed to the segment revenue growth. These revenue increases were partially offset by lower network entertainment advertising revenues reflecting lower general entertainment ratings.

    Fourth Quarter Segment Results

    Television reported quarterly segment OIBDA of $137 million, a $7 million decrease compared to the prior year quarter. Quarterly segment revenues declined as lower national and local advertising revenues from lower general entertainment ratings were partially offset by higher retransmission consent revenues. Total segment expenses were 3 per cent lower than the prior year quarter due to lower entertainment programming costs.

    FILMED ENTERTAINMENT

    Full Year Segment Results

    Full year Filmed Entertainment segment OIBDA of $1.05 billion decreased $34 million from the prior year primarily due to a 4 per cent adverse impact from foreign exchange rate fluctuations. Higher revenue from the television studio was more than offset by lower revenue at the film studio. The television studio’s revenue increased due to higher subscription video-on-demand licensing led by Homeland and The People v. O.J. Simpson: American Crime Story. The film studio’s revenue decline was attributable to difficult theatrical and home entertainment revenue comparisons to the prior year slate which included Deadpool and The Martian.

    Fourth Quarter Segment Results

    Filmed Entertainment generated a quarterly segment OIBDA loss of $22 million, a $186 million decrease from the $164 million contribution reported in the same period a year ago. The OIBDA decrease in the current quarter was principally driven by lower revenues at both the film and television studios. Quarterly segment revenues decreased $235 million to $1.80 billion, primarily reflecting lower home entertainment revenues due to the strong performance of Deadpool in the prior year quarter and lower pay and free television revenues due to the timing of feature film availabilities and fewer deliveries of returning television series.

    Full Year Results

    Annual equity losses of affiliates were $41 million as compared to $34 million of equity losses of affiliates in the prior year. The $7 million increase in losses primarily reflects higher equity losses from Hulu and lower equity earnings from Sky partially offset by lower equity losses from Endemol Shine Group.

    Fourth Quarter Results

    Quarterly equity earnings of affiliates were $16 million as compared to $72 million of equity losses of affiliates reported in the same period a year ago. The $88 million improvement in equity results primarily reflects lower equity losses reported at Endemol Shine Group and higher equity earnings reported at Sky.

    OTHER ITEMS

    Dividends

    The Company has declared a dividend of $0.18 per Class A and Class B share. This dividend is payable on October 18, 2017 with a record date for determining dividend entitlements of September 13, 2017.

    Pending Acquisition of the Remaining Shares of Sky

    The Company’s pending acquisition of the public shares of Sky has been cleared on public interest and plurality grounds in all of the markets in which Sky operates except the UK, including Austria, Germany, Italy and the Republic of Ireland. The acquisition has also received unconditional clearance by all competent competition authorities. The transaction is subject to certain other customary closing conditions and the requisite approval of Sky shareholders unaffiliated with the Company. In the event that the UK Secretary of State for Digital, Culture, Media and Sport makes a final decision to refer to the Competition and Markets Authority for a phase two review, the transaction is expected to close by June 30, 2018.

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  • Sky, Nippon & Globosat buy sports & music, etc. docus from GRB Entertainment

    MUMBAI: Sky UK, Nippon Television & Globosat have recently bought sports, music, etc documentaries from GRB Entertainment.

    Globosat Brazil renewed Remembering Whitney, a documentary featuring legendary singer Whitney Houston, just in time to celebrate the icon’s 9 August birthday. This breathtaking one-hour special celebrates the legacy of the six-time Grammy winner, featuring “never-before-seen footage” of Whitney, including interviews with the pop icon, exclusive concerts, private home videos, and candid insights from her family, including her daughter, Bobbi Kristina Brown.

    Nippon Television Network in Japan acquired Michael Sam, a 65-minute doc spotlighting the life of Michael Sam, the first openly gay U.S. football player in the NFL. Cameras follow Sam along his brave journey – from a football player at the University of Missouri to the biggest professional sports league in America as he works to earn a spot on a NFL team.

    Sky UK acquired two docs: Confessions of a Superhero follows the lives of three mortal men and one woman who make their living working as superhero characters on the sidewalks of the infamous Hollywood Boulevard. This deeply personal view into the daily routines of these characters reveal their hardships, and triumphs, while they pursue and achieve their own kind of fame; and The Mona Lisa Myth, narrated by Morgan Freeman, is a lavish period docu-drama that takes viewers from Leonardo Da Vinci’s happy sojourn in the duchy of Milan to his struggling years in Florence, through the controversy surrounding his famous painting The Mona Lisa and finally, his retirement at the French royal court in Amboise.

