News Corporation

News Corp shareholders lodge legal  complaint against Rupert Murdoch

Major US banks accuse Murdoch and News Corporation of corporate misconduct extending far beyond UK
 
News Corp And Its UK Subsidiary News International Seeks to Hid Incriminating Documents

Rupert Murdoch Rothschild News Corp Fraud Against INLNews Group (youtubeexposed.com)

RupertMurdochsEndlesspower (inltv.co.uk)

TheSunKing_RupertMurdoch'sEndlessReign (inltv.co.uk)

News Corporation LLC

NewsCorporation_SECFiling_NewNewsCorporation_LLC

Rupert Murdoch and Fox Corp. board members sued by investor over ‘stolen election claims’

Fox Corp. and Fox News are set to go to trial next week in the $1.6 billion defamation case brought by Dominion Voting Systems.
 
Please read the full story below on this www.inltv.co.uk webpage

"The News Corp Board Did Nothing Despite The Harm To News Corp Resulting From NAM and NDS Misconduct ..."

An investigative report states that The Rothschild Family, their partners and associates effectively finance, run and control the major security agencies and networks around the world, such as Israel's Mossad, Five Eyes consisting of the British (GCHQ/MI5/MI60, Canadian (CSE), New Zealand (NZSIS), Australian (ASIO) and USA (CIA)Security Agencies and Networks, and the Russian Security agencies and networks... being silent partners with Rupert Murdoch, News Corp, Facebook, Twitter, Google, Wikipedia etc., and many other mainstream media outlets around the worlds they make sure there are a lot of MI6, CIA etc. staff working as double agents for the media outlets, as well as being paid by these security agencies and networks to do their bidding within these mainstream media groups...

CMS Committee inquired about whether anyone who had testified in the prior committee proceeding had lied ... Both Murdochs (Rupert and James) claimed that they had no knowledge on that issue. James Murdoch also testified that he had he had no knowledge of the recent evidence (primarily the "Fox Neville" e-mail) that expanded the hacking scandal beyond one rogue reporter until the end of December 2010....

Shortly after James Murdoch testified, two former News International senior executives, Crone and Myer, challenged James Murdoch's testimony, claiming that they had told him years ago about an email that showed that the wrongdoing at News of the World was much more widespread than News Corp and their subsidiary News International acknowledged.

".. All powerful Red Lodge 33rd Degree Freemason Zionist Jew Rupert Murdoch and his Trillionaire silent partners 33rd Degree Red Lodge Freemason, Zionist Jew, Lord Jacob Rothschild and the Rothschild Partners, secretly arranged through Private Trust and their News Corp and its UK subsidiary News International managed to persuade the Freemason and Zionist Jewish controlled British Courts to seal of all court and investigation  proceedings, thus using the British Government and the British Courts to help them hide evidence of News Corp's and its directors, senior management, staff, servants and otherwise illegal and wrongful misconduct from the shareholders and the general public scrutiny. News Corp and News International further insisted on an extensive confidentiality provision in the settlement agreement to legally prevent Gordon Taylor or his attorneys from publicly speaking about the matter. The amount of settlement of £700,000, far exceeded amounts that had been awarded by courts in similar lawsuits, thus confirming that a major purpose of this extremely high £700,000 settlement was the confidentially agreement, to keep the matter under wraps. In a letter to the UK House of Commons Culture, Media and Sports Committee, James Murdoch confirmed that confidentiality was an important factor in the astronomical £700,000 settlement amount:

"Previously I had understood that the £700,000 settlement amount was based on a likely judgement of the likely damages that could be awarded, and the likely costs and expenses associated with the litigation .... since I gave this response, I have been informed that confidentiality was a factor in determining the amount of the settlement payment...."

Please take the time to read more of this story below on this INLTV.co.uk webpage

 
A young Keith Rupert Murdoch backed by his  silent partners, Lord Jacob Rothschild and the Rothschild Family who agreed to provide  unlimited capital,  to help Rupert Murdoch take control of the Australian Newspapers and then the world newspapers
 
Paul Carlucci, the chief executive of News America a fully owned subsidiary of Rupert Murdoch's News Corp, , was also quoted as having told Floorgraphics:
"If you ever get into any of our businesses, I will destroy you. I work for a man who wants it all, and doesn't understand anybody telling him he can't have it all."
Carlucci was referring to Rupert Murdoch, to whom Carlucci reported.
In 2005, Rupert Murdoch appointed Carlucci head of the New York Post, after Rupert Murdoch's son Lachlan designed from the position. Carlucci and Rupert Murdoch talk regulariy, so it is inconceivable that Rupert Murdoch would not have been aware about the illegal tactics being employed at NAM to thwart competition. At the very least, Rupert Murdoch and other News Corp Board Members knew about FBI's allegations, but failed to conduct any investigation of them.
 
News Corporation

News Corp shareholders lodge legal  complaint against Rupert Murdoch

Major US banks accuse Murdoch and News Corporation of corporate misconduct extending far beyond UK
Full text of shareholders' complaint
Please read the full story  further down this www.inltv.co.uk webpage
 

Rupert Murdoch and Fox Corp. board members sued by investor over ‘stolen election claims’

Fox Corp. and Fox News are set to go to trial next week in the $1.6 billion defamation case brought by Dominion Voting Systems.
  •  
April 11, 2023 By Jane C. Timm

A Fox Corp. shareholder sued Rupert Murdoch, Lachlan Murdoch and several members of the Fox Corp. board of directors in Delaware on Tuesday afternoon, arguing that they violated their fiduciary duty to the company when they allowed Fox News to broadcast election conspiracy theories.

The derivative action — a kind of lawsuit brought by shareholders who believe they’ve been harmed by the corporation — was brought by a single plaintiff, Robert Schwarz.Delaware judge willing to force Rupert Murdoch to testify in Fox News-Dominion trial

“The Board’s decision to chase viewers by promoting the false stolen election claims has exposed the Company to public ridicule and negatively impacted the credibility of Fox News as a media organization that is supposed to accurately report newsworthy events. The Company is now the subject of two defamation cases, with combined damages claimed to exceed $4 billion,” the lawsuit alleges.

The suit builds on the trove of internal communications, documents and evidence made public in Dominion Voting Systems' sweeping $1.6 billion defamation lawsuit against Fox News and Fox Corp., which has revealed that many at Fox News knew the rigged election claims were false even as they allowed their continued broadcast.

“FOX knew — from the Board on down — that Fox News was reporting false and dangerous misinformation about the 2020 Presidential election, but FOX was more concerned about short-term ratings and market share than the long-term damages of its failure to tell the truth,” the filing continues.

Lawyers for Dominion Voting Systems have argued in their court filings that Fox executives elevated election conspiracy theories because they feared they were losing their audience after Donald Trump’s 2020 presidential election loss.Judge allows Dominion's defamation case to go to trial

Fox News has denied that it defamed Dominion Voting Systems, arguing that its broadcasts and social media posts are protected by the First Amendment. Schwarz’s attorneys declined to comment in an email. Fox News and Fox Corp. did not immediately respond to a request for comment.

Bloomberg Law reported recently that several firms are eying derivative action against Fox Corp. board members.Jane Timm.

Jane C. Timm is a senior reporter for NBC News.

 

Lord Jacob Rothschild known to be one of the richest, most powerful and most influential men in the world
LordJacobRothschild_Worth_InExcessOf$5TrillionDollars_RothschildFamilyWorth$500TrillionDollars
 
The Rothschild Family's Secret Power
Despite being Zionist Jews, The Rothschild Family in one of the biggest financial donors to the Vatican and the Catholic Pope.
The Rothschild Family has the political backing  of the Roman Catholic Vatican Church, which helps The Rothschild Family get clearance for construction projects in Africa and anywhere else in the world.
 
A Special Secret INL NEWS Investigation Report indicates that the Roth Child Family together with the Vatican Church effectively own and control all the major Security Agencies in the world which include Mossad. Israel's Security Agency, Russia's Security Agency, the former KGB now known as the CSS. and the Fives Eyes Alliance.
 The Five Eyes (FVEY) is an intelligence alliance comprising Australia (ASIO), Canada (CSE), New Zealand (GCSB/NZSIS/DI) , the United Kingdom (GCHQ/MI6/MI5) , and the United States (CIA). These countries are parties to the multilateral UKUSA Agreement, a treaty for joint cooperation in signals intelligence. 

Informally, Five Eyes can also refer to the group of intelligence agencies of these countries.

The origins of the FVEY can be traced to informal secret meetings during World War II I between British and American code-breakers , which started before the US formally entered the war, followed by the Allies' 1941 Atlantic Charter  that established their vision of the post-war world. Canadian academic Srdjan Vucetic argues the alliance emerged from Winston Churchill's Iron Speech in 1946, which warned of open conflict with the Soviet Bloc  unless the English-speaking democracies learned to cooperate.

The Rothschild Family Private Jets
The Rothschild Family owns over 10 Boeing 747, and over 50 Private Jets. The fleet of planes owned by the Rothschild Family are worth over $39 billion Dollars. The Rothschild Family also owns over 200 luxury yachts and over 15 private islands.
Over 20% of the world's sea trade occur through ships owned by Lprd Jacob Rothschild. With the help of the Vatican Church and support from world leaders, Jacob Rothschild was able to continue his shipping business even during events like Covid 19, the Iraq War, the Ukraine War, etc.
 
RothschildFamilyNetWorth_$500TrillionDollars
 
 Rothschild Family Net Worth in excess of $500 Trillion Dollars
The Rothschild Family are considered the Richest Family on earth by Forbes. It is a  common belief based on research and pure logic  that the Rothschild Family use their obscene wealth to secretly control the world economy and global events for over three centuries. Lord Jacob Rothschild has a net worth in excess of $5 Trillion USD  Dollars. The Rothschild Family helped the British during the Second World War, by providing finance to purchase weapons. Through their Rothschild owned and controlled banks, The Rothschild Family indirectly control major banks and Big Pharma  and other major companies around the world.
 
 

Chairman and CEO of News Corporation Rupert Murdoch 

Rupert Murdoch is more powerful than the pope. In its inaugural list of the world's most powerful people, Forbes has the News Corp. chief at No. 7.

Media Billionaires Rupert & Lauchlan Murdoch, News Corp, REA Group Ltd, Owen Wilson, Masroor Siddiqui, Tamara Kayser Senior Barrister, Head Up Fraud Gang To Try and Destroy INL News Group Shareholder's Assets

Keith Rupert Murdoch is an Australian-born American business magnate, media proprietor, and investor. Through his company News Corp, he is the owner of hundreds of local, national, and international media outlets and companies

Rupert Murdoch is one of the wealthiest men in the world, amassing a fortune with his media empire at News Corp and the Fox Corporation.

Rupert Murdoch is known to have increased the circulation of his newspapers by focusing on sensational headlines which are printed in big letters

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Born Keith Rupert Murdoch 11th March 1931

 

 

 

Citizenship Australia (until 1985) United States (from 1985)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education Worcester College, Oxford (BA)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spouses: Patricia Booker (m. 1956; div.1967)

 

 

 

Anna Maria

 

 Anna Murdoch Mann 1967 A Scottish Born Journalist -

 

1999  Wendi Murdoch (Deng)  1999 - 2013

 

2013 Jerry Hall 2016 the previous wife of Mick Jagger- 2022

 

Ann Lesley Smith, a former San Francisco police chaplin, whose late husband was the country singer Chester Smith (who was also a television executive) told the Post that the union was "a gift from God". However the marriage was called off after two week

 

Murdoch, Rothschild invest in Israeli shale oil - The Jerusalem Post

Genie Energy

Rothschild said: “Rupert Murdoch’s extraordinary achievements speak for themselves, and we are very pleased he has agreed to be our partner. Gene Energy  is making good technological progress to tap the world’s substantial oil-shale deposits, which could transform the future prospects of Israel, the Middle East and our allies around the world.”

www.jpost.com/Business/Globes/Murdoch-Rothschild-invest-in-Israeli-shale-oil
www.jpost.com/Business/Globes/Murdoch-Rothschild-invest-in-Israeli-shale-oil

 The Australian Media Conspiracy

 The Australian Media Conspiracy is an extremely controversial book being published by the INL News and Australian Weekend News Publishing Group   based on a 30 plus year in depth INL News and Australian Weekend News Publishing Group Investigation Report into how immoral, unjust, devious, clandestine,  wrongful, and in many instances unlawful and illegal tactics and actions have been carried out by and/or for and on behalf of News Corp LLC, Keith Rupert Murdoch and his sons, Lachlan Murdoch and James Murdoch and the various directors and senior managers of News Corp LLC and its Australian controlled subsidiary publicly listed REA Group Limited ... which owns and controls the premium Australian Real Estate Advertising website

to make sure all of their print and web based media competitors are wiped out and destroyed ....

to protect their multi-billion dollar assets and income in their print and web based media and advertising businesses in Australia, which includes the multi-Australian multi-billion general classified and  real estate advertising market, commonly known in Australian Media Circles as

'The Rivers of Gold'

The book  The Australian Media Conspiracy and a film that is being made based on the book, shows how News Corp LLC, Keith Rupert Murdoch and his sons, Lachlan Murdoch and James Murdoch, their very silent behind the scenes Rothschild Partners,  and the various directors and senior managers of News Corp LLC and its Australian controlled subsidiary publicly listed REA Group Limited have carried out and/or ordered to be carried out, immoral. clandestine, unjust, devious, wrongful and in many instances illegal and unlawful activities to destroy their print and web based media competitors 

to protect their multi-billion dollar assets and income in their print and web based media and advertising businesses in Australia, which includes the multi-Australian multi-billion general classified and  real estate advertising market, commonly known in Australian Media Circles as

'The Rivers of Gold'

The book  The Australian Media Conspiracy and a film that is being made based on the book, shows how News Corp LLC, Keith Rupert Murdoch and his sons, Lachlan Murdoch and James Murdoch, their very silent behind the scenes Rothschild Partners,  and the various directors and senior managers of News Corp LLC and its Australian controlled subsidiary publicly listed REA Group Limited have used their absolutely powerful influence and unlimited deep financial pockets to obtain help from corrupt police, corrupt political and government staff magistrates, judges, court clerks, lawyers and barristers in the legal fraternity, corrupt financiers and bankers, corrupt people in the media, corrupted private investigators, criminals, corrupted politicians, corrupted people in government departments and large business organisations, corrupted real estate agents, corrupted real estate valuers, including the head of Queensland Valuation Control Board and others to help them carry out immoral. clandestine, unjust, devious, wrongful and in many instances illegal and unlawful activities to destroy their print and web based media competitors 

Historical INLNews.com Article

MurdochPapersOpenFireBBC (inlnews.com)

Murdoch Papers Open Fire BBC

  Murdoch papers open fire on BBC 
                  Why the Murdochs are wrong to blame BBC for media's woes

              
Mattoug" I'm sure this guy (Rupert Murdoch) has enough money, now go rest "

                                                               

Mr Wijat and His WIJAT Team also speaking out for Truth Justice and the True American Way

Mr Wijat and  ERF The Worm.  "James, how about true social justice, genuine love  and caring for your the people that share this earth with you, independent investigative journalism and the British culture, arts and life the BBC protects and maintains for the British people...how many more billions do you and your dad Rupert need to make...in your case the normal and acceptable profit motives to make a decent living to feed your family and have a decent life style have gone to the extreme and are turning into greed and extreme abuse of your power as the most powerful people the world with the most powerful media group iu the world that has the effectual power to appoint and dismiss governments and chance the way a whole nation thinks through what they read in your newspapers, and see on your TV channels and Internet websites.. me and EFR The Worm live in an organic farm, grow and own vegetables, have our own water from the rain and underground have our own electricity from the sun and wind power and still run an international media group, International News Limited, we have not need for money other than what it costs to run the websites  and other bills we have to pay as all businesses have...maybe you should take the friendly advice of Mattoug stated in the Telegraph on the 29th August, 2009, when he says,

INLTV Uncensored News Logo

INLTV Uncensored News 

INLTV is Easy To Find Hard To Leave

What The World Needs A Sense of Humus

ERFTheWorm2

ERF the Worm, Mr Wijat's Little Greenie Mate

Heading the World Needs "A Sense of Humus Campaign"


                        
                                   " I'm sure this guy (Rupert Murdoch) has enough money, now go rest "

"Why doesn't he just be straight with us and say he wants to charge for online content, after all this is what he's lining us up for. If the licence fee goes, so does free online BBC content, which is one of the main threats to News Corp. I'm sure this guy already has enough money, now go rest"...Telegraph... Mattoug 29th August, 2008


Rupert and James please read this little poem by Bert E, Pratt of Perth Western Australia from the 2001 Australian Weekend News
http://www.inlnews.com/AustWeekendNews2001.html

                           Australian Weekend News Poem of the Month (2001)
                                                       God and Money:

God put us on this earth to make it a better place, All we have done is turn it into a rat race. We get up in the morning and drive our cars like mad, We pollute the air and kill the trees, which makes me very sad, No matter how much God gives us, We still want more and more, There does not seem to be a number that we will settle for, You ask people to help you, They look at you aghast, And walk quickly past, But when you go through the pearly gates, With your money in hand, God will gently take it off you, And whisper "everybody's equal in this land".
Bert E. Pratt

 Rothschild Family Net Worth in excess of $500 Trillion Dollars
The Rothschild Family are considered the Richest Family on earth by Forbes. It is a  common belief based on research and pure logic  that the Rothschild Family use their obscene wealth to secretly control the world economy and global events for over three centuries. Lord Jacob Rothschild has a net worth in excess of $5 Trillion USD  Dollars. The Rothschild Family helped the British during the Second World War, by providing finance to purchase weapons. Through their Rothschild owned and controlled banks, The Rothschild Family indirectly control major banks and Big Pharma  and other major companies around the world.
 
The Rothschild Family's Secret Power
Despite being Zionist Jews, The Rothschild Family in one of the biggest financial donors to the Vatican and the Catholic Pope.
The Rothschild Family has the political backing  of the Roman Catholic Vatican Church, which helps The Rothschild Family get clearance for construction projects in Africa and anywhere else in the world.
 
The Rothschild Family has the support of most governments in Central Africa, which helps The Rothschild Family plunder trillions of dollars of natural resources like Diamonds, Gold, Lithium, and other valuable minerals. Even the Prime Minister of Canada Justin Trudeau has received a Private Jet as a gift from The Rothschild Family.
 
The Rothschild Family has been secretly sponsoring the Catholic Pope and Vatican for the past 200 years, thereby wielding significant control over world events and wars. During the Second World War, the Vatican Church helped The Rothschild Family to move assets from Italy and Greece, by facilitating a temporary cease-fire between the Germans and the British.
During the British War with Napolean, The Rothschild Family provided all the financial help to England. Once the war was over, The British seized France's gold reserves and paid back The Rothschild Family double the amount that The Rothschild Family had lent the British Government.
 
Quality Water One of the Most Scare Valuable Assets om Planet Earth
 
WATER IS NOW CONSIDERED WILL BE ONE OF THER MOST VALUABLE RESOURCES IN A FEW DECADES
Water is becoming a commodity equal to Oil and Gas. The Rothschild Family has started storing vast reserves of water at its various facilities across the world. It is estimated that as of today, the Rothschild Family have built a water reserve big enough to feed the entire United States for a whole week.
 
 
The Rothschild Family Private Jets
The Rothschild Family owns over 10 Boeing 747, and over 50 Private Jets. The fleet of planes owned by the Rothschild Family are worth over $39 billion Dollars. The Rothschild Family also owns over 200 luxury yachts and over 15 private islands.
Over 20% of the world's sea trade occur through ships owned by Lord Jacob Rothschild. With the help of the Vatican Church and support from world leaders, Jacob Rothschild was able to continue his shipping business even during events like Covid 19, the Iraq War, the Ukraine War, etc.
 
Estimated Summary of Rothschild Family Assets and Income
Annual Income: $690 Billion
Luxury Mansions 1800 plus
Land Owned 60,000 plus square miles
Private Jets 100 plus
Gold Reserves $50 plus billion
Luxury Yachts 60 plus
Passenger Ships 130 plus
Cargo Ships 400 plus
Oil Reserves 80 plus million barrels
 Banks 52 plus
PHARMA COMPANIES 110 plus
Biotechnology Firms 19 plus
Animal Research Labs 75 plus
 
 Rothschild Family Net Worth is in excess of $500 Trillion Dollars
The Rothschild Family are considered the Richest Family on earth by Forbes. It is a  common belief based on research and pure logic  that the Rothschild Family use their obscene wealth to secretly control the world economy and global events for over three centuries. Lord Jacob Rothschild has a net worth in excess of $5 Trillion USD  Dollars. The Rothschild Family helped the British during the Second World War, by providing finance to purchase weapons. Through their Rothschild owned and controlled banks, The Rothschild Family indirectly control major banks and Big Pharma  and other major companies around the world.
 
The Rothschild Family's Secret Power
Despite being Zionist Jews, The Rothschild Family in one of the biggest financial donors to the Vatican and the Catholic Pope.
The Rothschild Family has the political backing  of the Roman Catholic Vatican Church, which helps The Rothschild Family get clearance for construction projects in Africa and anywhere else in the world.
 
The Rothschild Family has the support of most governments in Central Africa, which helps The Rothschild Family plunder trillions of dollars of natural resources like Diamonds, Gold, Lithium, and other valuable minerals. Even the Prime Minister of Canada Justin Trudeau has received a Private Jet as a gift from The Rothschild Family.
 
The Rothschild Family has been secretly sponsoring the Catholic Pope and Vatican for the past 200 years, thereby wielding significant control over world events and wars. During the Second World War, the Vatican Church helped The Rothschild Family to move assets from Italy and Greece, by facilitating a temporary cease-fire between the Germans and the British.
During the British War with Napolean, The Rothschild Family provided all the financial help to England. Once the war was over, The British seized France's gold reserves and paid back The Rothschild Family double the amount that The Rothschild Family had lent the British Government.
 
Quality Water One of the Most Scare Valuable Assets om Planet Earth
 
WATER IS NOW CONSIDERED WILL BE ONE OF THER MOST VALUABLE RESOURCES IN A FEW DECADES
Water is becoming a commodity equal to Oil and Gas. The Rothschild Family has started storing vast reserves of water at its various facilities across the world. It is estimated that as of today, the Rothschild Family have built a water reserve big enough to feed the entire United States for a whole week.
 
Covid 19
The Rothschild Family had investments in 70% of all Big Pharma companies and medical distributors across the world. The Rothschild Family has overseen the supply of over 2 Billion doses of Covid vaccines through its various subsidiaries, cashing in hundreds of trillions in revenues
 
Summary of The Rothschild Family Wealth includes:
 
French railroad network
The Economist Magazine
Rio Tinto Group
50 plus Banks
The Rothschild Family Business List includes:
The Rothschild Family owns investments in some of the biggest corporations in the world (mostly founded by Jewish Investors).
 
As per Forbes, through direct and indirect investments, The Rothschild Family owns significant states in the following companies:
 
1, Facebook
2. Google
3. Goldman Sachs
4. Oracle 
5. Starbucks
6. Dell
7.Baskin Robbins
6. Procter & Gamble
9. AirBNB
10. Linkedin
11. Uber
12. Intel

Murdoch, Rothschild invest in Israeli shale oil - The Jerusalem Post

https://www.jpost.com/business/globes/murdoch-rothschild-invest-in-israeli-shale-oil

Lord Jacob Rothschild
Keith Rupert Murdoch

Negotiations with Rothschild and Murdoch began six months ago,

and Rothschild visited Israel during that time

. By Ameram Barak Published 22nd November 2010

Lord Jacob Rothschild and Rupert Murdoch have invested in an Israeli venture to produce oil from bituminous-bearing rock (shale) in the Elah Valley in the Judean Hills. Last week, they acquired 11 percent in equal shares of Genie Energy Corporation unit Genie Oil and Gas Inc. for a total of $11 million. Genie Energy, a subsidiary of IDT Corporation, is the parent company (89%) of Israel Energy Initiatives Ltd., which holds an exclusive shale-oil exploration and production license covering 238 square miles in the Adulam district, which is between Beit Shemesh and Beit Guvrin. The company believes its shale-oil cracking technology can free the world from dependence on Arab oil and turn Israel into an energy powerhouse able to produce 300 billion barrels of non-conventional oil at a cost of up to $40 per barrel.

Genie Energy comprises IDT Energy,which resells electricity and natural gas to customers in New York, and Genie Oil and Gas Inc. Genie Oil and Gas Inc., which received the $11m. investment, consists of American Shale Oil Corporation and the 89% stake in Israel Energy Initiatives.

Negotiations with Rothschild and Murdoch began six months ago, and Rothschild visited Israel during that time. Genie is involved in similar projects in Colorado and Mongolia.

IEI president Effie Eitam, a former national infrastructures minister, told Globes that IEI hopes to obtain a permit from the regional planning and building commission within days to carry out a pilot shale-oil project on a six-dunam site in the Elah Valley.

Local residents strongly oppose IEI’s venture. They fear possible environmental damage from the drilling. Residents claim that the drilling will harm the Adulam District’s vistas and nature, as well as its vineyards.

RELATED Story : Securities Authority mum on planned oil, gas rules Knesset to debate tax plans proposed by Sheshinski C'tee 

 

News Corporation

News Corp shareholders lodge complaint against Rupert Murdoch

Major US banks accuse Murdoch and News Corporation of corporate misconduct extending far beyond UK
Full text of shareholders' complaint
Ed Pilkington in New York  @edpilkington
Tue 13 Sep 2011 

The legal action, lodged in the Delaware courts, is led by Amalgamated Bank, a New York-based chartered bank that manages some $12bn on behalf of institutional investors and holds about 1 million shares of News Corporation common stock. Its lawsuit is aimed against the members of News Corp's board, including Rupert Murdoch himself, his sons James and Lachlan, and the media empire's chief operating officer, Chase Carey.

In the complaint, the shareholders accuse the board of allowing Murdoch to use News Corp as his "own personal fiefdom". In addition to the phone-hacking scandal at the News of the World, the complaint focuses on the controversial business tactics of two News Corp subsidiaries in America, its advertising arm News America Marketing and a manufacturer of satellite TV smart cards called NDS Group Plc.

In legal documents, the shareholders allege that the two companies were accused by multiple parties of "stealing computer technology, hacking into business plans and computers and violating the law through a wide range of anti-competitive behaviour".

The complaint draws on several lawsuits and trial transcripts in which the News Corp subsidiaries were prosecuted by rival businesses for alleged misconduct. In the case of News America, the company reached settlements with three separate competitors amounting to $650m.

In one trial, involving an advertising company called Floorgraphics, evidence was presented to the jury that News America had broken into its rival's secure computer systems at least 11 times.

The chief executive of News America, Paul Carlucci, was also quoted as having told Floorgraphics: "If you ever get into any of our businesses, I will destroy you. I work for a man who wants it all, and doesn't understand anybody telling him he can't have it all."

The complaint says that as Carlucci and Murdoch talk regularly, "it is inconceivable that Murdoch would not have been aware about the illegal tactics being employed by NAM to thwart comptetition".

In the case of NDS, the shareholder complaint refers to lawsuits launched by rivals Vivendi and EchoStar, who accused the company, which News Corp acquired in 1992, of illegally extracting the code of its smart cards used to unscramble satellite TV signals and charge subscribers. In court documents, Amalgamated Bank says NDS posted the Vivendi code on the internet, allowing hackers to break into broadcasts for free and inflicting more than $1bn in damages on its competitor.

In a separate case, EchoStar accused NDS of illegally intercepting one of its satellite television broadcasts, and a court injunction was obtained preventing the News Corp subsidiary from "intercepting or receiving, anywhere in the US, EchoStar's satellite television signal without authorisation".

Jay Eisenhofer, a lawyer representing Amalgamated Bank and its other leading complainants, the New Orleans Employees' Retirement System and Central Laborers Pension Fund, said the details of the alleged misconduct at News America and NDS were significant as they suggested a wider culture of improper behaviour that went beyond the illegality at the now-defunct News of the World.

"These cases establish a pattern of misconduct that extends far beyond the UK subsidiary. It demonstrates a corporate culture that allows this sort of misconduct to take place over a very long period of time."

Eisenhofer pointed out that several members of the News America and NDS boards were also directors of News Corp.

The latest complaint from Amalgamated and its co-plaintiffs provides the most detailed and serious allegations yet against News Corp for alleged business improprieties carried out within the US. The company is already under investigation by the FBI, which is looking into suggestions that News of the World reporters tried to gain access to the phone records of 9/11 victims.

The justice department is also carrying out a wide-ranging inquiry in the wake of the phone-hacking scandal into News Corp's corporate behaviour to see whether any US laws were broken.

There was no immediate response from News Corp to the allegations.

Full Text of legal complaint by News Corp shareholders against Rupert Murdoch and other company directors over alleged corporate goverance failures
Tuesday 13th September  2011 The Guardian
Exhibit A
In the Court of Chancery of the State of Delaware
In re NEWS CORPORATION  SHAREHOLDER DERIVATIVE LITIGATION
Consolidated C.A. No. 6283-VCN

Verified Second Amended Consolidated Shareholder Derivative and Class Action Complaint


Co-Lead Plaintiffs The Amalgamated Bank, as trustee for the LongView LargeCap 500  Index Fund, LongView LargeCap 500 Index VEBA Fund ("Amalgamated Bank") and Central Laborers Pension Fund ("Central Laborers") and plaintiff New Orleans Employees' Retirement System ("NOERS") ("Plaintiffs"), by and through their undersigned counsel, assert this action derivatively on behalf of News Corporation  ("News   Corp" or the Company) and directly on behalf of themselves and all simalarly situated public shareholders of News Corp against defendants Rupert Murdoch, James Murdoch, Laughlan Murdoch, Chase Carey, David F. DeVoe, Joel Klein, Arthur M. Siskind, Roderick Eddington, Andrew S.B Knight, Thomas J. Perkins, Peter Barns  Josi Maria Aznar, Natalie Bancroft, Kenneth E. Cowley, Viet Dinh, anf John L. Thornton ( the "Individual Defendants", "Defendants" of the "Board". Plaintiffs make the following allegations upon knowledge as to themselves and upon information and belief (including the investigation of counsel and review of publicly available information) as to all other matters and allege as follows:
Summary Of The Action
 
1.The case arises because the Board News Corp disregarded its fiduciary duties by allowing the Company's founder, CEO, Chairman and Controlling Shareholder, Rupert Murdoch to use News Corp as his own personal fiefdon. The Board had not lifted a finger to engage in any oversight of Rupert Murdoch's Iron Hand Rule of News Corp, even when it was provided with clear and unmistakable warnings that NEWS CORP's business practices were not only unethical, but also illegal. Worse  yet, the Board in bad faith allowed itstkf2to become an outright accomplice to Rupert Murdoch's self-interest breaches of duty, repeatedly approving transactions whose core  purposes was to establish his control, and to siphon value away from News Corp and its shareholders for the benefit of Rupert Murdoch and his Family, and Rupert Murdoch's Friends.

2. The Board's utter failure to curb Rupert Murdoch's use of the Company's (News Corporation Limited's) money to pursue his own agenda reflects that Rupert Murdoch completely controls the majority of the Board of NEWS CORPORATION LLC, including the Audit Committee. '
 
The Directors - all Murdoch's Family
 
The Directors - all of Rupert Murdoch's Family Members, long-time friends, News Corp Executives, or people with expensive business relationships with Rupert Murdoch and his media empire - consistently place Rupert Murdoch's interests ahead of those of News Corp and its public shareholders. Due to the Board's unwillingness or inability to stand up to Rupert Murdoch News Corp's business and reputation, along with its shareholders, have suffered severe harm. This case seeks to hold the News Corp Board accountable for that harm, and ensure that in the future, value is created for the Public Shareholders, rather than only for Rupert Murdoch and his loyal family and his loyalists friends.
 
3. For years, highly improper (and at times illegal) conduct has been carried out throughout News Corp subsidiaries around the world without any knowledge or board oversight or restraint. By the late 1990's, the News Corp Board first received evidence that News Corp subsidiaries were systematically engaging in illegal violations of third party privacy, when two subsidiaries News America Marketing ("NAM") and NDS Group  Plc  ("NDS"), were accused by multiple parties of stealing computer technology, hacking into business plans and computers and violating the law through a wide range of anti-competitive behaviour. NAM attempted to drive its competition out of business, by among other things, illegally hacking a competitor's password-protracted website on eleven separate occasions over a seven month period. The News Corp Board did not remain oblivious to this misconduct, which required NAM to pay out more than $630 million in settlements to three competitors. Another NEWS Corp subsidiary, NDS, was accused of illegally extracting software codes from competitors smart cards and posting the information on the Internet. This allowed hackers to create counterfeit cards that could be used illegally to intercept satellite television protected by competitors' smart cards. Several NEWS Corp Board Members sat on the Board of NDS and NAM, so their knowledge of this malfeance is clear.
 
6. For his part, rather than take action against senior officers at News Corp's subsidiaries who allowed these illegal practices to flourish, Rupert Murdoch, promoted and protected them. Executives involved in these illegal activities included Rebecca Brooks ("Brooks"), a very close of Rupert Murdoch, and Andy Coulson ("Coulson"), a Rupert Murdoch political ally, and a very close friend of Rebecca Brooks. James Murdoch- Rupert Murdoch's son and a News Corp Board Member  - was involved at a minimum, in News Corp's attempt to cover up these actions.

7. While certainly the most visible misdeed of the past several month's, the still unfolding phone-hacking scandal is just a continuation of the News Corp Board's malfeance. For years the News Corp Board condoned Rupert Murdoch's habitual use of News Corp to pursue his quest for power, control, and political gain, and to enrich himself and his family members, ar News Corp's and its public shareholders expense. For example, a few years ago the News Corp Board endorsed plans to repurchase News Corp shares from Rupert Murdoch's competitor John Malone, which protected Rupert Murdoch, but gave up what could have been a multi-million dollar profit on News Corp's investment in DirectTV. News Corp spent billions on Rupert Murdoch's vanity purchases of Dow Jones, only to write off billions less than two years later. Other examples of the News Corp Board doing what Rupert Murdoch wants, without regard to for what the shareholders need, abound.

8. The News Corp Board has also repeatedly allowed Rupert Murdoch to place his children and other family members in positions of power, and has caused News Corp to use its money to advance the selfish business interests of his Murdoch Family. Recently, Rupert Murdoch continued a long  history of abuses by causing News Corp to purchase 100% of Slane Group Ltd, the television and film production company that was run and majority owned by Rupert Murdoch's daughter Elizebeth Murdoch. The $650 million dollar transaction was rubber stamped by News Corp's Board at Rupert Murdoch's urging. Aa a result of the transaction, Elizabeth Murdoch is now approximately $250 million dollar richer and, more importantly, from her father's perspective, back within the News Corp executive suite.

9. Rupert Murdoch publicly proclaimed that his purpose in causing News Corp to enter into the transaction was to bring Elizabeth back into the Family Business and to put Elizebeth on News Corp's already conflicted and dominated board. It is only by virtue of the Plaintiff's litigation that the News Corp Board finally recognised that it would not be "appropriate" to appoint Elizabeth Murdoch to the News Corp Board at this time.
10. The News Corp Board's failure to take action to prevent the illegal conduct systemic within the Company and its rubberstamp- like acquiescence to all of Murdoch' desires is indicative of the fact that Rupert Murdoch completely controls the majority of the News Corp Board of Directors. In fact, even though the News Corp Board's purported recent investigation into the hacking scandal demonstrates its complete its complete domination by Rupert Murdoch since the two directors involved in the "investigation" are a close personal advisor and employee of Rupert Murdoch, and a Murdoch Family friend.The committee process is also clearly a whitewash, considering that as early as July, 2011, News Corp Board member Thomas Perkins already told the world that the News Corp Board aa a whole had already prejudiced the issue stating that "the Board supports top management" and that "there's no reason to believe that top management were lying. That's my very strong belief".
11. The News Corp Board's prolonged and complete failure of oversight and acquiescence to Rupert Murdoch's wishes unquestionably has caused the Company (News Corp) significant financial and reputational harm. Indeed, News Corp suffers from the "Rupert Murdoch discount;" which is a multi-billion dollar overhang on the Company's value. The total cost of the pattern of misconduct is yet untold, but it is yet untold, but it is at least $10 billion plus dollars.
12. Through this Legal Action, the Plaintiffs seek to obtain redress for News Corp's public shareholders for the harm caused by the News Corp. Board failure of oversight and to put News Corp on a path towards becoming a law-compliant corporation that puts its public shareholders interests ahead of the whims of Rupert Murdoch and his cronies.

Jurisdiction

13. This Court has jurisdiction over this action pursuant to 10 Del. C. s.341

14. As directors of a Delaware corporation, the Individual Defendants have consented to the jurisdiction of this Court pursuant to this Court pursuant to 10 Del. C. S3114
15. This Court has jurisdiction over News Corp pursuant to 10 Del. C. s.3111.

The Parties
16. Co-Lead Plaintiff Amalgamated Bank ("Amalgamated") is a New York state chartered bank that manages approximately $12 billion dollars for institutional investors, including Taft-Hartley plans and public employee pension funds. Amalgamated has locations in New York, New Jersey, California, Nevada and Washington D.C. with its main office located in Manhattan. Amalgamated brings this action as Trustee for the LongView LargeCap 500 Index VEBA Fund, LongView Quantative LargeCap Fund, and LongView Quantative LargeCap VEBA Fund ( the "Funds"). Amalgamated, through the Funds, holds nearly One Million shares of News Corp common stock.
17. Co-Lead Plaintiff Central Laborers Pension Fund is an Illonois based Taft-Hartley pension fund that owns shares of News Corp and has been a shareholder at all times relevant to the claims asserted heerin.
18. Plaintiff the City of New Orleans Employees' Retirement System ("NOERS") is a retirement fund for the benefit of City of New Orleans public employees. NOERS is a shareholder of News Corp and has been a shareholder at all times relevant to the claims asserted herein.
18. Nominal Defendant News Corp is a Delaware corpoation with its principal executive offices located at 1211 Avenue of the Avenue, New York, New York.

19. News Corp is the world's biggest and most influential media company. It has operations in the following eight segments:
(i) filmed entertainment,
(ii) television,
(iii) cable network programming,
(iv) direct broadcast satelite,
(v) integrated marketing services;
(vi) newspapers and information services,
(vii). book publishing, and
(viii) other.
Its properties include the Fox TV Networks, the Wall Street Journal, British Sky Broadcasting Group ("BSkyB") and the New York Post. It also owns 49% of NDS. Both BSkyB and NDS have managers and board members and board members who are related to Rupert Murdoch and/or are senior executives/Board members at News Corp. The Company is publicly listed on the NASDAW under the symbol "NWSA".

20. Defendant K. Rupert Murdoch ("Murdoch") has been Chief Executive Officer of the Company since 1979 and its Chairman since 1991. Although the Murdoch Family owns only 12% of the overall equity of the Company, the Murdoch Family, through the Murdoch Family Trust, beneficially owns almost 40% of News Corp's voting Class B common stock, and thus  has effective control over Company matters.

21. Defendant James R. Murdoch ("James Murdoch") has been a director of the Company and the Chairman and Chief Executive, Europe and Asia, since 2007. He has also been the Executive Chairman of News International since 2007. As of March 30, 2011, James Murdoch became Deputy Chief Operating Officer, as well as Chairman and Chief, International. In addition, he previously served as an Executive Vice President of the Company, and served as a member of the Board from 2000 and 2004. James Murdoch was the Chief Executive Officer of BSkyB from 2003 to 2007. He has served as a Director of BSkyB since 2003.

22. Defendant Lachlan K. Murdoch ("Lachlan Murdoch") has been a director of the Company since 1996. He served as an advisor to the Company from 2005 to 2007, and served as its Deputy Chief Operating Officer from 2000 to 2003. Lachlan Murdoch served as a director of NDS from 2002 to 2005.
 
23. Defendant Chase Carey ("Carey") has been the President, Chief Operating Officer and Deputy Chairman of the News Corp Board since July 2009. Carey served the News Corp and affiliates in numerous roles beginning in 1988, including as Co-Chief Operating Officer from 1996 to 2002, as a consultant from 2002 to 2003, and as a Director from 1996 to 2007. Carey has served as the Chairman of the Supervisory Board of Sky Deutschland ACI, a German pay-television operator and affiliate of the company since July 2010. Carey served as a President and Chief Executive Officer of DirecTV from 2003 to 2009 and as a director of DirecTV from 2003 to 2010. Carey also served as a Director of BSkyB from 2003 to 2008.
 
24. Defendant David F. Devoe ("Devoe") has been a Director of News Corp and its Chief Financial Officer since 1990. Devoe has served as Senior Executive Vice President of News Corp since 1996. Devoe has been a Director of BSkyB since 1994 and a Director of NDS since 1996. Devoe has served as a Director of DirecTV from 2003 to 2008.
 
25. Defendant Joel Klien ("Klien") joined the Board of News Corp in January  2011and currently serves as Executive Officer of News Corp's education division.
 
26. Defendant Arthur M. Siskind ("Siskind") has been a Director of News Corp since 1991 and Senior Advisor to Rupert Murdoch since 2005. Siskind served as News Corp's  Group General Counsel from 1991 to 2005, as Senior Executive Vice President from 1996 to 2005, and as Executive Vice President from 1991 to 1996. Siskind served as a Director of BSkyB since 1991 and as a Director of NDS from 1996 to 2009.
 
27. Defendant Sir Roderick Eddington ("Eddington") has been a Director of News Corp since 1999, serves as the Chairman of the Audit Committee and as a member of the Compensation Committee. Previously, Eddington served as a Director of News Limited,  News Corp's  principle subsidiary in Australia from 1998 to 2000, and as Chairman of Ansett Holdings Limited, and a Director of each of Ansett Australia Limited and Ansett Holdings Limited from 1997 to 2000. Until then News Corp owned 50% of Ansett Australia.
 
28. Defendant Andrew S.B. Knight ("Knight") has been a director of News Corp since 1991, and serves as a member of the Audit Committee that approved the Shine Transaction. Knight was the Chairman of News International, a subsidiary of News Corp from 1990 to 1995.
 
29. Defendant Thomas J. Perkins ("Perkins") has been a Director of News Corp since 1996 and served as a member of the Audit Committee that approved the Shine Transaction.
 
30. Defendant Peter L. Barnes has been a Director of News Corp since 2004 and is a member of the Audit Committee that approved the Shine Transaction.
 
31. Defendant Jose Maria Aznar ("Asnar") has been a Director of News Corp since 2006. Aznar served as the President of Spain from 1996 to 2004.
 
32. Defendant Natalie Bancroft ("Bancroft") has been a Director of News Corp since 2007. In connection with News Corp's acquisition of Dow Jones, Bancroft was appointed by Rupert Murdoch as a Director of News Corp pursuant to the terms and conditions of an agreement whereby the Bancroft Family whereby News Corp agreed to elect a member of the Bancroft Family or another mutually agreed upon individual to the Board of News Corp.
 
33. Kenneth E. Crowley ("Crowley") has been a Director of News Corp since 1979. Crowley served as a Senior Executive of News Limited, a subsidiary of News Corp from 1980 to 1997, including as its chairman and Chief Executive from 1980 to 1997.
 
34. Defendant Viet Dinh ("Dinh") has been a Director of News Corp since 2004, and has been a close friend of the Murdoch Family for many years.
 
35. Defendant John L. Thornton ("Thornton") has been a Director of News Corp since 2004.
 
Substantive Allegations 
A. The Board of News Corp Does Nothing As Computer Hacking, And Other Illegal Conduct By Murdoch Proteges Coats News Corp Over €650 Million.
 
1. Hacking and  Illegal Conduct at NAM
 
36. For more than a decade, News Corp subsidiaries have engaged in highly improper practices that have subjected News Corp to great financial and reputational damage. This misconduct was so pervasive that the News Corp Board must have either been aware of the wrongdoing or was deliberately indifferent to the Corporate Culture that encouraged this type of behaviour. In this regard the non corporate governance  actions and indifference to this abhorrent  illegal and wrongful Corporate Culture can be described as a serious example of the now well established legal term "Willful Blindness" by Directors of a Company to illegal and/or wrongful behaviour within and/or associated with a Company and/or a Group of Companies. For example, a series of lawsuits against two News Corp subsidiaries evidence a pattern of improper behaviour that was, at best consciously disregarded by the News Corp Board.
 
37. NAM is a News Corp subsidiary engaged in the business of providing marketing services for consumer product manufacturers. Defendants Rupert Murdoch, DeVoe, and Siskind each served as directors of NAM during the time the misconduct described below occurred.
 
38. In five lawsuits, three competitors alleged that NAM engaged in a variety of improper and often illegal anticompetitive conduct in an attempt to drive competitors out of business. The resulting settlements have cost News Corp more than €600 million dollars, and in the wake of the recent public attention given phone-hacking and email-hacking scandal, these most serious allegations of wrongful and illegal behaviour by people who were employed by News Corp and/or its subsidiaries, are receiving a large amount of public attention from law enforcement and regulatory investigators.
 
39. In 2004, FLOORgraphics ("FGI"), a competitor of NAM, filed a law suit alleging that NAM consistently tried to destroy FGI's business. Several days into the 2009 trial, NAM agreed to pay FGI more than $29 million dollars to purchase FGI a company with annual revenues og approximately $1,000,000 dollars - outright, thus mooting the Law Suit.
 
40.At trial, a founder of FGI testified that in July 1999, Paul Carlucci, NAM's CEO, told FGI: "If you ever get into our business, I will destroy you...I work for a man who wants it all, and doesn't understand anyone telling him he can't have it all." Carlucci was referring to Rupert Murdoch, to whom Carlucci reported. In 2005, Rupert Murdoch appointed Carlucci head of the New York Post, after Rupert Murdoch's son Lachlan designed from the position. Carlucci and Rupert Murdoch talk regularly, so it is inconceivable that Rupert Murdoch would not have been aware about the illegal tactics being employed at NAM to thwart competition. At the very least, Rupert Murdoch and other News Corp Board Members knew about FGI's allegations, but failed to conduct any investigation of them.
 
41.Robert Emmel, a former NAM account director, testified about how NAM implemented Carlucci's threat and succeeded in driving FGI's business to ruin by, among other things:
(1) putting out false press releases to prevent FGI from getting needed financing,
(2) misrepresenting FGI's compliance rate (the ratio of advertisements paid for by customers to advertisements actually placed),
(3) falsely telling customers that FGI was having difficulty in making payments to retailers, and
(4) mutilating and removing FGI signs from retailers.
 
42. After he became increasingly disenchanted with NAM in 2005, Emmel began to disclose confidential information to a series of government entities while still working for NAM, including the office of Senator Paul Sarbanes, the SEC, the New York Attorney General's Office, the office of Senator Charles Grassley, and the U.S. Senate's Finance and Judiciary Committees.
 
43. Among the most shocking allegations (and those receiving significant renewed public attention in the light of the UK Phone-hacking and Email-hacking Scandal) FGI learned in early 2004, that "on a least 11 occasions between October 2003 and January 2004, ...NAM breached FGI's secure computer system." FGI had evidence that someone working at NAM hacked into a password-protected website 5containing information intended for FGI and its customers. According to trial testimony, the password-protected website container FGI's proprietary advertisement inventory. In addition to past advertisements, there were advertisements contemplated for future use as well. A subsequent investigation by FGI uncovered evidence that someone at NAM had illegally accessed the FGI password-protected website. FGI sent a letter to DeVoe Jr, CFO of News Corp, but did not get any response.
 
44. FGI also reported the incident to the FIB, prompting investigations by the FBI, the Secret Services, and the New Jersey Division of Criminal Justice. Recently, New Jersey Senator, Frank Lautenberg, requested the Attorney General and the Director of the FBI to look into these most serious allegations of wrongful and illegal behaviour by people who were employed by News Corp and its subsidiaries, anew, as part of the FBI's investigations into allegations of phone-hacking of September 11th victims by News Corp employees.
 
45. In 2006, Valassis Communications, another NAM competitor, filed a lawsuit in Federal Court in Michigan against NAM alleging conduct substantially similar to that alleged by FGI. Valassis alleged that NAM, which is involved in a number of related marketing businesses threatened customers of Valassis that if they contracted with Valassis for particular types of advertisements, NAM would impose severe economic penalties with respect to the other marketing services that NAM provides by significantly raising the price of other NAM services. According to  Valassis' Complaint, this economic penalty was more than $1 million dollars, and in some cases as high as $5 million dollars.
 
46. NAM's conduct was no aberration, but rather came at Rupert Murdoch's directions. At  the trial, Carlucci testified that he told NAM employees...  "Last night Mr Rupert Murdoch was saying now you have to really go after Vassassis."... Debra Lucidi, a former director of business development for Sarah Lee, also testified that NAM ... "... threatened to charge a higher in-store price, if the company gives its FSI (Free Standing Insert, i.e. couponing) business to Valassis.
 
47.Following a trial in a case brought in Michigan State Court, a jury awarded Valassis $300,000 in damages. Thereafter, NAM settled with NAM for $500 million dollars and agreed with a ten year business arrangement with Valassis 
 
48. Similarly, Imsignia Systems filed a lawsuit against NAM alleging the same type if wrongful and illegal behaviour by people who were employed by News Corp and their subsidiaries such as NAM. Insignia alleged that due to NAM's campaign of improper and illegal behaviour and tactics against Insigna, its share price was driven down from $11 a share in 2002, to less than 30 cents a share in 2005. NAM used the same types of tactics against Insignia that NAM had used in its attempts to drive FGI and Valassis out of business, including falsely telling customers that Insignia was unable to perform its contracts, removing Insignia's advertisements from retailers, and offering uneconomically large payments to retailers to exclude competitors.
 
49. Shortly after opening statements were delivered, NAM rather than face another jury, agreed to pay Insigna $125 million dollars to settle the case.
 
Hacking and Illegal Conduct at NDS
 
50. In 2002 and  2003, respectfully, Vivendi and EchoStar filed lawsuits against NDS, News Corp subsidiary that manufactured smart cards.
These small cards are inserted into boxes given to customers of satelite television providers and contain software code that allows for the unscrambling of satellite television signals. Protecting the code with the Smart Card is of paramount importance to satellite television providers, otherwise, individuals can enter the code on their own smart card and unscramble satellite television signals without paying the satellite television provider.
 
51. In March 2002, three subsidiaries of Vivendi (hereafter collectively referred to as "Vevendi") a French Media Conglomerate, initiated a lawsuit in the Northern District of California against NDS alleging that NDS backed its smart phone card and provided counterfeiters the opportunity to create cards for the decoding of secure broadcast signals. In 1998, NDS sent Vivendi's smart cards to a laboratory in Israel for the purpose of cracking the code on the smart cards. When the access-coding software was extracted from the smart card, it was sent to NDS's U.S offices with instructions that it be published on the Internet. Not only were the smart cards used with Vivendi's customers, but Vivendi also sold their smart card to other providers to use in their  customer's equipment. Vivendi alleged that NDS's actions of illegally extracting the code to its smart cards and posting it on the Internet caused Vivendi more than $1 billion dollars in damages. News Corp was once again forced to buy its way out of legal trouble, and the case was dismissed as part of a deal in which News Corp purchased Telepin, a money losing Italian pay-TV platform, from Vivendi for €920 million Euros (approximately $907 million dollars).
 
52. In June 2003, EchoStar, three of its subsidiaries, and a joint venture in which Echo held a 50% stake (hereafter collectively referred to as "EchoStar") initiated a lawsuit against NDS in U.S. Court for the Central District Court of California. EchoStar owned the DISH Network, a satellite-based television broadcast. EchoStar purchased smart cards from its joint venture, NegraStar, for use in the DISH Network boxes provided to customers. In order to control the problem of counterfeit smart cards, EchoStar alleged that NDS made a conscious decision to hire and 'control' all of the moat well-known, or 'best' satellite pirates and hackers. Using these hackers, NDS could then control the piracy of its technology.
 
53. The jury found that NDS had engaged in illegal conduct by using one of the counterfeit smart cards that it had created from code extracted from a NegraStar smart card to illegally intercept an EchoStar satellite television broadcast as part of its testing process. Following up on its verdict, the court granted an injunction in favour of EchoStar preventing NDS from, among other things: "intercepting or receiving anywhere in the United States, or assisting anyone else in the United States in intercepting or receiving, EchoStar's satellite television signal without authorisation."
 
 
3. The News Corp Board Did Nothing Despite The Harm To News Corp Resulting From NAM and NDS Misconduct 
 
54. The EchoStar and similar lawsuits were chronicled in News Corp's Annual Reports, which were signed by numerous member of the current News Corp Board. 
The News Corp Board was therefore well aware of these most serious allegations  of wrongful and Illegal Conduct set out in these various lawsuits and were well aware of the massive amounts of News Corp  company cash that were required to discharge or settle these many various lawsuits issued against News Corp and or its various subsidiaries.
 
55. In addition, at the time that this misconduct was occurring and coming to public light at NDS and NAM, a number of members of the News Corp Board, including Defendants Siskind, DeVoe, Carey, and James Murdoch, were also directors of miscreant subsidiaries. Rupert Murdoch, Devoe, and Siskind were directors of both NAM and News around the time that anticompetitive practices that cost News hundreds of millions of dollars were rampant. The fact that so many directors common to both News Corp and these subsidiaries engaged in pervasive misconduct that ultimately caused News Corp  significant financial and reputational harm, underscores the News Corp Directors deliberate indifference to the misconduct occurring at these News Corp  subsidiaries.
 
56. In all events, the deeply rooted and deep seated pattern of News Corp  stealing private and completely valuable information was by this point obvious and clear to the News Corp Board.
 
 
A. The News Corp Board's Failure To Oversea And Investigate Rupert Murdoch's Proteges At News International Has Harmed News Corp 
 
 
57. The most recent and visible manifestation of the News Corp Board's pattern of indifference to misconduct at News Corp subsidiaries is a scandal involving bribery of police, phone hacking and other illegal newsgathering practices used by News of the World and other News Corp-owned newspapers over the past decade. Despite the significance of the misconduct and red flags that appeared as early as 2002, the News Corp Board, until very recently, has remained completely silent and passive on this issue - costing the News Corp billions of dollars in financial damage and an incalculable amount of reputational harm.
1. The Significance Of News International To News Corp's Operations And Revenue
 
58.News International Ltd is the U.K. newspaper-publishing subsidiary of News Corp. News International Ltd publishes its major titles through three subsidiaries: Times Newspaper Ltd, News Group Newspapers, and NI Free Newspapers Limited (thereafter, News Limited and its subsidiaries are collectively referred to as "News International"). News International's major titles include the Times, the Sunday Times, the Sun, and before its abrupt closure, News of the World.
 
59. The News International titles provide News Corp with prestige, cross promotional opportunities and vehicles for various public causes, among with a source of revenue. In fiscal year 2009, News Corp's newspaper arm reported profits of $466 million (more than 10% of News Corp 's adjusted operating income). For its quarterly profits reported in May 2010, News Corp recognised a 10% increase in advertising revenue for News International.
 
2. The Phone Hacking And Bribery Scandals
 
a. Widespread Phone Hacking Takes Place In News Corp's U.K. Subsidiaries 
 
60. The News Corp Board's most recent failure to oversee the newsgathering practices carried out under the watch of Rupert Murdoch's close friends, confidents, and staunch supporters, Rebecca Brooks and Andy Coulson, both of whom served as the chief editors of News of the World, further reflects the News Corp Board's capitulation to the control and domination of Rupert Murdoch. Brooks alto served as chief editor for the Sun, another of News Corp's British tabloids, and until she was forced to resign in July 2011, was the CEO of News International. News International employees working under Brooks and Coulson systematically engaged in illegal wiretapping, phone hacking and bribery.
 
61. For example, in 2005, Prince William's phone had been hacked. The Prince's aides noticed that voicemails to which they had never listened were showing up as "saved" messages in William's inbox. At the same time, News of the World was running a series of articles that reported startlingly intimate details of the Prince's life. As a result of these revelations, News of the World reporter Clive Goodman and Glen Mulcare, a private investigator working with News of the World were arrested in 2006 and convicted in 2007.
 
62. During the trial, Goodman testified that he was not the only reporter at News of the World to engage in phone hacking. The prosecutor also disclosed the companies including News International and News Corp had paid numerous "research companies" to illicitly obtain information.
 
63. On March 2? 2007, Goodman sent a letter to a senior human resources executive of News International protesting his dismissal, and stated that phone hacking was 'widely discussed in the daily editorial conferences" until "explicit reference to it was banned by the editor." Goldman's letter also stated that other News of the World journalists in the same conduct and these actions were carried out "with full knowledge and support" of his superiors. Stuart Kuttner; then managing Editor, News of the World, and Les Hinton, then  Executive Chairman of News International received copies of the letter.
 
64. Only four days after receiving the letter, Hinton testified before the House of Commons Media Committee that after conducting "a full rigorous inquiry" that News International had determined that no one other than Goodman and Mulcaire had engaged in phone hacking, and failed to mention Goldman's letter to the Committee. This supposedly "full" and "rigorous" inquiry was nothing of the sort, and the idea that  hacking was limited to Goodman as a rogue employee has been proven absurd.
 
65. In July 2009, The Guardian reported that "27 different journalists from the News of the World and four from the "Star" made more than 1,000 requests to private investigators to secure wiretaps, phone records, or otherwise illegally obtained personal and confidential information. In fact these purchases were not secret within the  News of the World office: "they were openly paid for by the accounts department with invoices that itemised illegal acts". Moreover, evidence seized in connection with the 2006 Goodman investigation revealed that: "several thousand public figures" were targets of News International's illegal newsgathering practices.
 
66. One former desk editor who worked under Coulson in 2006 described the pervasiveness of illegal behaviour at News International papers:
"The hacking was so routine that people didn't realise that they were doing anything wrong. They were just doing what was expected of them. People were obsessed in getting celebs' phone numbers. There were senior people who were really scared when the Mulcaire story came out. Everyone was surprised that Clive Goodman was the only one went down."
 
67.Yet another former reporter stated that Mulcaire performed illegal services in connection with almost every news story News of the World ran, from hacking into voicemail to accessing confidential data bases:
"The  paper was paying Glenn Mulcaire £2,000 per week, and they wanted their money's worth. For just about every story, they rang Glenn. It wasn't just tapping. It was routine. This was just common place. We realised David Beckham laid 13 different 13 sim cards, and Glenn could track every one of them.
 
68. News of the world commissioned private investigators to hack into the phones of several child murder victims, as well as phones belonging to family members of both fallen soldiers and victims of a 2005 London terrorist attack. In March 2002, thirteen year-old Milly Dowler was kidnapped on her way home from school and later found murdered. While Dowler was missing, News of the World paid Mulcaire to hack into the child's (Milly Dowler's) voicemail. As the girl's friends and family filled her mailbox with messages, News of the World recorded every word. Once Milly Dowler's mailbox filled up and would no longer accept new messages, however the reporters hit a wall. Greedy for more material, the paper (News of the World/News International) deleted messages that had been left in the last few days after her disappearance, allowing newer massages to be recorded. The paper's illegal interference gave false hope to the girl's family, who then mistakenly believed that it was Milly Dowler who had deleted the voicemail messages herself. The newspaper's (The News of the World/News International's) conduct also created confusion for police, observed the investigation, and destroyed potentially valuable evidence.
 
69. Further, Brooks herself was directly involved in phone hacking. In July 2000, an eight year old, Sarah Payne, disappeared and was later found murdered.Rebecca Brooks, then-editor of News of the World, gave Sarah Payne's mother a cell phone, ostensibly to keep in touch with her supporters. The public later learned that the cellphone provided by Rebecca Brooks was listed among Mulcaire's notes, suggesting that the phone that Rebecca Brookes had provided to Mrs Payne had been hacked. Rupert Murdoch's close confidant and proyege, Rebecca Brooks, preyed on the mother's suffering in order to steal a story.
 
70. In addition, Ian Edmondson, whom Coulson appointed, served as a news editor for News of the World, until his suspension occurred in January 2011, due to evidence that he commissioned Mulcaire to hack into phones of actress Stenna Miller, het staff, and her friends. Significantly, this arrest provides future proof that the tabloid's (News of the World/News International's) "rougue reporter" defense was a complete fabrication because the news editor serves as the primary liason between the journalists and the editors.
 
71. In the U.S. the FBI is investigating allegations that voicemails of September 11 victims were hacked as well. In addition, actor Jude Law's voicemail may have been hacked by News of the World investigators after he arrived in New York on a trip. If true, these allegations would expose News Corp to significantly greater risk of enforcement and legal actions by U.S. criminal, regulatory, and legislative bodies.
 
72. The U.S. Investigation could prove perilous for News Corp and its board, as these investigations threaten News Corp's GCC liencess. Section 308(b) of the Communications Act requires broadcast licenses to be of "good character", and the FCC could use this section to revoke News Corp's broadcast licenses, depending of the outcome of the domestic inquires. Indeed U.S. Senator Jay Rockefeller stated that the alleged hacking is "offensive and a serious breach of journalistic ethics." If News Corp lost its FCC licenses, it would devistate the value of some of News Corp's most profitable assets.
 
b. News Corp's Newspapers Bribed Police For Information And Engaged In Other Illegal Conduct In News Corp's Relentless Pursuit Of Tabloid Stories.
 
73. Although phone-hacking remains the most published of the misconduct that occurred  in News International's Tabloids, these Tabloids routinely gathered fodder for its stories by using other illegal tactics, including bribing of police officers for confidential information, illegally gaining access to targets' computers, and "blagging", which is essentially a form of identity theft where an individual pretends to be whomever is the target of the newsgathering in an effort to get financial, medical, or similar personal information about a target.
 
74. In September 2002,  the Guardian published a detailed of how journalists from a number of tabloids brought confidential i formation from a network of corrupt police officers through well known Red Lodge Freemason Jonathan Rees, a private investigator and ex-police officer.
Jonathan Rees was after years of investigation costing the London Police Met over  £20 million pounds, was finally charged with the murder of his business partner Daniel Morgan, who was threatening to publicly corrupt and illegal investigate tactics and methods carried out by Jonathan Rees. However, it appears that Jonathan Rees' Freemason Brothers arranged for a Freemason Justice in the London High Court to find a technicality to completely dismiss the murder charge against Jonathan Rees before his actual murder charge trial started. It is well known, as set out in various publications including unchallenged books exposing how Freemasonry works from within, which include Martin Short's book "Inside the Brotherhood", Stephen Knight's book "The Brotherhood" and the series of books published by the Australian Weekend News Publishing Group titled "The Triumph of Truth (Who Is Watching The Watchers?)",  that under the rules one joins Freemasonry, a Brother Freemason is obligated under fear of death by other Freemasons, as a result of "a Blood Oaths Freemasons have to swear to when joining Freemasonry", ... a Brother Freemason is obligated to help out another Brother Freemason... in any way he can.. even if it means a Judge, a Police Officer, a Politician, a Banker, etc... has to breach the Oath of His Office to help a Brother Freemason out of trouble.. even wrongfully ordering a serious murder charge to be completely dismissed without the Defendant such as Jonathan Rees standing trial before a Judge and Jury, to let the public see whether after a full open trial, the Jury finds Jonathan Rees inocent or Guilty of the murder of his then business partner Daniel Morgan.
 
75. In 2003, while Rebecca Brooks ran News of the World, the paper paid at least £100,000 pounds in cash bribes to between three and five Metropolitan Police Officers. At a Select Committee Hearing, Rebecca Brooks cavaliery admitted to "paying the police for information."
 
76. In April 2005, News of the World was named as one of the prime customers at the trial of private investigator, Steven Whitmore, who was employed by various tabloids to engage in illegal tactics to gain information for tabloid reporters. It is believed that he obtained this information through blagging, which has been illegal since 1994 under U.K.'s strict data privacy laws.
 
77. In December 2006, the Information Commissioner Office ("IOC"), an office created by Parliament as part of U.K. Data Protection Act Legislation, published a report entitled "What Price Privacy Now? The first six months progress in halting the unlawful trade in confidential information." This report detailed efforts by the U.K. Government to stop the illegal gathering of confidential personal information. The report found that twenty-three News of the World journalists were involved in 228transactions, as part of the criminal investigation of Whitmore and one of his colleagues.
 
78. While editor of the News of the World, Rebecca Brooks used Whitmore's services on at least two occasions. Specifically, Rebecca Brooks requested Whitmore to determine who a particular mobile phone number was registered to. Rebecca Brooks also used Whitmore for an electoral role search of a particular address.
 
79. In 2006, while Rebecca Brooks served editor of the Sun Tabloid, former British Prime Minister Gordon Brown claimed that the Sun used blagging to discover that his infant son has cystic fibrosis, a fact that at the time was only known by Gordon Brown's Family and doctors. In addition, the Sunday Times is also suspected of using blagging to obtain Gordon Brown's confidential property and financial information for its stories.
 
80. Both Any Coulson and Rebecca Brooks both well knew about the rampant use of illegal news gathering tactics at News International's newspapers, because such practices were so widespread and ingrained. Indeed, Shawn Hoare, a former reporter who worked at News of the World for over ten years, often closely with Andy Coulson, stated, "Either (Coulson) was a dreadful editor or a liar. You can not run a newspaper and not know where things come from." At the News of the World phone hacking "was encouraged as long as you didn't get court. Coulson was well aware, that these particular practices of phone and email hacking, blinging and blagging, were going on and were widespread illegal practices within the News International Tabloids." Hoare played illegally hacked voicemails for Andy Coulson while the two worked together for the Sun Newspaper, which is owned by News International, a subsidiary of News Corp. 
 
81. Likewise, Paul Mullan, a former features editor and then member of the News of the World's investigation team, stated that he personally commissioned private investigators to commit "several hundred acts which could well be regarded as unlawful, and that these illegal techniques were no secret at the paper, and that senior editors, including Coulson were all well aware of what was going on in this regard..."
 
82. Another veteran reporter who worked for Andy Coulson said that: "Any Coulson absolutely knew ... they all knew...it was a regular daily joke in daily conferences.. 'say no more'. Andy Coulson would ask questions in conferences. And he'd be told 'nudge... nudge.'..".
 
83. In addition into enquiries into phone-hacking and police bribery, U.K. officials opened up another investigation into alleged computer hacking and police bribery amid numerous reports that News International Tabloids engaged extensively in computer hacking as another illegal newsgathering technique. For example, a former British Army Intelligence Officer recently sued News International, claiming that in 2006 it had hired a computer expert to hack into his emails. In addition, several attorneys representing a number of phone-hacking victims stated that they saw evidence of potential computer hacking as well.
 
Rupert Murdoch And Other Top News Corp Executives Are Intimately Involved In The Operations Of News International And Other News Corp Subsidiaries 
 
84. Due to News International's cash flow importance to News Corp  and the UK Political Power and Influence to Rupert Murdoch and the Murdoch and Rothschild Families and their extremely powerful connections of 
News Corp..  ..Rupert Murdoch and the Murdoch and Rothschild Families and their extremely powerful connections  are heavily involved in many various ways...in the operations of News Corp's subsidiaries...and the International News Division receives attention at the News Corp Board level.. Rupert Murdoch, as an enraged boss, stays abreast of various news sources on a daily basis.. Rupert Murdoch's use of the various News Corp's news divisions as a vehicle for his personal social and political agendas shows that Rupert Murdoch is extremely heavily involved in their operations. Indeed, commentators have noted that Rupert Murdoch traditionally ruled News Corp "with an Iron Fist" and hand selected the various people that were most heavily involved in the backing scandals. For example, Roy Greensdale, a former Rupert Murdoch editor, who is now a professor of Journalism at City University, London, stated: "... you can see through the way the Sun and the News of the World operate...that Rupert Murdoch's word remains law....".
 
85. Rupert Murdoch and James Murdoch also maintain a long and close personal relationship with Rebecca Brooks. In fact Media Circles recognise Rebecca Brooks for conquering the World of Tabloid Journalism with meteoric success and becoming Rupert Murdoch's U.K. Proxy.
 
86. Rupert Murdoch regards Rebecca Brooks  "as a kind of favourite daughter... and he's very... very... very... attached to her...".
 
Rupert Murdoch promoted Rebecca Brooks swiftly through the newspaper's ranks. Brooks went from secretary to editor-in-chief at the News of the World in just 11years. Rupert Murdoch has moved Brooks to the top spot at the Sun, Britain's largest-selling newspaper. Two years ago Rupert Murdoch promoted Brooks to CEO of News International. Rupert Murdoch continued to support Brooks even as Brooks became more and more tanted by the phone and email hacking scandal. Indeed, the first time Brooks offered her resignation following the breaking of the phone and email hacking scandal, Rupert Murdoch rejected it. In addition when Rupert Murdoch was questioned by his priority when arriving in London to provide leadership in the wake of the outbreak of the scandal, Rupert Murdoch pointed to Brooks and said "This one ...." implying protecting Rebecca Brooks was Rupert Murdoch's paramount objective.
 
87. Rebecca Brooks' arrest over hacking and corruption allegations came two days after her resignation as CEO of News International on July 15th, 2011. In the immediately preceding days, Brooks appeared next to Rupert Murdoch as they tried  do down play the company's (News International's) wire tapping and bribery.
 
88. Likewise Les Hinton, who spent 50 years working for Rupert Murdoch, is described by News Corp's insiders as Rupert Murdoch's "cosiglien." Les Hinton ran News International starting in 1995 until he left in 2007 to run Dow Jones & Co., and therefore was at the helm of when the phone hacking and police payments occurred. Hinton is now accused of giving misleading  information to the UK Parliament in 2007 and 2009 by saying that no widespread inproprietories occurred within News International. When Les Hinton was forced to resign in the light of the scandal Rupert Murdoch stated that Les Hinton's resignation was a "matter of much sadness." Rupert Murdoch's close ties with Les Hinton makes it inconceivable that Hinton would not have informed Rupert Murdoch about the phone and email hacking and police bribery practices within News International at the time that they happened. 
 
d. The News Corp Board Knew About But Disregarded Systematic Illegal Conduct At News Corp's British Newspapers 
 
89. Over the last decade, as described above, senior employees at the News of the World and the Sun engaged in a massive scheme to intercept voicemail and other forms of electronic communications to obtain stories for these papers. The News Corp Board either knew or should have known about the information well before the revelations of the last few months. In this regard the News Corp Board was guilty of a well established legal term known as "willful blindness."
 
90. In this regard, News Corp's Board should have learned that reporters from News of the World used illegal means to gather news during Rebecca Brooks' tenue as chief editor of the News of the World from 2000 to 2003, given the Murdoch's close personal and professional relationship with Rebecca Brooks. In addition, the interrelation between News International and News Corp, particularly James Murdoch's leadership of News International and directorship of News Corp, kept New International's operations at the forefront of the News Corp Board's activities and oversight.
 
91. A specific red flag emerged in September 2003, when the Guardian published a detailed account of how journalists brought confidential information from Jonathan Rees. The News Corp Board received its next unambiguous red flag in April 2005, when the ICO specifically named News of the as one the primary customers of Whittamore (the private investigator being investigated by the ICO), and reflected 228 transactions involving 23 News of the World journalists.
 
92. News Corp's Board received (or should have received) another red flag in 2005 as a result of the investigation and trial from the events that ensued after Prince William's staff notified authorities  that William's phone had been hacked. An initial police investigation into the newspaper's conduct resulted in January 2007 convictions of Goodman and Mulcaire. Andy Coulson, the papers editor, resigned in the midst of the Scandal .
 
93. Another red flag emerged on February 9, 2010, when a British Parliament committee issued a report that found it was "inconceivable" that the one reporter blamed by News Corp for the phone and email hacking and police bribery scandal, could be the only person at News Corp to have been involved. The Report chastised News Corp for failing to adequately investigate the scandal. "Despite clear   evidence that others were involved, there was no further investigation of who those "others" might be and we are concerned at the readiness of all those involved... to leave Goodman as the sole scapegoat without carrying out a full investigation at the time. The newspaper's enquires were far from "full" or "rigorous", as we - and the Press Complaints  Committee - had been assured."
 
94. James Murdoch's own statements in the wake of this scandal clearly demonstrate that News Corp's Board failed to exercise any oversight of News Corp's affairs, and, indeed, affirmatively sanctioned or, at the very least, very conveniently turned a blind eye to rampant illegality taking place at News Corp's newspapers. In a press release issued July 7th, 2011, James Murdoch said, .. "... The News of the World is in the business of holding others account. But it failed when it came to itself." James Murdoch further admitted that "News of the World and News International failed to get to the bottom of repeated wrongdoing that occurred without conscience or legitimate purpose." With respect to payment of gag money, James Murdoch said: "The Company (News Corp) paid out-of-court settlements approved by me. I now know that I did not have the complete picture when I did so. This was wrong and is a matter of serious regret."
 
95. Various additional red flags (discussed below) existed for the News Corp Board that strongly suggested that phone hacking and other illegal newsgathering practices and techniques were rampant at News International papers, including News of the World. The News Corp Board, however, did not want to investigate these red flags because, it is very clear from News Corp's track record, the News Corp Board blindly follows of Rupert Murdoch and Rupert Murdoch did not want this illegal newsgathering practices and techniques investigated.
 
3. The Cover Up
 
Rather than following-up on the red flags and seeking to uncover wrongdoing within News International, News Corp's executives, and in some cases News Corp Board Members, took affirmative steps to hide wrong-doing from investors and the general public at large. News Corp used its governmental contacts when necessary and bought silence when it had to in order to avoid disclosure of its wrongdoing.
 
a. News International Pays "Hush Money" To Purchase The Silence Of Hacking Victims 
 
97. During the 2006 investigation of Goodman and Mulcaire,  Scotland Yard seized copious computer records, audiotapes, handwritten notes, and other documentary evidence. Those records contained the names of 4,332 people whom the two men were interested in targeting. 2, 978 mobile phone numbers, thirty tapes appearing to contain voicemail messages, and ninety-one PIN codes used to access voicemail boxes.
 
98. Scotland Yard (despite the mountains of evidence at their fingertips) notified only five individuals (apart from the members of the Royal Household) that their voicemail messages may well have  been intercepted. Two of those five people, Gordon Taylor, CEO of the Professional Footballers' Association, and Max Clifford, a powerful British Publicist, chose to sue News International.
 
99. In response to Taylor's Lawsuit, News International initially denied that the company was involved in hacking Taylor's phone and claimed that no records of any intercepted messages had been kept. But at the request of Taylor's lawyers, the court ordered the production of evidence seized by Scotland Yard in the Goodman inquiry and a subsequent Information Commission investigation. The documents revealed, among other things, an email from a News of the World reporter to News of the World's chief reporter Neville Thurlbeck sending transcripts of thirty-five voicemail messages intercepted by Mulcaire. This document became known as the "Fox Neville" email, and it took centre stage in the firestorm of public attention forced on News Corp and in particular James Murdoch.
 
100. The "Fox Neville" email contained transcripts of voicemails from the phone of a business associate of Gordon Taylor. Crone, the then-News of the World legal manager, Colin Myer, News of the World's then editor, recognizing that this email undermined the News International lie of a single rogue reporter involved in the phone hacking scandal, immediately brought this document to James Murdoch's attention and sought his approval of a substantial settlement with Gordon Taylor, in order to keep this document, and Gordon Taylor's other evidence under wraps.
 
101. Based on these revelations, in June 2008, News International sought to stop the lawsuit by offering Taylor £700,000 pounds in exchange for his silence. News International then quickly made a similar deal with Max Clifford, and one other individual, paying more than £1 million pounds in gag money in total.
 
102. Crone and Myer presented the settlement figure to James Murdoch along with their recommendation to approve it. On July 7th, 2011, admitted to personality approving these settlements. In response to the UK Parliament's request information, Myers and Crone confirmed their position in previously-submitted letters, namely that James Murdoch knew about the "Fox Neville email" when he approved the settlements, undermining his and News Corp Board's absurb obvìously false contention that phone hacking was limited limited to a single-rogue reporter.
 .

".. All powerful Red Lodge 33rd Degree Freemason Zionist Jew Rupert Murdoch and his Trillionaire silent partners 33rd Degree Red Lodge Freemason, Zionist Jew, Lord Jacob Rothschild and the Rothschild Partners, secretly arranged through PrivateTrust and their News Corp and its UK subsidiary News International managed to persuade the Freemason and Zionist Jewish controlled British Courts to seal of all court and investigation  proceedings, thus using the British Government and the British Courts to help them hide evidence of News Corp's and its directors, senior management, staff, servants and otherwise illegal and wrongful misconduct from the shareholders and the general public scrutiny. News Corp and News International further insisted on an extensive confidentiality provision in the settlement agreement to legally prevent Gordon Taylor or his attorneys from publicly speaking about the matter. The amount of settlement of £700,000, far exceeded amounts that had been awarded by courts in similar lawsuits, thus confirming that a major purpose of this extremely high £700,000 settlement was the confidentially agreement, to keep the matter under wraps. In a letter to the UK House of Commons Culture, Media and Sports Committee, James Murdoch confirmed that confidentiality was an important factor in the astronomical £700,000 settlement amount:

"Previously I had understood that the £700,000 settlement amount was based on a likely judgement of the likely damages that could be awarded, and the likely costs and expenses associated with the litigation .... since I gave this response, I have been informed that confidentiality was a factor in determining the amount of the settlement payment...."
 
103. All powerful Red Lodge 33rd Degree Freemason Zionist Jew Rupert Murdoch and his Trillionaire silent partners 33rd Degree Red Lodge Freemason, Zionist Jew, Lord Jacob Rothschild and the Rothschild Partners, secretly arranged through PrivateTrust and their News Corp and its UK subsidiary News International managed to persuade the Freemason and Zionist Jewish controlled British Courts to seal of all court and investigation  proceedings, thus using the British Government and the British Courts to help them hide evidence of News Corp's and its directors, senior management, staff, servants and otherwise illegal and wrongful misconduct from the shareholders and the general public scrutiny. News Corp and News International further insisted on an extensive confidentiality provision in the settlement agreement to legally prevent Gordon Taylor or his attorneys from publicly speaking about the matter. The amount of settlement of £700,000, far exceeded amounts that had been awarded by courts in similar lawsuits, thus confirming that a major purpose of this extremely high £700,000 settlement was the confidentially agreement, to keep the matter under wraps. In a letter to the UK House of Commons Culture, Media and Sports Committee, James Murdoch confirmed that confidentiality was an important factor in the astronomical £700,000 settlement amount:
"Previously I had understood that the £700,000 settlement amount was based on a likely judgement of the likely dsmages that could be awarded, and the likely costs and expenses associated with the litigation .... since I gave this response, I have been informed that confidentiality was a factor in determining the amount of the settlement payment...."
 
104. News International even agreed to "pay-off" with promise of future employment, its disgraced former reporter live Goodman for his silence. In Goodman's March 2007 letter to Les Hinton and others at News International, he stated that Crone and Myer "promised on many occasions that I could come back to a job at the newspaper if I did not implicate the newspaper ofr any of its staff in any mitigation plea. I did not, and I expect the paper to honour its promise to me."
 
b. New International Seeks to Hid Incriminating Documents
The scandal further intensified in early 2011, when a "lost" hoard of emails sent by senior executives in Rupert Murdoch's newspaper empire at the height of the phone-hacking scandal were found - after News International claimed that they were lost in transfer to Mumbai, prompting further criminal investigations in Britain.
 107. Moreover, according to an IT vendor, News International has requested email deletions none times in the past fifteen months. Police suspect that a large cache of email archives has been wrongfully deleted, dating back to 2005 (with the most recent suspected deletion having taken place in January 2011). News International executives also tried to hide the contents of a senior reporter's desk after he was arrested.
 
108.  Not surprisingly, in its july 20, 2011 report, the UK House of Commons Select Committee condemned News International condemned News International's response to the phone-hacking allegations: "We deplace the response of News International to the original investigation into hacking. It is almost impossible to escape the conclusion ..... that they  were deliberately trying to thwart a criminal investigation."
 
c. News Corp Takes A Half Hearted Investigation
 
109. Clear evidence of widespread use of illegal newsgathering techniques existed that warranted thorough investigation by News Corp and its Board. Nevertheless. News International pursued only a partial investigation with an extremely limited mandate. Rupert Murdoch and others at News Corp then distorted the scope of these extremely limited-mandate investigations to tell the world that they supported News Corp's one rogue reporter lie, even though the investigations intentionally were not designed to determine whether there was widespread misconduct at News of the World. Moreover,  News Corp and its Board refused to undertake any investigations into the matter at all, until a firestorm erupted in July 2011.
 
110. When the Goodman and Mulcare arrests occurred in 2006, News of the World retained the law firm of BCl Burton Copeland. Although Crone told a Parliamentary Committee in July 2009 that the firm was "brought in to go over everything and find out what had gone on, and to liaise with police," the investigation was limited primarily to one investigation on News of the World's staff or the review of emails sent by executives or journalists. The details of Burton Copeland's methods and findings were not fully disclosed, and on July 22, 2011, Burton Copeland ceased advising News International about the phone-hacking scandal for an undisclosed reason.
 
111. In 2007, News International retained another British law firm, Harbottle & Lewis, in connection with a wrongful termination lawsuit brought by Goodman. Jon Chapman, head of News International's legal department, asked Harbottle & Lewis to review emails that the company recovered, but only provided the law firm with emails from six of the 200 employees at News of the World. In a letter response to the UK Parliament, Harbottle & Lewis noted the extremely limited nature of the review requested by News International. In fact, News International only paid Harbottle & Lewis £10,000 for its review, which belies the sworn testimony of Rupert and James Murdoch and others at  News Corp and News International that this was (or was intended to be) a thorough investigation of wrongdoing at News of the World. Despite the incredibly narrow scope of the Harbottle & Lewis engagement, James Murdoch nevertheless told the UK Culture, Media and Sports Committee of the UK House of Commons that the law firm had given News International "a clean bill of health". The Harbottle firm subsequently made clear, through its own submission to the UK Parliament. that it would not endorse James Murdoch's characterization of the  prior investigation.
 
Notably, both News International and Harbottle & Lewis reviewed an emaILfrom Goodman to Coulson in which Goodman requested £1,000 to pay a police officer in the royal protection unit for a copy of the Green Book directory, which contained private phone numbers for the Queen, other Royal Family members, and their associates. In another email, Andy Coulson said he did not want to go into detail about cash payments because those involved could "go to prison for this."
 
 
4. Rupert Murdoch, James Murdoch and Rebecca Brooks Testify Before The U.K. Parliament's Culture, Media And Sports Committee Concerning Corporate Governance Issues And The Hacking Scandal
 
113. On July 12, 2011, the British Parliament summoned Rupert Murdoch, James Murdoch, and Rebecca Brooks to appear before the UK Parliament's Culture, Media and Sports Committee ("the CMS Committee"). The Murdoch's initially refused to attend the hearing, but appeared on July 19. only after they received a formal summons. The hearing re-opened the inquiry that the CMS Committee held in 2009 regarding press standards, privacy, and libel, and also focused on evidence about the phone-hacking that  occurred at  the News of the World. With recent evidence emerging in the hacking scandal, the CMS Committee expressed that it was "clear that Parliament has been mislead" in the 2009 proceeding.
 
114. In this regard, the CMS Committee inquired about whether anyone who had testified in the prior committee proceeding had lied ...Both Murdochs (Rupert and James) claimed that they had no knowledge on that issue. James Murdoch also testified that he had he had no knowledge of the recent evidence (primarily the "Fox Neville" e-mail) that expanded the hacking scandal beyond one rogue reporter until the end of December 2010, when documents were produced in civil litigation brought by the actress, Sienna Miller, against News Corp and News International. James Murdoch further denied having had any information about the Milly Dowler case until "The Guardian reported on that story.
 
115. Shortly after James Murdoch testified, two former News International senior executives, Crone and Myer, challenged James Murdoch's testimony, claiming that they had told him years ago about an email that showed that the wrongdoing at News of the World was much more widespread than News Corp and their subsidiary News International acknowledged.
 
116. In a resumption of the hearing held on September 6th, 2011, Myer and Crone said it was "inconceivable" that James Murdoch was unaware in 2008 of the significance of the "For Neville" e-mail which proved beyond any reasonable doubt that hacking went well beyond a single rogue reporter at the Sunday newspaper. They testified that the meeting at which the "Fox Neville" was discussed resulted in James 3authorizing payments to settle on-going litigation. Crone noted: "Since he gave us the authority we were asking for, I would take it that for the first time James Murdoch realised News of the World was involved in phone and email hacking, and that involvement involved people going went far beyond Clive Goodman." Crone further testified that "There was evidence that illegal activity had passed through our office and that the News of the World  was implicated. I would have explained the background to the litigation and the stance we had taken up and would have explained what this document meant.
 
117. Additional evidence of News Corp's and News International's lack of control emerged from the CMS Committee's questioning in July 2011, about the arrest of Clive Goodman and Glen Mulcaire. RUPERT Murdoch testified that speaking to Les Hinton was the only action he took to investigate the extent of the hacking. Notably Les Hinton's testimony before the CMS Committee in 2007 where he stated that News of the World had ... "carried out a full rigorous inquiry" into the use of phone hacking by the newspaper and was "absolutely convinced" that it was limited to "one rogue reporter". News Corp has now conceded that testimony is not true. Similarly, neither Rupert Murdoch nor anyone else made any effort to investigate News Corp's or News International's practices after Rebecca Brooks testified in 2003; and admitted that News of the World paid police for information.
 
118. Rupert Murdoch's testimony further demonstrated that News Corp prefers to largely rely upon the police- with which News International has had a cozy relationship - to find wrongdoing at News Corp and News International, rather than implementing its own investigation, and will only take action if forced to do so by government authorities. For example, when questioned why no one was fired in April 2011 after News Corp and News International admitted that News of the World has engaged in criminal interception of voicemails. Rupert Murdoch stated that it "was not our job to get in the course of justice. It was up to police to bring the charges and carry out the investigation." Likewise, when the CMS Committee inquired as to whether News Corp and News International would introduce another investigation if other forms of illicit surveillance like computer hacking were discovered.  Rupert Murdoch testified: "That would be up to the police.... if they wanted us to do it, we would do it..."  News Corp has not just failed ti reach the ideals of good governance, News Corp has openly rejected the basic norms.
 
119. During the July 18 hearing, Rupert Murdoch admitted that News Corp is a "family business", and he "would love to see his sons and daughters follow if they are interested".
 
5. News Corp's Board  - Years After Red Flags First  Appeared -  Establishes A Committee Of Questionable Independence To Investigate
 
120. After the hacking scandal broke in July 2011, News International finally formed a Management and Standards Committee (the "M&S Committee") to handle the crisis. The M&S Committee was tainted with a lack of independence since its formation. In this regard, the M&S Commitee originally reported to Rebecca Brooks - the same editor who was in charge of News of the World when the hacking scandal involving Milly Dowler and police bribes occurred. In addition, Will Lewis, a News International general manager, Simon Greenberg, News International's director of communication, and Jeff Palker, News Corp's general counsel for Europe and Asia, were assigned to the M&S Committee.
 
121. On July 8th, 2011, recognizing the compromised nature of investigation, Rupert Murdoch announced that Rebecca Brooks would no longer manage the investigation. Instead of appointing an independent person, much less outside legal counsel as is customary, to lead the investigation, Rupert Murdoch stated that the M&S Committee would report to News Corp's executive vice president and director, Klein - Rupert Murdoch's most closest and most visable advisor during the hacking scandal. Klein in turn would work with ostensibly independent director Viet Dinh, who is himself an extremely close Murdoch Family friend.
 
122. Klein is a News Corp employee who earns more than $4.5 million a year. Klein's position at News Corp is personal assistant and advisor to Rupert Murdoch, and Rupert Murdoch Klien his job and appointed Klien to the News Corp Board. In fact Rupert Murdoch and Klien were very close friends lo before Klien became a News Corp employee and a director News Corp Director. When Klien was the New York City School Councilor, Klien and Rupert Murdoch began discussing educational issues over regular lunches and dinners with their wives. Rupert Murdoch also donated $1 million of his own money to Klien's advisory group. Education Reform Now. Eventually their friendship and political alliance turned into a multi million dollar job at News Corp, with an office just down the hall from Rupert Murdoch's office, and frequent trips on Rupert Murdoch's private jet. Klien, a personal friend of and assistant to Rupert Murdoch, who owes Rupert Murdoch his livelihood, can not be  depended upon to exercise independent judgement related to  the M&S Committee's investigation.
 
123. When the hacking 2publicly broke, Klien was the first to arrive in London to help Rupert Murdoch to handle the fallout, and moved into a temporary office twenty feet from Rupert Murdoch's office. Klien further weighed in on the drafts of a statement that Rupert Murdoch wrote to deliver to the U.K. Parliament, and sat directly behind Rupert Murdoch while Rupert Murdoch testified before the U.K. Parliament. In addition, when three of News of the World journalists were arrested in April on suspicion of hacking, some executives pushed for an investigation that would have the full backing of the News Corp Board and senior management.  Rupert Murdoch however, opposed the idea outright, and Klien supported Rupert Murdoch's decision.
 
124. Dinh, who is the appointed person to keep the News Corp Board informed about all developments related to the hacking scandal investigation, also lacks independence. In this regard, Dinh suffers from a serious conflict of interest due to his close links to the Murdoch Family. Among other things, Dinh in the Godfather of Lachlan Murdoch's second child

 https://www.theguardian.com/media/interactive/2011/sep/13/news-corp-shareholder-complaint 

BBC: we won't charge for online news
Corporation says it has 'no intention' of charging – as Times and Sun owner News Corporation prepares to put up a paywalTara Conlanguardian.co.uk,
Tuesday 24 November 2009  Article history 
A young Rupert Murdoch backed by his  silent partners, Lord Jacob Rothschild and the Rothschild Family who agreed to provide  unlimited capital,  to help Rupert Murdoch take control of the Australian Newspapers and then the world newspapers
 
Lord Jacob Rothschild known to be one of the richest, most powerful and most influential men in the world

The BBC Trust chairman, Sir Michael Lyons. Photograph: Peter MacDiarmid
 
James Murdoch with a cartoon version of his father Keith Rupert Murdoch stating that the only way media maintains it's independence is by being profit driven, however as the cartoon version of Keith Rupert Murdoch depicts, that was presented on well known the Slate Website, Keith Rupert Murdoch if often being accused of not telling the truth about by his critics, about the past, present and the future promises when he takes over his next media vehicle, whether it be television, films. newspapers, Internet etc as he is often accused  saying he will nit meddle and/or chance the fabric of a newspaper like when he took over the Times of London, and is well know to use his newspapers to achieve his and his allies political, social and business aims, as he is doing at present using them to attack the BBC and Gordon Browns  and his Labour party in Britain, in an obvious attempt to make sure that David Cameron and his Tory Party win power in the 2010 British Election., as he has done in the past to help various political parties win UK elections. Keith Rupert Murdoch and his powerful News Corp media vehicles have in the past made sure that Maggie Thatcher won power and then supported Tony Blair to win power and keep hold of power until Tony Blair resigned as Prime Minister of Britain and handed over the reigns to Gordon Brown. Keith Rupert Murdoch ad his son James Murdoch have made it clear  they have now turned on Gordon Brown and his Labour Party and supporting David Cameron and his Tory Party, because David Cameron and the Tory Party in the UK will make sure the Murdoch's get their way if David Cameron wins power, and either has the BBC dismantled and/or allowed the Murdochs and their News Corp to buy the BBC. The reason for all this is a simple business problem the Murdochs have.  They have now realised that the £4 billion and growing yearly losses of News Corp losses will not turn back into a profit unless they can set up a pay wall  and start charging for news content on the Internet. This is not possible while the BBC is in existence as a semi government organisation funded by mandatory licence fees, as it has made it clear the BBC will not be charging for news content on the Internet to its readers. So for the Murdochs and the powerful News Corp media group to financially survive in the long term they have to have the BBC dismantled or buy the BBC. Otherwise News Corp will simply eventually run out of capital making losses each year and end up in liquidation, because the reality is that hard copy newspapers are becoming a thing of the past because of the power of the Internet to provide unlimited news at the click of a mouse, from any where in the world, the home, the beach, a cafe, a bus stop and in Bin Laden's case a cave.  The other reality is that young people and in growing numbers older people as well, are simply not buying and/or reading newspapers any more and there is a growing concern of the millions of trees that is needed to be cut down to make the paper each week,  to print the millions of newspaper the Murdochs and their News Corp print each day around the world. It as become a world wide concern that the cutting of down of  millions of tress each year to print the hundreds of million newspaper, is destroying the environment but increasing the green house gas effect, and contributing to global warming, destroying the natural habitat for the wild animals, birds, frogs, fish and other living things that keep nature in balance and as has been shown  in places like Australia where 90% of the forests and trees have been cut down since English Settlement in the 1800's this has cause the salt it rise in the earth making the land completely unusable and barron.
The BBC has today said it has "no intention" of charging for online news, in a declaration that is unlikely to please James Murdoch and his father Rupert as they prepare to start charging for News Corporation content on the internet.
Sir Michael Lyons, the BBC Trust chairman, said the corporation has "no intention of diluting BBC commitment to universal access to free news online" as he outlined the areas director general Mark Thompson's ongoing strategic review will cover.
The BBC's internet news operations came under fire in August at the Media Guardian Edinburgh International Television Festival from James Murdoch, chairman and chief executive of News Corporation in Europe and Asia, who accused the corporation of "throttling" the market and preventing its competitors from launching or expanding their own services online.
News International, the News Corp subsidiary that owns the company's British newspapers, including the Sun and the Times, is planning to start charging for its journalism online.
Lyons said today that the BBC Trust "recognises external concerns over scale and growth of BBC online operations". But he added: "Equally, it's an immensely popular service with audiences and an important tool for the economy."
Lyons said he wanted Thompson to ask what "licence fee payers really expect to get from their licence fee and what they might be surprised to see the BBC doing in the online world".
He indicated that some areas, such as the iPlayer and news online, are safe when he asked: "Beyond the core offer of news, sport, education, children's and the iPlayer, which parts of the online service are essential to the BBC's mission and which could be stopped?"
However, Lyons also questioned the future of content created for online that is not directly related to specific BBC programmes, asking, "where should the boundary be drawn" between this and "the online expression or extension of BBC programming"?
Lyons also said the BBC Trust has asked Thompson to look at how the corporation should "serve all audiences" with "fresh and new" programmes, not a "diet of the predictable and comfortable", while "nurturing home-grown talent... across the full range of genres".
Other questions include "does increased quality and distinctiveness come at a price?" and how can the BBC be "more open", both for "programme-makers and for audiences".
Another concern expressed by the trust is that "if it spreads itself too thinly the BBC may lose focus on the core mission to provide fresh, new, high-quality content".
The BBC is consulting its rivals about the strategic review, which was announced by Lyons in September, and Thompson is due to deliver his initial thoughts in the new year.
John McVay, the Pact chief executive, said: "Rather than making cuts in content, the BBC should look at its own fixed overheads and in-house capacity. Looking to make cuts online and on-air is not the compact the BBC has with the licence fee payer."
• To contact the MediaGuardian news desk email This email address is being protected from spambots. You need JavaScript enabled to view it. or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000.
• If you are writing a comment for publication, please mark clearly "for publication".
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x25487
Khephra 
Murdoch papers open fire on BBC
Newspapers controlled by media tycoon Rupert Murdoch laid into the BBC this morning, seeking to place the blame for the death of government advisor David Kelly firmly at the feet of the corporation.
 