    “GRB is well-known around the globe for its wide-ranging portfolio of factual programs and we are fortunate to also represent many top-notch documentaries. From a sports’ figure with a ground-breaking story to a great singer and her tragic life to a group of people chasing a Hollywood dream to the great artist Da Vinci, GRB has programs that transcend borders and language barriers,” said GRB Entertainment SVP – international distribution Michael Lolato.

  • Fox’ Sky buy: Representations to proposed merger invited by 14 July

    MUMBAI: Representations have been invited seeking views in relation to the UK Secretary of State’s minded-to decision not to refer the proposed merger between 21st Century Fox, Inc. and Sky plc on the grounds of genuine commitment to broadcasting standards. The deadline for responses is 17:00 on Friday 14 July.

    On 16 March the Secretary of State announced that she had intervened in the merger in relation to two public interest grounds; plurality of media ownership and commitment to broadcasting standards. This triggered an action for Ofcom to report to the Secretary of State on the media public interest grounds specified, and for the Competition and Markets Authority (CMA) to report on jurisdiction. These reports were submitted to the Secretary of State on 20 June.

    Ofcom, in preparing its report, invited comment on the two public interest grounds. This took place between 16 – 30 March and a summary of the responses received was included in its report to the Secretary of State. On 29 June the Secretary of State set out her minded to decision on whether or not to refer the Sky / Fox merger for a fuller, Phase 2 investigation by the Competition and Markets Authority.

    In relation to plurality of media ownership, as guided by the report from Ofcom, the Secretary of State indicated that she is minded-to refer for a fuller investigation and has invited further representations from the parties to the merger. On the question of genuine commitment to broadcasting standards, and again as guided by the recommendation set out in Ofcom’s report, the Secretary of State has indicated that she is minded-not-to refer to a Phase 2 investigation.

    Invitation for representations: This invitation for representations seeks views in relation to the Secretary of State’s minded-to decision not to refer on the grounds of genuine commitment to broadcasting standards. Officials would welcome new or substantive evidence on the question of commitment to broadcasting standards and on Ofcom’s assessment of these matters.

    What is a genuine commitment to broadcasting standards?
    The intention behind this consideration is whether a person carrying on or in control of a media enterprise post-merger is able demonstrate a genuine commitment to the content standards objectives that apply to all UK broadcasters.

    In other words are they likely to comply with the spirit as well as the letter of the broadcasting standards set down in the Communications Act 2003. These standards are set out in Ofcom’s invitation to comment document and are as follows:

    The objectives set out in section 319 of the Communications Act 2003 are:

    (a) that persons under the age of eighteen are protected;

    (b) that material likely to encourage or to incite the commission of crime or to lead to disorder is not included in television and radio services;

    (c) that news included in television and radio services is presented with due impartiality and that the impartiality requirements of section 320 are complied with;

    (d) that news included in television and radio services is reported with due accuracy;

    (e) that the proper degree of responsibility is exercised with respect to the content of programmes which are religious programmes;

    (f) that generally accepted standards are applied to the contents of television and radio services so as to provide adequate protection for members of the public from the inclusion in such services of offensive and harmful material;

    (fa) that the product placement requirements referred to in section 321(3A) are met in relation to programmes included in a television programme service (other than advertisements);

    (g) that advertising that contravenes the prohibition on political advertising set out in section 321(2) is not included in television or radio services;

    (h) that the inclusion of advertising which may be misleading, harmful or offensive in television and radio services is prevented;

    (i) that the international obligations of the United Kingdom with respect to advertising included in television and radio services are complied with;

    (j) that the unsuitable sponsorship of programmes included in television and radio services is prevented;

    (k) that there is no undue discrimination between advertisers who seek to have advertisements included in television and radio services; and

    (l) that there is no use of techniques which exploit the possibility of conveying a message to viewers or listeners, or of otherwise influencing their minds, without their being aware, or fully aware, of what has occurred.

    The commitment to broadcasting standards considerations is important for media plurality and this recognises the importance all broadcasters embedding these requirements in their corporate policies and editorial codes.