"BBC in crisis as Blair mood swings," splashed the Times, claiming it was the corporation, rather than a battered Labour government, that was "fighting to save its credibility."
 
The paper alleged the BBC may even have "sexed-up" its own coverage. "It is now the BBC that appears to have deliberately deceived viewers, listeners, its board of governors and parliament about the origins of this extraordinary battle with the government."
 
"You Rat," was the splash headline in the Sun, which rounded on Andrew Gilligan, claiming that he was branding Dr Kelly "a liar" in a bid to save his job.
 
more...........................
 
http://media.guardian.co.uk/presspublishing/story/0,749...
 
http://www.egyptmad.com/forums/index.php?s=defd3b5edc361d8fce7a0dcffcd75682&showtopic=221&pid=1736&st=0&#entry1736
Murdoch papers open fire on BBC 
 
Dominic Timms
Monday July 21, 2003 
 
 
Sun's Kavanagh: "Heads must roll at the BBC"
 
Newspapers controlled by media tycoon Rupert Murdoch laid into the BBC this morning, seeking to place the blame for the death of government advisor David Kelly firmly at the feet of the corporation.
"BBC in crisis as Blair mood swings," splashed the Times, claiming it was the corporation, rather than a battered Labour government, that was "fighting to save its credibility."
 
The paper alleged the BBC may even have "sexed-up" its own coverage. "It is now the BBC that appears to have deliberately deceived viewers, listeners, its board of governors and parliament about the origins of this extraordinary battle with the government."
 
"You Rat," was the splash headline in the Sun, which rounded on Andrew Gilligan, claiming that he was branding Dr Kelly "a liar" in a bid to save his job.
 
In later pages it broadened its attack. "How can we ever trust the BBC again?" asks the Sun's leader. "Its behaviour over the Dr David Kelly tragedy has been disgraceful."
 
"At every turn the BBC has displayed a total lack of judgement, bad faith, hypocrisy and low standards - all motivated by an absurd desire to prove it was bigger than No 10."
 
"Heads must roll at the BBC," it said. "There are two tragedies to emerge from the "sexed-up" dossier shambles," wrote political editor Trevor Kavanagh on page 6. "First is the death of decent David Kelly... [the second] the death of the BBC's priceless reputation for integrity." 
 
"Mr Sambrook cannot stay," Kavanagh went on to say, referring to the BBC's director of news, who mounted a robust defence of both Gilligan and the story. "But the biggest BBC scalp may be its mild-mannered chairman Gavyn Davies."
 
But it was not just the Murdoch-controlled Sun and Times that lambasted the BBC's role in Dr Kelly's tragic death.
 
The Financial Times was equally critical. A "reeling" BBC faces "the largest damage limitation exercise, arguably of its 76-year history," it said. In comparison, Tony Blair had "weathered the immediate crisis" after an "air of panic" gripped Downing Street on Friday.
 
The Telegraph bizarrely compared the tragic events to an episode of Inspector Morse. "Rarely in a Morse mystery are the guilty people natural criminals or low-lifers: they are people with a standing in the decent society whose order has been so violated . They have something to hide," the paper said in its leader column.
 
First on the list is Alastair Campbell, second the BBC. In a separate comment, novelist Robert Harris asks "who will rid of us of the over-mighty Campbell?" saying the No 10 advisor "exercises an extraordinary psychological dominance over the prime minister." However Mr Harris says the existence of Mr Campbell's political diaries, said to run to over 1 million words, prevents Mr Blair from sacking his trusted media aide.
 
If you have not seen "Hotel Rwanda," this might be a good time to check it out: http://www.mgm.com/ua/hotelrwanda/intro.html
 
http://mfile.akamai.com/28....00K.asx
 
 Scathing: James Murdoch said the scale of the BBC's activities is 'chilling' 
http://www.dailymail.co.uk/news/article-1209828/BBCs-expansion-drive-chilling-says-James-Murdoch.html
 
BBC's expansion drive is 'chilling' says James Murdoch
By PAUL REVOIR
Last updated at 5:18 PM on 29th August 2009 James Murdoch last night launched a vicious attack on the BBC, claiming the scale of its activities is 'chilling'.He branded the licence fee a 'regressive tax' that penalised the poor and said the corporation's dominance of the market was 'Orwellian' and stifled broadcasting.Mr Murdoch, the heir apparent to his father Rupert's global media empire, was scathing about the way the BBC has encroached into commercial areas.Giving the keynote MacTaggart speech at the Edinburgh TV festival, he singled out the way Radio 2 had chased younger listeners to the detriment of the rest of the market and hit out at the 'nationalisation' of the Lonely Planet travel guides bought by the BBC.He also criticised the broadcaster's governing body, the BBC Trust, branding its record 'abysmal' for allowing the corporation to grow unchecked.Mr Murdoch, 36, the chairman and chief executive of News Corporation in Europe and Asia, said a radical overhaul was needed to secure the independence of journalism rather than let news provision become dominated by the BBC.He said: 'The land grab is spearheaded by the BBC. The scale and scope of its current and future ambitions is chilling.'Rather than concentrating on areas where the market is not delivering, the BBC seeks to compete head on for audiences with commercial providers to try and shore up support - or more accurately dampen opposition - to a compulsory licence fee.'He criticised Radio 2 for ignoring its remit and pursuing younger listeners who were already 'well served' by commercial stations. Mr Murdoch said: 'Performers like Jonathan Ross were recruited on salaries no commercial competitor could afford and audiences for Radio 2 have grown steadily as a result. 'He described the BBC's decision to buy Lonely Planet as 'a particularly egregious example of the expansion of the state'.His speech last night to a hall packed with the UK's top broadcasting executives comes 20 years after his father's famous MacTaggart address. Rupert Murdoch's predictions have been described as an 'uncannily accurate manifesto' for the digital era.
He predicted that TV sets of the future would be 'linked by fibre optic cable to a global cornucopia of programming and nearly infinite libraries of data, education and entertainment. All with full interactivity .'In response to James Murdoch's speech, the chairman of the BBC Trust Sir Michael Lyons said that British broadcasting is admired around the world. But, he admitted, 'there are current problems and they need to be addressed'.'Our starting point is what is in the interests of the public, and the BBC agrees with James Murdoch's analysis that we need to trust them,' he said. 'And the public tell us that they, in turn, trust the BBC and value the wide range of services we provide. 'He added: 'As to the BBC Trust, let me underline that it is here to strengthen the BBC for the benefit of licence fee payers, not to emasculate it on behalf of commercial interests.'
BBC executive Jana Bennett was also under fire from the Conservative Party after saying it would be wrong for the BBC to publish the salaries of its top talent. Enlarge 
 
Read more: http://www.dailymail.co.uk/news/article-1209828/BBCs-expansion-drive-chilling-says-James-Murdoch.html#ixzz0Z0EE3NPj
 

James Murdoch targets BBC 'land-grabbing'

The BBC needs taming and a radical overhaul of regulation is crucial to securing the future of UK broadcasting, says James Murdoch, the chief executive and chairman of News Corporation.

Amanda Andrews  Published: 8:34PM BST 28 Aug 2009

In his MacTaggart Lecture at the Edinburgh International Television Festival yesterday, Mr Murdoch went short of calling for the abolition of the BBC licence fee, although he asked for the corporation's remit and governance to be drastically changed and brought back to basics. "The land grab is spear-headed by the BBC. The scale and scope of its current activities and future ambitions is chilling," he said. He also highlighted the BBC Trust's "abysmal record", citing the example of the "overt recklessness" of the trust's failure to question why BBC Worldwide was allowed to acquire a majority stake in the Lonely Planet travel guides. In its defence, the chairman of the BBC Trust, Sir Michael Lyons, last night highlighted its remit "to strengthen the BBC for the benefit of licence fee payers, not to emasculate it on behalf of its commercial interests". Mr Murdoch added that a "radical reorientation" of regulation is necessary to secure "dynamism and innovation" in the UK broadcasting sector. Regulators, he said, are intervening too much, which is leading to a fall in innovation and creativity. The answer, he said, is for regulators to intervene only on evidence of "actual and serious harm" and in the interest of consumers, "not merely because a regulator armed with a set of prejudices and a spreadsheet believes that a bit of tinkering here and there could make the world a better place". He added that too much regulation of broadcasters is responsible for Google's ability to gain a higher percentage of advertising spend in the UK than anywhere else in the world. Mr Murdoch believes communication regulator Ofcom's "repeated assertion of its bias against intervention" is becoming "impossible to believe". He argued that the UK broadcasting sector is wrongly governed by "creationism" – the belief in a process managed by a single omniscient authority – and it needs to be more "evolutionary". Creationism serves to create "unaccountable institutions", mentioning the BBC Trust, Channel 4 and Ofcom. Topical, he says, being the 150th anniversary of Darwin's On The Origin of Species. "The creationist approach is similar to the industrial planning which went out of fashion in other sectors in the 1970s," he said, adding that this approach only serves to penalise the poor with "regressive taxes and policies – like the licence fee and digital switchover". There was some clear self-interest in Mr Murdoch's speech. The comments follow repeated criticism of UK broadcasting regulation by BSkyB, the satellite broadcaster that Mr Murdoch chairs. Proposals from Ofcom that BSkyB could be forced to share premium content with rivals were unsurprisingly disputed by BSkyB. The broadcaster slammed UK regulators for effectively discouraging innovation by taking such an approach. "You don't need to scratch the surface to see that opportunities for media businesses are limited, investment and innovation are constrained and creativity is reduced," he said, adding: "A radical reorientation of the regulatory approach is necessary if dynamism and innovation is going to be central to the UK media industry." Mr Murdoch said the decline in advertising is making the situation for UK broadcasters difficult enough, with the heavily-controlled UK industry as dreary as "the Addams family" and over-regulated UK media groups worse off than those in other countries in which News International operates. "Thanks to Darwin we understand that the evolution of a successful species is an unmanaged process," he added, suggesting that continuing with the creationist approach will damage UK broadcasters.

SATURDAY, MARCH 12, 2011

Read the Story below
UK PRIME MINISTER David Cameron; MURDER; MURDOCH

DISCLAIMER: THE POSTING OF STORIES, COMMENTARIES, REPORTS, DOCUMENTS AND LINKS (EMBEDDED OR OTHERWISE) ON THIS SITE DOES NOT IN ANY WAY, SHAPE OR FORM, IMPLIED OR OTHERWISE, NECESSARILY EXPRESS OR SUGGEST ENDORSEMENT OR SUPPORT OF ANY OF SUCH POSTED MATERIAL OR PARTS THEREIN.

Jonathan Rees, who has links to David Cameron. 

UK Prime Minister David Cameron hired Andy Coulson as his media adviser.

Cameron knew that, as editor of Rupert Murdoch's News of the World, Coulson employed Jonathan Rees. (Jonathan Rees.)

Rees stood trial for the murder of Daniel Morgan.

Police believe Morgan was murdered because he discovered his business partner Jonathan Rees was using their company to launder money from drug trafficking.
, Daniel Morgan  

Morgan

In the UK, in 1987, Daniel Morgan was murdered "because he was about to expose a drugs conspiracy linked to police corruption."

One of the people who has been accused of murdering Morgan is Jonathan Rees.

Rees , a private investigator, has links to powerful police officers and to Rupert Murdoch's News of the World.

The case against Rees has collapsed in court.

On 12th March 2011 we read that in the Daniel Morgan murder, the family cry 'cover-up' as the case collapses. 

A Scotland Yard officer has said that police corruption during the initial investigation in 1987 was a key reason that no one had ever been convicted of Morgan's murder.

The prosecution case 'was significantly weakened' when a judge excluded the evidence of a Mr Gary Eaton.

Sally Ann Wood, the ex-girlfriend of one of the suspects, James Cook, allegedly claimed to have seen 30 murders, some involving some of the suspects.

Morgan was murdered in the car park of a pub in South-East London. An axe was left embedded in his face.

Police believe Morgan was murdered because he discovered his business partner Jonathan Rees was using their company to launder money from drug trafficking.

Rees was said to have obtained information from corrupt police officers about operations.

Daniel Morgan's brother Alistair claims that Daniel was murdered because he was about to expose police corruption.

An agency run by Rees conducted ‘confidential inquiries’ on behalf of the News of the World and newspapers in the Mirror Group in the late 1990s.


British PM Cameron grilled over media ties at ethics inquiry
By Richard Allen Greene and Laura Smith-Spark, CNN
http://edition.cnn.com/2012/06/14/world/europe/uk-cameron-leveson/index.html

London (CNN) -- British Prime Minister David Cameron was quizzed
Thursday about his links to former top Murdoch executive Rebekah Brooks and his decision to hire former News of the World editor Andy
Coulson. Cameron himself set up the inquiry into media ethics in response to phone hacking at the News of the World, the Rupert Murdoch-owned
tabloid that shut down over illegal eavesdropping. He has faced questions about his judgment as the scandal has unfolded,
amid suggestions that his government was too closely connected to Murdoch's media empire.
Questioned about his ties to Brooks, who was also previously editor of the Sun and the News of the World, Cameron said their friendship had
developed over several years, particularly after she married his friend and neighbor, Charlie Brooks.
 Former PM Gordon Brown testifies Protester disrupts Blair testimony
Inside the UK phone hacking scandal David Cameron hacking scandal link?
A text sent by Rebekah Brooks to Cameron on the eve of a major speech by him to the Conservative party annual conference appeared to show a close relationship.
"I am so rooting for you tomorrow, not just as a personal friend but because professionally we are in this together," she wrote. Cameron said he understood "we are in this together" to refer to the Sun's support for the Conservative party.
The Sun -- the UK's most popular newspaper, with a daily circulation of 7 million -- switched allegiance from Labour to the Conservatives in 2009, a week before Brooks sent the text. Cameron also had meetings with James Murdoch, the son of Rupert Murdoch and a senior News Corp. executive.
His government's handling of News Corp.'s bid to take full control of British satellite broadcaster BSkyB has come under scrutiny in recent onths, following the revelation of apparent back-channel communications between the company and an aide to Jeremy Hunt, the Cabinet minister who oversees British broadcasting. News Corp. eventually dropped the bid amid the furor over the phone hacking scandal.
Questioned about the appropriateness of appointing Hunt -- who had previously openly supported the BSkyB bid -- to adjudicate it, Cameron said it had seemed the best solution at the time to a political problem. The move had been approved by lawyers and civil servants, he said, and Hunt had acted properly at every point in the process. The prime minister earlier said relations between politicians and the media were "too close and unhealthy" but rejected the idea that he had made promises about government policies, for example on media regulation, in return for newspapers' support.
"There was no overt deal for support, there was no covert deal, there were no nods or winks," he said.
He acknowledged trying to win over different media organizations to back his party, but insisted he was "not trading policies for that
support. And when you look at the details of this, it is complete nonsense."
He rejected as a cooked-up "conspiracy theory" a suggestion by his predecessor as prime minister, Gordon Brown, that a deal had been struck between the Conservatives and News International, a British arm of News Corp.
Cameron said the inquiry was doing the job it was meant to in trying to "get to the bottom of the media-political relationship and put it
on a firmer footing." Asked how the relationship could work better, Cameron said more distance, formality and respect were called for on both sides.
A new regulatory system is needed for the press because the current self-regulation process "is not working," he said. The rules should work to protect ordinary people, some of whom have been terribly mistreated by the press, rather than being drawn up to make the media or politicians happy, he added.
He said the pain of the Dowler family had been "trebled" by the hacking of voice mail messages of their missing teenage daughter,
Milly, who turned out to have been murdered. The News of the World was shuttered amid public anger about the scandal. Earlier in the day, Cameron defended his decision to appoint former  News of the World editor Andy Coulson as director of communications for the Conservative Party and then in Downing Street, saying he was the best person for the job.
Coulson resigned from the Downing Street role last year when police began a new phone hacking investigation, saying it had become a
distraction. He quit the News of the World after two employees were jailed over phone hacking in 2007 but denies knowing of wrongdoing
while he was in charge. Coulson was this month arrested and charged with perjury over court
testimony about phone hacking, according to Britain's Press  Association news agency.
Asked about the hiring process, Cameron said Coulson had given him and others assurances that he knew nothing of the phone hacking while he
was editor. Cameron said he knew that Coulson's appointment would be "controversial" but that the party felt his experience as a tabloid
editor meant he was tough enough for the high-pressure role. He thought Coulson had done "the honorable thing" in resigning when the wrongdoing by his staff was uncovered, Cameron told the inquiry, and was willing to give him a second chance. Asked if he regretted the appointment, Cameron acknowledged it had come back to haunt both him and Coulson. But, he said, "You don't make decisions with 20/20 hindsight. "I made the decision I made," he said. "I don't try to run away from it, I just try to explain why I made it." While in the role, Coulson performed well and behaved entirely properly, he added. Cameron testified all day at the Leveson Inquiry, a wide-ranging investigation into media ethics and behavior currently examining the relationship between the media and politicians.
In April, Cameron told politicians in the House of Commons: "I think we all, on both sides of this house, did a bit too much cozying up to Mr. Murdoch."
The prime minister's testimony comes a day after Brooks appeared in court in connection with a separate police investigation into hacking. She, her husband and four other people are charged with trying to obstruct the investigation.
Three people were arrested Thursday morning on suspicion of making inappropriate payments to police and public officials, the
Metropolitan Police said. The probe into alleged bribery was set up alongside the police investigation into phone hacking. Brown and another former prime minister, John Major, testified at Leveson Inquiry this week. Brown lashed out Monday at Murdoch, his son and his British
newspapers, raising the stakes in a highly charged and public battle between the two men.
The conflict could affect whether Murdoch keeps control of the British part of his media empire.
The former British leader flatly denied the most sensational claim that Murdoch made when he testified at the media ethics inquiry this year: that Brown had "declared war" on Murdoch's company when The Sun endorsed the Conservative party rather than Brown's Labour party in 2009.
"This conversation never took place. I am shocked and surprised" that Murdoch said it had when he was grilled at the inquiry in April, Brown
said Monday. "There was no such conversation." Brown repeatedly insisted that there was "no evidence" of the phone call, basing his assertion on phone records from his office when he was prime minister.
The media tycoon said in April that Brown had phoned him and threatened him when the Sun newspaper pulled its support for Labour and switched to the Conservatives. "He said, 'Well, your company has made -- declared war on my government, and we have no alternative but to declare war on your vcompany.' And I said, 'I'm sorry about that Gordon, thank you for calling.' End of subject," the News Corp. chairman testified.
After Brown essentially accused Murdoch of lying under oath, News Corp. said its chairman stood by his testimony.
If British media regulators feel Murdoch is not a "fit and proper person" to hold a British broadcasting license, he could theoretically be stripped of control of BSkyB, a lucrative part of his worldwide operations. Murdoch's British operations are under scrutiny after revelations of widespread phone hacking by people working for his newspapers. Police and lawmakers are conducting separate inquiries into the scandal, separately from the Leveson Inquiry. At her eight-minute hearing Wednesday, Brooks, the former top executive of Murdoch's British newspaper group, spoke only to confirm her address and was ordered to appear in Southwark Crown Court on June 22. She is charged with obstructing a police investigation into phone hacking and bribery. Her husband, Charlie, and four current or former News International employees also face charges and appeared with her, becoming the first defendants to appear in court in connection with the wide-ranging
police investigation sparked by allegations of illegal eavesdropping. The defendants, who include Brooks' former personal assistant, driver
and bodyguard, were ordered not to communicate with each other directly, except for Brooks and her husband. Cheryl Carter, the personal assistant, was also instructed to surrender her passport. The six were charged last month with perverting the course of justice. They are accused of plotting to remove seven boxes of documents from News International offices and hide computers and documents from police. When she was charged in May, Brooks blasted British prosecutors, calling the case "an expensive sideshow." She said she is "baffled" and angered by the decision to charge "those closest to me."
"One day, the details of this case will emerge, and people will see today as nothing more than an expensive sideshow -- a waste of public
money as a result of an unjust and weak decision," she told reporters outside her lawyer's office.
Charlie Brooks said that his wife is the victim of a "witch hunt" and that the charges against him and others are "an attempt to use me and others as scapegoats, the effect of which is to ratchet up the pressure on my wife."
Cameron established the Leveson Inquiry amid British public anger at the News of the World about the hacking of Milly Dowler's voice messages.
Her case came on top of apologies from the tabloid for the hacking of the phones of celebrities and politicians, and proved to be the lastnstraw for the paper, which was shut down in July. The inquiry is intended to explore media ethics in Britain more widely, alongside police investigations into phone hacking, e-mail hacking and police bribery by people working for Murdoch's British newspapers.
 
http://www.independent.co.uk/news/uk/politics/has-cameron-done-a-deal-with-murdoch-1819010.html



Has Cameron done a deal with Murdoch?

Lord Mandelson's attack shines spotlight on Tory leader's links with media mogul

David Cameron has been accused of making a "contract" with Britain's biggest media company to trade political support before an election for government favours afterwards if the Tories win.

The accusation was levelled yesterday by the Business Secretary Peter Mandelson, who is increasingly the public face of Gordon Brown's government. Ministers are angry at the campaign that The Sun has run against the Prime Minister all this week over the spelling mistakes in na letter Mr Brown sent to the mother of a young soldier killed in Afghanistan.
They suspect that the Conservative Party has been tailoring its policies on media regulation and the BBC to suit the commercial interests of News International, which owns The Sun, and that the paper's aggressive support for the Tories is a pay-off that could spread to other parts of the mass media.#
Examples of the apparent tie-in between what News International's boss, James Murdoch, wants, and what David Cameron is ready to promise
include the recent decision by the Conservatives to abandon the idea of "top slicing" the BBC licence fee. It had been proposed that part
of the money paid to the BBC would be siphoned off to help regional television companies meet the threat from the internet. But this would also have helped them compete more effectively against Sky News, which is part of the Murdoch media empire.
When the policy was abandoned in September, Jeremy Hunt, the shadow# Culture Secretary, said that it was because enacting it might make the
commercial television companies "focus not on attracting viewers but on attracting subsidies". There was no gain for the BBC in the climbdown, because David Cameron had already said that the Tories will freeze the licence fee. What it will mean is that the BBC's income will be capped, without the regional television companies seeing any government help, which will strengthen the market position of Britain's only satellite television company, Sky. "This was done for News International," a Tory insider said yesterday. "Murdoch wants Sky to go head to head with the BBC. He doesn't want the independent companies strengthened."
In April 2008, James Murdoch complained bitterly about the media regulator Ofcom in his first major speech after taking over as chief executive of News Corporation in Europe and Asia. The following year, David Cameron announced that a Conservative government would cut Ofcom down to size.
Last summer James Murdoch attacked the "abysmal record" of the BBC Trust – the body created by Labour to over see the BBC – in a lecture
he gave at the Edinburgh Festival, singling out its "total failure" to stop the BBC buying the Lonely Planet travel guides, a takeover that Murdoch denounced as an "egregious" invasion of private enterprise by the state. Less than two months later, Jeremy Hunt promised that the Tories would abolish the Trust.
In the same lecture, Murdoch complained that BBC performers like Jonathan Ross are being paid salaries that "no commercial competitor
can afford". He had barely uttered the words before Ed Vaizey, a shadow media minister, promised that a Tory government would compel
the BBC to publish the salaries of its top performers.
Lord Mandelson alleged yesterday that the Conservatives and News International had "effectively formed a contract, over the head, incidentally, of the newspaper's editor and their readers, in which they are sort of bound to one another". Speaking to the BBC's Today programme, he added: "What The Sun can do for the Conservatives during the election is one part of the contract and, presumably, what the Conservatives can do for News International
if they are elected is the other side of the bargain. But there is a wider question. When The Sun creates the news in this way, this is then followed up by Sky News, which then puts pressure on the BBC to follow suit."
This was "absolutely, categorically" denied yesterday by The Sun's political editor, Tom Newton Dunn, who accused Lord Mandelson of talking "preposterous nonsense". The Sun, which supported Labour through three general elections under Tony Blair's leadership, announced that it was jumping ship on the day
that Gordon Brown delivered his annual speech to the Labour Party conference in September.
Its onslaught on Gordon Brown for the mistakes made in a handwritten letter to Jacqui Janes is the most aggressive attack that the
newspaper has directed at any Labour Party leader since Neil Kinnock stood down after losing the 1992 general election, a defeat for which
The Sun claimed victory with the slogan "It was The Sun wot won it".
But there were signs yesterday that the attack may have rebounded on The Sun. Mr Brown, who is blind in one eye, has admitted that his handwriting is bad and has apologised to Mrs Janes, whose 20-year-old son, Jamie, was killed by a makeshift bomb in Afghanistan last month.
A poll yesterday for the website PoliticsHome, whose main shareholder# is the Conservative Party deputy chairman Lord Ashcroft, found that 65 per cent of those polled thought that The Sun's attack was "inappropriate" compared with 23 per cent who thought it was "legitimate".
The closeness of the new Tory-Sun axis is shown up by the revelation, from an inside source, that David Cameron personally consulted the editor of The Sun, Dominic Mohan, in three separate conversations before he abandoned his "cast-iron" promise to hold a referendum on the Lisbon Treaty, now that all 27 members states of the EU have ratified it.
Mr Cameron was understandably wary of how The Sun might react to the abandonment of that promise. The paper has campaigned for years against what it sees as the growth of an EU superstate. It was in an open letter to readers of The Sun that Cameron first made his guarantee, two years ago.
His announcement that a referendum is off the agenda was subjected to a scathing attack in the Daily Mail, but in The Sun it was givenkid-glove treatment under the headline "Cameron's crusade for UK rights".
The person behind this aggressively pro-Tory policy is James Murdoch, not his father, Rupert, who created The Sun virtually from scratch in the 1970s. Rupert Murdoch claimed in an interview with Sky News Australia that he "regretted" his son's decision to turn against Gordon Brown, "who is a friend of mine", but defended it on the grounds that Brown has been a "disappointment".
Yesterday, The Times, another Murdoch newspaper, announced that its veteran political editor, Phil Webster, is leaving the Commons, where
he has been based for decades. Mr Webster is very well thought of by New Labour. His replacement, Roland Watson, was a friend of David Cameron's at Eton but has no political ties with the Tories. Tom Newton Dunn, newly appointed as The Sun's political editor, is another Old Etonian. His father, Bill, used to be a Tory MEP, but defected to the Liberal Democrats in 2000.

David Cameron's five secret meetings with Rupert Murdoch

Rupert Murdoch on Wednesday night disclosed that he had met the Prime
Minister on at least five more occasions than David Cameron has
previously admitted.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

Amendment No. 6

to FORM 10 

GENERAL FORM FOR REGISTRATION OF SECURITIES

PURSUANT TO SECTION 12(b) OR 12(g) OF

THE SECURITIES EXCHANGE ACT OF 1934

New Newscorp Inc

(Exact name of registrant as specified in its charter)

News Corp LLC Business Summary

Company contact information

News Corp.

1211 Avenue of the Americas, 10036, New York

TeL; +1 212 416 3400

http://www.newscorp.com

News Corporation is a diversified media and information services company. Its segments include Digital Real Estate Services, which include property and property-related advertising and services, including the sale of real estate listing and lead generation products and referral-based services to brokers, and homebuilders and landlords; Subscription Video Services, which provides sports, entertainment and news services to pay-television and streaming subscribers and other commercial licensees; Dow Jones, which consists of Dow Jones, a global provider of news and business information, which distributes its content and data through a variety of media channels, including newspapers, newswires and mobile apps; Book Publishing, which consists of HarperCollins, a publisher in the world, with operations in 17 countries; The News Media, which consists of News Corp Australia, News UK and the New York Post and includes, among other publications, The Australian and The Daily Telegraph.

Number of employees : 25,000

Members of the board of News Corp LLC

Members of the board Title Age Since
Chairman 92 2011
Chairman 52 2014
Director/Board Member 55 2017
Director/Board Member 42 2013
Director/Board Member 62 2013
Director/Board Member 70 2013
Director/Board Member 51 2013
Director/Board Member 56 2013

Portrait de Rupert Murdoch

Rupert Murdoch

Birthday : 03/11/1931
Place of birth : Melbourne - Australia
Public asset : 114,916,730 USD
Country of residence : United States

Linked companies :  Fox Corporation -  News Corporation

Biography of Rupert Murdoch

Keith Rupert Murdoch is a businessperson who founded TFCF Corp. and who has been the head of 11 different companies. He occupies the position of Co-Chairman for Fox Corp., Executive Chairman for Fox News Network LLC (a subsidiary of Fox Corp.), Executive Co-Chairman at News Corp., Chairman & Chief Executive Officer of Ruby Newco LLC (a subsidiary of News Corp.), Chairman at Sky Global Holdings, Inc. and Executive Chairman at FOX Business Network. Mr. Murdoch is also on the board of STAR Group Ltd. and The Partnership for New York City. Keith Rupert Murdoch previously occupied the position of Executive Co-Chairman at TFCF Corp., Executive Chairman of News Corp Australia Pty Ltd., Chairman at The DIRECTV Group, Inc., Chairman & Chief Executive Officer for Fox Entertainment Group, Inc. and Chairman for Dow Jones & Co., Inc. He received an undergraduate degree and a graduate degree from Worcester College.

Current positions of Rupert Murdoch

 

Holdings of Rupert Murdoch

Name Equities % Valuation
 Fox Corporation (FOX)
(Broadcasting)
1,422,038 0.60% 44,666,214 USD
 News Corporation (NWSA)
(Consumer Publishing)
2,182,358 0.57% 43,254,336 USD
 News Corp (NWS)
(Consumer Publishing)
1,009,446 0.52% 20,299,959 USD
 Fox Corporation (FOXA)
(Broadcasting)
200,186 0.074% 6,696,222 USD

Rupert Murdoch : Personal Network

Name Linked companies
Peter F. Chernin News Corporation
Ruby Newco LLC
Lachlan Murdoch Fox Corporation
News Corporation
Marianne Gambelli Fox Corporation
FOX Business Network
Fox News Network LLC
Charles Carey Fox Corporation
Sky Global Holdings, Inc.
STAR Group Ltd.
Viet D. Dinh Fox Corporation
News Corporation
Qun Yao Gao News Corporation
STAR Group Ltd.
John Nallen Fox Corporation
News Corporation
Kevin E. Lord Fox Corporation
Fox News Network LLC
Doug Peterson The Partnership for New York City, Inc.
Carla C. Hendra The Partnership for New York City, Inc.

Portrait de Lachlan Murdoch

Lachlan Murdoch

Age : 51
Public asset : 27,371,053 USD
Country of residence : Unknown

Linked companies :  Fox Corporation -  News Corporation

Biography of Lachlan Murdoch

Mr. Lachlan K. Murdoch is a Co-Chairman & Chief Executive Officer at Fox Corp., a Co-Chairman at News Corp., an Executive Chairman at Nova Entertainment Pty Ltd. and a Founder at Illyria Pty Ltd. He is on the Board of Directors at The Paley Center for Media, Museum of Contemporary Art Sydney and Nova Entertainment Investments Ltd. Mr. Murdoch was previously employed as a Non-Executive Chairman by Ten Network Holdings Ltd., a Deputy Chairman by Prime Media Group Ltd., a Chairman by Fox Television Stations, Inc. (Australia), an Executive Co-Chairman by Twenty-First Century Fox, Inc., and a Chairman by Queensland Press Pty Ltd. He also served on the board at Fox Entertainment Group, Inc., NDS Group Plc and Gemstar-TV Guide International, Inc. He received his undergraduate degree from Princeton University.

Current positions of Lachlan Murdoch

Name Title Since
 Fox Corporation
(Broadcasting)
Co-Chairman & Chief Executive Officer 2019
 News Corporation
(Consumer Publishing)
Co-Chairman 2014
Nova Entertainment Pty Ltd. Executive Chairman 2009
The Paley Center for Media Trustee 2020
Museum of Contemporary Art Sydney Director -
Nova Entertainment Investments Ltd. Director 2009
Illyria Pty Ltd. Founder 2005

Holdings of Lachlan Murdoch

NameEquities%Valuation Fox Corporation (FOXA)
(Broadcasting)815,4870.30%27,278,040 USD Fox Corporation (FOX)
(Broadcasting)1,9520.0008%61,312 USD News Corp (NWS)
(Consumer Publishing)1,4640.0008%29,441 USD News Corporation (NWSA)
(Consumer Publishing)1140.0000%2,259 USD

Lachlan Murdoch : Personal Network

Name Linked companies
Rupert Murdoch Fox Corporation
News Corporation
Siobhan McKenna Nova Entertainment Pty Ltd.
Nova Entertainment Investments Ltd.
Illyria Pty Ltd.
Viet D. Dinh Fox Corporation
News Corporation
John Nallen Fox Corporation
News Corporation
Marianne Gambelli Fox Corporation
Kevin E. Lord Fox Corporation
Anoushka Anna Louise Healy News Corporation
Yoel Flohr Fox Corporation
Charles Carey Fox Corporation
Paul Davis Ryan Fox Corporation

Robert Thomson

Age : 61
Public asset : 40,220 USD
Country of residence : Unknown

Linked companies :  News Corporation

Biography of Robert Thomson

Robert James Thomson is Chief Executive Officer & Director at News Corp. In the past Mr. Thomson occupied the position of Chief Executive Officer & Director at Move, Inc., Publisher at The Wall Street Journal, Inc., Managing Editor at The Financial Times (United States), Editor at Times Newspapers Ltd. and Executive Vice President of Dow Jones & Co., Inc

Current positions of Robert Thomson

Name Title Since
 News Corporation
(Consumer Publishing)
Chief Executive Officer & Director 2013

Holdings of Robert Thomson

Name Equities % Valuation
 News Corp (NWS)
(Consumer Publishing)
2,000 0.0010% 40,220 USD
 News Corporation (NWSA)
(Consumer Publishing)
0 0.0000% 0 USD

 Robert Thomson : Personal Network

Name Linked companies
Natalie Bancroft News Corporation
Lachlan Murdoch News Corporation
Masroor Taale Siddiqui News Corporation
Kelly Ann Ayotte News Corporation
Michael Florin News Corporation
Michael L. Bunder News Corporation
David Kline News Corporation
Susan Panuccio News Corporation
Anoushka Anna Louise Healy News Corporation
Ruth Allen News Corporation

Kelly Ann Ayotte

Age : 53
Public asset : 3,128,117 USD

Linked companies :  Blackstone Inc. -  News Corporation -  Boston Properties, Inc.

 Kelly Ann Ayotte holds the position of Chairman at BAE Systems, Inc.

She is also Member-Economic Strategy at The Aspen Institute, Inc. and on the board of 12 other companies.

Ms. Ayotte previously held the position of Associate for McLane Middleton, PA, Attorney at State of New Hampshire, Co-Chairman-Health Security at Center for Strategic & International Studies, Inc. and Co-Chairman-Digital Freedom Forum at Center for a New American Security.

She received an undergraduate degree from The Pennsylvania State University and a graduate degree from Villanova University School of Law.

Current positions of Kelly Ann Ayotte

Name Title Since
 Blackstone Inc.
(Investment Management & Fund Operators)
Independent Director 2019
 News Corporation
(Consumer Publishing)
Independent Non-Executive Director 2017
 Boston Properties, Inc.
(Commercial REITs)
Lead Independent Director -
Blink Health, Inc. Director 2018
BAE Systems, Inc. Chairman 2021
Boston Properties LP Director -
The One Campaign Director -
Blackstone Group Management LLC Director 2019
International Republican Institute Director -
McCain Institute for International Leadership Trustee -
Veterans Count Director -
Winning For Women, Inc. Director -
Swim With A Mission, Inc. Director -
The Aspen Institute, Inc. Member-Economic Strategy

Holdings of Kelly Ann Ayotte

Name Equities % Valuation
 Caterpillar Inc. (CAT)
(Heavy Machinery & Vehicles)
6,061 0.0012% 1,607,195 USD
 Blackstone Inc. (BX)
(Investment Management & Fund Operators)
14,514 0.0021% 1,520,922 USD
Boston Properties, Inc. 0 0.0000% 0 USD
 News Corporation (NWSA)
(Consumer Publishing)
0 0.0000% 0 USD
 Boston Properties, Inc. (BXP)
(Commercial REITs)
0 0.0000% 0 USD

Kelly Ann Ayotte: Personal Network

Name Linked companies
Joel Klein News Corporation
Boston Properties, Inc.
Boston Properties LP
Michael LaBelle Boston Properties, Inc.
Boston Properties LP
Ruth Porat Blackstone Inc.
The Aspen Institute, Inc.
Bruce Duncan Boston Properties, Inc.
Boston Properties LP
Diane J. Hoskins Boston Properties, Inc.
Boston Properties LP
Mary E. Kipp Boston Properties, Inc.
Boston Properties LP
Joan S. Solotar Blackstone Inc.
Blackstone Group Management LLC
Martin Mulroney Blackstone Inc.
Blackstone Group Management LLC
Jim Breyer Blackstone Inc.
Blackstone Group Management LLC
Douglas Linde Boston Properties, Inc.
Boston Properties LP

 

Natalie Bancroft

Age : 42
Public asset : 42,734 USD

Linked companies :  News Corporation

Natalie Bancroft is on the board of News Corp. and Wine Country Music Awards.

She received an undergraduate degree from L'Institut de Ribaupierre.

Current positions of Natalie Bancroft

Name Title Since
 News Corporation
(Consumer Publishing)
Independent Non-Executive Director 2013
Wine Country Music Awards Director 2017

Holdings of Natalie Bancroft

Name Equities % Valuation
 News Corp (NWS)
(Consumer Publishing)
2,125 0.0011% 42,734 USD

Natalie Bancroft: Personal Network

Name Linked companies
Ana Paula Pessoa News Corporation
Masroor Taale Siddiqui News Corporation
Michael Florin News Corporation
David Kline News Corporation
Susan Panuccio News Corporation
Anoushka Anna Louise Healy News Corporation
Marygrace DeGrazio News Corporation
Ruth Allen News Corporation
Todd Thorpe News Corporation
Robert Thomson News Corporation

José María Aznar

Age : 69
Public asset : 21,544 USD

Linked companies :  News Corporation

 Founder of U.S.-Spain Council, Inc., José María Aznar currently is President for Foundation for Social Studies & Analysis. Mr. Aznar is also on the board of News Corp., Afiniti, Inc. and Afiniti Ltd. (Bermuda). In the past he was President for Government of Spain, Executive President at Partido Popular of Spain, Member of State Council of Spain and Chairman-Atlantic Basin Initiative at The Paul H. Nitze School of Advanced International Studies.

Current positions of José María Aznar

Name Title Since
 News Corporation
(Consumer Publishing)
Independent Non-Executive Director 2013
Foundation for Social Studies & Analysis President 1989
Afiniti, Inc. Director 2016
Afiniti Ltd. (Bermuda) Director

Holdings of José María Aznar

 NameTitleSince News Corporation
(Consumer Publishing)Independent Non-Executive Director2013Foundation for Social Studies & AnalysisPresident1989Afiniti, Inc.Director2016Afiniti Ltd. (Bermuda)Director-

Holdings of José María Aznar

Name Equities % Valuation
 News Corporation (NWSA)
(Consumer Publishing)
1,087 0.0003% 21,544 USD

José María Aznar: Personal Network

Name Linked companies
John William Snow Afiniti Ltd. (Bermuda)
Afiniti, Inc.
Hasnain Aslam Afiniti Ltd. (Bermuda)
Afiniti, Inc.
Lachlan Murdoch News Corporation
Rupert Murdoch News Corporation
Natalie Bancroft News Corporation
Michael L. Bunder News Corporation
Kelly Ann Ayotte News Corporation
Michael Florin News Corporation
Ana Paula Pessoa News Corporation
Masroor Taale Siddiqui News Corporation

Masroor Taale Siddiqui

Age : 50

Linked companies :  News Corporation

 Founder of Naya Capital Management Ltd. and Naya Capital Management UK Ltd., Masroor Taale Siddiqui currently is Managing Partner at Naya Capital Management Ltd. and Chief Executive Officer at Naya Capital Management UK Ltd. (a subsidiary of Naya Capital Management Ltd.). Mr. Siddiqui is also on the board of News Corp., Naya (GP) Ltd. and The Children's Investment Fund Foundation (UK). In the past Mr. Siddiqui was Managing Director at Canyon Partners LLC, Partner at The Children's Investment Fund Management (UK) LLP, Portfolio Manager at Putnam Investment Management LLC, Analyst at Jefferies LLC and Analyst at Putnam Investments Ltd. He received a graduate degree from Yale University and an undergraduate degree from the University of Pennsylvania.

Current positions of Masroor Taale Siddiqui

Name Title Since
 News Corporation
(Consumer Publishing)
Independent Non-Executive Director 2013
Naya Capital Management UK Ltd. Chief Executive Officer 2011
Naya (GP) Ltd. Director -
The Children's Investment Fund Foundation (UK) Trustee -
Naya Capital Management Ltd. Managing Partner 2012

Linked companies :  Suzano S.A. -  News Corporation -  Cosan S.A. -  Suzano Holding SA

 Ana Paula Pessoa is a Brazilian entrepreneur who founded Black-Key Participações SA, Brunswick Capital Management Ltd and Avanti SC. Currently, Dr. Pessoa occupies the position of Chairman & Chief Strategy Officer at Kunumi Ai. Dr. Pessoa is also Member-Global Counsel at Stanford University, Member-Consulting Board at The Nature Conservancy in Brazil, Member of Roberto Marinho Foundation and Member of Instituto Atlantico De Gobierno, and on the board of 5 other companies. In the past Dr. Pessoa held the position of Chairman at Neemu Internet SA, Council Member at City of Rio de Janeiro, Partner at Black-Key Participações SA, Chief Financial Officer & Innovation Director at Globo Comunicaçoes e Participações SA, Chief Financial Officer for Infoglobo Comunicação e Participações SA and Managing Partner-Brazil Branch at Brunswick Group LLC. Dr. Pessoa received an undergraduate degree and a graduate degree from Stanford University. 

Current positions of Ana Paula Pessoa

Name Title Since
 Suzano S.A.
(Paper Products)
Independent Director 2019
 News Corporation
(Consumer Publishing)
Independent Non-Executive Director 2013
 Cosan S.A.
(Oil & Gas Refining and Marketing)
Independent Director 2021
 Suzano Holding SA
(Paper Products)
Director -
Kunumi Ai Chairman & Chief Strategy Officer 2017
Stanford University Brazil Association Director -
Stanford University Member-Global Counsel -
The Nature Conservancy in Brazil Member-Consulting Board 2014
Roberto Marinho Foundation Member -
Instituto Atlantico De Gobierno, Member

 Holdings of Ana Paula Pessoa

Name Equities % Valuation
 News Corporation (NWSA)
(Consumer Publishing)
0 0.0000% 0 USD

Ana Paula Pessoa: Personal Network

Name Linked companies
Daniel Feffer Suzano S.A.
The Nature Conservancy in Brazil
Suzano Holding SA
Gabriela Feffer Moll Suzano S.A.
Suzano Holding SA
David Feffer Suzano S.A.
Suzano Holding SA
Walter Schalka Suzano S.A.
Suzano Holding SA
Christian Orglmeister Suzano S.A.
Suzano Holding SA
Fernando de Lellis Garcia Bertolucci Suzano S.A.
Suzano Holding SA
Maria Priscila Rodini Vansetti Machado Suzano S.A.
Suzano Holding SA
Nildemar Secches Suzano S.A.
Suzano Holding SA
Marcelo Feriozzi Bacci Suzano S.A.
Suzano Holding SA
Paulo Sergio Kakinoff Suzano S.A.
Suzano Holding SA

Senior Managers  of News Corp LLC

Managers Title Age Since
Chief Executive Officer 62 2012
Director of Finance/CFO 51 2017
Compliance Officer 58 2013
Chief Tech/Sci/R&D Officer - 2019
Investor Relations Contact - 2013
Comptroller/Controller/Auditor 46 2022
General Counsel - 2013
Corporate Secretary - 2003
Corporate Officer/Principal - -
Human Resources Officer - 2017

Susan Panuccio

Age : 50
Public asset : 4,617,109 USD
Country of residence : Unknown

Linked companies :  News Corporation

 Biography of Susan Panuccio

Presently, Susan Lee Panuccio is Chief Financial Officer of News Corp. She is also on the board of 5 other companies. In her past career Ms. Panuccio was Chief Financial Officer & Director at News Corp Australia Pty Ltd.

Holdings of Susan Panuccio

Name Equities % Valuation
 News Corporation (NWSA)
(Consumer Publishing)


 Susan Panuccio : Personal Network

Name Linked companies
Michael L. Bunder News Corporation
Natalie Bancroft News Corporation
Robert Thomson News Corporation
David Kline News Corporation
Anoushka Anna Louise Healy News Corporation
Ana Paula Pessoa News Corporation
Marygrace DeGrazio News Corporation
Ruth Allen News Corporation
Todd Thorpe News Corporation
José María Aznar News Corporation

 

David Pitofsky

Age : 57
Public asset : 1,267,608 USD
Country of residence : Unknown

Linked companies :  News Corporation

Biography of David Pitofsky

David B. Pitofsky occupies the position of Chief Compliance Officer, EVP & General Counsel at News Corp. He is also on the board of New York Lawyers for the Public Interest, Inc. and Member of New York State Bar Association. He previously was Partner at Goodwin Procter LLP and Deputy Chief Officer-Criminal Division at United States District Court for the Eastern District of NY. Mr. Pitofsky received an undergraduate degree from the University of Michigan and a graduate degree from Georgetown University Law Center.

Current positions of David Pitofsky

Name Title Since
 News Corporation
(Consumer Publishing)
Chief Compliance Officer, EVP & General Counsel 2015
New York Lawyers for the Public Interest, Inc. Director -
New York State Bar Association Member

Holdings of David Pitofsky

Name Equities % Valuation
 News Corporation (NWSA)
(Consumer Publishing)
63,956 0.017% 1,267,608 USD

 David Pitofsky : Personal Network

NameLinked companiesRupert MurdochNews CorporationMarygrace DeGrazioNews CorporationKelly Ann AyotteNews CorporationJosé María AznarNews CorporationAnoushka Anna Louise HealyNews CorporationNatalie BancroftNews CorporationDavid KlineNews CorporationMasroor Taale SiddiquiNews CorporationSusan PanuccioNews CorporationMichael FlorinNews Corporation

David Kline

Country of residence : Unknown

Linked companies :  News Corporation

Biography of David Kline

Currently, David Kline occupies the position of Chief Technology Officer & Executive VP at News Corp. Mr. Kline is also on the board of Video Advertising Bureau (former Chairman). In the past Mr. Kline was Chief Information Officer & Executive VP of Discovery, Inc., Chief Information Officer & SVP-Technology at Viacom, Inc. and Chief Information Officer-Information Systems at Rainbow Media Holdings LLC. He received an MBA and an undergraduate degree from Long Island University.

Current positions of David Kline

Name Title Since
 News Corporation
(Consumer Publishing)
Chief Technology Officer & Executive VP 2020
Video Advertising Bureau Vice Chairman

David Kline : Personal Network

Name Linked companies
Donna Speciale Video Advertising Bureau
David Kline Video Advertising Bureau
Marianne Gambelli Video Advertising Bureau
Linda Yaccarino Video Advertising Bureau
Jon Steinlauf Video Advertising Bureau
Sean F. Moran Video Advertising Bureau
Natalie Bancroft News Corporation
Ana Paula Pessoa News Corporation
Marygrace DeGrazio News Corporation
Todd Thorpe News Corporation

Michael Florin

Linked companies :  News Corporation

Sales per Business of News Corp LLC

Presently, Michael Florin holds the position of Senior Vice President & Head-Investor Relations at News Corp. In the past he was Vice President of Morgan Stanley & Co. LLC and Principal at TIAA-CREF Investment Management LLC. He received an undergraduate degree from the University of Michigan and an MBA from Columbia Business School.

Current positions of Michael Florin

Name Title Since
 News Corporation
(Consumer Publishing)
Senior Vice President & Head-Investor Relations 2013

 Michael Florin: Personal Network

Name Linked companies
Ana Paula Pessoa News Corporation
Masroor Taale Siddiqui News Corporation
Natalie Bancroft News Corporation
David Kline News Corporation
Susan Panuccio News Corporation
Anoushka Anna Louise Healy News Corporation
Marygrace DeGrazio News Corporation
Ruth Allen News Corporation
Todd Thorpe News Corporation
Robert Thomson News Corporation

 

Marygrace DeGrazio

Age : 45
Public asset : 430,530 USD

Linked companies :  News Corporation

Marygrace DeGrazio holds the position of Chief Accounting Officer of News Corp.
 
Current positions of Marygrace DeGrazio
 
Name Title Since
 News Corporation
(Consumer Publishing)
Senior Vice President-Global Financial Operations 2020

Holdings of Marygrace DeGrazio
 
Name Equities % Valuation
 News Corporation (NWSA)
(Consumer Publishing)
21,722 0.0057% 430,530 USD

Marygrace DeGrazio: Personal Network

Name Linked companies
José María Aznar News Corporation
David Pitofsky News Corporation
Rupert Murdoch News Corporation
Lachlan Murdoch News Corporation
Masroor Taale Siddiqui News Corporation
Michael Florin News Corporation
Natalie Bancroft News Corporation
Robert Thomson News Corporation
David Kline News Corporation
Susan Panuccio News Corporation

Todd Thorpe

Linked companies :  News Corporation

Sales per Business of News Corp LLC

Presently, Todd Thorpe is Global Head-Government Affairs at News Corp. Mr. Thorpe received an undergraduate degree from Utah State University and a graduate degree from Université Libre de Bruxelles.

Current positions of Todd Thorpe

Name Title Since
 News Corporation
(Consumer Publishing)
Global Head-Government Affairs 2014

 Todd Thorpe: Personal Network

Name Linked companies
Ana Paula Pessoa News Corporation
Lachlan Murdoch News Corporation
Kelly Ann Ayotte News Corporation
Masroor Taale Siddiqui News Corporation
Michael Florin News Corporation
Michael L. Bunder News Corporation
Robert Thomson News Corporation
Susan Panuccio News Corporation
David Kline News Corporation
Ruth Allen News Corporation

Michael L. Bunder Linked companies :  News Corporation

Presently, Michael L. Bunder holds the position of Secretary, Senior VP & Deputy General Counsel at News Corp.
 
Current positions of Michael L. Bunder
Name Title Since
 News Corporation
(Consumer Publishing)
Secretary, Senior VP & Deputy General Counsel 2004
 
Michael L. Bunder: Personal Network
 

Anoushka Anna Louise Healy

Linked companies :  News Corporation

Sales per Business of News Corp LLC

Anoushka Anna Louise Healy is on the board of Times Newspapers Holdings Ltd. and The Marie Colvin Center For International Reporting and Chief Strategy Officer & Executive Vice President at News Corp. In her past career Ms. Healy occupied the position of Managing Editor at The Sunday Times Ltd., Managing Editor at The Times and Head-Corporate Communications at Financial Times Group Ltd.

Current positions of Anoushka Anna Louise Healy

Name Title Since
 News Corporation
(Consumer Publishing)
Chief Strategy Officer & Executive Vice President 2014
Times Newspapers Holdings Ltd. Director 2010
The Marie Colvin Center For International Reporting Director

 

Anoushka Anna Louise Healy: Personal Network

Name Linked companies
Ana Paula Pessoa News Corporation
David Kline News Corporation
Masroor Taale Siddiqui News Corporation
Robert Thomson News Corporation
Michael Florin News Corporation
Kelly Ann Ayotte News Corporation
Michael L. Bunder News Corporation
Kai Georg Diekmann Times Newspapers Holdings Ltd.
Sarah Elizabeth Mary Baroness Hogg Times Newspapers Holdings Ltd.
Ruth Allen News Corporation

Sales per Business of News Corp LLC

USD in Million 2022 Weight 2023 Weight Delta
News Media
2,423 23.3 % 2,266 22.9 % -6.48%
Dow Jones
2,004 19.3 % 2,153 21.8 % +7.44%
Book Publishing
2,191 21.1 % 1,979 20.0 % -9.68%
Subscription Video Services
2,026 19.5 % 1,942 19.7 % -4.15%
Digital Real Estate Services
1,741 16.8 % 1,539 15.6 % -11.60%

Sales per region  of News Corp LLC

USD in Million 2022 Weight 2023 Weight Delta
Australia
4,200 40.4 % 3,900 39.5 % -7.14%
United States
4,000 38.5 % 3,800 38.5 % -5.00%
United Kingdom
1,400 13.5 % 1,200 12.1 % -14.29%
Other Europe
408 3.9 % 469 4.7 % +14.95%
Australasia and Other
280 2.7 % 343 3.5 % +22.50%
Canada
97 0.9 % 167 1.7 % +72.16%

Shareholders of News Corp LLC

Name Equities % Valuation
 The Vanguard Group, Inc.
57,156,117 15.00 % 1 133 M $
 T. Rowe Price Associates, Inc. (Investment Management)
48,902,805 12.84 % 969 M $
 Yacktman Asset Management LP
13,980,000 3.670 % 277 M $
 Independent Franchise Partners LLP
11,315,651 2.970 % 224 M $
 Geode Capital Management LLC
10,480,029 2.751 % 208 M $
 Dodge & Cox
8,914,781 2.340 % 177 M $
 Lazard Asset Management LLC
6,280,710 1.649 % 124 M $
 Norges Bank Investment Management
6,010,031 1.578 % 119 M $
 Dimensional Fund Advisors LP
5,871,467 1.541 % 116 M $
 Burgundy Asset Management Ltd.
4,457,949 1.170 % 88 M $

Business and Corporate Holdings of News Corp LLC

Name Equities % Valuation
67,521,089 68.87% 42,102,775 $
81,141,397 61.42% 8,524,452,271 $
37,385,989 28.09% 24,309,492 $
28,183,294 17.34% 116,960,670 $
40,803,132 13.32% 28,300,236 $
8,525,323 5.95% 32,681,570 $

Group companies of News Corp LLC

Name Category and Sector Since
 HarperCollinsPublishers India Pvt Ltd.
Consumer Services - Publishing: Books/Magazines
1991
 News Finance, Inc.
-
May. 14
 News Corp UK & Ireland Ltd.
Consumer Services - Publishing: Newspapers
2021
 HarperCollins Canada Ltd.
Consumer Services - Publishing: Books/Magazines
2021
 HarperCollins Publishers LLC
Consumer Services - Publishing: Books/Magazines
2017
 HarperCollins Publishers Ltd.
Consumer Services - Publishing: Books/Magazines
2021
 OPIS Benchmark Administration BV
-
2022

Most Read News

8/04 Credit Agricole's Q2 results beat estimates on insurance, consumer finance
MR
08/11 Italy stands ready to host as Musk talks up Zuckerberg rumble
RE
08/07 Elon Musk Says he Might Need Surgery, Will Get MRI
DJ
08/17 Warren Buffett donates $27 million Berkshire stock
RE
08/10 Telefonica teams up with Elon Musk's Starlink to connect remote customers
RE
08/15 Soros foundation to limit EU funding in new strategy - internal email
RE
08/03 Fisker unveils electric pickup truck even as supply chain bottleneck lingers
RE
08/10 Compugroup grows stronger than expected - margin picks up
DP
08/14 Kraft Heinz CEO Patricio to step down, insider to succeed
RE
08/09 Britain's John Lewis signs deal with Alphabet's Google Cloud
RE
More news

Delaware (State or other jurisdiction of
incorporation or organization)

46-2950970 (I.R.S. Employer
Identification No.)

1211 Avenue of the Americas,

New York, New York

10036 (Zip Code)

(Address of principal executive offices)

Registrant’s telephone number, including area code: 212-852-7000

Securities to be registered pursuant to Section 12(b) of the Act:        

(Address of principal executive offices)

Name of each exchange on which each class is to be registered

NASDAQ Global Select Market

Title of each class to be so registered

Class A Common Stock, par value $0.01 per share

Class B Common Stock, par value $0.01 per share

Class A Preferred Stock Purchase Rights

Class B Preferred Stock Purchase Rights

Securities to be registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one) 

             
Large accelerated filer   ¨    Accelerated filer   ¨
       
Non-accelerated filer   x  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

List of assets owned by News Corp

https://en.wikipedia.org/wiki/List_of_assets_owned_by_News_Corp 

Television

News Corp AustraliaEdit

News UKEdit

Interne

Advertising, Branding & Tech

Global

News UK

  • bridge studio
  • wireless Group
    • wireless studios
    • urban media
    • First Radio
    • Switchdigital
    • TIBUS
    • ZESTY

News Corp Australia

Radio

News UK

  • wireless Group
    • talkSPORT
    • talkSPORT 2
    • talkRADIO
    • Virgin Radio
    • Virgin Radio Anthems
    • Virgin Radio Chilled
    • Virgin Radio Groove
    • FM104
    • Q102
    • 96FM
    • c103
    • Live 95FM
    • LMFM
    • U105
    • Times Radio

Magazines and Inserts (digital and print)

News Corp Australia

News & Magazines (digital and print)

United Kingdom

News UK

Australia

News Corp Australia

National
New South Wales
Victoria
Queensland
South AustraliaEdit
Tasmania
Northern Territory

Community suburban newspapersEdit

Sydney
Cumberland/Courier (NSW) newspapers[17]
  • Blacktown Advocate
  • Canterbury-Bankstown Express
  • Central
  • Central Coast Express Advocate
  • Fairfield Advance
  • Hills Shire Times
  • Hornsby and Upper North Shore Advocate
  • Inner West Courier
  • Liverpool Leader
  • Macarthur Chronicle
  • Mt Druitt-St Marys Standard
  • NINETOFIVE
  • North Shore Times
  • Northern District Times
  • NORTHSIDE
  • Parramatta Advertiser
  • Penrith Press
  • Rouse Hill Times
  • Southern Courier
  • The Manly Daily
  • The Mosman Daily
  • Village Voice Balmain
  • Wentworth Courier
Melbourne
Leader (Vic) newspapers[18]
  • Bayside Leader
  • Berwick/Pakenham Cardinia Leader
  • Brimbank Leader
  • Caulfield Glen Eira/Port Philip Leader
  • Cranbourne Leader
  • Dandenong/Springvale Dandenong Leader
  • Diamond Valley Leader
  • Frankston Standard/Hastings Leader
  • Free Press Leader
  • Heidelberg Leader
  • Hobsons Bay Leader
  • Hume Leader
  • Knox Leader
  • Lilydale & Yarra Valley Leader
  • Manningham Leader
  • Maribyrnong Leader
  • Maroondah Leader
  • Melbourne Leader
  • Melton/Moorabool Leader
  • Moonee Valley Leader
  • Moorabbin Kingston/Moorabbin Glen Eira Leader
  • Mordialloc Chelsea Leader
  • Moreland Leader
  • Mornington Peninsula Leader
  • Northcote Leader
  • Preston Leader
  • Progress Leader
  • Stonnington Leader
  • Sunbury/Macedon Ranges Leader
  • Waverley/Oakleigh Monash Leader
  • Whitehorse Leader
  • Whittlesea Leader
  • Wyndham Leader
Brisbane
Quest (QLD) newspapers[19]
  • Albert & Logan News (Fri)
  • Albert & Logan News (Wed)
  • Caboolture Shire Herald
  • Caloundra Journal
  • City News
  • City North News
  • City South News
  • Ipswich News
  • Logan West Leader
  • Maroochy Journal
  • North-West News
  • Northern Times
  • Northside Chronicle
  • Pine Rivers Press/North Lakes Times
  • Redcliffe and Bayside Herald
  • South-East Advertiser
  • South-West News/Springfield News
  • Southern Star
  • The Noosa Journal
  • weekender
  • Westside News
  • Wynnum Herald
  • Weekender Essential Sunshine Coast
Adelaide
Messenger (SA) newspapers[20]
  • Adelaide Matters
  • City Messenger
  • City North Messenger
  • East Torrens Messenger
  • Eastern Courier Messenger
  • Guardian Messenger
  • Hills & Valley Messenger
  • Leader Messenger
  • News Review Messenger
  • Portside Messenger
  • Southern Times Messenger
  • Weekly Times Messenger
Perth
Community (WA) newspapers[21] (50.1%) (Formerly)
  • Advocate
  • Canning Times
  • Comment News
  • Eastern Reporter
  • Fremantle-Cockburn Gazette
  • Guardian Express
  • Hills-Avon Valley Gazette
  • Joondalup-Wanneroo Times
  • Mandurah Coastal / Pinjarra Murray Times
  • Melville Times
  • Midland-Kalamunda Reporter
  • North Coast Times
  • Southern Gazette
  • Stirling Times
  • Weekend-Kwinana Courier
  • Weekender
  • Western Suburbs Weekly
Darwin
Sun (NT) newspapers[22]
  • Darwin Sun
  • Litchfield Sun
  • Palmerston Sun

Regional and rural newspapers

New South Wales
Victoria
Queensland
Tasmania
Northern Territory  Centralian Advocate

Papua New GuinePapua New Guinea Post-Courier (63%)

United StatesEdit

International Dow Jones & Company

Consumer Media Group
Enterprise Media Group
  • Dow Jones Newswires – global, real-time news and information provider.
  • Factiva – provides business news and information together with content delivery tools and services.
  • Dow Jones Indexes – stock market indexes and indicators, including the Dow Jones Industrial Average. (10% ownership)
  • Dow Jones Financial Information Services – produces databases, electronic media, newsletters, conferences, directories, and other information services on specialised markets and industry sectors.
  • Betten Financial News – leading Dutch language financial and economic news service.
Strategic Alliances
  • STOXX (33%) – joint venture with Deutsche Boerse and SWG Group for the development and distribution of Dow Jones STOXX indices.

Wireless Group

Books

  • HarperCollins
    • 4th Estate
    • Collins
    • Ecco Press
    • Harlequin Enterprises
    • Harper Perennial
    • Harper Voyager
    • HMH Books & Media
    • Kappa Books
    • Modern Publishing
    • Unisystems Inc.
    • Zondervan Publishing (Christian publishing company taken over by HarperCollins in 1988)
    • Thomas Nelson (Christian publishing company taken over by HarperCollins in 2011)
    • Inspirio – religious gift production
    • 3000 Pictures (joint venture with Sony Pictures) – film and television production company

Former assets

SoldEdit

Defunct

See also

References

  1. ^ "Melbourne startup Punters.com.au acquired by News Corp Australia".
  2. ^ "delicious"NewsCorp Australia. Retrieved 2021-12-25.
  3. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  4. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  5. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on May 29, 2010.
  6. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  7. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au.
  8. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  9. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  10. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  11. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  12. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 2, 2011.
  13. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on July 19, 2011.
  14. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on July 21, 2011.
  15. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  16. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  17. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on May 28, 2010.
  18. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on February 20, 2008.
  19. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  20. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  21. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  22. ^ "Horse Racing News - Just Horse Racing"www.justhorseracing.com.au. Archived from the original on January 3, 2011.
  23. ^ Bond, David (30 June 2016). "News Corp tunes into radio with £220m Talksport acquisition"Financial Times.
  24. ^ "TalkTV | Straight talking starts here"talk.tv.
  25. ^ Khrennikov, Ilya (11 December 2012). "Prokhorov's RBC Says It's Not in Talks to Buy Stake in Vedomosti"Bloomberg.

External link

  • News Corp website
  • NewsSpace, "a site for media professionals, combining News Limited's media platforms into one location – newspapers, magazines and digital brands"
 
Last edited 15th August2023 by 202.162.66.4

RELATED ARTICLW

NEW NEWSCORP INC

INFORMATION REQUIRED IN REGISTRATION STATEMENT

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF

FORM 10

Cross-Reference Sheet Between Information Statement and Items of Form 10

Certain information required to be included in this Form 10 is incorporated by reference to specifically-identified portions of the body of the information statement filed herewith as Exhibit 99.1 (the “Information Statement”). None of the information contained in the Information Statement shall be incorporated by reference herein or deemed to be a part hereof unless such information is specifically incorporated by reference.

Item 1A.  Risk Factors.

The information required by this item is contained under the sections of the information statement entitled “Risk Factors” and “Cautionary Statements Concerning Forward-Looking Statements.” Those sections are incorporated herein by reference.

Item 2.  Financial Information.

The information required by this item is contained under the sections of the information statement entitled “Selected Historical Combined Financial Data,” “Unaudited Pro Forma Combined Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Those sections are incorporated herein by reference.

Item 3.  Properties.

The information required by this item is contained under the section of the information statement entitled “Business—Properties.” That section is incorporated herein by reference.

Item 4.  Security Ownership of Certain Beneficial Owners and Management.

The information required by this item is contained under the section of the information statement entitled “Security Ownership of Certain Beneficial Owners and Management.” That section is incorporated herein by reference.

Item 5.  Directors and Executive Officers.

The information required by this item is contained under the section of the information statement entitled “Management.” That section is incorporated herein by reference.

Item 6.  Executive Compensation.

The information required by this item is contained under the sections of the information statement entitled “Compensation of Directors,” “Management” and “Executive Compensation.” Those sections are incorporated herein by reference.

Item 7.  Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is contained under the sections of the information statement entitled “Management,” “Certain Relationships and Related Person Transactions” and “Our Relationship With Parent Following the Distribution.” Those sections are incorporated herein by reference.

Item 8. Legal Proceedings.

The information required by this item is contained under the section of the information statement entitled “Business—Legal Proceedings.” That section is incorporated herein by reference.

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

The information required by this item is contained under the sections of the information statement entitled “Dividend Policy” and “Description of Our Capital Stock.” Those sections are incorporated herein by reference.

Item 10. Recent Sales of Unregistered Securities.

The information required by this item is contained under the section of the information statement entitled “Description of Our Capital Stock—Sale of Unregistered Securities.” That section is incorporated herein by reference.

Item 11. Description of Registrant’s Securities to be Registered.

The information required by this item is contained under the section of the information statement entitled “Description of Our Capital Stock.” That section is incorporated herein by reference.

Item 12. Indemnification of Directors and Officers.

The information required by this item is contained under the section of the information statement entitled “Description of Our Capital Stock—Limitation of Liability for Officers and Directors and Insurance.” That section is incorporated herein by reference.

Item 13. Financial Statements and Supplementary Data.

The information required by this item is contained under the section of the information statement entitled “Index to Financial Statements” (and the financial statements referenced therein). That section is incorporated herein by reference.

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 15. Financial Statements and Exhibits.
(a) Financial Statements

The information required by this item is contained under the section of the information statement entitled “Index to Financial Statements” (and the financial statements referenced therein). That section is incorporated herein by reference.

(b) Exhibits

See below.

The following documents are filed as exhibits hereto:

     

Exhibit
Number

  Exhibit Description
   
  2.1†   Form of Separation and Distribution Agreement
   
  2.2†   Form of Tax Sharing and Indemnification Agreement
   
  2.3†   Form of Transition Services Agreement
   
  2.4†   Form of Employee Matters Agreement
   
  3.1†   Form of Certificate of Incorporation of New News Corporation
   
  3.2†   Form of By-laws of New News Corporation
   
  4.1†   Form of Stockholder Rights Agreement
   
10.1†   Employment Agreement between NC Transaction, Inc. and Robert J. Thomson
   
10.2†   Employment Agreement between NC Transaction, Inc. and Bedi Ajay Singh
   
10.3†   Form of New News Corporation 2013 Long-Term Incentive Plan
   
10.4†   Form of FOX SPORTS Trademark License
   
10.5†   Form of FOX Trademark License
   
21.1†   List of Subsidiaries
   
24.1†   Power of Attorney
   
99.1   Preliminary Information Statement
   
99.2†   Form of Notice of Internet Availability of Information Statement Materials
Previously filed

Exhibit Index

         

Exhibit

Number

    Exhibit Description
   
    2.1†      Form of Separation and Distribution Agreement
   
    2.2†      Form of Tax Sharing and Indemnification Agreement
   
    2.3†      Form of Transition Services Agreement
   
    2.4†      Form of Employee Matters Agreement
   
    3.1†      Form of Certificate of Incorporation of New News Corporation
   
    3.2†      Form of By-laws of New News Corporation
   
    4.1†      Form of Stockholder Rights Agreement
   
  10.1†      Employment Agreement between NC Transaction, Inc. and Robert J. Thomson
   
  10.2†      Employment Agreement between NC Transaction, Inc. and Bedi Ajay Singh
   
  10.3†      Form of New News Corporation 2013 Long-Term Incentive Plan
   
  10.4†      Form of FOX SPORTS Trademark License
   
  10.5†      Form of FOX Trademark License
   
  21.1†      List of Subsidiaries
   
  24.1†      Power of Attorney
   
  99.1      Preliminary Information Statement
   
  99.2†      Form of Notice of Internet Availability of Information Statement Materials

 

Previously filed

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

NEW NEWSCORP INC.

/s/ K. Rupert Murdoch

By: K. Rupert Murdoch

Title: Executive Chairman

Date: June 12, 2013

INFORMATION STATEMENT

New News Corporation

Class A Common Stock, Par Value $.01 Per Share

Class B Common Stock, Par Value $.01 Per Share

This information statement is being furnished in connection with the distribution by News Corporation (“Parent”) to its stockholders of all of the outstanding shares of common stock of New Newscorp Inc (“New News Corporation”), a wholly-owned subsidiary of Parent that will hold the following businesses of Parent: newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. To implement the distribution, Parent will distribute the shares of New News Corporation common stock on a pro rata basis to Parent’s stockholders in a manner that is intended to be tax-free to its stockholders for U.S. federal income tax purposes, except for cash that stockholders receive in lieu of fractional shares. For tax consequences to Australian holders, see “The Distribution—Material Australian Tax Consequences of the Distribution.”

New News Corporation was organized as New Newscorp LLC, a limited liability company under the laws of the State of Delaware, and has been converted to New Newscorp Inc, a Delaware corporation.

For every four shares of Parent Class A Common Stock held of record by you as of the close of business on June 21, 2013, the record date for the distribution, you will receive one share of New News Corporation Class A Common Stock. For every four shares of Parent Class B Common Stock held of record by you as of the record date for the distribution, you will receive one share of New News Corporation Class B Common Stock. Each share of New News Corporation common stock will have attached to it a preferred stock purchase right as further described in “Description of Our Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Our Stockholder Rights Agreement.” You will receive cash in lieu of any fractional shares of New News Corporation common stock which you would have received after application of the above-mentioned ratio, as applicable. We expect the applicable shares of New News Corporation common stock to be distributed by Parent to you on June 28, 2013. We refer to the date of the distribution of New News Corporation common stock as the “distribution date.” Immediately after the distribution becomes effective, New News Corporation will be an independent, publicly traded company.

No approval of the distribution by Parent’s stockholders is required. However, in order to effectuate the distribution in the manner discussed in this information statement, Parent intends to amend its Restated Certificate of Incorporation, and will hold a Special Meeting of its stockholders (the “Special Meeting”) in connection therewith. Parent has distributed a separate proxy statement which contains information regarding the Special Meeting. The distribution contemplated by this information statement assumes that certain proposals contained in the separate proxy statement will be approved by Parent’s stockholders and completion of the distribution is conditioned upon such approval. 

You do not need to pay any consideration, exchange or surrender your existing common stock of Parent or take any other action to receive your applicable shares of New News Corporation common stock.

Parent currently owns all of the outstanding shares of New News Corporation. Accordingly, there is no current trading market for New News Corporation common stock, although we expect that a limited market, commonly known as a “when-issued” trading market, will develop shortly before the record date for the distribution, and we expect “regular-way” trading of New News Corporation common stock to begin on the first trading day following the completion of the distribution. New News Corporation intends to apply to have both its Class B Common Stock and Class A Common Stock authorized for listing on the NASDAQ Global Select Market (“NASDAQ”) under the symbols “NWS” and “NWSA,” respectively, and to have CHESS Depositary Interests (“CDIs”) representing its Class B Common Stock and Class A Common Stock listed and traded on the Australian Securities Exchange (“ASX”), initially under temporary trading symbols, and then under the symbols “NWS” and “NWSLV,” respectively. As discussed under “The Distribution—Trading Prior to the Distribution Date,” if you sell your Parent Class A Common Stock or Class B Common Stock in the “due-bills” market after the record date and before the distribution, you also will be selling your right to receive shares of New News Corporation Class A Common Stock or Class B Common Stock, as applicable, in connection with the distribution. However, if you sell your Parent Class A Common Stock or Class B Common Stock in the ex-distribution market up to and including the distribution date, you will still be entitled to receive shares of our common stock in the distribution. Holders of Parent CDIs representing shares of Parent common stock will receive CDIs representing shares of the applicable class of New News Corporation common stock, other than with respect to fractional CDIs. It is anticipated that Parent CDIs will commence trading on an ex-distribution and normal settlement basis shortly before the record date. Once this occurs, trading of Parent CDIs on a “cum” basis, with an entitlement to receive CDIs representing shares of our common stock in the distribution, will cease. Trading of CDIs representing New News Corporation Class A Common Stock and Class B Common Stock will commence shortly before the record date, initially, on a “conditional and deferred” settlement basis and then on an “unconditional and deferred” settlement basis between the distribution date and the mailing of holding statements. There are risks associated with the trading of Parent and New News Corporation CDIs prior to the distribution, which are disclosed in “The Distribution—Trading Prior to the Distribution Date,” and investors should read that section carefully and are encouraged to consult their brokers and financial advisors regarding these risks.

In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 21.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is June 12, 2013.

Parent first mailed a Notice of Internet Availability of Information Statement Materials (the “Notice of Internet Availability”) containing instructions on how to access this information statement to its stockholders on or about May 20, 2013. Parent will mail this information statement to stockholders who previously elected to receive a paper copy of Parent’s materials.

cash or any other consideration to receive your shares of New News Corporation common stock. The number of shares of Parent’s Class A Common Stock or Class B Common Stock that you currently own will not change as a result of the distribution.

This information statement describes New News Corporation’s business, its relationship with Parent, how this transaction affects Parent’s stockholders and provides other information to assist you in evaluating the benefits and risks of holding or disposing of New News Corporation common stock that you will receive in the distribution.

Parent

News Corporation, a Delaware corporation, is a diversified global media company currently with operations in the following six industry segments: (i) Cable Network Programming; (ii) Filmed Entertainment; (iii) Television; (iv) Direct Broadcast Satellite Television; (v) Publishing; and (vi) Other. The activities of News Corporation are conducted principally in the U.S., the U.K., Continental Europe, Australia, Asia and Latin America. Parent owns all of our common stock issued and outstanding prior to the distribution. After the distribution, Parent will not own any of our common stock. It is anticipated that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc.

Our Company

We are a global diversified media and information services company focused on creating and distributing authoritative and engaging content to consumers and businesses throughout the English-speaking world, as well as increasingly in other countries across the globe. Our company is comprised of leading businesses across a range of media, including: news and information services, sports programming in Australia, digital real estate services, book publishing, and pay-TV distribution in Australia, that are distributed under some of the world’s most recognizable and respected brands, including The Wall Street Journal, Dow Jones, Herald SunThe SunThe Times, HarperCollins Publishers, FOX SPORTS Australia, realestate.com.au, and many others. We are also a rapidly developing provider of digital education content, assessment and delivery services. Our commitment to high-quality premium editorial content makes our media properties a trusted source of news and information among consumers; at the same time many of these properties deliver broad reach and high audience engagement levels in their respective markets, making them attractive advertising vehicles for our advertising customers. Key components of our business include:

TABLE OF CONTENTS

         
     Page  

INFORMATION STATEMENT SUMMARY

     1   

RISK FACTORS

     21   

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

     35   

THE DISTRIBUTION

     36   

DIVIDEND POLICY

     49   

CAPITALIZATION

     50   

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

     51   

BUSINESS

     60   

SELECTED HISTORICAL COMBINED FINANCIAL DATA

     79   

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     81   

MANAGEMENT

     118   

EXECUTIVE COMPENSATION

     125   

COMPENSATION OF DIRECTORS

     134   

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     136   

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     137   

OUR RELATIONSHIP WITH PARENT FOLLOWING THE DISTRIBUTION

     141   

DESCRIPTION OF OUR CAPITAL STOCK

     149   

CHESS DEPOSITARY INTERESTS AND OTHER AUSTRALIAN MATTERS

     160   

WHERE YOU CAN FIND MORE INFORMATION

     171   

INDEX TO FINANCIAL STATEMENTS

     F-

INFORMATION STATEMENT SUMMARY

The following is a summary of material information discussed in this information statement. This summary may not contain all the details concerning the distribution or other information that may be important to you. To better understand the distribution and New News Corporation’s business and financial position, you should carefully review this entire information statement. Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement, including the combined financial statements of New News Corporation, which will consist of the entities associated with the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia, assumes the completion of all the transactions referred to in this information statement in connection with the distribution. Unless the context otherwise requires, references in this information statement to “New Newscorp LLC,” “New Newscorp Inc,” “New News Corporation,” “we,” “us,” “our” and “our company” refer to New News Corporation and its combined subsidiaries. References in this information statement to “Parent” refers to News Corporation, a Delaware corporation, and its consolidated subsidiaries (other than, after the distribution, New News Corporation and its combined subsidiaries), unless the context otherwise requires.

 We anticipate that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc. and we will assume the name News Corporation. If such name changes are completed as anticipated, then from the time such name changes become effective, references to “New News Corporation” shall be deemed to refer to News Corporation and its combined subsidiaries and references to “Parent” shall be deemed to refer to Twenty-First Century Fox, Inc. and its consolidated subsidiaries.

New News Corporation was organized as a limited liability company under the laws of the State of Delaware and has been converted from a limited liability company to a Delaware corporation.

This information statement describes the businesses to be transferred to New News Corporation by Parent as if the transferred businesses were our businesses for all historical periods described. References in this information statement to our historical assets, liabilities, products, businesses or activities are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the transferred businesses as they were conducted as part of Parent and its subsidiaries prior to the distribution.

You should not assume that the information contained in this information statement is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and we undertake no obligation to update the information, except in the normal course of our public disclosure obligations. In particular, a number of matters contained in this information statement relate to agreements or arrangements which have not yet been finalized and expectations of what may occur. It is possible that prior to the distribution these agreements, arrangements, and expectations may change.

Why New News Corporation Sent a Notice of Internet Availability or This Information Statement to You

New News Corporation sent a Notice of Internet Availability or this information statement to you because you were a holder of Parent’s Class A Common Stock or Class B Common Stock on the record date for the distribution of New News Corporation Class A Common Stock or Class B Common Stock, as applicable. Accordingly, you are entitled to receive one share of New News Corporation Class A Common Stock or New News Corporation Class B Common Stock, as applicable, for every four shares of Parent’s Class A Common Stock or Class B Common Stock that you held as of the record date, respectively. No action is required on your part to participate in the distribution, and you do not have to surrender or exchange your shares of Parent or pay   cash or any other consideration to receive your shares of New News Corporation common stock. The number of shares of Parent’s Class A Common Stock or Class B Common Stock that you currently own will not change as a result of the distribution.

This information statement describes New News Corporation’s business, its relationship with Parent, how this transaction affects Parent’s stockholders and provides other information to assist you in evaluating the benefits and risks of holding or disposing of New News Corporation common stock that you will receive in the distribution.

Parent

News Corporation, a Delaware corporation, is a diversified global media company currently with operations in the following six industry segments: (i) Cable Network Programming; (ii) Filmed Entertainment; (iii) Television; (iv) Direct Broadcast Satellite Television; (v) Publishing; and (vi) Other. The activities of News Corporation are conducted principally in the U.S., the U.K., Continental Europe, Australia, Asia and Latin America. Parent owns all of our common stock issued and outstanding prior to the distribution. After the distribution, Parent will not own any of our common stock. It is anticipated that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc.

Our Company

We are a global diversified media and information services company focused on creating and distributing authoritative and engaging content to consumers and businesses throughout the English-speaking world, as well as increasingly in other countries across the globe. Our company is comprised of leading businesses across a range of media, including: news and information services, sports programming in Australia, digital real estate services, book publishing, and pay-TV distribution in Australia, that are distributed under some of the world’s most recognizable and respected brands, including The Wall Street Journal, Dow Jones, Herald SunThe SunThe Times, HarperCollins Publishers, FOX SPORTS Australia, realestate.com.au, and many others. We are also a rapidly developing provider of digital education content, assessment and delivery services. Our commitment to high-quality premium editorial content makes our media properties a trusted source of news and information among consumers; at the same time many of these properties deliver broad reach and high audience engagement levels in their respective markets, making them attractive advertising vehicles for our advertising customers. 

Key components of our business include:

   

News and Information Services: Our key brands include The Wall Street Journal, Dow Jones Newswires and Factiva, Herald Sun in Australia, The Sun and The Times in the U.K. and News America Marketing Group.

   

Cable Network Programming: FOX SPORTS Australia is the leading sports programming provider in Australia based on total subscribers.

   

Digital Real Estate Services: We own 61.6% of REA Group Limited (“REA”), which owns the leading digital portals for residential and commercial property in Australia based on monthly site visits.

   

Book Publishing: HarperCollins is one of the largest English-language consumer publishers in the world based on global revenue, with an active print and digital catalog of over 50,000 publications and over 60 branded imprints.

   

Amplify: Our innovative digital education business is focused on the digitization of K-12 education.

   

Foxtel: We own 50% of Foxtel, the largest pay-TV provider in Australia based on total subscriber

We deliver our premium content to consumers across numerous distribution platforms consisting not only of traditional print and television, but also through an expanding array of digital platforms including websites, electronic readers and applications for tablets and mobile devices. We are focused on pursuing integrated strategies across our businesses to continue to capitalize on the transition from print to digital consumption of high-quality content. We believe that the increasing availability of high-speed Internet access, electronic readers and connected mobile devices will allow us to continue to deliver our content in a more engaging, timely and personalized manner; provide opportunities to more effectively monetize our content via strong customer relationships and more compelling and engaging advertising solutions; and reduce our physical production and distribution costs as we continue to shift to digital platforms.

Our diversified revenue base consists of recurring subscriptions, circulation copies, licensing fees, affiliate fees and direct sales, as well as the sale of advertising and sponsorships. We manage our businesses to take advantage of opportunities to share technologies and practices across geographies and businesses and bundle selected offerings to provide greater value to consumers and advertising partners. Headquartered in New York, we operate primarily in North America, Australia, and the U.K., and our content is distributed and consumed worldwide. Our North American, Australian and U.K. premium content and trusted brands include:

                 

North America

 

Australia

 

U.K.

       
LOGO   LOGO   LOGO   LOGO
         
LOGO   LOGO   LOGO   LOGO   LOGO
LOGO   LOGO   LOGO   LOGO   LOGO
LOGO   LOGO   LOGO        
  LOGO            
LOGO   LOGO            

For the fiscal year ended June 30, 2012, we recorded combined revenue of $8,654 million, loss before income tax benefit of $2,377 million and Total Segment EBITDA of $782 million. For the nine months ended March 31, 2013, we recorded combined revenue of $6,634 million, income before income tax benefit of $1,633 million and Total Segment EBITDA of $558 million. For a reconciliation of Total Segment EBITDA, a non-GAAP measure, to (loss) income before income tax benefit (expense), reported in accordance with generally accepted accounting principles (“GAAP”), see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our results of operations in recent periods have been negatively impacted by write-downs of goodwill and intangible assets in our News and Information Services segment, due largely to declines in advertising and circulation revenue, as well as restructuring charges primarily resulting from closures of some of our newspapers and organizational restructurings at others. We expect to record a pre-tax non-cash impairment charge in the range of $1.2 billion to $1.4 billion in the quarter ending June 30, 2013 related to our News and Information Services segment. These charges reflect the challenging environment faced by our News and Information Services segment as a result of, among other things, unfavorable economic conditions in some of our markets and adverse trends in the newspaper industry generally.

It is anticipated that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc. and we will assume the name News Corporation.

Our operations are organized into five reporting segments: (i) News and Information Services; (ii) Cable Network Programming (a separate segment since November 2012—see “Cable Network Programming” below); (iii) Digital Real Estate Services; (iv) Book Publishing; and (v) Other, which primarily consists of Amplify, our digital education business, and general corporate overhead expenses. We account for our 50% stake in Foxtel as an equity investment.

News and Information Services

The News and Information Services segment comprises different products and services targeting consumer and enterprise customers and includes the global product offerings of The Wall Street Journal and Barron’s publications, The Wall Street Journal Digital Network (“WSJDN”) and our suite of information services, including Dow Jones Newswires and Factiva. In addition to WSJ.com and Barrons.com, WSJDN includes MarketWatch, AllThingsD and related services. We also own, among other publications, The AustralianHerald SunThe Daily Telegraph and The Courier Mail in Australia, The TimesThe Sunday Times and The Sun in the U.K. and the New York Post in the U.S. Many of our newspapers are among the leading news brands by total circulation in their respective markets. For example, The Wall Street Journal is the leading circulation daily newspaper in the U.S., with total average print and digital circulation of 2,378,827 for the six months ended March 31, 2013 based on Alliance of Audited Media (“AAM”) data. In Australia, our daily, Sunday, weekly and bi-weekly newspapers account for more than 63% of the total circulation of newspapers in Australia, and in the U.K., The Sun, The Times and The Sunday Times account for approximately one-third of all national newspaper sales. This segment also includes News America Marketing Group (“NAMG”), a leading provider of free-standing coupon inserts, in-store marketing products and digital-savings marketing solutions. NAMG’s customers include many of the largest consumer packaged goods (“CPG”) advertisers in the U.S. and Canada. The News and Information Services segment generates revenue primarily through print and digital advertising sales and through circulation and subscriptions.

Cable Network Programming

Our Cable Network Programming segment consists of FOX SPORTS Australia, Australia’s leading sports programmer based on total subscribers. FOX SPORTS Australia is focused on live national and international sports events and is distributed via long-term carriage agreements with pay-TV providers (mainly Foxtel) in Australia. FOX SPORTS Australia provides featured original and licensed premium sports content tailored to the Australian market, including live sports such as National Rugby League, the domestic football league, English Premier League, Australian and international cricket, as well as the NFL. FOX SPORTS Australia offers seven standard definition television channels, high definition versions of five of those channels, an interactive viewing application and one internet protocol (“IPTV”) channel. Its channels consist of FOX SPORTS 1, FOX SPORTS 2, FOX SPORTS 3, FOX FOOTY, FOX SPORTS NEWS, FUEL TV and SPEED. FOX SPORTS Australia’s channels provide premium compelling live broadcasts, including almost every game of the highly popular Australian Football League. FOX SPORTS Australia also operates foxsports.com.au and offers a range of interactive mobile and tablet applications. Revenues comprise primarily affiliate fees, as well as advertising sales.

Prior to November 2012, we owned a 50% interest in FOX SPORTS Australia, which we accounted for as an equity investment. In November 2012, we acquired Consolidated Media Holdings Limited (“CMH”), a media investment company that owned the remaining 50% interest in FOX SPORTS Australia. As a result of the CMH acquisition, our ownership interest in FOX SPORTS Australia increased to 100% and, accordingly, the results of FOX SPORTS Australia are included within a new Cable Network Programming segment beginning in November 2012.

Digital Real Estate Services

We own 61.6% of REA, a publicly traded company listed on ASX (ASX: REA) that is a leading digital advertising business specializing in real estate services. REA operates Australia’s largest residential property website, realestate.com.au, and Australia’s largest commercial property site, realcommercial.com.au, which have approximately 23.1 million visits each month combined based on Nielsen average monthly total traffic ratings for the six months ended March 31, 2013. REA also operates a market-leading Italian property site, casa.it, and other property sites and apps across Europe and in Hong Kong. REA’s portfolio of property sites is used by approximately 21,000 agents, with over 37 million visits per month based on Nielsen average monthly total traffic ratings for the six months ended December 31, 2012. REA generates revenue primarily through the sale of basic and premium advertising subscription packages and advertising listing upgrades to real estate agents. REA also provides unique digital advertising solutions to help real estate agents sell or rent properties and win new listings. REA increasingly generates revenue as a result of customers upgrading to premium listing services.

Book Publishing

Our HarperCollins book publishing segment is one of the largest English-language consumer publishers in the world based on global revenue, with particular strengths in general fiction, nonfiction, children’s and religious publishing, and an industry leader in digital publishing. HarperCollins includes over 60 branded publishing imprints including Avon, Harper, HarperCollins Children’s Publishers, William Morrow and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as J.R.R. Tolkien, Paulo Coelho, Rick Warren and Agatha Christie and popular titles such as The HobbitGoodnight Moon and To Kill a Mockingbird. HarperCollins’ active print and digital global catalog includes over 50,000 publications and approximately 100,000 SKUs, including various print and digital editions of the same title. Nearly all of our titles published in the last four years, as well as the majority of our entire catalog, are available in electronic reader and tablet formats. Our growing digital publishing business provides us opportunities to enhance our products and secure new avenues to reach our consumers, including through Amazon, Apple, Google and Barnes & Noble, and to improve our operating results.

Other

Our Other segment primarily consists of Amplify, our digital education business focused on the K-12 learning market, and general corporate overhead expenses. Amplify focuses on three areas of business: data and analytics; digital content and curriculum; and mobile distribution systems designed for education. Amplify Insight, Amplify’s data and analytics division, which formerly operated as Wireless Generation, Inc. (“Wireless Generation”), commenced operations in 2000 and was acquired by Parent in 2010. Amplify Insight provides premium data and analytics services to enable real-time personalization of educational content. Through its Amplify Learning division, Amplify is creating innovative digital curricula for K-12 education designed to enhance teaching and learning in English Language Arts, Science and Math. Through its Amplify Access division, Amplify is developing an open, tablet-based education platform that integrates its existing assessment and analytics tools and services with its digital curricula, as well as third-party content and interactive applications.

Equity Investments

Foxtel

We own 50% of Foxtel, Australia’s largest pay-TV provider, which has approximately 2.3 million subscribing households in Australia, or over 30% of the country’s population (as of December 31, 2012). Foxtel’s 200-plus channel selection (which includes standard definition channels, high definition versions of some of those channels, and audio and interactive channels) provides premium and exclusive content, and a wide array of digital and mobile features not available to viewers via the three major commercial Free-To-Air (“FTA”) networks and two major government-funded broadcasters in Australia, which collectively broadcast approximately 17 main channels in most major metropolitan markets. Foxtel’s premium content includes FOX SPORTS Australia’s suite of sports channels and TV shows from HBO, FOX and Universal, among others. Foxtel also owns and operates 26 channels, including general entertainment and movie channels and sources an extensive range of movie programming through arrangements with major U.S. studios. Through innovative products such as high definition channels, the extension of pay-TV programming to mobile devices and tablets (including iPads and iPhones via FOXTEL Go), as well as IPTV, and advanced DVR and Electronic Program Guide technology, we believe Foxtel offers subscribers a compelling alternative to FTA TV. The remaining 50% of Foxtel is owned by Telstra Corporation Limited (“Telstra”), one of Australia’s leading telecommunications companies. Foxtel generates revenue primarily through subscription revenue as well as advertising revenue.

Our Competitive Strengths

Extensive portfolio of premium content and trusted brands

We distribute high quality content through some of the world’s leading and most trusted brands. For example, our news and information products and services, including The Wall Street JournalBarron’s, WSJDN, Factiva, Dow Jones Newswires and other sources, provide timely, premium information for their respective customer bases. Likewise the sports content offered via FOX SPORTS Australia’s channels and the content offered by our HarperCollins titles are compelling and entertaining for our customers. We distribute content via trusted brands such as The Wall Street JournalThe Australian and The Times that have cultural relevance, longevity and stature in their respective markets with audiences and advertisers alike. The nature and quality of our content as well as the strength of our brands allow us to effectively monetize our content via a combination of subscriptions, circulation, licensing fees, affiliate fees and direct sales, as well as the sale of advertising and sponsorships.

Leadership positions across most of our key businesses

We enjoy strong leadership positions across most of our key businesses, allowing us to not only effectively monetize our content but also to innovate and take advantage of opportunities to transform and grow our businesses in the digital era. The Wall Street Journal is the leading daily newspaper in the U.S. based on average print and digital circulation for the six months ended March 31, 2013. We also own leading news brands by circulation in Australia, such as Herald Sun, and the U.K., such as The Sunday Times. This position has helped us to actively transition these products for effective digital consumption and monetization through, for example, the successful implementation of digital subscriptions. NAMG is a leading provider of free-standing coupon inserts, in-store marketing products and digital-savings marketing solutions for advertisers in the U.S. and Canada. Our HarperCollins book publishing segment is one of the largest English-language consumer publishers in the world based on global revenue, with particular strengths in general fiction, nonfiction, children’s and religious publishing, and an industry leader in digital publishing. REA owns the leading residential and commercial real estate websites in Australia based on monthly site visits. Likewise, FOX SPORTS Australia and Foxtel are leaders based on total subscribers and each is leveraging digital technology to improve and expand its product offerings.

Global reach and distribution of premium content across major English-speaking markets

We create and distribute our proprietary content through print, digital and pay-TV platforms to major English-speaking markets worldwide. Our expanding global presence, as well as our large multi-platform footprint in each of these markets, allows us to produce, distribute and monetize our content in a cost-effective manner, develop new offerings, engage new audiences, and share practices and models across geographies. Our size and breadth of platforms allow us to cross-market our products across many of our customers, as well as to create more compelling product offerings via cross-branded and bundled offerings

Ownership in the leading Australian media and sports franchises across multiple media platforms

We have an advantageous position in Australia as a result of our leading national and local presence across each of our Australian businesses. Through News Limited, we are the leader in print and digital news content in Australia based on total circulation. News Limited also owns a portfolio of leading digital properties in key categories including business, lifestyle, food and health. Through FOX SPORTS Australia, we own the largest sports programmer in Australia based on total subscribers, with seven TV sports channels and, together with Foxtel, the rights to one of the most compelling suites of sports video programming in the country. Additionally we own foxsports.com.au, a leading general sports website in Australia, an IPTV sports channel, as well as an 89.5% equity stake in SportingPulse, one of the leading online community sports networks in the country. Combined with our Australian newspaper publications’ sports editorial content we have created one of the strongest multi-platform sports media franchises in Australia with further opportunities to increase subscription and advertising revenues through continued investment in premium sports content, increased provision of enhanced services to our audience and advertisers and further integration across our properties. Foxtel, in which we own a 50% equity stake, is the leading pay-TV provider in Australia based on total subscribers. Foxtel delivers premium news, sports and entertainment programming to consumers through its popular content packages and provides integrated advertising and sponsorship options to its advertising partners. Through significant investments in proprietary technology, Foxtel has amassed a leading portfolio of programming and developed leading traditional and digital delivery capabilities. We believe Foxtel is uniquely positioned to deliver a compelling alternative to FTA TV, thus increasing penetration and driving significant growth in Australian pay-TV. However, we can offer no assurance that any increased penetration or growth will be achieved.

History of successful innovation in and expansion across digital media platforms

Our ongoing commitment to innovation and the development of new business models and sources of revenue have resulted in numerous new businesses and growth opportunities. The combination of our size, premium content and leading market positions has been instrumental in the development of businesses such as WSJDN, REA and HarperCollins’ e-book business, among others. Other examples of our digital expansion include the launch of paid-for digital platforms across a number of our newspapers, including Herald Sun in Australia and The Times in the U.K., as well as the introduction of one of the earliest print-at-home coupon websites in the U.S. We have leveraged technology to enhance our ability to monetize our content through digital subscriptions, electronic reader products and mobile applications and to retain and attract advertisers seeking integrated digital advertising solutions. As the shift to digital consumption continues, we believe we have the vision and the expertise to utilize current and emerging technologies to provide adaptive and transformative products and create future revenue opportunities, including in our digital education business.

Strong balance sheet and diversified revenue base

Our strong balance sheet provides us with the financial flexibility to continue our development of premium content, make investments across our businesses to maintain our leadership position amidst the continuing digital evolution, allocate capital towards investments in higher growth initiatives, and take advantage of strategic opportunities, including potential acquisitions, across the range of the media categories in which we operate. In connection with the distribution, Parent is expected to make a cash contribution to us such that at the distribution date, we expect to have approximately $2,600 million of cash on hand. As of March 31, 2013, on a pro forma basis taking into consideration Parent’s expected contribution, we had combined assets of approximately $18,600 million. See “Summary Historical and Unaudited Pro Forma Combined Financial Information” and the “Unaudited Pro Forma Combined Financial Statements” for further details. We also expect to benefit from our diversified revenue base, which reduces our dependence on any one geography, business or customer, and from the cash flow generated by our portfolio of businesses. For the fiscal year ended June 30, 2012, we generated combined revenue of $8,654 million, of which approximately 41% was generated in the U.S., 20% was generated in the U.K. and 32% was generated in Australia. In the same period, we recorded a net loss of $2,040 million, primarily resulting from non-cash impairment charges.

Experienced management team with demonstrated industry expertise

We will be led by company founder and Executive Chairman, K. Rupert Murdoch, our CEO, Robert J. Thomson, and a management team with demonstrated industry expertise. The team shares a vision to capitalize 

on our current strengths and strategically invest in new initiatives and businesses to grow our platform and generate value for our stockholders. The management team is supported by experienced senior executives with significant tenure in our company and the industries in which we operate.

Goals and Strategies

Continue to invest in high quality premium content

We intend to continue investing in compelling content and new and existing brands to build on our leadership positions and to continually improve the quality of the platforms, products and services we deliver to our audiences and advertisers. For example, we recently enhanced our online and mobile offerings in the U.K. through the acquisition of the rights to show highlight clips for all Premier League soccer matches for three years on these platforms. We believe that these investments will allow us to grow and increase the engagement level of our audiences and improve the monetization of our content through subscription revenues, as well as increase our advertising revenues through the provision of increasingly effective marketing solutions.

Leverage our brands to expand our content across digital products and platforms

We plan to continue to take advantage of emerging technologies and consumer preferences in order to expand the channels through which we distribute our content and enhance our existing digital products, such as web sites, smartphone and tablet applications, video-on-demand services, online video, IPTV and other emerging digital technology. We are transforming each of our businesses by leveraging their powerful brands through enabling investments in new technologies, platforms and partnerships with leading distributors to deliver an enhanced value proposition to our audiences and advertisers alike. Additionally, we expect to continue to build new business models and revenue streams through exploitation of our existing content and brands as well as product innovations and strategic relationships. We have established a Strategy and Creative group to identify new products and services across our businesses to increase revenues and profitability.

Improve operating results through increased integration, focus on operational efficiencies and the continued expansion of our digital platforms

We are focused on implementing operational initiatives across all of our businesses and in each of our geographies to continue to improve our operating results. We intend to maintain cost discipline across the organization through tighter integration of technology and purchasing across our businesses, as well as enhanced sharing of new products, technology, business models and practices. For example, we have implemented a cross-platform editorial technology system, which will enable seamless content sharing across our global network of media channels (including print, digital media and video). We are also leveraging our existing paywall technology to increase content monetization across our digital businesses. We also intend to continue to simplify our organizational structure and processes while maintaining the high journalistic and content standards that our products are known for. Recent examples include: unifying our U.S. newsroom by combining Wall Street Journal and Dow Jones Newswires newsroom staff and improving our operations by consolidating newspaper warehouses and outsourcing non-strategic functions such as printing (in the U.S.) and distribution. Separately, the expansion of our businesses across digital platforms presents opportunities to continue to reduce our distribution and warehousing infrastructure and overall operational footprint.

Take advantage of our brands, content, shared technologies and expertise to continue to expand into new geographies

We see significant opportunities to expand our footprint into new geographies by taking advantage of our trusted brands, premium content and global platform. Much of our content, including business news and information as well as certain book and educational content, has a global audience outside our current core markets in the U.S., Australia and the U.K. For example, we now publish over 12 versions of The Wall Street Journal in 9 languages, including versions in China, Japan and Korea. In addition, REA, which began as a leading digital real estate site in Australia, has since expanded to operate leading sites in Hong Kong, Italy and Luxembourg. With the ongoing digitization of content creation and distribution as well as our focus on a fully integrated global infrastructure, we believe that we will be able to continue to efficiently expand into and operate our businesses in new markets across the globe.

Integrate our media offerings in Australia and strengthen our sports leadership position

We continue to focus on finding ways to integrate our diverse set of businesses and improve our organizational structure. In our Australian news business we have integrated our operations into a single, data-driven, customer-focused marketing organization and have built a collaborative, national editorial structure. At FOX SPORTS Australia, we will continue to invest in compelling sports programming and extend distribution of our content across our multiple media platforms. We plan on integrating foxsports.com.au with the digital properties of our existing Australian news sports brands and SportingPulse, a leading online community sports network, which provides unique local sports content to incorporate into our community newspaper and other digital properties. As we expand our digital presence, we expect to cross-sell advertising across multiple platforms to create stronger integrated advertising offerings.

Increasingly supplement advertising revenue with recurring subscription revenue

Many of our businesses (including Dow Jones Newswires, Factiva and FOX SPORTS Australia) generate revenues largely via recurring subscriptions for their content and services. In these businesses, we strive to grow our revenues by expanding our subscriber base. Other businesses, including The Wall Street JournalThe Times and other newspapers, generate revenues largely via the sale of advertising or a combination of subscriptions and advertising sales. Within these businesses, we are pursuing strategies to grow subscription revenues by, among other things, continuing to monetize our digital content by increasing digital subscriptions and expanding the size of our customer base through a focus on customer service, ongoing investments in subscriber management and customer insight platforms and other initiatives. As we execute on these strategies across our businesses, we expect that the revenues we generate from the sale of advertising will increasingly be supplemented by stable and growing sources of recurring subscription revenues.

Establish Amplify as the leading digital education provider for improving outcomes in K-12 education

We believe that technological innovation coupled with the movement to Common Core Standards and a desire by educators and taxpayers to deliver world-class educational services in a scaled, cost-effective manner will drive fundamental changes in the nature and delivery of education services in the coming years. We plan to take advantage of these changes and grow our education business, Amplify, by building an innovative and compelling digital curriculum for K-12 education to enhance teaching and learning in English Language Arts, Science and Math. We also aim to develop a 4G mobile tablet-based platform for students and teachers that will support our assessment tools, our digital curriculum as well as other third-party content and interactive applications. We believe Amplify will be a transformative and effective solution for the challenges facing K-12 education, and are focused on creating content as immersive and entertaining as the best films and games to drive the growth of this business. See “Risk Factors—No Assurance of Profitability of Amplify” for a discussion of risks associated with our Amplify business.

Risks Associated with the Proposed Transaction and Our Business

You should carefully consider the matters discussed under the heading “Risk Factors” of this information statement.

 

Risks Associated with the Proposed Transaction and Our Business

You should carefully consider the matters discussed under the heading “Risk Factors” of this information statement.

Prior to completing the distribution, New News Corporation must complete the necessary registration under U.S. federal securities laws and relevant Australian Corporations law requirements of New News Corporation Class A Common Stock and New News Corporation Class B Common Stock, as well as the applicable NASDAQ and ASX listing requirements for such shares. Parent will need to obtain approval under the Australian Foreign Acquisition and Takeovers Act of 1975 (“FATA”) and the Australian Government’s foreign investment policy to implement the steps necessary to effect the internal reorganization and to make the distribution. Parent will apply for the relevant approvals prior to implementing the various transaction steps.

 

The Distribution

Internal Reorganization

The separation and distribution agreement will provide for the transfers of entities and related assets and liabilities so that as of the distribution Parent will retain the entities associated with Parent’s media and entertainment business and New News Corporation will retain the entities associated with the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. We are currently a wholly-owned subsidiary of Parent. In connection with the distribution, Parent will undertake a series of internal reorganization transactions to facilitate the transfers of entities and the related assets and liabilities. See “The Distribution—Internal Reorganization” for further discussion.

Reasons for the Distribution

The board of directors of Parent determined that the distribution of the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia is in the best interest of Parent and Parent’s stockholders. The following benefits were considered by the board of directors of Parent in approving the distribution:

   

the opportunity to allow each company to focus on and pursue distinct strategic priorities and industry-specific opportunities that would maximize each company’s long-term potential;

   

the opportunity to allow each company to benefit from greater financial and operational flexibility and better position each company to compete;

   

the opportunity to allow each company to respond and react more quickly to rapidly-evolving technology and global market opportunities;

   

the opportunity to provide investors in each company with a more targeted investment opportunity, each with different inherent values, including different financial and operational structures; and

   

the opportunity to allow each company to tailor its capital structure, allocate and deploy resources and implement compensation plans in a manner consistent with strategic objectives that best enhance value for its stockholder group.

On December 4, 2012, the board of directors of Parent authorized management to proceed with the proposed distribution, subject to the satisfaction or waiver of certain conditions and the board of directors’ ongoing consideration of the transaction and its final approval. On May 22, 2013, the board of directors of Parent approved the distribution and declared the dividend of our common stock to holders of record on June 21, 2013, to be paid on June 28, 2013, subject to the satisfaction or waiver of certain conditions and the board’s approval not being withdrawn prior to the distribution date. See “The Distribution—Conditions to the Distribution” for further discussion.

Regulatory Approval

 Other than the requirements discussed above, we do not believe that any other material governmental or regulatory filings or approvals will be necessary to consummate the distribution.

Conditions

The distribution is subject to a number of conditions, including, among others:

   

the approval by the board of directors of Parent of the distribution and all related transactions (and such approval not having been withdrawn);

   

the affirmative vote of the stockholders of Parent approving certain amendments to Parent’s Restated Certificate of Incorporation;

   

Parent’s receipt of certain tax rulings and tax opinions;

   

no pending, threatened or issued order, injunction or decree by any governmental entity of competent jurisdiction or other legal restraint that would prevent the consummation of the distribution;

   

no events or developments having occurred prior to the distribution that, in the judgment of the board of directors of Parent, would result in the distribution having a material adverse effect on Parent or its stockholders;

   

Parent’s and New News Corporation’s execution of the separation and distribution agreement and all other ancillary agreements relating to the distribution;

   

Parent’s receipt of the regulatory approvals described above; and

   

no rating agency action having occurred that is likely to result in either Parent or us being downgraded below investment grade after giving effect to the distribution.

We cannot assure you that any or all of the conditions will be satisfied or waived. See “The Distribution—Conditions to the Distribution” for additional details.

No Appraisal Rights

Parent’s stockholders will not have any appraisal rights in connection with the distribution.

Corporate Information

New News Corporation was formed in Delaware on December 11, 2012. The address of New News Corporation’s principal executive offices is 1211 Avenue of the Americas, New York, New York, 10036. New News Corporation’s telephone number is 212-852-7000. Following the distribution, New News Corporation’s corporate website will be located at www.newscorp.com. The information that will be contained on our website, or that can be accessed via our website, is not part of this information statement.

QUESTIONS AND ANSWERS ABOUT THE New News Corp Share DISTRIBUTION D5

What is New News Corporation and why is Parent separating New News Corporation’s business and distributing its stock?

New News Corporation is currently a wholly-owned subsidiary of Parent formed to hold the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. The separation of New News Corporation from Parent and the distribution of New News Corporation common stock are intended to provide you with equity investments in two separate companies, each able to focus on its respective business. See “The Distribution—Background of the Distribution” and “The Distribution—Reasons for the Distribution.”

Why is the separation of New News Corporation structured as a distribution?

Parent believes that the distribution of New News Corporation common stock to Parent’s stockholders in a manner that is intended to be tax-free for U.S. federal income tax purposes (except for cash that stockholders receive in lieu of fractional shares) is an efficient way to separate the businesses to be held by New News Corporation and Parent’s media and entertainment businesses.

Is stockholder approval required for the distribution?

Stockholder approval of the distribution is not required. The distribution of New News Corporation Class A Common Stock or Class B Common Stock, as applicable, will be accomplished by distributing all such shares to holders of Parent’s Class A Common Stock or Class B Common Stock, as described herein. Accordingly, the distribution of shares of New News Corporation common stock has been approved by the board of directors of Parent pursuant to its authority under Parent’s Restated Certificate of Incorporation and applicable Delaware law regarding the declaration and payment of dividends.

While you are not being asked to vote on the distribution, in order to effectuate the distribution in the manner discussed in this information statement, Parent intends to amend its Restated Certificate of Incorporation, and will hold the Special Meeting in connection therewith. Parent has distributed a separate proxy statement which contains information regarding the Special Meeting. The distribution contemplated by this information statement assumes that certain proposals contained in the separate proxy statement will be approved by Parent’s stockholders and completion of the distribution is conditioned upon such approval.

What do stockholders need to do to participate in the distribution?

No action is required on the part of stockholders, but you are encouraged to read this entire information statement carefully. Stockholders of Parent on the record date for the distribution are not required to take any action, including making any payments in cash or exchanging or delivering their shares of Parent, to receive shares of New News Corporation. 
Please do not deliver your shares of Parent.

What will I receive in the distribution if I hold CDIs representing Parent common stock?
For every four CDIs, each representing one share of Parent’s Class A Common Stock, that you own as of the record date, you will receive one CDI representing a beneficial interest in one share of New News Corporation Class A Common Stock. For every four CDIs, each representing one share of Parent’s Class B Common Stock, that you own as of the record date, you will receive one CDI representing a beneficial interest in one share of New News Corporation Class B Common Stock. For holders of CDIs who would have otherwise been entitled to receive any fractional CDIs, the underlying shares will be sold and the sale proceeds will be converted into Australian dollars and distributed to such holders. See “CHESS Depositary Interests and Other Australian Matters” and “The Distribution” for additional details.


What is the record date for the distribution?

Record ownership will be determined as of 5:00 p.m. Eastern Time on June 21, 2013, which we refer to as the record date.

 When will the distribution occur?

We expect that shares of New News Corporation Class A Common Stock or Class B Common Stock, as applicable, will be distributed on June 28, 2013, which we refer to as the distribution date.

When will the distribution occur?

We expect that shares of New News Corporation Class A Common Stock or Class B Common Stock, as applicable, will be distributed on June 28, 2013, which we refer to as the distribution date.

If I sell my Parent shares or CDIs prior to the distribution, will I still be entitled to receive shares or CDIs of New News Corporation in the distribution?

If  you hold shares of Parent Class A Common Stock or Parent Class B Common Stock on the record date and decide to sell the shares prior to the distribution date, you may choose to sell such shares with or without your entitlement to receive New News Corporation Class A Common Stock or New News Corporation Class B Common Stock, as applicable. If you sell your Parent Class A Common Stock or Parent Class B Common Stock in the “due-bills” market after the record date and before the distribution, you also will be selling your right to receive shares of New News Corporation Class A Common Stock or shares of New News Corporation Class B Common Stock, as applicable, in connection with the distribution. However, if you sell your Parent Class A Common Stock or Parent Class B Common Stock in the ex-distribution market up to and including the distribution date, you will still receive shares of our common stock in the distribution.

It is anticipated that Parent CDIs will commence trading on an ex-distribution and normal settlement basis shortly before the record date. Once this occurs, trading of Parent CDIs on a “cum” basis, with an entitlement to receive CDIs representing shares of our common 

stock in the distribution, will cease. Therefore, if you sell your Parent CDIs after the ex-distribution date, you will still receive your New News Corporation CDIs in the distribution.

You should consult your bank, broker or nominee to discuss your options and alternatives. See “The Distribution—Trading Prior to the Distribution Date” for additional details, including information regarding the risks associated with the trading of CDIs prior to the distribution.

How will fractional shares and CDIs be treated in the distribution?

No fractional shares or CDIs will be distributed in connection with the distribution. Instead, holders will receive a cash payment equal to the value of such shares or CDIs in lieu of the fractional shares or CDIs, as applicable.

Can Parent decide to cancel the distribution even if all of the conditions have been satisfied?

Yes. Until the distribution has occurred, Parent has the right to terminate the distribution, even if all the conditions have been satisfied, if the board of directors of Parent determines that the distribution is not in the best interest of Parent and its stockholders or that market conditions or other circumstances are such that the separation of New News Corporation and Parent is no longer advisable at that time.

What are the material U.S. federal income tax consequences of the distribution?

Parent has applied for a ruling from the Internal Revenue Service (the “IRS”) to the effect that the distribution will be a tax-free transaction for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), except with respect to cash paid in lieu of fractional shares. With respect to certain requirements for tax-free treatment on which the IRS will not rule, Parent expects to receive an opinion of Hogan Lovells US LLP to the effect that such requirements will be satisfied.
The tax consequences to you of the distribution depend on your individual situation. You should consult with your own tax advisor as to the specific tax consequences of the distribution to you. See “The Distribution—Material U.S. Federal Income Tax Consequences of the Distribution” for additional details.

What are the material Australian tax consequences of the distribution?

Parent has applied for a Class Ruling from the Australian Taxation Office (“ATO”) confirming that, in the circumstances of the distribution (i) no part of the distribution of New News Corporation shares will be a dividend; and (ii) the Commissioner of Taxation will not make a determination under either section 45A or 45B of the Income Tax Assessment Act (1936) to deem all or part of the distribution of New News Corporation shares to be an unfranked dividend.

The tax consequences to you of the distribution depend on your individual situation. You should consult with your own tax advisor as to the specific tax consequences of the distribution to you. See “The Distribution—Material Australian Tax Consequences of the Distribution” for additional details.

Will the number of Parent shares I own change as a result of the distribution?

No, the number of shares of Parent Class A Common Stock or Parent Class B Common Stock that you own will not change as a result of the distribution.

Will my Parent shares continue to trade after the distribution?

Yes. It is anticipated that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc., and its Class B Common Stock and Class A Common Stock will continue to be listed and traded on NASDAQ, its principal market, under the symbols “FOX” and “FOXA,” respectively. CDIs representing Parent’s Class B Common Stock and Class A Common Stock will continue to be listed and traded on ASX under the symbols “FOX” and “FOXLV,” respectively. Parent’s name change to Twenty-First Century Fox, Inc. will not affect the validity or transferability of any currently outstanding stock certificates and stockholders will not be requested to surrender for exchange any certificates presently held by them. See “The Distribution—Trading Prior to the Distribution Date” for additional details.

What will the price be for my New News Corporation shares and when will I be able to trade my shares?

There is no current trading market for New News Corporation common stock, although we expect that a limited market, commonly known as a “when-issued” trading market, will develop shortly before the record date for the distribution, and we expect “regular-way” trading of New News Corporation common stock to begin on the first trading day following the completion of the distribution. In addition, it is anticipated that trading of CDIs representing our Class A Common Stock and Class B Common Stock on ASX will commence shortly before the record date and continue up through the distribution date, initially on a “conditional and deferred,” and then on an “unconditional and deferred” settlement basis. We cannot predict our trading price for our common stock prior to, on or after the distribution date. It is possible that some of Parent’s stockholders may sell our common stock received in the distribution because, among other things, our business profile or market capitalization do not fit their investment objectives or because our common stock is not included in certain indices. Until the market has analyzed fully the operations and financial characteristics of New News Corporation separate from Parent, the price of New News Corporation’s shares may fluctuate significantly. See “The Distribution—Trading Prior to the Distribution Date” and “The Distribution—Listing and Trading of the Shares of New News Corporation” for additional details.

Are there risks associated with owning shares of New News Corporation?

Yes. New News Corporation’s business is subject to both general and specific risks and uncertainties relating to its business, including risks specific to its industry and its operation, and risks associated with its ongoing contractual relationships with Parent and others, as well as its status as a separate, publicly traded company. See “Risk Factors” for additional information.


Will the number of Parent shares I own change as a result of the distribution?

No, the number of shares of Parent Class A Common Stock or Parent Class B Common Stock that you own will not change as a result of the distribution.

Will my Parent shares continue to trade after the distribution?


Yes. It is anticipated that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc., and its Class B Common Stock and Class A Common Stock will continue to be listed and traded on NASDAQ, its principal market, under the symbols “FOX” and “FOXA,” respectively. CDIs representing Parent’s Class B Common Stock and Class A Common Stock will continue to be listed and traded on ASX under the symbols “FOX” and “FOXLV,” respectively. Parent’s name change to Twenty-First Century Fox, Inc. will not affect the validity or transferability of any currently outstanding stock certificates and stockholders will not be requested to surrender for exchange any certificates presently held by them. See “The Distribution—Trading Prior to the Distribution Date” for additional details.

Does New News Corporation intend to pay cash dividends?

Following the distribution, we expect to pay regular cash dividends, although the timing, declaration, amount and payment of future dividends to stockholders will fall within the discretion of our board of directors. Our board of directors cannot provide any assurances that any dividends will be declared or paid. See “Dividend Policy.”

Does New News Corporation intend to repurchase shares of its common stock?

Our board of directors has authorized a stock repurchase program in which, after the distribution, we may purchase up to an aggregate of $500 million of our Class A Common Stock. All decisions regarding future stock repurchases will be at the sole discretion of a duly appointed committee of our board of directors and management. The committee’s decisions regarding future stock repurchases will be evaluated from time to time in light of many factors, including our financial condition, earnings, capital requirements and debt facility covenants, if any, other contractual restrictions, as well as legal requirements (including compliance with the IRS private letter ruling), regulatory constraints, industry practice and other factors that the committee may deem relevant. The stock repurchase program may be modified, extended, suspended or discontinued at any time by our board of directors. See “Capitalization” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Class A Common Stock Repurchase Program.”

What will be the relationship between Parent and New News Corporation following the distribution?

Parent will not own any shares of New News Corporation following the distribution. New News Corporation and Parent will enter into a separation and distribution agreement and other agreements, including with respect to matters such as transition services, employment arrangements, tax sharing and indemnification, intellectual property, and real estate, among others. Such agreements will provide a framework for New News Corporation’s relationship with Parent after the distribution, certain transition services, allocations of assets and liabilities and indemnification arrangements for certain liabilities. Following the distribution, there will be an overlap between certain senior management of Parent and New News Corporation; K. Rupert Murdoch will serve as our Executive Chairman and the Chairman and Chief Executive Officer of Parent, and Gerson Zweifach will serve as our General Counsel and as Senior Executive Vice President and Group General Counsel of Parent. For a description of these relationships, including the provisions relating to corporate opportunities in our amended and restated certificate of incorporation, see “Risk Factors—Risks Related to the Distribution,” “Our Relationship With Parent Following the Distribution,” “Management” and “Description of Capital Stock—Certain Corporate Opportunities” for additional details

What will be the voting rights of the New News Corporation stock I receive in the distribution?

The shares of New News Corporation Class A Common Stock or Class B Common Stock that you will receive in the distribution will have the same voting rights as the respective shares of Parent Class A or Class B Common Stock that you currently hold.

As a general matter, holders of our Class B Common Stock are entitled to one vote per share on all matters on which stockholders have the right to vote. Under a limited set of circumstances, the holders of our Class A Common Stock are entitled to vote together with the holders of our Class B Common Stock. See “Description of Our Capital Stock” for a description of the circumstances in which the holders of our Class A Common Stock are entitled to vote. Other than in those circumstances described, holders of our Class A Common Stock have no right to vote.

 

Will there be any anti-takeover protections at New News Corporation following the distribution?

Certain provisions of our amended and restated certificate of incorporation and amended and restated by-laws may have the effect of making the acquisition of control of our company in a transaction that is not approved by our board of directors more difficult. In addition, on May 22, 2013, in connection with the distribution, our board of directors determined to adopt a stockholder rights agreement, to be executed prior to the distribution, under which our stockholders will be granted rights to purchase from us additional shares of our Class A Common Stock and Class B Common Stock in the event that a person or group acquires beneficial ownership of 15% or more of the then-outstanding Class B Common Stock without approval of our board of directors, subject to exceptions for, among other things, persons beneficially owning 15% or more of our Class B Common Stock as of the first date of public announcement of our board of directors’ determination to adopt the stockholder rights agreement. The rights will expire 12 months from the distribution date, unless earlier redeemed or exchanged by us. The stockholder rights agreement could make it more difficult for a third-party to acquire our voting common stock without the approval of our board of directors. Acquisitions of shares of our Class B Common Stock as a result of acquiring additional Parent Class B Common Stock prior to the distribution or shares representing our Class B Common Stock in the when-issued trading market or as a result of the distribution will each be included in determining the beneficial ownership of a person and all such acquisitions following public announcement of our board of directors’ determination to adopt the stockholder rights agreement will be taken into account in determining whether a person is an acquiring person under the terms of the stockholder rights agreement. Therefore, a person could become an acquiring person under the terms of the stockholder rights agreement simultaneously with the acquisition of our Class B Common Stock in the distribution. Even if a person is initially an exempt person under the terms of the stockholder rights agreement, such person could lose such status as a result of pre-distribution acquisitions. See “Description of Our Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Our Stockholder Rights Agreement.” Additionally, certain provisions of the agreements entered into by us and Parent in connection with the distribution could discourage potential acquisition proposals. See “Risk Factors—We might not Be Able to Engage in Desirable Strategic Transactions and Equity Issuances Following the Distribution Because of Certain Restrictions Relating to Requirements for Tax-Free Distributions for U.S. Federal Income Tax Purposes.”

What percentage of New News Corporation shares will K. Rupert Murdoch own following the distribution?
 

K. Rupert Murdoch may be deemed to beneficially own in the aggregate less than one percent of our Class A Common Stock and 39.4% of our Class B Common Stock immediately following the distribution. See “Risk Factors—Certain Provisions of Our Certificate of Incorporation, By-laws, Tax Sharing and Indemnification Agreement, Separation and Distribution Agreement and Delaware Law, Our Stockholder Rights Agreement and the Ownership of Our Common Stock by the Murdoch Family Trust May Discourage Takeovers and the Concentration of Ownership Will Affect the Voting Results of Matters Submitted for Stockholder Approval” for additional details on K. Rupert Murdoch’s ownership and certain effects of his ownership

Do I have appraisal rights in connection with the distribution?

No. Holders of Parent common stock have no appraisal rights in connection with the distribution. See “The Distribution—No Appraisal Rights” for additional details.
 
Who is the transfer agent for New News Corporation shares?
 
Computershare Trust Company, N.A.
 
Who operates the registry for New News Corporation CDIs?
Computershare Investor Services Pty Ltd.
 
Where can I get more information?
 
 
If you have any questions regarding the distribution, you should contact the information agent, Georgeson Inc., or the transfer agent, Computershare, as follows:

Within the U.S., at:
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
866-767-8867
877-277-9781
 
Outside the U.S., at:
Computershare Investor Services Pty Ltd.
Level 5
115 Grenfell Street
Adelaide SA 5000
1300 340 121 (Australia)
+ 61 3 9415 4394 
(All Other Non-U.S. Locations)

 

SUMMARY HISTORICAL AND UNAUDITED

PRO FORMA COMBINED FINANCIAL INFORMATION

The following table presents the summary historical and unaudited pro forma combined financial data for New News Corporation. The combined operating and balance sheet data included in the following table reflect our combined operations. We derived the combined operating data for the three years ended June 30, 2012, and the combined balance sheet data as of June 30, 2012, as set forth below, from our audited combined financial statements, which are included elsewhere in this information statement. We derived the combined operating data for the nine months ended March 31, 2013 and 2012, and the combined balance sheet data as of March 31, 2013, from our unaudited combined financial statements, which are included elsewhere in this information statement. The unaudited combined financial statements have been prepared on the same basis as the audited combined financial statements and, in the opinion of our management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information set forth in this section.

The summary unaudited pro forma combined financial data as of and for the nine months ended March 31, 2013 and the year ended June 30, 2012 have been prepared to reflect the expected impact of events directly attributable to the distribution and related transaction agreements that are factually supportable, and for the purposes of the statement of operations, are expected to have a continuing impact on us. However, such adjustments are subject to change based on finalization of the terms of the separation and distribution agreement and related agreements. The unaudited pro forma combined statement of operations data for the nine months ended March 31, 2013 and the fiscal year ended June 30, 2012 reflects our results as if the distribution and related transactions described below had occurred on July 1, 2011. The unaudited pro forma combined balance sheet data as of March 31, 2013 reflects our results as if the distribution-related events described below had occurred as of such date. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information, and we believe such assumptions are reasonable under the circumstances.

The unaudited pro forma combined financial statement data presented below are not necessarily indicative of our results of operations or financial condition had the distribution and our anticipated post-distribution capital structure been completed on the dates assumed. Also, they may not reflect the results of operations or financial condition that would have resulted had we been operating as an independent, publicly traded company during such periods. In addition, they are not necessarily indicative of our future results of operations or financial condition.

You should read this summary financial data together with “Unaudited Pro Forma Combined Financial Statements,” “Capitalization,” “Selected Historical Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the combined financial statements and accompanying notes included elsewhere in this information statement.

                                                         
     As of and for the nine months ended
March 31,
     As of and for the year ended
June 30,
 
      Pro Forma
2013
     2013      2012      Pro Forma
2012
    2012     2011      2010  
     (in millions, except per share amounts)  

Statement of Operations Data:

                                                            

Revenues

   $ 6,831       $ 6,634       $ 6,520       $ 9,140      $ 8,654      $ 9,095       $ 8,752   

Income (loss) before income tax benefit (expense) (1)

     174         1,633         248         (2,189     (2,377     961         461   

Net income (loss) attributable to New News Corporation (1)

     84         1,630         143         (1,918     (2,075     678         243   

Net income (loss) per share—basic

   $ 0.14                         $ (3.07                         

Net income (loss) per share—diluted

   $ 0.14                         $ (3.07                         

Total Segment EBITDA (2)

     756         558         602         1,099        782        1,213         813   
               

Balance Sheet Data:

                                                            

Cash and cash equivalents

   $ 2,560       $ 1,539                        $ 1,133                    

Total assets

     18,594         16,954                          13,090                    

 

(1) Fiscal 2013 results include a non-cash, non-taxable gain of approximately $1.3 billion relating to the revaluation of existing holdings in FOX SPORTS Australia. Fiscal 2012 results included non-cash impairment charges of approximately $2.6 billion ($2.2 billion, net of tax).
(2) Segment EBITDA is defined as revenues less operating expenses and selling, general, and administrative expenses. Management believes that Total Segment EBITDA is an appropriate measure for evaluating the operating performance of New News Corporation’s business segments because it is the primary measure used by New News Corporation’s chief operating decision maker to evaluate the performance of, and allocate resources within, New News Corporation’s businesses. Total Segment EBITDA provides management, investors and equity analysts a measure to analyze operating performance of each of New News Corporation’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences). For a reconciliation of historical Total Segment EBITDA to (loss) income before income tax benefit (expense), see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following is the reconciliation of pro forma Total Segment EBITDA to pro forma income (loss) before income tax (expense) benefit.
                 
     Pro Forma  
     For the nine months ended
March 31, 2013
    For the year ended
June 30, 2012
 
     (in millions)  

Revenues

   $ 6,831      $ 9,140   

Operating expenses

     (4,161     (5,432

Selling, general and administrative expenses

     (1,914     (2,609
    

 

 

   

 

 

 

Total Segment EBITDA

     756        1,099   

Depreciation and amortization

     (413     (521

Impairment and restructuring charges

     (231     (2,763

Equity earnings of affiliates

     14        (10

Interest, net

     55        65   

Other, net

     (7     (59
    

 

 

   

 

 

 

Income (loss) before income tax (expense) benefit

   $ 174      $ (2,189
    

 

 

   

 

 

 

RISK FACTORS

You should carefully consider the following risks and other information in this information statement in evaluating us and our common stock. If any of the following risks develop into actual events, it could materially and adversely affect our business, results of operations or financial condition, and could, in turn, impact the trading price of our common stock. The risk factors generally have been separated into three groups: risks related to our business, risks related to the distribution and risks related to our common stock and the securities market.

Risks Related to Our Business

A Decline in Customer Advertising Expenditures in Our Newspaper and Other Businesses Could Cause Our Revenues and Operating Results to Decline Significantly in any Given Period or in Specific Markets.

We derive substantial revenues from the sale of advertising on or in our newspapers, integrated marketing services and digital media properties. We also derive revenues from the sale of advertising on our cable channels and pay-TV programming. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. National and local economic conditions, particularly in major metropolitan markets, affect the levels of retail, national and classified newspaper advertising revenue. Changes in gross domestic product, consumer spending, auto sales, housing sales, unemployment rates, job creation and circulation levels and rates all impact demand for advertising. A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities. Our advertising revenues in the fiscal year ended June 30, 2012 declined 5% as compared to the prior year, due in large part to lower advertising revenues at our Australian newspapers as a result of the weakening Australian economy, particularly among consumers, as well as declines at our integrated marketing services business resulting from lower in-store advertising spend by CPG manufacturers. These declines were offset, in part, by increased revenues in our Digital Real Estate Services segment. In addition to economic conditions, other factors such as consolidation across various industries may also reduce our overall advertising revenue.

Demand for our products is also a factor in determining advertising rates. For example, circulation levels for our newspapers and ratings points for our cable channels are among the factors that are weighed when determining advertising rates. In addition, newer technologies, including new downloading capabilities via the Internet, digital distribution models for books and other devices and technologies are increasing the number of media choices available to audiences. These technological developments may cause changes in consumer behavior that could affect the attractiveness of our offerings to advertisers.

In addition, the range of advertising choices across digital products and platforms and the large inventory of available digital advertising space have historically resulted in significantly lower rates for digital advertising than for print advertising. Consequently, our digital advertising revenue may not be able to replace print advertising revenue lost as a result of the shift to digital consumption. A decrease in our customers’ advertising expenditures, reduced demand for our offerings or a surplus of advertising inventory could lead to a reduction in pricing and advertising spending, which could have an adverse effect on our businesses and assets.

Advertising, Circulation and Audience Share May Continue to Decline as Consumers Migrate to Other Media Alternatives.

Our businesses face competition from other sources of news, information and entertainment content delivery, and we may be adversely affected if consumers migrate to other media alternatives. For example, advertising and circulation revenues in our News and Information Services segment have been declining, reflecting general trends in the newspaper industry, including declining newspaper buying by young people and consumers’ increasing reliance on the Internet for the delivery of news and information, often without charge. In recent years, Internet sites devoted to recruitment, automobile and real estate services have become significant competitors of our newspapers and websites for classified advertising sales. As a result, in the fiscal year ended June 30, 2012, our advertising revenues decreased 7% and our circulation and subscription revenues decreased

8% in the News and Information Services segment as compared to the prior year. In addition, due to innovations in content distribution platforms, consumers are now more readily able to watch Internet-delivered content on television sets and mobile devices, in some cases also without charge, which could reduce consumer demand for our television programming and pay-TV services and adversely affect both our subscription revenue and advertisers’ willingness to purchase television advertising from us.

We Must Respond to Changes in Consumer Behavior as a Result of New Technologies in Order to Remain Competitive.

Technology continues to evolve rapidly, leading to alternative methods for the delivery and storage of digital content. These technological advancements have driven changes in consumer behavior and have empowered consumers to seek more control over when, where and how they consume digital content. Content owners are increasingly delivering their content directly to consumers over the Internet, often without charge, and innovations in distribution platforms have enabled consumers to view such Internet-delivered content on portable devices and televisions. There is a risk that our responses to these changes and strategies to remain competitive, including distribution of our content on a “pay” basis, may not be adopted by consumers. In addition, enhanced Internet capabilities and other new media may reduce the demand for newspapers and television viewership, which could negatively affect our revenues. The trending toward digital media may drive down the price consumers are willing to spend on our products disproportionately to the costs associated with generating content. Our failure to protect and exploit the value of our content, while responding to and developing new products and business models to take advantage of advancements in technology and the latest consumer preferences, could have a significant adverse effect on our businesses, asset values and results of operations.

The Inability to Renew Sports Programming Rights Could Cause the Revenue of Certain of Our Australian Operating Businesses to Decline Significantly in any Given Period.

The sports rights contracts between certain of our Australian operating businesses, on the one hand, and various professional sports leagues and teams, on the other, have varying duration and renewal terms. As these contracts expire, renewals on favorable terms may be sought; however, third parties may outbid the current rights holders for the rights contracts. In addition, professional sports leagues or teams may create their own networks or the renewal costs could substantially exceed the original contract cost. The loss of rights could impact the extent of the sports coverage offered by us and could adversely affect our revenues. Upon renewal, our results could be adversely affected if escalations in sports programming rights costs are unmatched by increases in subscriber and carriage fees and advertising rates.

No Assurance of Profitability of Amplify.

Many of Amplify’s newer lines of business are still under development. Accordingly, Amplify’s prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets such as digital education. These risks for Amplify include, but are not limited to, an evolving business model and the management of growth. Amplify must, among other things, develop a customer base for its full range of offerings, including by utilizing the existing customers associated with its data and analytics business, implement and successfully execute its business and marketing strategy, continue to develop and upgrade its software and content offerings, respond to competitive developments, and attract, retain and motivate qualified personnel. Since our 2010 acquisition of Wireless Generation, the former brand of Amplify’s data and analytics business, now Amplify Insight, and the initiation of our development of the broader business initiatives of Amplify, our digital education business has recorded a cumulative loss before income taxes of approximately $207 million through March 31, 2013. The portion of this loss recognized in the nine months ended March 31, 2013 was approximately $105 million and we estimate a total loss before income taxes for the year ended June 30, 2013 of approximately $180 million. Significant expenses associated with Amplify’s businesses include salaries, employee benefits and other routine overhead associated with product development. There can be no assurance 

that Amplify will be successful in addressing these risks or in achieving these goals, and the failure to do so could have a material adverse effect on Amplify’s business, prospects, financial condition and results of operations.

We May Make Strategic Acquisitions That Could Introduce Significant Risks and Uncertainties.

In order to position our business to take advantage of growth opportunities, we may make strategic acquisitions that involve significant risks and uncertainties. These risks and uncertainties include, among others: (1) the difficulty in integrating newly acquired businesses and operations in an efficient and effective manner, (2) the challenges in achieving strategic objectives, cost savings and other anticipated benefits, (3) the potential loss of key employees of the acquired businesses, (4) the risk of diverting the attention of our senior management from our operations, (5) the risks associated with integrating financial reporting and internal control systems, (6) the difficulties in expanding information technology systems and other business processes to accommodate the acquired businesses, (7) potential future impairments of goodwill associated with the acquired business and (8) in some cases, increased regulation. If an acquired business fails to operate as anticipated or cannot be successfully integrated with our existing business, our business, results of operations and financial condition could be adversely affected.

Global Economic Conditions May Have a Continuing Adverse Effect on Our Business.

The United States and global economies have undergone a period of economic uncertainty, which caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, lower consumer and business spending and lower consumer net worth. The resulting pressure on the labor and retail markets and the downturn in consumer confidence weakened the economic climate in certain markets in which we do business and has had and may continue to have an adverse effect on our business, results of operations, financial condition and liquidity. A continued decline in these economic conditions could further impact our business, reduce our advertising and other revenues and negatively impact the performance of our newspapers, books, television operations and other consumer products. These conditions could also impair the ability of those with whom we do business to satisfy their obligations to us. Additionally, we will have a greater proportional exposure to certain Australian business risks, including specific Australian legal and regulatory risks, consumer preferences and competition because we will hold substantially all of Parent’s former Australian assets and those Australian assets will represent a greater proportion of our total assets than of Parent’s former total assets. As a result, our results of operations may be adversely affected by negative developments in the Australian market. Although we believe that our post-distribution capitalization, operating cash flow and current access to capital and credit markets will give us the ability to meet our financial needs for the foreseeable future, there can be no assurance that continued or increased volatility and disruption in the global capital and credit markets will not impair our liquidity or increase our cost of borrowing.

We Do Not Have the Right to Manage Foxtel, Which Means We Are Not Able to Cause Foxtel to Operate or Make Corporate Decisions in a Manner that is Favorable to Us.

We do not have the right to manage the business or affairs of Foxtel. While our rights include the right to appoint one-half of the board of directors of Foxtel, we are not able to cause management or the board of directors to take any specific actions on our behalf, including with regards to declaring and paying dividends.

We Face Investigations Regarding Allegations of Phone Hacking, Illegal Data Access, Inappropriate Payments to Public Officials and Other Related Matters and Related Civil Lawsuits.

U.K. and U.S. regulators and governmental authorities are conducting investigations relating to phone hacking, illegal data access and inappropriate payments to public officials at our former publication, The News of the World, and at The Sun, and related matters, which we refer to as the U.K. Newspaper Matters. We, together with Parent, are cooperating with these investigations.

We have admitted liability in many civil cases related to the phone hacking allegations and have settled many cases. We also announced a private compensation scheme under which parties could pursue claims against us. While additional civil lawsuits may be filed, no additional civil claims may be brought under the compensation scheme after April 8, 2013.

We are not able to predict the ultimate outcome or cost of the civil claims or criminal matters. From July 1, 2010 through March 31, 2013, we incurred aggregate legal and professional fees related to the U.K. Newspaper Matters of $270 million and paid $27 million to claimants for civil settlements. In addition, as of March 31, 2013, we have provided for our best estimate of the liability for the claims that have been filed and costs incurred and have accrued approximately $60 million. We and Parent will agree in the separation and distribution agreement that Parent will indemnify us for payments made after the distribution date arising out of civil claims and investigations relating to the U.K. Newspaper Matters as well as legal and professional fees and expenses paid in connection with the criminal matters, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with us. In addition, violations of law may result in criminal fines or penalties for which we will not be indemnified by Parent. Parent’s indemnification obligations with respect to these matters will be settled on an after-tax basis. It is possible that these proceedings and any adverse resolution thereof, including any fines or other penalties associated with any plea, judgment or similar result for which we will not be indemnified, could damage our reputation, impair our ability to conduct our business and adversely affect our results of operations and financial condition. See “Business—Legal Proceedings” and “Our Relationship with Parent Following the Distribution—Mutual Releases and Indemnification” for additional information.

We Could Suffer Losses Due to Asset Impairment and Restructuring Charges.

As a result of adverse developments in our industry and challenging economic and market conditions, we may recognize impairment charges for write-downs of goodwill and intangible assets, as well as restructuring charges relating to the reorganization of our businesses, which negatively impact our financial results. In accordance with GAAP, we perform an annual impairment assessment of our recorded goodwill and indefinite-lived intangible assets, including newspaper mastheads and distribution networks, during the fourth quarter of each fiscal year. As a result of the fiscal 2012 annual impairment review performed, we recorded non-cash impairment charges of approximately $2.6 billion ($2.2 billion, net of tax) during the fiscal year ended June 30, 2012. The charges consisted of a write-down of goodwill of $1.3 billion and a write-down of indefinite-lived intangible assets of $1.3 billion. These charges were due in large part to adverse trends affecting our News and Information Services segment, including secular declines in the economic environment in Australia. In response to these challenging conditions we are reorganizing our Australian newspaper businesses, and we recognized $231 million of restructuring charges in the nine months ended March 31, 2013, a significant portion of which resulted from our restructuring activities in Australia and the U.K.

We continually evaluate whether current factors or indicators, such as the prevailing conditions in the capital markets or the economy generally, require the performance of an interim impairment assessment of those assets, as well as other investments and other long-lived assets, or require us to engage in any additional business restructurings to address these conditions. Any significant shortfall, now or in the future, in advertising revenue and/or the expected popularity of the programming for which we have acquired rights could lead to a downward revision in the fair value of certain reporting units. The News and Information Services and Other segments have reporting units with goodwill and intangible assets that continue to be at risk for future impairment. As of June 30, 2012, $3.6 billion of goodwill and intangible assets at these reporting units was at risk for future impairment because the fair values of the reporting units or indefinite lived intangible assets exceeded their carrying values by less than 10%. During the nine months ended March 31, 2013, goodwill increased by approximately $0.5 billion as a result of the acquisition of CMH.

In the fourth quarter of fiscal 2013, as part of our long-range planning process in preparation for the distribution, we adjusted our future outlook and related strategy principally with respect to our News and Information Services business in Australia and secondarily with respect to our News and Information Services.

businesses in the U.S., which resulted in a reduction in expected future cash flows. As a result, on May 24, 2013, we concluded that certain of our goodwill and intangible assets were potentially impaired and we expect to record a pre-tax non-cash impairment charge in the range of $1.2 billion to $1.4 billion in the quarter ending June 30, 2013 related to our News and Information Services segment. Goodwill and intangible assets in the News and Information Services segment continue to be at risk for future impairment. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” for an analysis of the sensitivity of the fair value of goodwill and intangible assets to changes in key assumptions. Any further downward revisions in the fair value of a reporting unit, indefinite-lived intangible assets, investments or long-lived assets could result in additional impairments for which non-cash charges would be required. Any such charge could be material to our reported results of operations. We may also incur additional restructuring charges in the future if we are required to further realign our resources in response to significant shortfalls in revenue or other adverse trends.

Our Business Could Be Adversely Impacted by Changes in Governmental Policy and Regulation.

Various aspects of our activities are subject to regulation in numerous jurisdictions around the world, and the introduction of new laws and regulations in countries where our products and services are produced or distributed (and changes in the enforcement of existing laws and regulations in those countries) could have a negative impact on our interests.

For example, our Australian operating businesses may be adversely affected by changes in government policy, regulation or legislation, or the application or enforcement thereof, applying to companies in the Australian media industry or to Australian companies in general. This includes:

   

anti-siphoning legislation which currently prevents pay-TV providers such as Foxtel from acquiring rights to televise certain listed events (for example, the Olympic Games and certain Australian Rules football and cricket matches) unless:

   

national and commercial television broadcasters have not obtained these rights 12 weeks before the start of the event;

   

the rights to televise are also held by commercial television licensees who have rights to televise the event to more than 50% of the Australian population; or

   

the rights to televise are also held by one of Australia’s two major government-funded broadcasters; and

   

legislation such as the Broadcasting Services Act that regulates ownership interests and control of Australian media organizations. Such legislation may have an impact on our ownership structure and operations and may restrict our ability to take advantage of acquisition or investment opportunities. For example, current media diversity rules would prevent us from exercising control of a commercial television broadcasting license, a commercial radio license and a newspaper in the same license area.

On April 30, 2012, the Minister for Broadband, Communications and Digital Economy released the Final Report of a comprehensive review of Australia’s communications and media regulation referred to as the Convergence Review. In March 2013, legislation was passed in response to the Convergence Review that, among other things, reduced the license fees payable by FTA networks. Certain other legislative changes that would have had a significant impact on the way we operate our business and which would have limited our ability to acquire new businesses were proposed by the Australian Government, but withdrawn without becoming law. However, there is a risk that the Australian Government could seek to reintroduce these proposed laws or to introduce other regulation in response to the Convergence Review, and the passage of any such regulation could adversely impact our Australian businesses.

In addition, our newspaper businesses in the U.K. are likely to be subject to greater regulation and oversight following the implementation of recommendations of the Leveson inquiry into the U.K. press, which was  

established by Prime Minister David Cameron in mid-2011. The inquiry was triggered by allegations of illegal voicemail interception at our former publication, The News of the World. Lord Justice Leveson, Chairman of the Inquiry, has concluded the first part of the inquiry and published a report in late November 2012 containing various recommendations for greater regulation and oversight of the U.K. press. In response, the U.K. Government has proposed establishing a regulatory body to oversee the U.K. press, a majority of the members of which would be independent of the industry. If adopted, a new regulatory regime may impose burdens on the print media in the U.K. that represent competitive disadvantages versus other forms of media and may increase the costs of compliance.

Changes in Educational Funding.

Our U.S. educational businesses may be adversely affected by changes in state educational funding as a result of changes in legislation, both at the federal and state level, changes in the state procurement process and changes in the condition of the local, state or U.S. economy. Future changes in federal funding and the state and local tax base could create an unfavorable environment, leading to budget issues resulting in a decrease in educational funding.

Newsprint Prices May Continue to Be Volatile and Difficult to Predict and Control.

Newsprint is one of the largest expenses of our publishing units. During the nine months ended March 31, 2013, our average cost per ton of newsprint was approximately 4% higher than our historical average annual cost per ton over the past five fiscal years. The price of newsprint has historically been volatile and the consolidation of newsprint mills over the years has reduced the number of suppliers, which has led to increases in newsprint prices. Failure to maintain our current consumption levels, further supplier consolidation or the inability to maintain our existing relationships with our newsprint suppliers could adversely impact newsprint prices in the future.

We Rely on Network and Information Systems and Other Technology That May Be Subject to Disruption or Misuse, Which Could Result in Improper Disclosure of Personal Data or Confidential Information as well as Increased Costs or Loss of Revenue.

Network and information systems and other technologies, including those related to our network management, are important to our business activities. Network and information systems-related events, such as computer hackings, computer viruses, worms or other destructive or disruptive software, process breakdowns, denial of service attacks, malicious social engineering or other malicious activities, or any combination of the foregoing, could result in a disruption of our services or improper disclosure of personal data or confidential information. Improper disclosure of such information could harm our reputation, require us to expend resources to remedy such a security breach or subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue.

Technological Developments May Increase the Threat of Content Piracy and Limit Our Ability to Protect Intellectual Property Rights.

We seek to limit the threat of content piracy; however, policing unauthorized use of our products and services and related intellectual property is often difficult and the steps taken by us may not in every case prevent the infringement by unauthorized third parties. Developments in technology increase the threat of content piracy by making it easier to duplicate and widely distribute pirated material. We have taken, and will continue to take, a variety of actions to combat piracy, both individually and, in some instances, together with industry associations. However, protection of our intellectual property rights is dependent on the scope and duration of our rights as defined by applicable laws in the U.S. and abroad and the manner in which those laws are construed. If those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from intellectual property may decrease, or the cost of obtaining and 

maintaining rights may increase. There can be no assurance that our efforts to enforce our rights and protect our products, services and intellectual property will be successful in preventing content piracy.

Our Business Relies on Certain Intellectual Property and Brands.

Our businesses rely on a combination of trademarks, trade names, copyrights, and other proprietary rights, as well as contractual arrangements, including licenses, to establish and protect our intellectual property and brand names. We believe our proprietary trademarks and other intellectual property rights are important to our continued success and our competitive position. Any impairment of any such intellectual property or brands could adversely impact the results of our operations or financial condition.

Fluctuations in Foreign Exchange Rates Could Have an Adverse Effect on Our Results of Operations.

We have significant operations in a number of foreign jurisdictions and certain of our operations are conducted in foreign currencies. The value of these currencies fluctuates relative to the U.S. dollar. As a result, we are exposed to exchange rate fluctuations, which could have an adverse effect on our results of operations in a given period or in specific markets.

Labor Disputes May Have an Adverse Effect on Our Business.

In a variety of our businesses, we engage the services of employees who are subject to collective bargaining agreements. If we are unable to renew expiring collective bargaining agreements, it is possible that the affected unions could take action in the form of strikes or work stoppages. Such actions, as well as higher costs in connection with these collective bargaining agreements or a significant labor dispute, could have an adverse effect on our business by causing delays in production or by reducing profit margins.

Risks Related to the Distribution

If the Distribution, Together with Certain Related Transactions, Were Ultimately Determined to be Taxable Transactions for U.S. Federal Income Tax Purposes, then We, Parent and Our Stockholders Could Be Subject to Significant Tax Liability.

The distribution is conditioned upon a private letter ruling from the IRS substantially to the effect that, among other things, the distribution of our Class A Common Stock and Class B Common Stock qualifies as tax-free under Sections 368 and 355 of the Code except for cash received in lieu of fractional shares of our stock, as well as upon Parent receiving an opinion from the law firm of Hogan Lovells US LLP confirming the tax-free status of the distribution for U.S. federal income tax purposes, including confirming the satisfaction of the requirements under Section 368 and 355 of the Code not specifically addressed in the IRS private letter ruling. The opinion of Hogan Lovells US LLP will not be binding on the IRS or the courts, and there is no assurance that the IRS or a court will not take a contrary position.

The private letter ruling and the opinion will rely on certain facts and assumptions, and certain representations from us and Parent regarding the past and future conduct of our respective businesses and other matters. Notwithstanding the receipt of the private letter ruling and the opinion, the IRS could determine on audit that the distribution or the internal transactions should be treated as taxable transactions if it determines that any of these facts, assumptions, representations or undertakings is not correct or has been violated, or that the distribution or the internal transactions should be taxable for other reasons, including as a result of a significant change in stock or asset ownership after the distribution. If the distribution ultimately is determined to be taxable, the distribution could be treated as a taxable dividend or capital gain for U.S. federal income tax purposes, and U.S. stockholders and certain non-U.S. stockholders could incur significant U.S. federal income tax liabilities as described under “Material U.S. Federal Income Tax Consequences of the Distribution.” In addition, if the internal reorganization and/or the distribution is ultimately determined to be taxable, Parent would recognize 

gains on the internal reorganization and/or recognize gain in an amount equal to the excess of the fair market value of shares of our common stock distributed to Parent’s stockholders on the distribution date over Parent’s tax basis in such shares of our common stock.

In addition, under the terms of the tax sharing and indemnification agreement that we intend to enter into in connection with the distribution, we would, in certain circumstances, be responsible for all taxes, including interest and penalties, imposed on Parent as a result of actions taken by us or any of our subsidiaries after the distribution. Specifically, in the event that the distribution or the internal transactions intended not to be subject to tax were determined to be subject to tax and such determination was the result of certain actions taken, or omitted to be taken, after the distribution by us or any of our subsidiaries and such actions (1) were inconsistent with any representation or covenant made in connection with the private letter ruling or opinion of Hogan Lovells US LLP, (2) violated any representation or covenant made in the tax sharing and indemnification agreement, or (3) we or any of our subsidiaries know or reasonably should expect, after consultation with our advisors, may result in any such determination, we will be responsible for any taxes imposed on Parent as a result of such determination.

If the ATO Forms the View that All or Part of the Distribution Should be Treated as an Unfranked Dividend Under Australian Taxation Law, Then Parent and the Australian Resident Stockholders Could be Subject to a Significant Tax Liability.

Parent has requested a Class Ruling from the ATO confirming that (1) no part of the distribution of our Class A Common Stock and Class B Common Stock will be a dividend, and (2) the Commissioner of Taxation will not make a determination to deem all or part of the distribution to be an unfranked dividend.

The Class Ruling will be based upon certain facts and assumptions regarding past and future conduct of our respective businesses. If the ATO considers that the information provided in the application for the Class Ruling was not correct, or omitted relevant information, in respect of a material fact or assumption, then the ATO may take the view that it is not bound by the view of the law expressed in the Class Ruling. In those circumstances, or if the ATO refuses to issue the Class Ruling, all or part of the distribution could be taken to be an unfranked dividend, the amount of which would be required to be included in the assessable income of Australian resident holders of Parent common stock or CDIs.

We Could Be Liable for Income Taxes Owed by Parent.

Each member of the Parent consolidated group, which includes Parent, our company and Parent’s other subsidiaries, is jointly and severally liable for the U.S. federal income tax liability of each other member of the consolidated group. Consequently, we could be liable in the event any such liability is incurred, and not discharged, by any other member of the Parent consolidated group. The tax sharing and indemnification agreement will require Parent to indemnify us for any such liability. Disputes or assessments could arise during future audits by the IRS in amounts that we cannot quantify.

We Might Not Be Able to Engage in Desirable Strategic Transactions and Equity Issuances Following the Distribution Because of Certain Restrictions Relating to Requirements for Tax-Free Distributions for U.S. Federal Income Tax Purposes.

Our ability to engage in significant strategic transactions and equity issuances may be limited or restricted after the distribution in order to preserve, for U.S. federal income tax purposes, the tax-free nature of the distribution by Parent. Even if the distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, it may result in corporate level taxable gain to Parent under Section 355(e) of the Code if 50% or more, by vote or value, of shares of our stock or Parent’s stock are acquired or issued as part of a plan or series of related transactions that includes the distribution.

To preserve the tax-free treatment to Parent of the distribution and the internal transactions in connection with the distribution for U.S. federal income tax purposes, under the tax sharing and indemnification agreement 

that we will enter into with Parent, we will be prohibited from taking or failing to take certain actions that may prevent the distribution and related transactions from being tax-free for U.S. federal income tax purposes. Further, for the two-year period following the distribution, without obtaining the consent of Parent, we may be prohibited from:

   

approving or allowing any transaction that results in a change in ownership of more than a specified percentage of our common stock,

   

a merger,

   

a redemption of equity securities,

   

a sale or other disposition of certain businesses or a specified percentage of our assets,

   

an acquisition of a business or assets with equity securities to the extent one or more persons would acquire in excess of a specified percentage of our common stock, or

   

amending our organizational documents or taking any other action through stockholder vote or otherwise that affects the relative economic or voting rights of our outstanding stock.

These restrictions may limit our ability to pursue strategic transactions or engage in new business or other transactions that may maximize the value of our business. Moreover, the tax sharing and indemnification agreement will also provide that we are responsible for any taxes imposed on Parent or any of its affiliates as a result of the failure of the distribution or the internal transactions to qualify for favorable treatment under the Code if such failure is attributable to certain actions taken after the distribution by or in respect of us, any of our affiliates or our stockholders.

The Separation and Distribution Agreement May Restrict Us From Acquiring or Owning Certain Types of Assets in the U.S.

The Federal Communications Commission (“FCC”) has promulgated certain rules and regulations that limit the ownership of radio and television broadcast stations, television broadcast networks and newspapers (the “Broadcast Ownership Rules”) and place commercial restrictions on a cable network programmer in which a cable television operator holds an ownership interest (the “Program Access Rules”). Under the FCC’s rules for determining ownership of the media assets described above, the Murdoch Family Trust’s ownership interest in both Parent and us following the distribution would generally result in each company’s businesses and assets being attributable to the Murdoch Family Trust for purposes of determining compliance with the Broadcast Ownership Rules and the Program Access Rules. Consequently, our future conduct, including our acquisition of any newspapers in the same local markets in which Parent owns or operates television stations or our acquisition of an ownership interest in a cable operator, may affect Parent’s ability to own and operate its television stations or otherwise comply with the Broadcast Ownership Rules, or may subject Parent to the Program Access Rules. Therefore, we and Parent will agree in the separation and distribution agreement that if we acquire, after the distribution date, newspapers, radio or television broadcast stations or television broadcast networks in the U.S. and such acquisition would impede or be reasonably likely to impede Parent’s business, then we will be required to take certain actions, including divesting assets, in order to permit Parent to hold its media interests and to comply with such rules. In addition, we will be prohibited from acquiring an interest in a multichannel video programming distributor, including a cable television operator, if such acquisition would subject Parent to the Program Access Rules to which it is not then subject. This agreement will effectively limit the activities or strategic business alternatives available to us if such activities or strategic business alternatives implicate the Broadcast Ownership Rules or Program Access Rules and would impede or be reasonably likely to impede Parent’s business.

The Indemnification Arrangements We Enter Into With Parent in Connection With the Distribution May Require Us to Divert Cash to Satisfy Indemnification Obligations to Parent.

Pursuant to the separation and distribution agreement and certain other related agreements, Parent will agree to indemnify us for certain liabilities and we will agree to indemnify Parent for certain liabilities, as discussed 

further in the section entitled “Our Relationship With Parent Following the Distribution.” As a result, we could be required, under certain circumstances, to indemnify Parent and its affiliates against certain liabilities to the extent such liabilities result from an action we or our affiliates take or from any breach of our or our affiliates’ representations, covenants or obligations under the separation and distribution agreement, tax sharing and indemnification agreement or any other agreement we enter into in connection with the distribution.

Certain Agreements That We Enter Into With Parent in Connection With the Distribution May Limit Our Ability to Take Certain Actions With Respect to the Civil U.K. Newspaper Matters.

Under the terms of the separation and distribution agreement, in consideration for Parent’s agreement to certain indemnification arrangements, we will agree that Parent will have the right to control our defense of civil claims relating to the U.K. Newspaper Matters. In exercising its rights to control the defense of the civil claims relating to the U.K. Newspaper Matters, Parent may be guided by interests that are different than or adverse to our interests and the interests of our stockholders and advocate strategies that our management would not otherwise adopt. Furthermore, if we fail to comply with these control arrangements or do not consent to settlements with respect to such matters proposed by Parent, we have agreed with Parent that we will, at Parent’s discretion, forego any indemnification with regard to such or all of these matters. Our inability to take actions with respect to these civil matters without Parent’s consent or our adoption of strategies advocated by Parent could damage our reputation or impair our ability to conduct our business while our taking any such action without Parent’s consent in breach of our agreements could increase our liability exposure with regard to such matters and adversely affect our results of operations and financial condition. See “Business—Legal Proceedings” and “Our Relationship with Parent Following the Distribution—Mutual Releases and Indemnification” for additional information.

There Can Be No Assurance That We Will Have Access to the Capital Markets on Terms Acceptable to Us.

From time to time we may need to access the long-term and short-term capital markets to obtain financing. Although we believe that the sources of capital in place at the time of the distribution will permit us to finance our operations for the foreseeable future on acceptable terms and conditions, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including, but not limited to: (1) our financial performance, (2) our credit ratings or absence of a credit rating, (3) the liquidity of the overall capital markets and (4) the state of the economy. There can be no assurance, particularly as a new company that currently has no credit rating, that we will have access to the capital markets on terms acceptable to us.

We May be Unable to Achieve Some or All of the Benefits That We Expect to Achieve as an Independent, Publicly-Traded Company.

By separating from Parent there is a risk that we may be more susceptible to market fluctuations and other adverse events than we would have otherwise been while we were still a part of Parent. As part of Parent, we were able to enjoy certain benefits from Parent’s operating diversity and access to capital for investments, which benefits will no longer be available to us after we separate from Parent.

As an independent, publicly-traded company, we believe that our businesses will benefit from, among other things, sharpened focus on the financial and operational resources of our specific business, allowing our management to design and implement a capital structure, corporate strategies and policies that are based primarily on the business characteristics and strategic opportunities of our businesses. We anticipate this will allow us to respond more effectively to industry dynamics and to allow us to create effective incentives for our management and employees that are more closely tied to our business performance. However, we may not be able to achieve some or all of the expected benefits. Additionally, completion of the distribution will require a significant amount of our management’s time and effort, which may divert attention from operating and growing our business. If we fail to achieve some or all of the benefits in the time we expect, our business, financial condition and results of operations could be materially and adversely affected.

We Have No Operating History as an Independent, Publicly-Traded Company, and Our Historical and Pro Forma Financial Statements Are Not Necessarily Representative of the Results We Would Have Achieved as an Independent, Publicly-Traded Company and May Not Be Reliable Indicators of Our Future Results.

The historical and pro forma financial statements included in this information statement do not necessarily reflect the results of operations, cash flows and financial condition that we would have achieved as an independent, publicly-traded company during the periods presented or those that we will achieve in the future, primarily as a result of the following factors:

   

Historically, our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, have been provided by Parent to the extent we did not generate sufficient cash flows to cover our cash requirements. Parent has historically managed and retained cash we have generated. Following completion of the distribution, Parent will not be providing us with funds to finance our working capital or other cash requirements. Without the opportunity to obtain capital from Parent, we may need to access capital markets and there is no guarantee that capital will be available to us or available on terms that are as favorable as those we could have obtained when we were part of Parent.

   

Prior to the distribution, our business was operated by Parent as part of its broader corporate organization, rather than as an independent company. Parent has historically performed various corporate functions for us, including, but not limited to, tax administration, treasury activities, accounting, legal, ethics and compliance program administration, investor and public relations, certain governance functions (including internal audit) and external reporting. Our historical and pro forma financial statements reflect allocations of corporate expenses from Parent for these and similar functions. These allocations may be more or less than the comparable expenses we would have incurred had we operated as an independent, publicly traded company.

   

Other significant changes may occur in our cost structure, management, financing, business operations, personnel needs, tax and structure as a result of our operation as a company separate from Parent. We benefited from Parent’s operating diversity, size and purchasing power, and we will lose such benefits as an independent company. Additionally, we will be entering into transactions with Parent that did not exist prior to the distribution.

Our Accounting and Other Management Systems and Resources May Not be Adequately Prepared to Meet the Financial Reporting and Other Requirements to Which We Will Be Subject Following the Distribution. If We Are Unable to Achieve and Maintain Effective Internal Controls, Our Results of Operations, Cash Flows and Financial Condition Could Be Materially Adversely Affected.

Our financial results previously were included within the consolidated results of Parent, and we believe that our reporting and control systems were appropriate for those of subsidiaries of a public company. However, we were not directly subject to the reporting and other requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result of the distribution, we will be directly subject to reporting and other obligations under the Exchange Act. Beginning with our annual report on Form 10-K for the fiscal year ending June 30, 2014, we will be required to comply with Section 404 of the Sarbanes Oxley Act of 2002, which will require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm. These reporting and other obligations will place significant demands on our management and administrative and operational resources, including accounting resources. To comply with these requirements, we may need to upgrade our systems, including information technology, and implement additional financial and management controls, reporting systems and procedures. We expect to incur additional annual expenses related to these steps, and those expenses may be significant. If we are unable to upgrade our financial and management controls, reporting systems, information technology systems and procedures in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired. Any failure to achieve and maintain effective internal controls could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Until the Distribution Occurs, Parent Has the Sole Discretion to Change the Terms of the Distribution.

Until the distribution occurs, Parent will have the sole and absolute discretion to determine and change the terms of the distribution, including the record date and distribution date. These changes could be unfavorable to us. In addition, Parent may decide at any time not to proceed with the distribution.

After the Distribution, Certain of Our Directors and Officers May Have Actual or Potential Conflicts of Interest Because of Their Equity Ownership in Parent, and Certain of Our Officers and Directors May Have Actual or Potential Conflicts of Interest Because They Also Serve as Officers and/or on the Board of Directors of Parent, Which May Result in the Diversion of Corporate Opportunities to Parent.

Following the distribution, certain of our directors and executive officers may own shares of Parent’s common stock, and the individual holdings may be significant for some of these individuals compared to their total assets. In addition, following the distribution, certain of our officers and directors will also serve as officers and/or as directors of Parent, including K. Rupert Murdoch, who will serve as our Executive Chairman and the Chairman and Chief Executive Officer of Parent, and Gerson Zweifach, who will serve as our General Counsel and as Senior Executive Vice President and Group General Counsel of Parent. This ownership or service to both companies may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for Parent and us. For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between Parent and us regarding the terms of the agreements governing the internal reorganization, the distribution and the relationship thereafter between the companies, including with respect to the indemnification of certain matters. In addition to any other arrangements that we and Parent may agree to implement, we and Parent will agree that officers and directors who serve at both companies will recuse themselves from decisions where conflicts arise due to their positions at both companies. See “Procedures for Approval of Related Person Transactions” for a discussion of certain procedures we will institute with regard to such matters.

Our amended and restated certificate of incorporation will acknowledge that our directors and officers, as well as certain of our stockholders, including K. Rupert Murdoch, certain members of his family and certain family trusts (so long as such persons continue to own, in the aggregate, 10% or more of the voting stock of each of Parent and us), each of which we refer to as a covered stockholder, are or may become stockholders, directors, officers, employees or agents of Parent and certain of its affiliates. Our amended and restated certificate of incorporation will provide that any such overlapping person will not be liable to us, or to any of our stockholders, for breach of any fiduciary duty that would otherwise exist because such individual directs a corporate opportunity (other than certain limited types of restricted business opportunities set forth in our amended and restated certificate of incorporation) to Parent instead of us. As Parent will not have a similar provision regarding corporate opportunities in its certificate of incorporation, the provisions in our amended and restated certificate of incorporation could result in an overlapping person submitting any corporate opportunities other than restricted business opportunities to Parent instead of us. See “Description of Our Capital Stock—Certain Corporate Opportunities.”

Risks Related to Our Common Stock and the Securities Market

There Is No Existing Market for Our Common Stock, and a Trading Market That Will Provide You with Adequate Liquidity May Not Develop for Our Common Stock. In Addition, Once Our Common Stock Begins Trading, the Market Price of Our Shares May Fluctuate Significantly.

There is currently no public market for our common stock. It is anticipated that shortly before the record date for the distribution, trading of shares of our common stock will begin on a “when-issued” basis and will continue up to and through the distribution date. However, there can be no assurance that an active trading market for our common stock will develop as a result of the distribution or be sustained in the future. The lack of an active trading market may make it more difficult for you to sell our shares and could lead to our share price being depressed or more volatile.

We cannot predict the prices at which our common stock may trade after the distribution. The market price of our common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including: (1) a shift in our investor base; (2) our quarterly or annual earnings, or those of other companies in our industry; (3) actual or anticipated fluctuations in our operating results; (4) success or failure of our business strategy; (5) our ability to obtain financing as needed; (6) changes in accounting standards, policies, guidance, interpretations or principles; (7) changes in laws and regulations affecting our business; (8) announcements by us or our competitors of significant new business developments or customers; (9) announcements by us or our competitors of significant acquisitions or dispositions; (10) the failure of securities analysts to cover our common stock after the distribution; (11) changes in earnings estimates by securities analysts or our ability to meet our earnings guidance; (12) the operating and stock price performance of other comparable companies; (13) results from material litigation or governmental investigations; (14) changes in capital gains taxes and taxes on dividends affecting stockholders; and (15) overall market fluctuations and general economic conditions.

Furthermore, our business profile and our market capitalization may not fit the investment objectives of many of Parent’s stockholders and, as a result, these stockholders may sell our shares after the distribution. See “—Substantial Sales of Common Stock May Occur in Connection with This Distribution, Which Could Cause Our Stock Price to Decline.”

Substantial Sales of Common Stock May Occur in Connection with This Distribution, Which Could Cause Our Stock Price to Decline.

The shares of our common stock that Parent distributes to its stockholders generally may be sold immediately in the public market. Although we have no actual knowledge of any plan or intention on the part of any significant stockholders of Parent to sell our common stock on or after the record date, it is possible that

some of Parent’s stockholders will sell our common stock received in the distribution for reasons such as our business profile or market capitalization as an independent company not fitting their investment objectives or because our common stock is not included in certain indices after the distribution. The sales of significant amounts of our common stock or the perception in the market that this will occur may result in the lowering of the market price of our common stock.

Certain Provisions of Our Certificate of Incorporation, By-laws, Tax Sharing and Indemnification Agreement, Separation and Distribution Agreement and Delaware Law, Our Stockholder Rights Agreement and the Ownership of Our Common Stock by the Murdoch Family Trust May Discourage Takeovers and the Concentration of Ownership Will Affect the Voting Results of Matters Submitted for Stockholder Approval.

Our amended and restated certificate of incorporation and amended and restated by-laws will contain certain anti-takeover provisions that may make more difficult or expensive a tender offer, change in control, or takeover attempt that is opposed by our board of directors or certain stockholders holding a significant percentage of the voting power of our outstanding voting stock. Our equity capital and governance structure is designed to mirror Parent’s existing capital and governance structure to the maximum extent applicable. In particular, our amended and restated certificate of incorporation and amended and restated by-laws provide for, among other things:

   

a dual class common equity capital structure;

   

stockholders to remove directors only for cause;

   

a prohibition on stockholders taking any action by written consent without a meeting;

   

special stockholders’ meeting to be called only by the chief executive officer, the board of directors, or the holders of not less than 20% of the voting power of our outstanding voting stock;

   

the requirement that stockholders give us advance notice to nominate candidates for election to the board of directors or to make stockholder proposals at a stockholders’ meeting 

the requirement of an affirmative vote of at least 65% of the voting power of our outstanding voting stock to amend or repeal our by-laws;

   

certain restrictions on the transfer of our shares; and

   

the board of directors to issue, without stockholder approval, Preferred Stock and Series Common Stock with such terms as the board of directors may determine.

These provisions could discourage potential acquisition proposals and could delay or prevent a change in control of New News Corporation, even in the case where a majority of the stockholders may consider such proposals, if effective, desirable. See “Description of Our Capital Stock.”

In addition, on May 22, 2013, in connection with the distribution, our board of directors determined to adopt a stockholder rights agreement, to be executed shortly thereafter and prior to the distribution, pursuant to which each outstanding share of our common stock will have attached to it a right entitling its holder to purchase from us additional shares of our Class A Common Stock and Class B Common Stock in the event that a person or group acquires beneficial ownership of 15% or more of the then-outstanding Class B Common Stock without approval of our board of directors, subject to exceptions for persons beneficially owning 15% or more of our Class B Common Stock as of the first date of public announcement of our board of directors’ determination to adopt the stockholder rights agreement. The stockholder rights agreement could make it more difficult for a third-party to acquire our voting common stock without the approval of our board of directors. Acquisitions of shares of our Class B Common Stock as a result of acquiring additional Parent Class B Common Stock prior to the distribution or shares representing our Class B Common Stock in the when-issued trading market or as a result of the distribution will each be included in determining the beneficial ownership of a person and all such acquisitions following public announcement of our board of directors’ determination to adopt the stockholder rights agreement will be taken into account in determining whether a person is an acquiring person under the terms of the stockholder rights agreement. Therefore, a person could become an acquiring person under the terms of the stockholder rights agreement simultaneously with the acquisition of our Class B Common Stock in the distribution. Even if a person is initially an exempt person under the terms of the stockholder rights agreement, such person could lose such status as a result of pre-distribution acquisitions. See “Description of Our Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation, Amended and Restated By-laws and Our Stockholder Rights Agreement.”

Further, as a result of his ability to appoint certain members of the board of directors of the corporate trustee of the Murdoch Family Trust, which, based on its current ownership of Parent common stock, will beneficially own less than one percent of our outstanding Class A Common Stock and 38.4% of our Class B Common Stock immediately following the distribution, K. Rupert Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the Murdoch Family Trust. K. Rupert Murdoch, however, disclaims any beneficial ownership of these shares. Also, K. Rupert Murdoch will, based on the current ownership of Parent common stock, beneficially own or be deemed to beneficially own an additional one percent of our Class B Common Stock and less than one percent of our Class A Common Stock immediately following the distribution. Thus, K. Rupert Murdoch may be deemed to beneficially own in the aggregate less than one percent of our Class A Common Stock and 39.4% of our Class B Common Stock immediately following the distribution. This concentration of voting power could discourage third parties from making proposals involving an acquisition of New News Corporation. Additionally, the ownership concentration of Class B Common Stock by the Murdoch Family Trust increases the likelihood that proposals submitted for stockholder approval that are supported by the Murdoch Family Trust will be adopted and proposals that the Murdoch Family Trust does not support will not be adopted, whether or not such proposals to stockholders are also supported by the other holders of Class B Common Stock. Furthermore, the adoption of the stockholder rights agreement will prevent, unless our board of directors otherwise determines at the time, other potential stockholders from acquiring a similar ownership position in our Class B Common Stock and, accordingly, could prevent a meaningful challenge to the Murdoch Family Trust’s influence over matters submitted for stockholder approval.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This information statement and other materials that we have filed or will file with the Securities Exchange Commission (the “SEC”) contain, or will contain, “forward-looking statements.” Words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “believes,” “may,” “will” and variations of such words and similar expressions are intended to identify our forward-looking statements. Where, in any forward-looking statements, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished.

Examples of forward-looking statements include, but are not limited to, statements made regarding business strategies, market potential, future financial performance and other events or developments that we expect or anticipate will occur in the future and statements expressing general views about future operating results. These forward-looking statements are subject to a number of important factors, including those factors discussed in detail under “Risk Factors” in this information statement that could cause our actual results to differ materially from those indicated in any such forward-looking statements. These factors include, but are not limited to, increased competition; changes in advertising demand; increasing consolidation of advertising customers; changes in relationships with our significant customers and suppliers; changes in newsprint prices; newspaper circulation matters, including circulation trends; continued volatility of commodity and other input costs; pricing actions; increased costs of sales; regulatory or legal changes, restrictions or actions; unanticipated expenses such as litigation or legal settlement expenses; unanticipated business disruptions; our ability to predict, identify and interpret changes in consumer preferences and demand; our ability to realize the expected benefits of the distribution; our ability to complete proposed divestitures or acquisitions; our ability to realize the expected benefits of acquisitions if they are completed; uncertainty regarding the availability of financing to us in the future and the terms of such financing; disruptions in our information technology networks and systems; our inability to protect our intellectual property rights; continued consumer weakness; weakness in general global economic conditions; uncertainty in global political, business or regulatory conditions; changes in accounting standards and tax law changes. Additionally, there may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material impact on New News Corporation’s business.

We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this information statement, except as required by applicable law or regulation. 

THE DISTRIBUTION

Background of the Distribution

On June 28, 2012, Parent announced its intent to pursue the separation of its business into two separate independent public companies, one of which will hold Parent’s global media and entertainment businesses and another which will hold the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. On December 4, 2012, the board of directors of Parent authorized management to proceed with the proposed distribution, subject to the satisfaction or waiver of certain conditions and the board of directors’ ongoing consideration of the transaction and its final approval. On May 22, 2013, the board of directors of Parent approved the distribution and declared the dividend of our common stock to holders of record on June 21, 2013, to be paid on June 28, 2013, subject to the satisfaction or waiver of certain conditions and the board’s approval not being withdrawn prior to the distribution date. See “The Distribution—Conditions to the Distribution” for further discussion.

In connection with the distribution, Parent will undertake the internal reorganization described under “Our Relationship with Parent Following the Distribution.” Following the internal reorganization, Parent will distribute all of the shares of New News Corporation common stock to its stockholders on a pro rata basis. After the distribution, Parent will not own any equity interest in New News Corporation, and we will operate independently from Parent. Parent’s stockholders will not be required to vote to effectuate the distribution. However, in order to effectuate the distribution in the manner discussed in this information statement, Parent will be required to amend its Restated Certificate of Incorporation, and Parent will hold a Special Meeting in connection therewith. Parent has distributed a separate proxy statement which contains the relevant information regarding the Special Meeting. The distribution contemplated by this information statement assumes that certain proposals contained in the separate proxy statement will be approved by Parent’s stockholders. Parent’s stockholders will not have appraisal rights with regards to the distribution.

The internal reorganization and, in turn, the distribution, are subject to the satisfaction, or waiver by Parent, of a number of conditions. Additionally, Parent may determine not to complete the internal reorganization or the distribution if, at any time, the board of directors of Parent determines, in its sole and absolute discretion, that the distribution is not in the best interest of Parent or its stockholders or is otherwise not advisable.

Reasons for the Distribution

The board of directors of Parent regularly reviews Parent’s businesses to ensure that Parent’s resources are utilized in a manner that is in the best interest of Parent and its stockholders. In this process, the board of directors of Parent, with input and advice from Parent’s management, has evaluated distinct alternatives, including potential acquisitions, dispositions, business combinations and separations, with the objective of increasing stockholder value. In 2012, the board of directors of Parent again reviewed potential strategic alternatives, including the proposed distribution. As a result of this evaluation, after considering a variety of factors in light of Parent’s businesses and their operations at that time, and with input from Parent’s management and financial advisors, the board of directors determined that pursuing the separation of its business into two independent public companies holding the respective assets described above in “—Background of the Distribution” would be in the best interest of Parent and Parent’s stockholders and would enhance stockholder value.

The determination of which businesses of Parent would comprise New News Corporation was driven by a variety of factors, including the historical structure of Parent’s reportable segments, the publishing nature of businesses, the historical management of businesses and the regional nature of certain of our businesses’ operations. Parent’s newspapers, information services and integrated marketing services and book publishing businesses were historically grouped together for Parent’s segment reporting purposes, comprising the “Publishing” segment in Parent’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

Parent’s digital real estate services business operates principally in Australia and delivers advertising solutions to the real estate industry, including advertising subscription packages and real estate listing services. As such, this business is closely aligned to our newspaper publishing business in Australia. The digital education business has operations that Parent and we believe are better aligned with the operations and content of our publishing businesses due to the portfolio of educational content and assessment tools which this business produces. FOX SPORTS Australia and Foxtel, the businesses comprising Parent’s sports programming and pay-TV distribution in Australia, are located and solely operated in Australia. Management of our Australian newspaper operations has historically reviewed the financial results of these businesses and managed the relationships with these businesses which, until November 2012, were both equity investments. In addition, the current Chief Executive Officer of our publishing business in Australia is a former head of Foxtel. Based upon this historical track record of consistent geographic management and financial review, we and Parent believe that FOX SPORTS Australia and our investment in Foxtel are more appropriately transferred together to New News Corporation. After the distribution, we expect that FOX SPORTS Australia and our investment in Foxtel will continue to be overseen locally along with our Australian newspaper business, supporting the inclusion of these businesses in New News Corporation’s organizational structure.

The board of directors of Parent believes that creating these two distinct publicly traded companies will present a number of opportunities, including:

 

   

allowing each company to focus on and pursue distinct strategic priorities and industry-specific opportunities that would maximize each company’s long-term potential;

   

allowing each company to benefit from greater financial and operational flexibility and better positioning the companies to compete;

   

allowing the companies to each respond and react more quickly to rapidly-evolving technology and global market opportunities;

   

providing investors in each company with a more targeted investment opportunity, each with different inherent values, including different financial and operational structures; and

   

allowing the companies to tailor their capital structures, allocate and deploy resources and implement compensation plans in a manner consistent with strategic objectives that best enhance value for their respective stockholder groups.

In determining whether to pursue the distribution, Parent’s board of directors considered the costs and risks associated with the transaction, including the cost associated with preparing New News Corporation to become an independent publicly traded company, the risk of volatility in New News Corporation’s stock price immediately following the distribution due to sales by Parent’s stockholders whose investment objectives may not be fulfilled by our common stock, the time it may take for New News Corporation to attract its optimal stockholder base, any potential negative impact on Parent’s credit rating as a result of the distribution, the time and effort required by this transaction from Parent’s and New News Corporation’s management and the potential distraction from their respective businesses and the loss of synergies and scale from operating as a single company. Notwithstanding these costs and risks, and taking into account the factors discussed above, Parent’s board of directors determined that the distribution was the best alternative to achieve the above objectives and enhance stockholder value.

Internal Reorganization

The separation and distribution agreement will provide for the transfers of entities and related assets and liabilities so that as of the distribution Parent will retain the entities associated with Parent’s media and entertainment business and New News Corporation will retain the entities associated with the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. We 

are currently a wholly-owned subsidiary of Parent. In connection with the distribution, Parent will undertake a series of internal reorganization transactions to facilitate the transfers of entities and the related assets and liabilities. See “Our Relationship With Parent Following the Distribution—The Separation and Distribution Agreement” for further discussion.

In the internal reorganization, certain assets will be contributed to a newly-formed U.S. subsidiary (the “Subsidiary”) in exchange for common and preferred stock of such Subsidiary (the “Subsidiary Contribution”). The assets transferred in the Subsidiary Contribution consist of the stock of the parent companies of Dow Jones and News International (“NI”) and the entities comprising NAMG. Also as part of the internal reorganization, $20 million of cumulative redeemable preferred stock in the Subsidiary will be sold to an unrelated third party. The preferred stock will pay dividends at a rate of 9.5% per annum, payable quarterly. The issuer may call the security at any time after the fifth year, and the holder may put the security to the issuer after 10 years, both at a price of $20 million, respectively, plus cumulative dividends, if any.

Manner of Effecting the Distribution

The general terms and conditions relating to the distribution will be set forth in the separation and distribution agreement between us and Parent. Under the separation and distribution agreement, the distribution will be effective as of June 28, 2013, the distribution date.

The distribution will be made on the basis of one share of New News Corporation Class A Common Stock for every four shares of Parent’s Class A Common Stock and one share of New News Corporation Class B Common Stock for every four shares of Parent’s Class B Common Stock outstanding on the record date. The actual total number of shares of New News Corporation common stock to be distributed will depend on the number of Parent’s shares outstanding on the record date. The number of shares of New News Corporation Class A Common Stock and Class B Common Stock distributed to Parent’s stockholders, as applicable, will be based upon the number of shares of Parent’s Class A Common Stock and Class B Common Stock outstanding on June 21, 2013. The shares of New News Corporation common stock to be distributed will constitute 100% of the outstanding shares of New News Corporation common stock. In the distribution, holders of CDIs representing shares of Parent’s Class A Common Stock and Class B Common Stock will receive CDIs representing shares of New News Corporation’s Class A Common Stock and Class B Common Stock, respectively. See “CHESS Depositary Interests and Other Australian Matters” for further discussion.

Each share of our common stock will have attached to it a preferred stock purchase right as further described in “Description of Our Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Our Stockholder Rights Agreement.”

For most of Parent’s stockholders, the transfer agent will credit their shares of New News Corporation common stock to book-entry accounts established to hold their shares of New News Corporation common stock. The transfer agent will send such stockholders a statement reflecting their ownership of New News Corporation common stock. For stockholders who own Parent’s common stock through a broker or other nominee, their shares of our common stock will be credited to these stockholders’ accounts by the broker or other nominee. Book-entry refers to a method of recording stock ownership in New News Corporation’s records in which no physical certificates are used.

Stockholders of Parent on the record date for the distribution are not required to take any action, including making any payments in cash or exchanging or delivering their shares of Parent common stock, to receive shares of New News Corporation.

Results of the Distribution

After the distribution, we will be an independent, publicly traded company owning and operating the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. Immediately following the distribution, we expect to have approximately 38,843 holders of record of New News Corporation Class A Common Stock and 1,021 holders of record of Class B Common Stock and approximately 378,873,908 shares of New News Corporation Class A Common Stock and 199,630,238 shares of Class B Common Stock outstanding, based on the number of holders of record and outstanding shares of Parent’s Class A Common Stock and Class B Common Stock on May 20, 2013. The actual number of shares of New News Corporation common stock to be distributed will be determined as of the record date and will reflect any issuance of new shares or exercises of options pursuant to Parent’s equity plans on or prior to the record date. The distribution will not affect the number of outstanding shares of Parent’s common stock or any rights of Parent’s stockholders.

Prior to the distribution, we will enter into several agreements with Parent and certain of its subsidiaries and affiliates, including the separation and distribution agreement. These agreements will govern the relationship between Parent and us up to and after completion of the distribution, including with regards to various commercial, transition services and shared services arrangements, and will allocate between Parent and us various assets, liabilities, rights and obligations, including employee benefits, intellectual property and tax-related assets and liabilities. See “Our Relationship With Parent Following the Distribution.”

Treatment of Fractional Shares

The transfer agent will not distribute any fractional shares of New News Corporation common stock in connection with the distribution. Instead the transfer agent will aggregate all fractional shares of New News Corporation common stock into whole shares and sell them on the open market at the prevailing market prices on behalf of those registered holders who otherwise would be entitled to receive a fractional share. We anticipate that these sales will occur as soon as practicable after the distribution date. The transfer agent will then distribute the aggregate cash proceeds of such sale, in an amount equal to their pro rata share of the total proceeds of those sales. Any applicable expenses, including brokerage fees, will be paid by us. We do not expect the amount of any such fees to be material to us. For holders of CDIs who would have otherwise been entitled to receive any fractional CDIs, the underlying shares will be sold and the sale proceeds will be converted into Australian dollars and distributed by the CDI registry to such holders.

If you physically hold stock certificates of Parent common stock, your check for any cash that you may be entitled to receive instead of fractional shares of New News Corporation common stock will be mailed to you separately. It is expected that all fractional shares held in street name will be aggregated and sold by brokers or other nominees according to their standard procedures. You should contact your broker or other nominee for additional details.

None of Parent, New News Corporation, or the transfer agent will guarantee any minimum sale price for the fractional shares of New News Corporation common stock. Neither New News Corporation nor Parent will pay any interest on the proceeds from the sale of fractional shares. The receipt of cash in lieu of fractional shares will generally be taxable to the recipient stockholders or CDI holders, as applicable. Each stockholder or CDI holder entitled to receive cash proceeds from these fractional shares should consult his, her or its own tax advisor as to the stockholder or CDI holder’s particular circumstances. See “The Distribution—Material U.S. Federal Income Tax Consequences of the Distribution” and “The Distribution—Material Australian Tax Consequences of the Distribution.”

Trading Prior to the Distribution Date

The following is a summary of trading markets that we expect will develop in New News Corporation and Parent common stock and CDIs prior to the distribution. Additional information on trading prior to the 

distribution date will be provided by press release once available. Stockholders are encouraged to consult their brokers and financial advisors regarding the specific consequences of trading New News Corporation and Parent common stock and CDIs prior to the distribution date.

Trading of Shares on NASDAQ

It is anticipated that a “when-issued” market in New News Corporation common stock will develop on NASDAQ shortly before the record date and continue through the distribution date. In the context of the distribution, when-issued trading refers to a securities transaction made conditionally on or before the distribution date because the securities are not yet available. When-issued trades generally settle within four trading days after the distribution date. If you own shares of Parent’s common stock on the record date, you will be entitled to receive shares of New News Corporation common stock in the distribution. You may trade this entitlement to receive shares of New News Corporation common stock, without the shares of Parent’s common stock you own, on the when-issued market. On the first trading day following the distribution date, we expect that when-issued trading of New News Corporation common stock will end and “regular-way” trading will begin. Regular-way trading typically involves a trade that settles on the third full trading day following the date of the securities transaction. If the distribution does not occur, all when-issued trades in New News Corporation common stock will not be settled and therefore will be null and void.

We also anticipate that, on or shortly before the record date and continuing through the distribution date, there will be two markets in Parent’s common stock: a “due-bills” market and an “ex-distribution” market. Shares of Parent’s common stock that trade on the due-bills market will trade with an entitlement to receive shares of New News Corporation common stock in the distribution, and such shares will settle on a regular-way basis. Shares that trade on the ex-distribution market will trade without an entitlement to receive shares of New News Corporation common stock in the distribution, and such trades will generally settle within four trading days after the distribution date. Therefore, if you sell shares of Parent’s common stock in the due-bills market up through the distribution date, you will be selling your right to receive shares of New News Corporation common stock in the distribution. However, if you own shares of Parent’s common stock on the record date and sell those shares in the ex-distribution market up through the distribution date, you will still be entitled to receive shares of New News Corporation common stock in the distribution. On the first trading day following the distribution date, shares of Parent’s common stock will begin trading without any entitlement to receive shares of New News Corporation common stock. If the distribution does not occur, all ex-distribution trades in Parent’s common stock will not be settled and therefore will be null and void.

Trading of CDIs on ASX

It is anticipated that trading of CDIs representing New News Corporation Class A Common Stock and Class B Common Stock on ASX will commence on the ex-distribution date, which will be shortly before the record date, on a conditional and deferred settlement basis, and continue trading on this basis until the distribution occurs. On and from the first ASX trading day after the distribution and until we have advised ASX that holding statements have been distributed to CDI holders, New News Corporation CDIs will trade on an unconditional and deferred settlement basis. Holding statements are expected to be distributed to holders on the first ASX trading day after the distribution date. On that basis, CDIs representing New News Corporation common stock will commence trading regular way, which means a normal T+3 settlement basis as described above in “—Trading of Shares on NASDAQ,” on the second ASX trading day after the distribution occurs and all conditional and unconditional deferred settlement trades will settle on or about the fifth ASX trading day after the distribution.

It is the responsibility of the investors to verify their holding of CDIs before trading. CDI holders can do this by checking their holding statement which will be sent to them on the first business day following the distribution date. Investors who trade prior to receipt of their holding statement do so at their own risk.

We also anticipate that Parent CDIs will commence trading on ASX on an ex-distribution, unconditional and regular-way settlement basis on the same date as New News Corporation CDIs commence trading on a conditional  

and deferred settlement basis. Once this occurs, unlike on NASDAQ, there will only be a single, ex-distribution market in Parent’s common stock, and trading of Parent CDIs on a “cum” basis, with an entitlement to receive CDIs representing shares of New News Corporation common stock in the distribution, will cease.

Parent CDI holders who intend to trade their Parent CDIs prior to the distribution should be aware of the risks in doing so. As noted in “Risk Factors – Until the Distribution Occurs, Parent Has the Sole Discretion to Change the Terms of the Distribution”, Parent may decide at any time not to proceed with the distribution. There is no certainty that the distribution will occur, even once the record date has passed. If the distribution is cancelled, all trades in New News Corporation CDIs occurring up to that point will also be cancelled and be of no effect. However, any trades in Parent CDIs made after the commencement of trading on an ex-distribution, unconditional and regular way settlement basis will not be cancelled or unwound, even if the distribution is cancelled. Those Parent CDI holders who sold their Parent CDIs on or after the ex-distribution date may have sold their Parent CDIs at prices which are less than what they would have obtained had the Parent CDIs continued trading on a “cum” basis and never on an ex-distribution basis, reflecting the value attributed to the proposed distribution of our businesses. Such holders will be unable to recover the value of that difference in price from purchasers or any other persons. Accordingly, holders who choose to trade their Parent CDIs on ASX before the distribution do so at their own risk,

Conversions Between the U.S. and Australian Registers

Due to the different settlement procedures operating in the U.S. and Australian markets and the timing of the due-bills/“cum” and ex-distribution periods prior to the record date, it is anticipated that Parent will, subject to receipt of the applicable ASX waivers, cease processing of conversions between its U.S. common stock register and its Australian CDI register during the period commencing on the first day of when-issued trading on NASDAQ in Parent common stock and of ex-distribution trading on ASX in Parent CDIs, both of which are expected to commence on the same date shortly before the record date, and ending on the record date.

Listing and Trading of the Shares of New News Corporation

As of the date of this information statement, we are a wholly-owned subsidiary of Parent and, accordingly, there is currently no public market for our common stock, although a “when-issued” market in our common stock may develop prior to the distribution. See “—Trading Prior to the Distribution Date” above for an explanation of a “when-issued” market. We intend to list our shares of Class B Common Stock on NASDAQ under the symbol “NWS” and our shares of Class A Common Stock on NASDAQ under the symbol “NWSA,” and intend for CDIs representing the Class B Common Stock and Class A Common Stock to be listed and traded on ASX under the symbols “NWS” and “NWSLV,” respectively. If when-issued trading occurs, the listings for our Class A Common Stock and Class B Common Stock are expected to be under trading symbols that are different from our regular-way trading symbols. In addition, following the distribution, ASX will require CDIs representing New News Corporation common stock to trade on ASX under temporary trading symbols. Trading under the temporary symbols will continue until such time as ASX determines that the transition to “NWS” and “NWSLV” can be completed, which we currently expect to be approximately two months. We will announce our when-issued and temporary trading symbols and related details by press release once they become available.

Following the distribution, Parent’s Class B Common Stock and Class A Common Stock will continue to be listed and traded on NASDAQ, its principal market, under the symbols “FOX” and “FOXA,” respectively, and CDIs representing Parent’s Class B Common Stock and Class A Common Stock will continue to be listed and traded on ASX under the symbols “FOX” and “FOXLV,” respectively.

We cannot assure you as to the price at which our Class A Common Stock or Class B Common Stock will trade before, on or after the distribution date and the price at which such stock trades may fluctuate significantly. In addition, the combined trading prices of Parent’s Class A Common Stock and New News Corporation’s Class A Common Stock, and Parent’s Class B Common Stock and New News Corporation’s Class B Common 

Stock following the distribution may be less than, equal to or greater than the current trading price of Parent’s Class A and Class B Common Stock, respectively. See “Risk Factors—There Is No Existing Market for Our Common Stock, and a Trading Market That Will Provide You with Adequate Liquidity May Not Develop for Our Common Stock. In Addition, Once Our Common Stock Begins Trading, the Market Price of Our Shares May Fluctuate Significantly.”

Shares of New News Corporation Class A Common Stock and Class B Common Stock distributed to Parent’s stockholders will be freely transferable, except for such shares that are distributed to persons who are considered our affiliates. Individuals or entities may be deemed to be affiliates of New News Corporation if they control, are controlled by, or are under common control with, New News Corporation, as those terms generally are interpreted for federal securities law purposes. These persons may include certain or all of our directors, officers, and significant stockholders. In addition, individuals who are affiliates of Parent on the distribution date may be deemed to be affiliates of New News Corporation. Individuals who are our affiliates, or are deemed our affiliates, will be permitted to sell their shares of New News Corporation common stock only pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from the registration requirements of the Securities Act, such as those afforded by Section 4(1) of the Securities Act or Rule 144A thereunder.

Material U.S. Federal Income Tax Consequences of the Distribution

The following summary discusses the material U.S. federal income tax consequences of the distribution. This discussion is based upon the Code, Treasury regulations, published positions of the IRS, judicial decisions and other applicable authorities, all as currently in effect, and all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change could affect the accuracy of this discussion. The discussion does not address the effects of the distribution under any state, local, or foreign tax laws.

The discussion assumes that Parent stockholders hold their Parent common stock, and will hold New News Corporation common stock, as capital assets within the meaning of Section 1221 of the Code. Further, the discussion does not constitute tax advice and does not address all aspects of U.S. federal income taxation that may be relevant to a particular stockholder in light of such stockholder’s personal investment circumstances or to stockholders subject to special treatment under the U.S. federal income tax laws such as: (i) insurance companies and other financial institutions; (ii) tax-exempt organizations; (iii) dealers in stocks or securities; (iv) cooperatives; (v) stockholders who acquired their Parent common stock through the exercise of options or otherwise as compensation or through a tax-qualified retirement plan; (vi) stockholders that hold Parent common stock as part of a hedge, straddle, a constructive sale or conversion transaction or other risk reduction or integrated investment transaction; (vii) investors in pass-through entities; and (viii) individuals who are not citizens or residents of the U.S., foreign corporations and other foreign entities.

PARENT STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE DISTRIBUTION TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX LAWS, IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES AND THE EFFECT OF POSSIBLE CHANGES IN LAW THAT MIGHT AFFECT THE TAX CONSEQUENCES DESCRIBED IN THIS INFORMATION STATEMENT.

In November 2012, Parent applied for a ruling from the IRS to the effect that the distribution will qualify as a tax-free transaction under Sections 368(a)(1)(D) and 355 of the Code. A favorable ruling under these sections will also provide that for U.S. federal income tax purposes:

   

no gain or loss will be recognized by, or be included in the income of, a holder of Parent common stock solely as the result of the receipt of New News Corporation common stock pursuant to the distribution, except as discussed below with respect to cash received in lieu of fractional shares of New News Corporation common stock 

the aggregate tax basis of Parent common stock and New News Corporation common stock in the hands of Parent stockholders immediately after the distribution will be the same as the tax basis of Parent common stock immediately before the distribution, allocated between Parent common stock and New News Corporation common stock in proportion to their relative fair market values on the date of the distribution;

   

the holding period of the New News Corporation common stock received by each Parent stockholder will include the holding period at the time of the distribution for Parent common stock on which the distribution is made, provided that such Parent common stock is held as a capital asset on the date of the distribution; and

   

stockholders of Parent who receive cash from the distribution agent in lieu of fractional shares will recognize gain or loss on the sale of the fractional share interest in an amount equal to the difference between the cash received and the stockholder’s tax basis in the fractional share interest. The gain or loss will be capital gain or loss to the stockholder provided the fractional share interest is a capital asset in the hands of the stockholder.

Although a ruling relating to the qualification of the distribution as a tax-free transaction for U.S. federal income tax purposes will be generally binding on the IRS, the continuing validity of such ruling is subject to factual representations and assumptions. The IRS, however, will not rule on some requirements necessary for tax-free treatment under Section 355 of the Code. Therefore, in addition to conditioning the distribution on obtaining the ruling from the IRS, Parent has also made it a condition to the distribution that it obtain an opinion from Hogan Lovells US LLP that the distribution will qualify as a tax-free transaction for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code. The opinion will be dependent on, among other things, certain assumptions and representations as to factual matters made by Parent and New News Corporation.

If the distribution does not qualify as a tax-free transaction, Parent would recognize taxable gain equal to the excess of the fair market value of New News Corporation common stock distributed to Parent stockholders over Parent’s tax basis in the New News Corporation common stock. In addition, each Parent stockholder who receives New News Corporation common stock in the distribution would generally be treated as receiving a taxable distribution in an amount equal to the fair market value of the New News Corporation common stock received, including any fractional share sold on behalf of the stockholder. Such stockholder would be taxed on the full value of the New News Corporation common stock received in the distribution (without reduction for any portion of such stockholder’s tax basis in its Parent shares) as a dividend for U.S. federal income tax purposes to the extent of such stockholder’s pro rata share of Parent’s current and accumulated earnings and profits (including Parent’s taxable gain on the distribution).

Even if the distribution otherwise qualifies for tax-free treatment under Sections 368(a)(1)(D) and 355 of the Code, it may be disqualified as tax-free to Parent under Section 355(e) of the Code if 50% or more of Parent’s stock or New News Corporation stock is acquired or issued as part of a plan or series of related transactions that includes the distribution. For this purpose, any acquisitions or issuances of Parent’s stock within two years before the distribution, and any acquisitions or issuances of Parent’s stock or of New News Corporation stock within two years after the distribution, are presumed to be part of such a plan, although Parent or New News Corporation may be able to rebut that presumption. If an acquisition or issuance of Parent’s stock or New News Corporation stock would cause Section 355(e) of the Code to apply, Parent would recognize taxable gain as described above, but the distribution would generally remain tax-free to each Parent stockholder.

The ruling will also cover certain aspects of the internal reorganization, including the Subsidiary Contribution and the sale of preferred stock in the Subsidiary to an unrelated third party which, together with the distribution of New News Corporation stock, result in the recognition of significant built-in losses and gains to Parent (through its U.S. federal consolidated group). It is expected that the losses will exceed the gains recognized. Following the distribution of the New News Corporation stock, the tax basis of the Subsidiary’s assets will be equal to their fair market values. The excess of the fair market values of certain assets over the historical tax basis is expected to result in increased amortization deductions for us (through our U.S. federal consolidated group) in future years. The recognition of these built-in losses and gains and increased amortization deductions are not conditions to the distribution.

 

In connection with the distribution, Parent and New News Corporation will enter into a tax sharing and indemnification agreement pursuant to which New News Corporation will agree to be responsible for certain liabilities and obligations following the distribution. In general, under the terms of the tax sharing and indemnification agreement, New News Corporation is required to indemnify Parent against taxes on the distribution that arise as result of certain actions or failures to act by New News Corporation, or a result of changes in ownership of the stock of New News Corporation after the distribution. In addition, we have filed tax refund claims in a foreign jurisdiction which are currently in litigation. If we ultimately receive a refund or the claimed amount is credited or applied against another tax for which we are otherwise liable, the tax sharing and indemnification agreement provides that we will pay the amount of such refund, including any interest net of any tax cost, to Parent. If New News Corporation is required to indemnify Parent under the circumstances set forth in the tax sharing and indemnification agreement, New News Corporation may be subject to substantial liabilities.

Treasury regulations under Section 355 of the Code require that each Parent stockholder who receives shares of New News Corporation common stock in the distribution attach to such stockholder’s U.S. federal income tax return for the year in which the distribution occurs a detailed statement setting forth such data as may be appropriate to show the applicability of Section 355 of the Code to the distribution. Within a reasonable period of time after the distribution, Parent will provide its stockholders who receive New News Corporation common stock pursuant to distribution with the information necessary to comply with such requirement.

Material Australian Tax Consequences of the Distribution

The following contains a general summary of the material Australian tax implications of the distribution, by Parent, of New News Corporation CDIs to holders of Parent CDIs who are residents of Australia for income tax purposes and who hold their Parent CDIs on capital account, but who are not members of the Parent company group (“CDI Holders”). This summary does not apply to CDI Holders who do not hold their Parent shares on capital account (for example, holders of Parent CDIs who hold their Parent CDIs as trading stock or revenue assets), holders of Parent CDIs who acquired their CDIs in connection with an employee share plan, or holders of Parent CDIs who are members of the Parent company. The summary does not take account of the individual circumstances of particular Parent stockholders, including CDI Holders, and does not constitute tax advice. It is intended as a general guide only and Parent stockholders, including CDI Holders, should seek independent professional advice on the tax implications of the distribution based on their own individual circumstances.

THIS SUMMARY DOES NOT TAKE INTO ACCOUNT THE TAX LAWS OF COUNTRIES OTHER THAN AUSTRALIA AND HAS BEEN PREPARED ON THE BASIS OF AUSTRALIAN TAXATION LAW AS OF THE DATE OF THIS INFORMATION STATEMENT. THIS SUMMARY DOES NOT TAKE INTO ACCOUNT OR ANTICIPATE CHANGES IN LAW OR JUDICIAL INTERPRETATION AFTER THAT TIME.

Separation Transaction

The transactions which constitute the separation of the Parent businesses prior to the distribution will not have direct income tax consequences for the CDI holders.

Class Ruling

Parent has applied to the ATO for a Class Ruling confirming that, in the circumstances of the distribution (i) no part of the distribution of New News Corporation shares will be a dividend; and (ii) the Commissioner of Taxation will not make a determination under either section 45A or 45B of the Income Tax Assessment Act (1936) to deem all or part of the distribution of New News Corporation shares to be an unfranked dividend,

If the Commissioner confirms the above statements, no part of the distribution of the New News Corporation shares to the CDI Holders will be an assessable dividend when received by the CDI Holders.

Return of Share Capital

The distribution of New News Corporation shares will not qualify for demerger tax relief under Australian taxation law and will give rise to tax consequences for Parent and may have tax consequences for CDI Holders.

Unless the Commissioner of Taxation makes a determination that any part of the distribution should be treated as an unfranked dividend (this is the subject of the application for Class Ruling—see above), the distribution should be treated, for Australian tax purposes, as a return of share capital in respect of Parent shares held on the date of distribution. The return of capital will constitute a ‘CGT event’ which may give rise to a capital gain or a cost base adjustment for CDI Holders.

Capital Gains Tax (“CGT”)

Unless the Commissioner of Taxation makes a determination that any part of the capital return should be treated as an unfranked dividend (this is the subject of the application for Class Ruling—see above), CDI Holders will derive capital gains if and to the extent that the values of the New News Corporation shares distributed exceed their original CGT cost bases for their Parent CDIs. Any such capital gains would be required to be included in the calculation of any net capital gain, which in turn would be included in the assessable income of the CDI Holders.

CDI Holders who are individuals, trusts or complying superannuation entities may be entitled to reduce capital gains (after taking into account capital losses) by half, in the case of individuals and trusts, or by one-third, in the case of complying superannuation entities, if they have held, or are deemed to have held, their Parent shares for at least 12 months prior to the time of the relevant CGT event. Companies are not entitled to claim the CGT discount.

CDI Holders should seek their own advice as to whether they are entitled to claim a CGT discount and, in particular, trustees should seek advice as to whether the benefit of any discount capital gain derived by a trust will be taken to flow through to beneficiaries of the trust.

If the value of the New News Corporation shares distributed by Parent does not exceed a CDI Holder’s original CGT cost base for their Parent CDIs, no capital gain should arise from the distribution for the CDI Holders and the cost base and reduced cost base of their Parent CDIs should be reduced to the extent of the value of the capital return, unless and to the extent that the ATO makes a determination that any part of the capital return should be treated as an unfranked dividend (this is the subject of the application for Class Ruling—see above). If the Commissioner were to make a determination that any part of the capital return should be treated as an unfranked dividend, CDI Holders would, instead, be required to include the amount of the deemed unfranked dividend in their assessable income or, in the circumstances described above where a CDI Holder would otherwise have made a capital gain from the distribution, the amount of the deemed dividend would effectively reduce the amount of that capital gain, or, if no capital gain arose, reduce the reduction in the cost base and reduced cost base of their Parent CDIs.

Disposals of New News Corporation CDIs

For CGT purposes, CDI Holders will be taken to have acquired their New News Corporation CDIs on the date of the distribution.

The first element of the New News Corporation CDI holders’ cost bases or reduced cost bases for their New News Corporation CDIs will be equal to the market value of the New News Corporation CDIs when distributed.

Where New News Corporation CDI holders dispose of their New News Corporation CDIs after the distribution, they will make an assessable capital gain if the proceeds received on disposal exceed their cost bases 

(the first element of the cost base is determined as set out above) for their New News Corporation CDIs. Certain New News Corporation CDI holders may be entitled to reduce their capital gains (after taking into account any available capital losses) by the CGT discount (see above). However, the CGT discount will only be available after the New News Corporation CDIs have been held for at least 12 months from the date that the New News Corporation CDIs were acquired (i.e. the date of the distribution).

Conversely, if the proceeds from the disposal of the New News Corporation CDIs are less than the reduced cost base of the New News Corporation CDIs (the first element of which is determined as set out above), New News Corporation CDI holders will make a capital loss. A capital loss can be offset against other capital gains but cannot otherwise be deducted from assessable income.

CDI Holders who receive cash from the CDI registry in lieu of fractional shares of New News Corporation will be taken to have disposed of their fractional shares in New News Corporation for an amount equal to the cash received for those interests.

Dividends Received From New News Corporation After Distribution of New News Corporation Shares

The tax rules applying to dividends received from New News Corporation are the same as the rules applying to dividends received from Parent. Accordingly, New News Corporation CDI holders will be taxed on any dividends they receive from New News Corporation in the same way as they are taxed on any dividends they receive currently from Parent.

Stamp Duty

CDI Holders will pay no Australian stamp duty on the distribution of the New News Corporation shares by Parent.

Goods and Services Tax (“GST”)

CDI Holders will not be liable for (or be required to pay) GST on the receipt of New News Corporation CDIs from Parent.

Conditions to the Distribution

We expect that the distribution will be effective on the distribution date, provided that the conditions described in this information statement under “Our Relationship with Parent Following the Distribution—Conditions to the Distribution” have been satisfied or waived by Parent:

   

the approval by the board of directors of Parent of the distribution and all related transactions (and such approval not having been withdrawn);

   

the affirmative vote of the holders of Parent’s Class A Common Stock and Class B Common Stock, each voting as a separate class, approving certain amendments to Parent’s Restated Certificate of Incorporation, as described more fully in the Proxy Statement filed under Schedule 14A by Parent;

   

the completion of the internal reorganization;

   

Parent’s receipt of the private letter rulings from the IRS in a form satisfactory to Parent in its sole and absolute discretion, to the effect that, among other things, subject to the accuracy of and compliance with certain representations, assumptions and covenants, the contribution of Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia to us and the distribution will qualify for non-recognition of gain or loss to Parent and its stockholders under Sections 368 and 355 of the Code except to the extent of cash received in lieu of fractional shares

Parent’s receipt of the ATO Class Ruling or other evidence in a form satisfactory to Parent in its sole and absolute discretion, confirming that, in the circumstances of the distribution and for Australian tax purposes (i) no part of the distribution of New News Corporation shares will be a dividend; and (ii) the Commissioner of Taxation will not make a determination under either section 45A or 45B of the Income Tax Assessment Act (1936) to deem all or part of the distribution of New News Corporation shares to be an unfranked dividend;

   

Parent’s receipt of an opinion from Hogan Lovells US LLP, in form and substance satisfactory to Parent in its sole and absolute discretion, that, subject to the accuracy of and compliance with certain representations, assumptions and covenants, (i) the distribution will qualify for non-recognition of gain or loss to Parent and Parent’s stockholders pursuant to Section 355 of the Code, except to the extent of cash received in lieu of fractional shares and (ii) the relevant aspects of the internal reorganization described under “Our Relationship with Parent Following the Distribution—The Separation and Distribution Agreement” will qualify for non-recognition of gain or loss to Parent pursuant to Sections 368 and 355 of the Code;

   

no order, injunction or decree that would prevent the consummation of the distribution will be threatened, pending or issued (and still in effect) by any governmental entity of competent jurisdiction and no other legal restraint or prohibition preventing consummation of the distribution will be in effect;

   

no events or developments having occurred prior to the distribution that, in the judgment of the board of directors of Parent, would result in the distribution having a material adverse effect on Parent or its stockholders;

   

Parent’s and New News Corporation’s execution of the separation and distribution agreement, the tax sharing and indemnification agreement, the transition services agreement, the employee matters agreement and all other ancillary agreements relating to the distribution;

   

Parent’s election of the individuals to be listed as members of our board of directors post-distribution, as described in this information statement, immediately prior to the distribution date;

   

the SEC having declared effective the Form 10, of which this information statement forms a part;

   

no rating agency action having occurred that is likely to result in either Parent or us being downgraded below investment grade after giving effect to the distribution;

   

our Class A Common Stock and Class B Common Stock having been approved for listing on NASDAQ and our Class A Common Stock and Class B Common Stock (trading as CDIs) having been approved for admission to the official list of ASX;

   

the Notice of Internet Availability or this information statement having been mailed to Parent’s stockholders;

   

all actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities laws and any other necessary and applicable consents having been taken, obtained and, where applicable, having become effective or been accepted;

   

Parent having established the record date for the distribution, given NASDAQ not less than ten days’ advance notice of such record date and given ASX not less than seven Business Days’ (as defined under ASX Listing Rules) advance notice of such record date; and

   

our amended and restated certificate of incorporation and amended and restated by-laws, each in substantially the form filed with the Form 10, having become effective at or prior to the distribution.

The fulfillment of the above conditions will not create any obligation on Parent’s part to effect the distribution. Parent, in its sole and absolute discretion, will determine the terms of, and whether to proceed with, the distribution and, to the extent it determines to proceed, determine the record date and distribution date.

The fulfillment of the above conditions will not create any obligation on Parent’s part to effect the distribution. Parent, in its sole and absolute discretion, will determine the terms of, and whether to proceed with, the distribution and, to the extent it determines to proceed, determine the record date and distribution date

Our Name

We anticipate that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc. and we will assume the name News Corporation.

Regulatory Approval

New News Corporation must complete the necessary registration under U.S. federal securities laws and relevant Australian Corporations law requirements of New News Corporation Class A Common Stock and New News Corporation Class B Common Stock, as well as satisfy the applicable NASDAQ and ASX listing requirements for such shares.

Parent will need to obtain approval under FATA and the Australian Government’s foreign investment policy to implement the steps necessary to effect the separation and to make the distribution. Parent will apply for the relevant approvals prior to implementing the various transaction steps.

Other than the requirements discussed above, we do not believe that any other material governmental or regulatory filings or approvals will be necessary to consummate the distribution.

No Appraisal Rights

Parent’s stockholders will not have any appraisal rights in connection with the distribution.

Reasons for Furnishing this Information Statement

We are furnishing this information statement solely to provide information to Parent’s stockholders who will receive shares of our common stock in the distribution. You should not construe this information statement as an inducement or encouragement to buy, hold or sell any of our securities or any securities of Parent. We believe that the information contained in this information statement is accurate as of the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and neither Parent nor we undertake any obligation to update the information except in the normal course of Parent’s and our public disclosure obligations and practices.

Required Australian Disclosures

This information statement is not a prospectus under the Australian Corporations Act 2001 (Cth) (the “Corporations Act”) and has not been lodged with the Australian Securities and Investments Commission (“ASIC”). As required by the ASX Listing Rules, this information statement contains all information that a reasonable person would expect to have a material effect on the price or value of the securities to be quoted. None of ASX, ASIC or any of their respective officers takes any responsibility for the contents of this information statement. The fact that ASX may admit New News Corporation to its official list is not to be taken in any way as an indication of the merits of New News Corporation.

DIVIDEND POLICY

Following the distribution, we expect to pay regular cash dividends, though the timing, declaration, amount and payment of future dividends to stockholders will fall within the discretion of our board of directors. Our board of directors’ decisions regarding the payment of future dividends will depend on many factors, including our financial condition, earnings, capital requirements and debt facility covenants (if any), other contractual restrictions, as well as legal requirements, regulatory constraints, industry practice and other factors that our board of directors deems relevant. Our board of directors cannot provide any assurances that any dividends will be declared or paid.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2013, on a historical and on a pro forma basis to give effect to the separation and distribution and the transactions related to the separation and distribution as if they occurred on March 31, 2013. Explanation of the pro forma adjustments made to our historical combined financial statements can be found under “Unaudited Pro Forma Combined Financial Statements.” The following table should be reviewed in conjunction with “Unaudited Pro Forma Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical combined financial statements and accompanying notes included elsewhere in this information statement.

As of March 31, 2013    Historical   Pro forma    (in millions) 

Cash and cash equivalents

  $1,539    $2,560     

Borrowings:

Current borrowings

  $—      $—    

Long-term borrowings

   —       —       

Total borrowings

   —       —       

Redeemable preferred stock

   —       20     

Total borrowings and redeemable preferred stock

   —       20      

Equity:

Common stock, par value

   —       6  

Additional paid-in capital

   —       14,120  

Total parent company equity and noncontrolling interests

   12,566     —       

Total equity

   12,566     14,126     

Total capitalization

  $12,566    $14,146     

Our board of directors has authorized a stock repurchase program in which, after the distribution, we may purchase up to an aggregate of $500 million of our Class A Common Stock. All decisions regarding future stock repurchases will be at the sole discretion of a duly appointed committee of our board of directors and management. The committee’s decisions regarding future stock repurchases will be evaluated from time to time in light of many factors, including our financial condition, earnings, capital requirements and debt facility covenants, if any, other contractual restrictions, as well as legal requirements (including compliance with the IRS private letter ruling), regulatory constraints, industry practice and other factors that the committee may deem relevant. The stock repurchase program may be modified, extended, suspended or discontinued at any time by our board of directors and our board of directors cannot provide any assurances that any shares will be repurchased.

Additionally, we may enter into a credit facility prior to the distribution, which would be undrawn at the time of the distribution

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined statements of operations for the nine months ended March 31, 2013 and for the fiscal year ended June 30, 2012, and the unaudited pro forma combined balance sheet as of March 31, 2013 were derived from our unaudited interim and audited combined financial statements included elsewhere in this information statement.

The unaudited pro forma combined statements of operations for the nine months ended March 31, 2013 and for the fiscal year ended June 30, 2012 reflect our results as if the events had occurred on July 1, 2011. The unaudited pro forma combined balance sheet gives effect to these events as if they occurred as of March 31, 2013, our latest balance sheet date. The unaudited pro forma combined financial statements give effect to the following:

   

the consolidation of Consolidated Media Holdings Limited (“CMH”) and related acquisition adjustments;

On November 19, 2012, we acquired CMH, a media investment company that operates in Australia. CMH had a 25% interest in Foxtel and a 50% interest in FOX SPORTS Australia. The acquisition doubled our stakes in FOX SPORTS Australia and Foxtel to 100% and 50%, respectively. Accordingly, the results of FOX SPORTS Australia are included in our results from November 19, 2012. Prior to November 2012, FOX SPORTS Australia was accounted for under the equity method of accounting. Our investment in Foxtel continues to be accounted for under the equity method of accounting.

   

the contribution by Parent to us, pursuant to the distribution, of all the assets and liabilities that comprise our business with the exception of the investment in SKY Network Television Ltd which was sold in March 2013;

   

the expected transfer to us, upon the distribution, of certain assets and liabilities that were not reflected in our historical combined financial statements;

   

our anticipated post-distribution capital structure, including the issuance of approximately 580 million shares of our common stock to holders of Parent common stock (this number of shares is based upon the number of shares of Parent common stock outstanding on March 31, 2013 and an assumed distribution ratio of one share of our common stock for every four shares of Parent common stock held on the record date); and

   

the impact of, and transactions contemplated by, the separation and distribution agreement and the tax sharing and indemnification agreement between us and Parent and the provisions contained therein.

The unaudited pro forma combined financial statements are subject to the assumptions and adjustments described in the accompanying notes. Our management believes that these assumptions and adjustments are reasonable under the circumstances and given the information available at this time. However, these adjustments are subject to change as we and Parent finalize the terms of the separation and distribution agreement and the other agreements related to the distribution.

The unaudited pro forma combined financial statements are for illustrative and informational purposes only and are not intended to represent, or be indicative of, what our financial position or results of operations would have been had the transactions occurred on the dates indicated. The unaudited pro forma combined financial statements also should not be considered representative of our financial position. The financial information presented below should not be relied upon as a representation of our future performance.

We expect to experience changes in our ongoing cost structure when we become an independent, publicly-traded company. For example, Parent currently provides many corporate functions on our behalf, including, but not limited to, finance, legal, insurance, information technology, compliance and human resource activities. Our historical combined financial statements include allocations of these expenses from Parent of $69 million and $102 million for the nine months ended March 31, 2013 and year ended June 30, 2012, respectively. We believe 

these costs may not be representative of the future costs we will incur as an independent public company. We estimate that these costs could range between $140 million and $160 million on an annual basis. This range is based on subjective estimates and assumptions and, therefore, we have not adjusted the accompanying unaudited pro forma financial statements of operations for these estimated costs.

Costs related to the distribution of approximately $46 million have been incurred by Parent for the nine months ended March 31, 2013. These costs include accounting, legal, consulting and advisory fees. Parent has assumed all of these distribution costs incurred to date and Parent anticipates that it will be responsible for all similar costs incurred prior to the distribution. Therefore, in the historical and the pro forma combined statements of operations for the nine months ended March 31, 2013, no transaction costs incurred by Parent were allocated to us or otherwise reflected in our financial results.

We currently estimate costs that we will incur during our transition to being a stand-alone public company will not be material. We have not adjusted the accompanying unaudited pro forma combined statements of operations for these estimated costs as the costs are not expected to have an ongoing impact on our operating results; they are projected amounts based on subjective estimates and assumptions, and would not be factually supportable. We anticipate that substantially all of these costs will be incurred within 18 months of the distribution. The transition-related costs include, but are not limited to, the following:

   

incremental accounting, tax and other professional costs pertaining to establishing us as a stand-alone public company;

   

recruiting and relocation costs associated with hiring additional key corporate senior management personnel new to our company; and

   

costs to separate corporate information systems.

Due to the scope and complexity of these activities, the amount of these costs could increase or decrease materially and the timing of incurrence could change.

The unaudited pro forma combined financial statements should be read in conjunction with our historical combined financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this information statement.

EW NEWS CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED MARCH 31, 2013

(in millions, except per share amounts)

Historical
New News
Corporation (a)  Historical
CMH  (b)  Pro Forma
CMH Acquisition
Adjustments  Pro Forma for
CMH Acquisition  Pro Forma
Distribution
Adjustments  Pro Forma for
CMH Acquisition
and Distribution 

Revenues

 $6,634   $—     $197(c)  $6,831   $—     $6,831  

Operatiexpenses

  (4,040)   (20)   (101)(c),(d)   (4,161)   —      (4,161) 

Selling, general and administrative

  (2,036)   —      (10)(c)   
(2,046

  
132
(l) 
  (1,914) 

Depreciation and amortization

  (398)   —      (15)(c),(e)  (413)   —      (413) 

Impairment and restructuring charges

  (231)   —      —      (231)   —      (231) 

Equity earnings of affiliates

  81    34    (67)(f)   48    (34)(h)   14  

Interest, net

  54    1    —      55    —      55  

Other, net

  1,569    —      (1,255)(g)   314    (321)(h)   (7)    

Income (loss) before income tax benefit (expense)

  1,633    15    (1,251)   397    (223)   174  

Income tax benefit (expense)

  27    (5)   (56)(p)   (34)   (26)(p)   (60)  
 

Net income (loss)

  1,660    10    (1,307)   
363
  
  (249)   114  

Less: Net income attributable to noncontrolling interests

  (30)   —      —      (30)   —      (30)   
 

Net income (loss) attributable to New News Corporation

 $1,630   $10   $(1,307)  

$

 

 $(249)  $84    

Earnings Per Share      

Basic  $0.14(n) 

Diluted  $0.14(n)        

Weighted-Average Shares outstanding

Basic 586(n) 

Diluted      586(n) 

(1) 

The change in our cost structure related to our company becoming an independent, publicly traded company is not reflected above.

See accompanying Notes to the Unaudited Pro Forma Combined Financial Statements

NEW NEWS CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 2012

(in millions, except per share amounts)

Historical
New News
Corporation (a)  Historical
CMH  (b)  Pro Forma
CMH Acquisition
Adjustments  Pro Forma for
CMH Acquisition  Pro Forma
Distribution
Adjustments  Pro Forma
for CMH
Acquisition and
Distribution 

Revenues

 $8,654   $2   $484(c)  $9,140   $—     $9,140  

Operating expenses

  (5,122)   (11)   (299)(c)   (5,432)   —      (5,432) 

Selling, general and administrative

  (2,750)   —      (45)(c)   (2,795)   186(l)   (2,609) 

Depreciation and amortization

  (483)   —      (38)(c),(e)   (521)   —      (521)  

Impairment and restructuring charges

  (2,763)   —      —      (2,763)   —      (2,763) 

Equity earnings of affiliates

  90    83    (142)(f)   31    (41)(h)   (10) 

Interest, net

  56    5    4(c)   65    —      65  

Other, net

  (59)   —      —      (59)   —      (59)   

(Loss) income before income tax benefit (expense)

  (2,377)   79    (36)    (2,334)   145    (2,189)  

Income tax benefit (expense)

  337    9    (2)(p)   344    (38)(p)   306    
 

Net (loss) income

  (2,040)   88    (38)   (1,990)   107    (1,883) 

Less: Net income attributable to noncontrolling interests

  (35)   —      —      (35)   —      (35)   

Net (loss) income attributable to New News Corporation

 $(2,075)  $88   $(38)  $(2,025)  $107   $(1,918)   

Loss Per Share          

Basic   $(3.07)(n) 

Diluted    $(3.07)(n)        

Weighted-Average Shares outstanding        

Basic      625(n) 

Diluted     625(n) 

(1) 

The change in our cost structure related to our company becoming an independent, publicly traded company is not reflected above

See accompanying Notes to the Unaudited Pro Forma Combined Financial Statements

NEW NEWS CORPORATION

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF MARCH 31, 2013

(in millions)

Historical New News
Corporation (a)
   Pro Forma
Distribution
Adjustments
  Pro Forma for
CMH
Acquisition
and Distribution
 

Assets:

Current assets:

Cash and cash equivalents

  $1,539    $1,021(j)  $2,560  

Accounts Receivables, net

   1,463     —      1,463  

Other

   849     60(l)   909     

Total current assets

   3,851     1,081    4,932     

Investments

   2,848     140(i)   2,988  

Property, plant and equipment, net

   3,221     —      3,221  

Intangible assets, net

   3,296     —      3,296  

Goodwill

   3,188     —      3,188  

Other non-current assets

   550     419(k),(q)   969     

Total assets

  $16,954     1,640   $18,594     

Liabilities and Equity

Current liabilities:

Accounts payable

  $259     —     $259  

Accrued expenses

   1,047     —      1,047  

Deferred revenue

   424     —      424  

Other current liabilities

   763     —      763     

Total current liabilities

   2,493     —      2,493     

Other liabilities

   749     60(k)   809  

Deferred income taxes

   1,146     —      1,146     

Total liabilities

   4,388     60    4,448     

Mezzanine equity:

Redeemable preferred stock

   —       20(q)   20     

Equity:  

Common stock

   —       6(o)   6  

Additional paid-in capital

   —       14,120(m)   14,120  

Parent company investment and accumulated other comprehensive income

   12,566     (12,566)(i),(j),(k),(l),(m),(q)   —       

Total equity

   12,566     1,560    14,126     

Total liabilities and equity

  $16,954    $1,640   $18,594     

 See accompanying Notes to the Unaudited Pro Forma Combined Financial Statements

NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

(a) Our historical combined financial statements reflect the historical financial position and results of operations of the following businesses of Parent: newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia and may not reflect the impact of certain assets and liabilities that will be contributed to or assumed by us from Parent in the distribution and that are discussed separately. As the acquisition of CMH was completed November 19, 2012, CMH and FOX SPORTS Australia, which comprise the sports programming and pay-TV distribution business in Australia, are reflected in our historical Statement of Operations from November 19, 2012 onwards and are included in our historical March 31, 2013 balance sheet.
(b) Reflects the historical results of operations of CMH through the date of acquisition, November 19, 2012. From November 19, 2012 onwards, CMH is included in the historical results of operations of New News Corporation. CMH is a holding company with no primary activities other than a 50% interest in FOX SPORTS Australia and a 25% interest in Foxtel whose results are reflected in equity earnings.
(c) The adjustments to the Statements of Operations reflect the consolidation of FOX SPORTS Australia as a subsidiary from July 1, 2011. As the acquisition was completed November 19, 2012, the assets and liabilities of CMH which include FOX SPORTS Australia are already included in the historical New News Corporation balances in the March 31, 2013 balance sheet. The table below summarizes the preliminary allocation of purchase price to the fair value of the identifiable assets and liabilities of the CMH business acquired:
         

($ in millions)

        
   

Fair value of Consideration:

        

Cash

     2,004   

Fair value of previously held equity interest

     1,626   
    

 

 

 
       3,630   
    

 

 

 

Preliminary purchase price allocation:

        

Current assets

     223   

Property, plant and equipment

     35   

Investments (Foxtel)

     2,227   

Deferred tax assets

     136   

Other assets

     417   

Intangible assets

     785   

Current liabilities

     (120

Deferred income taxes

     (354

Borrowings

     (234

Goodwill

     515   
    

 

 

 
       3,630   
    

 

 

 
(d) Reflects the reversal of $21 million of transaction expenses directly related to the CMH acquisition that are included in the historical Statement of Operations for the period ended March 31, 2013 but are non-recurring in nature.
(e) Reflects additional amortization expense of $11 million for the nine months ended March 31, 2013 and $28 million for the year ended June 30, 2012 resulting from the recognition of approximately $685 million of amortizable intangible assets, primarily customer relationships, with useful lives ranging from 15 to 25 years, in the application of acquisition accounting for the CMH transaction.
(f)

Represents (i) the removal of the equity earnings of FOX SPORTS Australia of $40 million for the nine months ended March 31, 2013 and $93 million for the year ended June 30, 2012, recorded in the historical 

results to give effect to the consolidation of FOX SPORTS Australia from July 1, 2011, (ii) the incremental amortization expense of $22 million for the nine months ended March 31, 2013 and $75 million for the year ended June 30, 2012 and (iii) the adjustment of ($5 million) and $26 million, to present our share of partnership earnings from Foxtel on a pre-tax basis related to the change in FOX SPORTS Australia as described below, for the nine months ended March 31, 2013 and for the year ended June 30, 2012 respectively.

The incremental amortization expense reflected in (ii) above results from the initial estimate of amortization of the Foxtel subscriber relationships which received a fair value uplift of approximately $800 million in the application of acquisition accounting resulting in a total subscriber relationship value of approximately $1 billion. The difference between the ending subscriber relationship value of approximately $1 billion and the uplift is due to an acquisition by an equity associate, Foxtel, in May 2012. The Foxtel subscriber relationships are being amortized on a straight-line basis over 10 years, which represents the estimated useful life of these intangible assets. The incremental amortization expense of $22 million for the nine months ended March 31, 2013 and $75 million for the year ended June 30, 2012, respectively, was combined with the amortization expense recorded in the historical results of $53 million and $5 million for the nine months ended March 31, 2013 and for the year ended June 30, 2012, respectively. The incremental amortization expense was calculated as the difference between the total estimated subscriber amortization expense of $75 million and $80 million for the nine months ended March 31, 2013 and for the year ended June 30, 2012, respectively, less the historical amortization expense. The increase in the pro forma and historical amortization expense for the nine months ended March 31, 2013 was due to an acquisition made by Foxtel in May of 2012.

The adjustment to the equity earnings in (iii) above results from the partner in Foxtel, FOX SPORTS Australia, becoming a wholly owned subsidiary of New News Corporation. Foxtel is a 50/50 partnership with an unrelated third party and, therefore, is not a separate Australian taxpayer. Its earnings are passed through to its partners on a pre-tax basis. As a result of this change, New News Corporation’s pro forma equity earnings for Foxtel are recognized on a pre-tax basis as compared to an after-tax historical basis when FOX SPORTS Australia was not a wholly owned subsidiary. The adjustment to equity earnings was calculated using the Australian statutory tax rate of 30%.

(g) Represents the removal of the $1.3 billion non-taxable gain relating to the revaluation of existing holdings in FOX SPORTS Australia included in our historical Statement of Operations as it is a non-recurring item that is directly related to the acquisition.
(h) Reflects the removal of the equity earnings of SKY Network Television Ltd of $33 million for the nine months ended March 31, 2013 and $42 million for the year ended June 30, 2012 reflected in our historical combined financial statements as the investment was sold in March 2013. The sale resulted in us recording a gain of approximately $321 million included in Other, net in the historical Statement of Operations for the nine months ended March 31, 2013 which has been removed as it is a non-recurring item directly related to the disposition.
(i) Reflects the adjustment of $140 million principally related to certain cost-based investments in Asia that are expected to be contributed to us by Parent prior to the distribution in connection with the internal reorganization.
(j) Reflects the net contribution from Parent based upon the anticipated post-distribution capital structure such that New News Corporation’s cash balance is approximately $2.6 billion upon the distribution, of which the majority will be held domestically.
(k) Certain of our U.S. employees participate in defined benefit pension plans sponsored by Parent. When we become a standalone independent company, we will assume these obligations and provide the benefits directly. Parent will transfer to us the plan liabilities in the amount of $117 million and assets in the amount of $57 million associated with our active employees. The obligations associated with such plans will result in us recording net benefit liabilities of $60 million and $19 million of additional deferred tax assets. The unrecognized loss on these plans is $53 million
(l) The separation and distribution agreement provides that Parent will indemnify us for payments made after the distribution date arising out of civil claims and investigations relating to the U.K. Newspaper Matters as well as legal and professional fees and expenses paid in connection with the criminal matters, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with us. Adjustment reflects (i) the removal of U.K. Newspaper Matters-related legal expenses, fees and costs included in our historical Statements of Operations to the extent Parent would have indemnified us for similar costs paid by us after the distribution date and (ii) the recognition of an indemnification asset with respect to the accrual for the estimate of the liability for such claims that have been filed and costs incurred that is reflected in our historical balance sheet. Through the nine months ended March 31, 2013, we incurred a total of $144 million of U.K. Newspaper Matters expenses, of which $132 million would have been eligible for indemnification from Parent. Similarly, during the year ended June 30, 2012, we incurred a total of $199 million of U.K. Newspaper Matters expenses, of which $186 million would have been eligible, for indemnification from Parent. Settlement of such claims will be made by Parent to us on an after-tax basis. Historical expenses and payments eligible for indemnification may not be representative of the future pattern of expenses and payments to be incurred.
(m) Adjustment reflects the pro forma recapitalization of our equity. As of the distribution date, Parent’s net investment in our company will be distributed to Parent’s stockholders through the distribution of all the common stock of New News Corporation.
(n) Pro forma earnings per share and pro forma weighted-average shares outstanding are based on the weighted-average number of shares of Parent outstanding during the fiscal year ended June 30, 2012 and the nine months ended March 31, 2013, respectively, adjusted for an assumed distribution ratio of one share of New News Corporation common stock for every four shares of Parent common stock held on the record date. While the actual future impact of potential dilution from shares of common stock related to equity awards granted to our employees under Parent’s equity plans will depend on various factors, including employees who may change employment from one company to another, we do not currently estimate that the future dilutive impact is material.
(o) Reflects approximately 580 million shares at a par value of $.01 per share. The number of shares of common stock is based on the number of shares of Parent common stock outstanding on March 31, 2013 and an expected distribution ratio of one share of New News Corporation common stock for every four shares of Parent common stock.
(p) The provision for income taxes reflected in our historical combined financial statements was determined as if we filed separate, stand-alone income tax returns in each relevant jurisdiction. In determining the tax rate to apply to our pro forma adjustments we used, consistent with Instruction 7 to Rule 11-02(b) of Regulation S-X, the applicable statutory rate based on the jurisdiction in which the adjustment relates. If the adjustment relates to an item that would never be taxed in that particular jurisdiction, we did not provide any tax.

For the nine months ended March 31, 2013, the gain resulting from the acquisition of CMH of $1.3 billion is excluded from the pro forma CMH acquisition income tax calculations since it is non-taxable. In addition, the historical equity earnings of FOX SPORTS Australia of $19 million and $42 million are also excluded from the pro forma CMH acquisition income tax calculations for the periods ended March 31, 2013 and June 30, 2012, respectively, since the entity is now being consolidated and the related tax effects are included in the CMH pro forma adjustments. The tax effects for the remaining pro forma CMH acquisition adjustments of $22 million and $6 million for the periods ended March 31, 2013 and June 30, 2012, respectively, are computed based on the Australian statutory rate of 30%. In addition, for the nine months ended March 31, 2013, a pro forma CMH acquisition adjustment of $49 million is included to reverse the effects of deferred taxes previously recorded for the historical equity earnings of FOX SPORTS Australia that are no longer required since FOX SPORTS Australia is consolidated.

For the nine months ended March 31, 2013, the gain resulting from the sale of SKY Network Television Ltd. of $321 million is excluded from the pro forma distribution adjustments tax calculations since it is non-taxable 

For the periods ended March 31, 2013 and June 30, 2012, equity earnings of SKY Network Television Ltd. of $33 million and $42 million, respectively, are excluded from the pro forma distribution adjustments since they are non-taxable. In addition, non-deductible legal expenses of $16 million and $24 million are excluded from the pro forma distribution adjustments for the periods ended March 31, 2013 and June 30, 2012. The tax effects for the remaining pro forma distribution adjustments of $115 million and $162 million for the periods ended March 31, 2013 and June 30, 2012, respectively, are computed based on a weighted average applicable rate of 22% and 24%, respectively. Such tax rate is determined based on the relative effect of the pro forma distribution adjustments to the applicable jurisdictions of the U.S. and the U.K.

(q) As described in the financial statements and elsewhere in this information statement, Parent will undertake an internal reorganization to facilitate the separation of the companies. Such an internal reorganization would not be undertaken but for the distribution transaction. The internal reorganization will be structured in a manner that results in an increase of approximately $1.05 billion in the tax basis to fair market value of certain intangible assets, including goodwill, owned by New News Corporation, which will be amortizable upon the distribution, with a corresponding taxable gain to the Parent’s consolidated tax group of the same amount.

As part of this internal reorganization, News America Incorporated (“NAI”), a subsidiary of Parent, will transfer assets to, and will receive the common stock and cumulative redeemable preferred stock of, a new U.S. subsidiary that will become a subsidiary of New News Corporation. NAI will sell the preferred stock to an unrelated third party prior to the distribution and will retain the proceeds from this sale.

Prior to the distribution the taxable gain to Parent’s consolidated group and the increased amortization deductions will be deferred because New News Corporation and Parent are in the same consolidated tax group. However, upon the distribution, New News Corporation will leave the Parent’s consolidated tax group as it will be a separate public company and, at that point, New News Corporation will have fair market value tax basis in the intangible assets including goodwill and recognize a deferred tax asset of $400 million representing the increase of $1.05 billion in fair value for tax purposes above the existing basis (estimated current fair value of total assets of $1.35 billion in excess of the existing tax basis of $0.3 billion) multiplied by the applicable tax rate of 38%. Absent the sale of the preferred shares to a third party, the Parent’s consolidated tax group would not recognize the taxable gain described above and thus New News Corporation would not recognize the deferred tax asset of $400 million upon the distribution.

The preferred stock will pay dividends at a rate of 9.5% per annum, payable quarterly. The preferred stock is callable at any time after the fifth year and is puttable by the holder after 10 years, in each case at the sales price, plus cumulative dividends, if any

BUSINESS

Company Overview

We are a global diversified media and information services company focused on creating and distributing authoritative and engaging content to consumers and businesses throughout the English-speaking world, as well as increasingly in other countries across the globe. Our company is comprised of leading businesses across a range of media, including: news and information services, sports programming in Australia, digital real estate services, book publishing, and pay-TV distribution in Australia, that are distributed under some of the world’s most recognizable and respected brands, including The Wall Street Journal, Dow Jones, Herald SunThe SunThe Times, HarperCollins Publishers, FOX SPORTS Australia, realestate.com.au, and many others. We are also a rapidly developing provider of digital education content, assessment and delivery services. Our commitment to high-quality premium editorial content makes our media properties a trusted source of news and information among consumers; at the same time many of these properties deliver broad reach and high audience engagement levels in their respective markets, making them attractive advertising vehicles for our advertising customers.

We deliver our premium content to consumers across numerous distribution platforms consisting not only of traditional print and television, but also through an expanding array of digital platforms including websites, electronic readers and applications for tablets and mobile devices. We are focused on pursuing integrated strategies across our businesses to continue to capitalize on the transition from print to digital consumption of high-quality content. We believe that the increasing availability of high-speed Internet access, electronic readers and connected mobile devices will allow us to continue to deliver our content in a more engaging, timely and personalized manner; provide opportunities to more effectively monetize our content via strong customer relationships and more compelling and engaging advertising solutions; and reduce our physical production and distribution costs as we continue to shift to digital platforms.

Our diversified revenue base consists of recurring subscriptions, circulation copies, licensing fees, affiliate fees and direct sales as well as the sale of advertising and sponsorships. We manage our businesses to take advantage of opportunities to share technologies and practices across geographies and businesses and bundle selected offerings to provide greater value to consumers and advertising partners. Headquartered in New York, we operate primarily in North America, Australia, and the U.K., and our content is distributed and consumed worldwide.

It is anticipated that, on or about the distribution date and subject to the approval of the holders of a majority of Parent’s Class B Common Stock entitled to vote, Parent will change its name to Twenty-First Century Fox, Inc. and we will assume the name News Corporation.

Our operations are organized into five reporting segments: (i) News and Information Services; (ii) Cable Network Programming (a separate segment since November 2012—see “Cable Network Programming” below); (iii) Digital Real Estate Services; (iv) Book Publishing; and (v) Other, which primarily consists of Amplify, our digital education business, and general corporate overhead expenses. We account for our 50% stake in Foxtel as an equity investment 

Business Segments

                 

For the year ended June 30, 2012

 
     Revenues      Segment
EBITDA
 
     (in millions)  

News and Information Services

   $ 7,058       $ 939   

Digital Real Estate Services

     286         129   

Book Publishing

     1,189         86   

Other (includes Amplify)

     121         (372
    

 

 

    

 

 

 

Total

   $ 8,654       $ 782   
    

 

 

    

 

 

 
                 

For the nine months ended March 31, 2013

 
     Revenues      Segment
EBITDA
 
     (in millions)  

News and Information Services

   $ 5,069       $ 584   

Cable Network Programming (a)

     178         44   

Digital Real Estate Services

     254         122   

Book Publishing

     1,040         120   

Other (includes Amplify)

     93         (312
    

 

 

    

 

 

 

Total

   $ 6,634       $ 558   
    

 

 

    

 

 

 
(a) 

As a result of the CMH acquisition, our ownership interest in FOX SPORTS Australia increased to 100% and accordingly, the results of FOX SPORTS Australia are included within a new Cable Network Programming segment beginning in November 2012.

NEWS AND INFORMATION SERVICES

Our News and Information Services segment consists of Dow Jones, News Limited, News International, the New York Post and News America Marketing Group.

Dow Jones

Dow Jones is a global provider of news and business information, which distributes its content and data through a variety of media channels including newspapers, newswires, websites, electronic readers, mobile applications, newsletters, magazines, proprietary databases, conferences, radio and video. Dow Jones offers products targeting individual consumer and enterprise customers, including The Wall Street Journal, Dow Jones Newswires, Factiva, Barron’s and MarketWatch, and its revenue is diversified across business-to-consumer and business-to-business subscriptions, advertising, and licensing fees for its print and digital products.

Through its premier brands and authoritative journalism, Dow Jones products targeting individual consumers provide insights, research and understanding that customers need in order to be informed and make educated financial decisions. With a focus on the financial markets, investing and other professional services, many of these products offer advertisers an attractive customer demographic. Products targeting consumers include the following:

   

The Wall Street Journal (WSJ). The Wall Street Journal, the Dow Jones flagship product, is available in print, online at WSJ.com, and across multiple mobile, electronic reader and tablet devices, and covers business developments and trends, national and international news along with analysis, economics, financial markets, investing, opinion, lifestyle, culture and sports. The Wall Street Journal is the leading circulation daily newspaper in the U.S., with total average print and digital circulation of 2,378,827 for 

the six months ended March 31, 2013 based on AAM data. WSJ is printed at plants located around the U.S., including 9 owned by us. WSJ sells regional advertising in 3 major U.S. regional editions (Eastern, Central and Western) and 21 smaller sub-regional editions. WSJ.com, which offers both free and premium content, averaged more than 70 million visits per month on average for the 12 months ended March 31, 2013 according to Adobe Omniture, and includes local language editions in Chinese, Japanese, German, Spanish, Portuguese, Bahasa, Turkish and Korean. Print and digital products under the WSJ brand include:

PrintThe Wall Street Journal (including its Asia and Europe editions), The Wall Street Journal Sunday, and WSJ.Magazine.

DigitalWSJ.com (includes CIO Journal and CFO Journal), WSJ.com international sites (asia.WSJ.com, Europe.WSJ.com, WSJ.de (Germany), cn.WSJ.com (China), jp.WSJ.com (Japan), kr.wsj.com (Korea), indo.wsj.com (Indonesia), india.wsj.com, wsj.com.tr (Turkey) and Latin American and Brazil local language sites available through WSJ.com).

Video : WSJ Live (live and on-demand news online through WSJ.com and other platforms including Internet-connected TV and set-top boxes).

   

Barron’s. Barron’s is available in print, online at Barrons.com, and on electronic reader and mobile devices, and delivers news, analysis, investigative reporting, company profiles and insightful statistics for investors and others interested in the investment world. Print and digital products under the Barron’s brand include:

PrintBarron’s (weekly magazine with an average paid weekly circulation of 305,362 for the six months ended December 31, 2012 based on AAM data).

Digital: Barrons.com (offers both free and premium content providing in-depth analysis and commentary on the markets, updated every business day online, along with alerts and tools) and Barron’s iPad application (paid app which resembles the website). Barrons.com had more than 170,000 paid subscribers on average for the 12 months ended March 31, 2013.

   

The Wall Street Journal Digital Network. WSJDN comprises business and financial news websites and mobile applications. WSJDN had nearly 1.4 million paid subscribers on average for the 12 months ended March 31, 2013 and, during that same period, averaged more than 138 million visits per month with more than 524 million page views per month according to Adobe Omniture. In addition to WSJ.com and Barrons.com, discussed above, WSJDN includes MarketWatch, AllThingsD and related services.

  -  

Marketwatch.comMarketwatch.com is an investing and financial news website targeting active investors. It also provides real-time commentary and investment tools and data. Products include an iPad application (paid application), MarketWatch Mobile (free iPhone application and mobile site), MarketWatch Premium Newsletter (paid newsletters on a variety of investing topics), Big Charts (free investment charting website) and Virtual Stock Exchange (free stock simulation game through the website). MarketWatch.com averaged nearly 42 million visits per month for the 12 months ended March 31, 2013 according to Adobe Omniture.

  -  

AllThingsD.comAllThingsD.com is a personal technology site that features breaking technology news, in-depth coverage of Silicon Valley and the media industry, and product reviews and analysis. Since 2003, the annual D: All Things Digital conference has brought together influential figures in the digital, technology and media industries.

   

Dow Jones Local Media. The Dow Jones Local Media business publishes community-focused print publications – including eight general interest daily newspapers – and related local web sites in California, Maine, Massachusetts, New Hampshire, New York, Oregon and Pennsylvania. The Dow Jones Local Media business also publishes 13 weekly newspapers, performs commercial printing at its  

five printing locations and offers other products and services. We are currently exploring the possible sale of the Dow Jones Local Media business.

Dow Jones products targeting enterprise customers combine news and information with technology and tools designed to inform decisions and to aid awareness, research and understanding. As our solutions are increasingly integral to the success of these customers, we expect to sustain strong retention rates by providing high levels of service and continued innovation through news, data and tools that meet their specific needs. These products include the following:

   

Factiva. Factiva is a leading provider of global business content, built on an archive of important, original publishing sources. This combination of business news and information, plus sophisticated tools, helps professionals find, monitor, interpret and share essential information. As of March 31, 2013, there were approximately 1.14 million activated Factiva users, including both institutional and individual accounts. Many of the institutional accounts have multiple individual users. Factiva offers content from over 34,000 global news and information sources from over 200 countries and in 28 languages. Thousands of our sources are not available for free on the Internet and more than 3,800 sources make information available via Factiva on or before the date of publication by the source. Factiva leverages complex metadata extraction and text-mining to help our customers build precise searches and alerts to access and monitor this data.

   

Dow Jones Newswires. Dow Jones Newswires distributes real-time business news, information, analysis, commentary and statistical data to financial professionals and investors worldwide. It publishes over 19,000 news items in 13 languages each day via terminals and trading platforms reaching hundreds of thousands of financial professionals. This content also reaches millions of individual investors via customer portals and intranets of brokerage and trading firms, as well as digital media publishers.

   

Dow Jones Sales & Trading. Dow Jones Sales & Trading products provide traders, analysts and risk managers with low latency, corporate and economic news and data feeds for algorithmic trading models. We also make archives available for model back-testing. Products include Dow Jones Elementized Newsfeed and Dow Jones News & Archives for Algorithmic Applications.

   

Dow Jones Private Equity & Venture Capital. Dow Jones Private Equity & Venture Capital products provide news and comprehensive data on venture and private-equity backed private companies, and their investors, to help venture capitalists, financial professionals and other service providers identify deal and partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. Products include VentureSource, LP Source, VentureWire, Private Equity Analyst and LBO Wire.

   

Risk and Compliance. Dow Jones Risk and Compliance products provide data solutions for customers focused on anti-corruption, anti-money laundering and monitoring embargo and sanction lists. Our solutions allow customers to filter their business transactions against our data to identify regulatory, corporate and reputational risk, and request follow-up due diligence reports. Products include Dow Jones Watchlist, Dow Jones Anti-Corruption, Dow Jones Sanction Alert and Dow Jones Due Diligence.

News Limited

News Limited is the largest general news provider in Australia by readership and circulation, owning over 120 newspapers covering a national, regional and suburban footprint. Its daily, Sunday, weekly and bi-weekly newspapers account for more than 63% of the total circulation of newspapers in Australia, and its Sunday newspaper network is read by approximately 4.7 million Australians every week. In addition, its digital mastheads and other websites are among the leading digital properties in Australia based on monthly site visits. News Limited’s news portfolio includes:

   

The Australian (National). The Australian is published Monday through Saturday. Average paid circulation for the year ended March 31, 2013 was approximately 149,000 

The Daily Telegraph and The Sunday Telegraph (Sydney). The Daily Telegraph is published Monday through Saturday. Average paid circulation for the year ended March 31, 2013 was approximately 330,000 for The Daily Telegraph and 592,000 for The Sunday Telegraph.

   

Herald Sun and Sunday Herald Sun (Melbourne). Herald Sun is published Monday through Saturday. Average paid circulation for the year ended March 31, 2013 was approximately 449,000 for Herald Sun and 517,000 for Sunday Herald Sun.

   

The Courier Mail and The Sunday Mail (Brisbane). The Courier Mail is published Monday through Saturday. Average paid circulation for the year ended March 31, 2013 was approximately 194,000 for The Courier Mail and 442,000 for The Sunday Mail.

   

The Advertiser and Sunday Mail (Adelaide). The Advertiser is published Monday through Saturday. Average paid circulation for the year ended March 31, 2013 was approximately 177,000 for The Advertiser and 263,000 for Sunday Mail.

   

A large number of community newspapers, including Manly Daily, the only daily community newspaper in Australia, Northern Times and Guardian Messenger, as well as leading regional publications, including the Gold Coast Bulletin.

News Limited has launched paid-for digital platforms for The Australian and Herald Sun websites and expects to launch digital subscription platforms for The Daily Telegraph and Herald Sun in May 2013 and for The Courier Mail and the Adelaide Advertiser in June 2013. News Limited’s broad portfolio of digital properties also comprises a number of other premier assets, including leading general interest sites in Australia such as news.com.au, which provides business, entertainment, lifestyle, news and sports information, taste.com.au, a leading food and recipe site, and kidspot.com.au, a leading parenting website. Other digital media assets include a 50% stake in CareerOne.com.au (a joint venture with Monster.com), a 50% stake in carsguide.com.au (a joint venture with a consortium of leading car dealers), an 89.5% stake in the SportingPulse (which supplies a scheduling tool for sports organizations), and 100% of Business Spectator and Eureka Report (online business and investment news and commentary services).

News International

NI publishes The Sun, The Times and The Sunday Times, which are leading newspapers in the U.K. Sales of these three titles account for approximately one-third of all national newspaper sales in the U.K. NI also distributes content through thesun.co.uk, thetimes.co.uk and thesundaytimes.co.uk. Revenue is derived primarily from advertising, circulation and subscriptions to our print and digital products. NI’s newspapers (except some Saturday and Sunday supplements) are printed at world-class printing facilities in England, Scotland and Ireland. NI also generates revenue by providing third party printing services through these facilities and is now the largest contract printer in the U.K. In addition, NI has developed a portfolio of highly complementary ancillary product offerings, including Sun Bingo, the U.K.’s largest online bingo platform, as well as newer products such as Sunday Times Driving, a digital classified offering, and The Times and The Sunday Times Whisky Club, which supplies premium products and accompanying editorial content.

   

The Sun. The Sun newspaper is published Monday through Saturday and on Sunday as of February 2012. Based on National Readership Survey data for the six months ended December 31, 2012, The Sun is the most read national newspaper in the U.K., with an average issue readership of approximately 6,700,000 Monday through Saturday for The Sun and 5,900,000 for The Sun on Sunday. Average paid circulation for the year ended March 31, 2013 was approximately 2,443,000 for The Sun and 2,074,000 for The Sun on Sunday. The Sun iPad edition is expected to launch in mid-2013.

   

The Times. The Times newspaper is published Monday through Saturday with an average issue readership of approximately 1,300,000 million for the six months ended December 31, 2012 based on National Readership Survey data. Average paid circulation for the year ended March 31, 2013 was approximately 400,000. The Times is also distributed through online and mobile applications. As of 

March 31, 2013, The Times had approximately 151,000 paid print subscribers and 141,000 paid digital subscribers. NI also publishes The Times Literary Supplement, a weekly literary review.

   

The Sunday Times. The Sunday Times is the leading broadsheet Sunday newspaper in the U.K. with an average issue readership of approximately 2,500,000 for the six months ended December 31, 2012 based on National Readership Survey data. Average paid circulation for the year ended March 31, 2013 was approximately 905,000. The Sunday Times is also distributed through online and mobile applications. As of March 31, 2013, The Sunday Times had approximately 182,000 paid print subscribers and 127,000 paid digital subscribers.

New York Post

The New York Post (the “Post”) is the oldest continuously published daily newspaper in the U.S., with a focus on coverage of the New York metropolitan area. The print version of the Post is primarily distributed in New York and throughout the Northeast, as well as Florida and California. The Post provides a variety of general interest content ranging from breaking news to business analysis, and is known in particular for its comprehensive sports coverage, famous headlines and its iconic Page Six section, an authority on celebrity news. The Post’s digital platforms feature all the sections of the print version as well as continually updated breaking news and other content and extend the reach of the Post to a national audience. For the twelve month period ended March 31, 2013, average weekday circulation, including digital editions, was approximately 512,000. The Post is printed in a printing facility in the Bronx, New York and uses third party printers in its other markets in the U.S. Our Community Newspaper Group also owns several local newspapers and other publications distributed in the New York metropolitan area.

News America Marketing Group

NAMG is a leading provider of coupon promotions, special offers and other direct consumer marketing solutions through a network of approximately 1,700 publications, 50,000 retail stores and 300 partner sites including SmartSource.com as well as through the expanding app, SmartSource Xpress for iPad and iPhone. NAMG offers direct consumer marketing solutions for companies that include consumer packaged goods manufacturers, financial services, pharmaceutical manufacturers, quick-service and casual restaurants, retailers and other marketers in the U.S. and Canada. NAMG has developed broad, long-standing relationships with many well-known brands, including Procter & Gamble, General Mills, Kraft, GlaxoSmithKline, Walmart, Kroger, American Express, Target, Loblaws, Citibank and DirectTV.

NAMG’s marketing solutions are available via multiple distribution channels, including publications, in-store and digital, primarily under the SmartSource brand name. NAMG provides customers with “one-stop shopping” for their direct-to-consumer marketing needs through its three primary business areas:

   

Free-Standing InsertsFree-standing inserts are multiple-page marketing booklets containing coupons, rebates and other consumer offers, which are distributed to consumers through insertion primarily into local Sunday publications. NAMG is one of the two largest publishers of free-standing inserts in the U.S. Advertisers, primarily packaged goods companies, pay NAMG to produce free-standing inserts, often on an exclusive basis within their product category. NAMG contracts with and pays, newspaper publishers, among others, to include the free-standing inserts in their papers. NAMG’s free-standing insert products are distributed 43 times a year to over 74 million households.

 

   

In-Store Advertising and Merchandising: NAMG is a leading provider of in-store marketing products and services, primarily to consumer packaged goods manufacturers. NAMG’s marketing products include: at-shelf advertising such as coupon, information and sample-dispensing machines as well as container, floor and shopping-cart advertising, among others, and are found in approximately 50,000 supermarkets, drug stores, dollar stores, office supply stores and mass merchandisers across North America. NAMG also provides in-store merchandising, including instant-redeemable coupons, on-pack stockers, shipper assembly, display set-up and refilling, shelf management and new product cut-ins 

SmartSource DigitalSmartSource Digital manages NAMG’s portfolio of database and electronic-marketing solutions. The database-marketing business, branded SmartSource Direct, provides direct-mail solutions via access to a national network of retailer frequent-shopper card databases offering information on the purchase behavior of more than 100 million cardholders. The SmartSource Savings Network, which includes SmartSource.com and SmartSource Xpress, encompasses all of NAMG’s electronic couponing and sampling solutions accessed through the web, mobile and tablet-based programming and reaches an audience of more than 85 million consumers.

NAMG’s programs have key advantages when compared to other marketing options available to packaged goods companies, retailers and other marketers. NAMG offers cost-effective programs that reach a national audience of engaged consumers who are actively seeking coupons or discounts and who are at a critical moment in their purchase decision. By delivering an immediate incentive or brand message to shoppers as they are making brand decisions, free-standing inserts and in-store advertising have an advantage over other mass media such as radio and television.

Competition

Our news and information services products compete with a wide range of media businesses, including both print publications and digital media and information services.

Our newspapers, magazines and digital publications compete for readership and advertising with local and national newspapers, web and application-based media, social media sources and other traditional media such as television, magazines and radio. Competition for print and digital subscriptions is based on the news and editorial content, subscription pricing, cover price and, from time to time, various promotions. Competition for advertising is based upon advertisers’ judgments as to the most effective media for their advertising budgets, which is in turn based upon various factors including circulation volume, readership levels, audience demographics, advertising rates and advertising effectiveness results. In recent years, the newspaper industry has experienced difficulty increasing or maintaining circulation volume and revenue due to, among other factors, increased competition from new media formats and sources and shifting preferences among some consumers to receive all or a portion of their news from sources other than a newspaper, including digital sources available free of charge to consumers. We believe that these changes will continue to pose opportunities and challenges within the newspaper industry, and that we are well positioned to continue to benefit from the transition to digital consumption. We plan to leverage our global reach and brand recognition and our proprietary technology to expand our digital offerings, many of which are in early stages and have significant potential for growth.

Dow Jones’ business targeting enterprise customers also competes with select information service providers across its various product offerings. Dow Jones Newswires competes with other global financial newswires, including Thomson Reuters and Bloomberg L.P., as well as many Internet-based providers of financial news and information. Factiva competes with various business information service providers, such as LexisNexis, as well as various Internet-based information search services.

NAMG competes against other providers of advertising, marketing and merchandising products and services, including those that provide promotional or advertising inserts, direct mailers of promotional or advertising materials, providers of point-of-purchase and other in-store programs, other merchandising services companies and providers of savings and/or grocery-focused digital applications. Competition is based on, among other things, rates, availability of markets, quality of products and services provided and their effectiveness, rate of coupon redemption, store coverage and other factors. We believe that NAMG’s large reach of over 74 million households for its free-standing inserts and approximately 50,000 retail outlets for its in-store advertising, provides significantly broader consumer access than many of its competitors

CABLE NETWORK PROGRAMMING

Our Cable Network Programming segment consists of FOX SPORTS Australia, the leading sports programming provider in Australia based on total subscribers. FOX SPORTS Australia is focused on live national and international sports events and provides featured original and licensed premium sports content tailored to the Australian market, including live sports such as National Rugby League, the domestic football league, English Premier League, Australian and international cricket, as well as the NFL. FOX SPORTS Australia offers seven standard definition television channels, high definition versions of five of those channels, an interactive viewing application and one IPTV channel. Its channels consist of FOX SPORTS 1, FOX SPORTS 2, FOX SPORTS 3, FOX FOOTY, FOX SPORTS NEWS, FUEL TV and SPEED that broadcast an average of 23 hours of live sports per day reaching FOXTEL, Telstra and Optus subscription television customers. FOX SPORTS Australia is distributed via longstanding carriage agreements with pay-TV providers (mainly Foxtel) in Australia and generates revenue primarily through affiliate fees payable under these carriage agreements, as well as advertising sales. FOX SPORTS Australia’s access to compelling local and international sports programming, as well as its production of high-quality original sports content has made it the leading sports programming provider in Australia.

FOX SPORTS Australia has made technological advances in recent years, becoming the first TV network ever to feature a live 3D sporting event in Australia on May 24, 2010. FOX SPORTS Australia also operates foxsports.com.au, a leading general sports website in Australia, and offers an IPTV channel and several interactive mobile and tablet applications that extend the reach of our content across multiple new platforms.

Prior to November 2012, we owned a 50% interest in FOX SPORTS Australia, which we accounted for as an equity investment. In November 2012, we acquired CMH, a media investment company that owned the remaining 50% interest in FOX SPORTS Australia. As a result of the CMH acquisition, our ownership interest in FOX SPORTS Australia increased to 100% and accordingly, the results of FOX SPORTS Australia are included within a new Cable Network Programming segment beginning in November 2012.

Competition

FOX SPORTS Australia competes primarily with ESPN, the FTA channels and certain telecommunications companies in Australia.

DIGITAL REAL ESTATE SERVICES

Our Digital Real Estate Services segment consists of our 61.6% interest in REA, a publicly-traded company on ASX (ASX: REA) that is a leading digital advertising business specializing in real estate services. Established in Melbourne in 1995, REA owns and operates Australia’s number one residential and commercial property websites, realestate.com.au and realcommerical.com.au, as well as the market-leading Italian property site, casa.it, and other property sites and apps across Europe and in Hong Kong. REA is used by approximately 21,000 agents, and REA’s flagship sites realestate.com.au and realcommercial.com.au have approximately 23.1 million visits each month combined based on Nielsen average monthly total traffic ratings for the six months ended March 31, 2013.

REA’s Australian operations include realestate.com.au, a residential real estate service, realcommercial.com.au, a commercial real estate service and REA Media. Realestate.com.au derives the majority of its revenue via residential monthly advertising subscriptions and advertising listing upgrades from real estate offices. Agents subscribing to the website may upload unlimited listings for sale or rent and purchase a selection of upgrade products to increase the prominence of their listings on the site. Additionally, realestate.com.au offers a variety of targeted products, including brand-building services for real estate agents. Realcommercial.com.au generates revenue through three main sources, agent subscription revenue, agent branding revenue and listing revenue. REA Media offers unique advertising opportunities on both realestate.com.au and realcommercial.com.au, as well as via mobile ad placements. Its revenue is generated primarily from commercial developers and banks / financial institutions which benefit from being able to target REA’s substantial audience base.

REA’s other operations include property sites in Italy, Luxembourg, France, Germany and Hong Kong. Casa.it, with approximately 7.1 million visits each month based on Nielsen average monthly total traffic ratings for the six months ended December 31, 2012, is Italy’s leading residential property site. Casa.it’s award winning social media strategy saw it named one of the 10 most popular brands in Italy. Squarefoot.com.hk is REA’s English and Chinese language property site in Hong Kong with approximately 269,000 visits on average per month. The atHome business operates the number one property site in Greater Luxembourg as well as sites in France and Germany.

REA continuously invests in new technology and capabilities that enable it to offer its customers innovative solutions, such as its new Diamond premium subscription package which allows real estate agents to connect and streamline their marketing across a broad range of digital channels including the Internet, mobile applications and social media. REA has leveraged these value-added products to generate increased revenue per customer.

Competition

REA competes primarily with other real estate websites in its geographic markets, including domain.com.au in Australia.

BOOK PUBLISHING

Our Book Publishing segment consists of HarperCollins Publishers (“HarperCollins”), one of the largest English-language consumer publishers in the world based on global revenue, with operations in the U.S., the U.K., Canada, Australia, New Zealand and India. HarperCollins publishes and distributes consumer books globally through print, digital and audio formats. Our digital formats include electronic books for devices such as the Apple iPad, Amazon’s Kindle, Google’s Nexus and Barnes & Noble’s NOOK as well as audio downloads for smartphones and MP3 players. HarperCollins owns over 60 branded imprints and a catalog which comprises approximately 100,000 SKUs, approximately 30,000 of which are available in e-book formats. HarperCollins publishes fiction and nonfiction, with a focus on general, children’s and religious content. In July 2012, HarperCollins completed its acquisition of Thomas Nelson, Inc. (“Thomas Nelson”), a leading publisher in the Christian publishing market. Additionally, in the U.K., HarperCollins publishes titles for the equivalent of the K-12 educational market.

HarperCollins is rapidly transitioning from print production to digital with leading e-book offerings. As of March 31, 2013, HarperCollins offered approximately 30,000 e-book titles, which accounted for approximately 21% of global revenues in the quarter (up from approximately 18% in the prior year period). Nearly all of our titles published in the last four years, as well as the majority of our entire catalog, are available in electronic reader and tablet formats. With the rapid adoption of electronic formats by consumers, HarperCollins is publishing many titles in digital formats before, or instead of, publishing a print edition. For example, through its popular romance imprint, Avon, HarperCollins launched a “digital-first” series which releases one new title per week in the romance category. The series has already generated three New York Times electronic bestsellers since its launch.

During fiscal 2012, HarperCollins U.S. had 144 titles on the New York Times bestseller list, with 17 titles hitting number one, including American Sniper by Chris Kyle with Scott McEwen and Jim DeFelice, The Pioneer Woman Cooks: Food from My Frontier by Ree Drummond, Act Like a Lady, Think Like a Man by Steve Harvey, The Capture of the Earl of Glencrae by Stephanie Laurens, Loving by Karen Kingsbury, Divergent by Veronica Roth, If You Give a Dog a Donut by Laura Numeroff, Pete the Cat and His Four Groovy Buttons by Eric Litwin, Insurgent by Veronica Roth, Pete the Cat: Rocking in My School Shoes by Eric Litwin, The Night Before Christmas by Clement C. Moore, The Power of Six by Pittacus Lore, Every Thing On It by Shel Silverstein, Pinkalicious and the Pink Pumpkin by Victoria Kann, Fancy Nancy and the Mermaid Ballet by Jane O’Connor, One Direction: Dare to Dream by One Direction and The Fame Game by Lauren Conrad

HarperCollins derives its revenue from the sale of print and digital books to a customer base that includes global technology companies, traditional brick and mortar booksellers, wholesale clubs and discount stores, including Amazon, Apple, Barnes & Noble and Tesco. As our digital products continue to account for more of our business, we expect to benefit from increased profit contribution and improved working capital dynamics due to diminishing physical plant requirements, inventory and returns related to our print business as well as faster payments for e-books.

Competition

The book publishing business operates in a highly competitive market that is quickly changing and continues to see technological innovations, including electronic book devices sold by Amazon, Apple, Google and Barnes & Noble. HarperCollins competes with other large publishers, such as Random House, Penguin Group, Simon & Schuster and Hachette Livre, as well as with numerous smaller publishers, for the rights to works by well-known authors and public personalities; competition could also come from new entrants, since barriers to entry in book publishing are low. In addition, HarperCollins competes for readership with other media formats and sources. We believe HarperCollins is well positioned in the evolving book publishing market with significant size and brand recognition across multiple categories and geographies and as an early adopter of the digital model, where it is an industry leader with approximately 30,000 e-book titles. Furthermore, HarperCollins is a leader in children’s and religious books, categories which have been less impacted by the transition to digital consumption.

OTHER

The Other segment includes Amplify, our digital education business, and general corporate overhead expenses.

Amplify

In July 2012, we launched Amplify, the brand for our education business. Amplify is dedicated to improving K-12 education by creating digital products and services that empower teachers, students and parents in new ways. Its products serve over 200,000 educators and 3 million students in all 50 states. Amplify is focused on transforming teaching and learning by creating and scaling digital innovations in three areas:

   

Amplify InsightAmplify’s successful data and analytics business, which formerly operated under the brand Wireless Generation, commenced operations in 2000 and was acquired by Parent in 2010. Amplify Insight provides powerful assessment products and services to support staff and technology development, including student assessment tools and analytic technologies, intervention programs, enterprise education information systems, and professional development and consulting services. Key products include mClassTM, a suite of products that enable teachers to easily and quickly monitor individual and class progression through standards and access detailed analysis, custom grouping and instructional planning tools.

   

Amplify Learning: Amplify’s nascent digital curriculum business is developing new content in English Language Arts, Science and Math, including software that will combine interactive, game-like experiences with rigorous analytics, all driven by adaptive technologies that respond to individual students’ needs as they evolve. Amplify Learning’s digital curriculum will incorporate the new Common Core State Standards that will be implemented in 45 states beginning with the 2014-2015 school year. Amplify launched pilots of its new digital English and Science curriculum for students in the middle grades during the 2013 fiscal year.

   

Amplify AccessAmplify’s distribution platform business, which is developing new distribution and delivery mechanisms, consists of an open tablet-based distribution platform that will offer curated third-party as well as proprietary curricular and extracurricular content, sophisticated analytic capabilities a

tablet, and 4G connectivity through a subscription-based bundle optimized for the K-12 market to facilitate personalized instruction and enable anywhere, anytime learning. Amplify launched pilots of its new distribution platform for the classroom during the 2013 fiscal year.

Amplify’s digital products are or will generally be available on a subscription basis. We also expect to market and sell some supplemental print-based materials, as well as instructional and information technology-related services. In addition, while each of Amplify’s products will be available on a stand-alone basis, we also anticipate that we will have the ability to cross-sell products between our three business areas and offer bundled solutions to our customers.

Competition

Amplify competes with existing K-12 education publishers and content providers such as Pearson plc and McGraw-Hill Education, large platform companies such as Google, Apple, and Amazon that market their tablet or e-reader products for educational use, as well as a number of smaller content, analytics and distribution platform companies. We believe that Amplify’s capabilities across analytics and assessment, content and curriculum and distribution and delivery make it well-positioned to offer schools a unique integrated learning solution.

EQUITY INVESTMENTS

Foxtel

We and Telstra, an ASX-listed telecommunications company, each own 50% of Foxtel, the largest pay-TV provider in Australia. Foxtel has approximately 2.3 million subscribing households throughout Australia, or over 30% of the country’s population, as of December 31, 2012 through cable, satellite and IPTV distribution.

Foxtel delivers more than 200 channels (including standard definition channels, high definition versions of some of those channels, and audio and interactive channels) covering news, sport, general entertainment, movies, documentaries, music and children’s programming. Foxtel’s premium content includes FOX SPORTS Australia’s suite of sports channels such as FOX SPORTS 1, FOX SPORTS 2 and FOX SPORTS 3 and TV shows from HBO, FOX and Universal, among others. Foxtel also owns and operates 26 channels, including general entertainment and movie channels and sources an extensive range of movie programming through arrangements with major U.S. studios. Foxtel’s channels are distributed to subscribers via both Telstra’s hybrid fibrecoaxial cable network and a long-term contracted satellite platform provided by Optus. Foxtel offers limited versions of its services via broadband to the Xbox platform, Telstra’s T-Box platform, select Samsung televisions, a number of Virgin Australia aircraft, and mobile devices and tablets (including iPads and iPhones via FOXTEL Go), as well as via the Internet to personal computers. Foxtel customers are also able to access their electronic programming guide via their tablet, mobile devices and personal computers to remotely record programming.

For the nine months ended March 31, 2013, under U.S. GAAP, Foxtel recorded revenues of $2.4 billion, net income before income taxes of $159 million, interest expense of $173 million and depreciation and amortization of $343 million, calculated before purchase accounting adjustments. Foxtel’s EBITDA, which is calculated by excluding interest expense and depreciation and amortization from net income before income taxes, was $675 million for the nine months ended March 31, 2013, under U.S. GAAP. Management believes that EBITDA is an appropriate measure for evaluating the operating performance of this business for the reasons set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Segment Analysis” with respect to Segment EBITDA.

In the nine months ended March 31, 2013, Foxtel’s average residential recurring subscription revenue per user, or ARPU, was $99 per month (as calculated by Foxtel), and its annualized residential subscriber churn rate based on data for the nine months ended March 31, 2013 was 14.4% (as calculated by Foxtel). In addition 

Foxtel had $2.1 billion of indebtedness outstanding as of March 31, 2013 (excluding $1.0 billion of shareholder loans due to Telstra and us, which includes accrued interest payable of $83 million), and paid distributions of $57 million to us during the nine months ended March 31, 2013. In November 2012, our stake in Foxtel increased from 25% to 50% as a result of the CMH acquisition. The amount included for Foxtel in our Equity earnings of affiliates was $30 million for the nine months ended March 31, 2013.

We and Telstra each have the right to appoint one-half of the board of directors of Foxtel. In addition, we have the right to appoint the Chief Executive Officer and Chief Financial Officer of Foxtel, while Telstra has the right to terminate these officers.

Competition

Foxtel competes primarily with the three major commercial FTA networks and two major government-funded broadcasters in Australia for subscribers, as well as other pay-TV operators and IPTV providers. Foxtel provides a 200-plus channel selection with premium and exclusive content and a wide array of digital and mobile features that are not available to viewers on the FTA networks. Through innovations such as digital HD channels, the extension of pay-TV programming to mobile devices and the use of DVR and Electronic Program Guide technology, we believe Foxtel offers subscribers a compelling alternative to FTA TV and Foxtel’s other competitors.

Governmental Regulation

General

Various aspects of New News Corporation’s activities are subject to regulation in numerous jurisdictions around the world. New News Corporation believes that it is in material compliance with the requirements imposed by those laws and regulations described herein. The introduction of new laws and regulations in countries where New News Corporation’s products and services are produced or distributed (and changes in the enforcement of existing laws and regulations in those countries) could have a negative impact on the interests of New News Corporation.

Australian Media Regulation

New News Corporation’s subscription television interests are subject to Australia’s regulatory framework for the broadcasting industry. The key regulatory body for the Australian broadcasting industry is the Australian Communications and Media Authority (“ACMA”).

Key regulatory issues for subscription television providers include: (a) anti-siphoning restrictions—currently under the ‘anti-siphoning’ provisions of the Australian Broadcasting Services Act 1992 (Cth), subscription television providers are prevented from acquiring rights to televise certain listed events (for example, the Olympic Games and certain Australian Rules football and cricket matches) unless national and commercial television broadcasters have not obtained these rights 12 weeks before the start of the event, the rights to televise are also held by commercial television licensees who have rights to televise the event to more than 50% of the Australian population or the rights to televise are also held by one of Australia’s two major government-funded broadcasters; (b) the Broadcasting Services Act—this legislation may impact our ownership structure and operations and restrict our ability to take advantage of acquisition or investment opportunities including, for example, preventing us from exercising control of a commercial television broadcasting license, a commercial radio license and a newspaper in the same license area; and (c) Convergence Review—on April 30, 2012, the Minister for Broadband, Communications and the Digital Economy released the Final Report of a comprehensive review of Australia’s communications and media regulation in light of increasing convergence in media platforms. The report covered a number of broad areas, including media ownership laws, media content standards, the ongoing production and distribution of Australian and local content and the allocation of radio communications spectrum. In March 2013, legislation was passed in response to the Convergence Review that 

among other things, reduced the license fees payable by FTA networks by 50%. Certain other proposed reforms that would have restricted our ability to make further acquisitions or to expand and grow our business were withdrawn and did not become law. No legislation has yet been introduced removing the prohibition on an FTA network’s signal reaching greater than 75% of the Australian population; however, the Australian Government has indicated such legislation may be introduced in the future. Any attempt to reintroduce the proposed laws that were not passed or any other change in regulation arising out of the Convergence Review could adversely impact our Australian businesses.

U.K. Press Regulation

On July 13, 2011, Prime Minister David Cameron announced a two-part inquiry into the U.K. press and appointed Lord Justice Leveson as Chairman of the Inquiry. The inquiry was triggered by allegations of illegal voicemail interception at our former publication, The News of the World. Hearings opened on November 14, 2011 with respect to the first part of the inquiry, and Lord Justice Leveson published his report on November 29, 2012.

The report made recommendations on the future of press regulation and governance in the U.K., which have been the subject of debate in the U.K. parliament, as well as discussion both among newspaper groups (including NI) and the industry and the government.

On March 18, 2013, the U.K. Government published a draft Royal Charter on Self-Regulation of the Press which, if granted, would establish a Recognition Panel that would be responsible for recognizing, overseeing and monitoring a new press regulatory body. The new press regulatory body, a majority of the members of which would be independent of the industry, would be responsible for overseeing the U.K. press and would replace the existing Press Complaints Commission. The U.K. Government has also proposed legislation which would ensure that the Royal Charter could only be altered by a two-thirds majority of parliament. In addition to the Royal Charter and establishment of a new regulatory body, rules have been proposed which, if adopted, would result in publishers who do not participate in this new U.K. press regulatory system being potentially liable for exemplary damages in certain cases where such damages are not currently awarded.

On April 24, 2013, an alternative proposed form of Royal Charter was published by a group representing a significant majority of the U.K. press, including NI. This contained many similar provisions but omitted or varied several others, including the requirement for any future alteration to be approved by a two-thirds majority of parliament. While a new regulatory regime is supported by the primary political parties in the U.K. and is likely to be introduced, at this time it remains unclear what precise form the new regime will take and when it will come into force.

The new U.K. press regulatory body is likely to, among other things, introduce and oversee a revised press code, require members to implement appropriate internal governance processes and require self-reporting of any failures, provide a complaints handling service, have the ability to require publications to print corrections, have the power to investigate serious or systemic breaches of the press code and be able to levy fines. It may also introduce an arbitration service to resolve claims against publications. Changes may also be made to U.K. data protection legislation. If adopted, the proposed new regulatory regime may impose burdens on the print media that represent competitive disadvantages versus other forms of media and may increase the costs of compliance. A date has yet to be set for the second part of the inquiry.

Internet

The Children’s Online Privacy Protection Act of 1998 (“COPPA”) prohibits websites from collecting personally identifiable information online from children under age 13 without prior parental consent. The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) regulates the distribution of unsolicited commercial emails, or “spam.” Online services provided by New News Corporation may be subject to COPPA and CAN-SPAM requirements.

Federal regulators’ interest in issues of privacy, cybersecurity and data security has been steadily increasing. On February 23, 2012, the Obama administration issued a white paper on consumer data privacy that includes a Consumer Privacy Bill of Rights. The Obama administration is convening a multi-stakeholder process to implement the Bill of Rights through industry codes of conduct that would be enforceable by the Federal Trade Commission (“FTC”) and State Attorneys General. The Obama administration also announced it would work with Congress to implement these rights through legislation. On March 26, 2012, the FTC released a report on consumer privacy, which sets forth a detailed privacy framework and urges industry to accelerate the pace of adoption of self-regulatory measures, including more widespread adoption of a Do-Not-Track browser mechanism. The report also recommends that Congress consider baseline privacy legislation incorporating the principles articulated in the framework. A number of privacy and data security bills have been introduced in both Houses of Congress that address the collection, maintenance and use of personal information, web browsing and geolocation data, data security and breach notification requirements, and cybersecurity. Several Congressional hearings have examined privacy implications for online, offline and mobile data. Some state legislatures have already adopted legislation that regulates how businesses operate on the Internet, including measures relating to privacy, data security and data breaches. The industry released a set of self-regulatory online behavioral advertising principles in 2009, which have been implemented by web publishers, online advertisers and online advertising networks. In November 2011, these principles were extended to the use of online consumer data for purposes other than advertising. It is unclear whether these and other industry self-regulatory efforts alone will address the concerns expressed by some federal and state officials about the collection of anonymous data online or via mobile applications to serve targeted content and advertising. It is not possible to predict whether proposed privacy and data security legislation will be enacted or to determine what effect such legislation might have on New News Corporation’s business.

Foreign governments are raising similar privacy and data security concerns. In particular, the EU has proposed a new privacy regulation (the “EU Regulation”) that would replace the current Data Protection Directive, would tighten regulation of the collection, use and security of online data and would continue to restrict the trans-border flow of data. European industry has implemented a self-regulatory regime for online behavioral advertising that is largely consistent with the U.S. self-regulatory framework. The proposed EU Regulation will not be effective for at least three or four years and may undergo many changes before it is adopted. It is unclear how the final EU Regulation would affect New News Corporation’s business.

New News Corporation monitors pending legislation and regulatory initiatives to ascertain relevance, analyze impact and develop strategic direction surrounding regulatory trends and developments.

Education

The availability of funding for K-12 education is affected by changes in legislation, both at the federal and state level, as well as changes in the state procurement process. Future changes in federal funding and the state and local tax base could create an unfavorable environment, leading to budget issues resulting in a decrease in educational funding.

Intellectual Property

New News Corporation’s intellectual property assets include: copyrights in newspapers, books, television programming and other content and technologies; trademarks in names and logos; domain names; and licenses of intellectual property rights. In addition, its intellectual property assets include patents or patent applications for inventions related to its products, business methods and/or services, none of which are material to its financial condition or results of operations. New News Corporation derives value and revenue from these assets through, among other things, print and digital newspaper and magazine subscriptions and sales, the sale, distribution and/or licensing of print and digital books, the sale of subscriptions to its content and information services, the operation of websites and other digital properties and the distribution and/or licensing of its television programming to cable and satellite television services.

New News Corporation devotes significant resources to protecting its intellectual property in the U.S., the U.K., Australia and other foreign territories. To protect these assets, New News Corporation relies upon a combination of copyright, trademark, unfair competition, patent, trade secret and other laws and contract provisions. However, there can be no assurance of the degree to which these measures will be successful in any given case. Policing unauthorized use of New News Corporation’s products, services and content and related intellectual property is often difficult and the steps taken may not in every case prevent the infringement by unauthorized third parties of New News Corporation’s intellectual property. New News Corporation seeks to limit that threat through a combination of approaches, including pursuing legal sanctions for infringement, promoting appropriate legislative initiatives and international treaties and enhancing public awareness of the meaning and value of intellectual property and intellectual property laws. Piracy, including in the digital environment, continues to present a threat to revenues from products and services based on intellectual property.

Third parties may challenge the validity or scope of New News Corporation’s intellectual property from time to time, and such challenges could result in the limitation or loss of intellectual property rights. Irrespective of their validity, such claims may result in substantial costs and diversion of resources that could have an adverse effect on New News Corporation’s operations. Moreover, effective intellectual property protection may be either unavailable or limited in certain foreign territories. Therefore, New News Corporation engages in efforts to strengthen and update intellectual property protection around the world, including efforts to ensure the effective enforcement of intellectual property laws and remedies for infringement.

Raw Materials

As a major publisher of newspapers, magazines, free-standing inserts and books, New News Corporation utilizes substantial quantities of various types of paper. In order to obtain the best available prices, substantially all of New News Corporation’s paper purchasing is done on a regional, volume purchase basis, and draws upon major paper manufacturing countries around the world. New News Corporation believes that under present market conditions, its sources of paper supply used in its publishing activities are adequate.

Employees

As of March 31, 2013, we had approximately 24,000 employees, of whom approximately 9,000 were located in the U.S., 4,000 were located in the U.K. and 9,000 were located in Australia. Of our employees, approximately 6,000 were represented by various employee unions. The contracts with such unions will expire during various times over the next several years. We believe our current relationships with employees are generally good.

Properties

New News Corporation owns and leases various real properties in the U.S., Europe, Australia and Asia that are utilized in the conduct of its businesses. Each of these properties is considered to be in good condition, adequate for its purpose and suitably utilized according to the individual nature and requirements of the relevant operations. New News Corporation’s policy is to improve and replace property as considered appropriate to meet the needs of the individual operation.

United States

New News Corporation’s principal real properties in the U.S. are the following:

  (a) The U.S. headquarters of New News Corporation, located at 1211 Avenue of the Americas, New York, New York and the offices of New News Corporation located at 1185 Avenue of the Americas, New York, New York, each of which will be subleased from Parent. These spaces include the executive and corporate offices of New News Corporation, the executive and editorial offices of Dow Jones, the editorial offices of the Post, the executive offices of NAMG and the corporate offices of Amplify.
(b) The leased offices of HarperCollins U.S. in New York, New York;
  (c) The leased office and warehouse facilities of HarperCollins U.S. in Scranton, Pennsylvania;
  (d) The owned office and warehouse facilities of Thomas Nelson in Nashville, Tennessee;
  (e) The printing plant of the Post located in Bronx, New York;
  (f) The leased offices of Wireless Generation in Brooklyn, New York; and
  (g) The office space campus owned by New News Corporation in South Brunswick, New Jersey.

Europe

New News Corporation’s principal real properties in Europe are the following:

  (a) The newspaper production and printing facilities for its U.K. newspapers, which consist of:
  1. The leased office space at each of Thomas More Square, London, England; Fleet House, Peterborough, England; Dublin, Ireland and Glasgow City Centre, Scotland; and
  2. The freehold interests in each of a publishing and printing facility in Broxbourne, England and printing facilities in Knowsley, England and North Lanarkshire, Scotland.
  (b) The leased headquarters and editorial offices of HarperCollins Publishers Limited in London, England;
  (c) The leased executive and editorial offices of Dow Jones in London, England; and
  (d) The leased warehouse and office facilities of HarperCollins Publishers Limited in Glasgow, Scotland.

Australia and Asia

New News Corporation’s principal real properties in Australia and Asia are the following:

 

  (a) The Australian newspaper production and printing facilities which consist of:
  1. New News Corporation-owned print center and office building in Sydney, Australia at which The Australian, the Daily Telegraph and The Sunday Telegraph are printed and published;
  2. New News Corporation-owned print center and the leased office facility in Melbourne, Australia at which Herald-Sun and the Sunday Herald-Sun are printed and published;
  3. New News Corporation-owned print center and office building in Adelaide, Australia utilized in the printing and publishing of The Advertiser and The Sunday Mail;
  4. New News Corporation-owned print center and office building in Brisbane, Australia at which The Courier Mail and Sunday Mail are printed and published;
  5. The two New News Corporation-owned buildings in Perth, Australia used to print and publish The Sunday Times; and
  (b) The leased office space of Dow Jones in Hong Kong.

Legal Proceedings

We routinely are involved in legal proceedings, claims and governmental inspections or investigations, or other legal matters, arising in the ordinary course of our business.

U.K. Newspaper Matters

On July 19, 2011, a purported class action lawsuit captioned Wilder v. News Corp., et al. was filed on behalf of all purchasers of Parent’s common stock between March 3, 2011 and July 11, 2011, in the U.S. District Court 

for the Southern District of New York. The plaintiff brought claims under Section 10(b) and Section 20(a) of the Securities Exchange Act, alleging that false and misleading statements were issued regarding alleged acts of voicemail interception at The News of the World. The suit named as defendants Parent, Rupert Murdoch, James Murdoch and Rebekah Brooks, and sought compensatory damages, rescission for damages sustained, and costs.

This litigation and certain other Parent stockholder lawsuits are all now before the same judge. On June 5, 2012, the court issued an order appointing the Avon Pension Fund (“Avon”) as lead plaintiff in the litigation and Robbins Geller Rudman & Dowd as lead counsel. Thereafter, on July 3, 2012, the court issued an order providing that an amended consolidated complaint was to be filed by July 31, 2012. Avon filed an amended consolidated complaint on July 31, 2012, which among other things, added as defendants our subsidiary, NI Group Limited, and Les Hinton, and expanded the class period to include February 15, 2011 to July 18, 2011. Defendants filed their motion to dismiss on September 25, 2012, and the parties have completed briefing on the motion. The motion is pending.

Parent and New News Corporation management believe these Parent stockholder claims are entirely without merit and intend to vigorously defend this action.

In addition, U.K. and U.S. regulators and governmental authorities continue to conduct investigations initiated in 2011 with respect to the U.K. Newspaper Matters. We, together with Parent, are cooperating with these investigations.

We have admitted liability in many civil cases related to the phone hacking allegations and have settled many cases. We also announced a private compensation scheme under which parties could pursue claims against us. While additional civil lawsuits may be filed, no additional civil claims may be brought under the compensation scheme after April 8, 2013.

We are not able to predict the ultimate outcome or cost of the civil claims or criminal matters. We incurred legal and professional fees related to the U.K. Newspaper Matters and costs for civil settlements totaling approximately $144 million and $151 million during the nine months ended March 31, 2013 and 2012, respectively. As of March 31, 2013, we have provided for our best estimate of the liability for the claims that have been filed and costs incurred and have accrued approximately $60 million. It is not possible to estimate the liability for any additional claims that may be filed given the information that is currently available to us. If more claims are filed and additional information becomes available, we will update the liability provision for such matters.

We and Parent will agree in the separation and distribution agreement that Parent will indemnify us for payments made after the distribution date arising out of civil claims and investigations relating to the U.K. Newspaper Matters as well as legal and professional fees and expenses paid in connection with the criminal matters, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with us. In addition, violations of law may result in criminal fines or penalties for which we will not be indemnified by Parent. Parent’s indemnification obligations with respect to these matters will be settled on an after-tax basis. It is possible that these proceedings and any adverse resolution thereof, including any fines or other penalties associated with any plea, judgment or similar result for which we will not be indemnified, could damage our reputation, impair our ability to conduct our business and adversely affect our results of operations and financial condition.

Harper Collins

Commencing on August 9, 2011, twenty-nine purported consumer class actions have been filed in the U.S. District Courts for the Southern District of New York and for the Northern District of California, which relate to the decisions by certain publishers, including HarperCollins Publishers L.L.C. (“HarperCollins”), to begin selling their eBooks pursuant to an agency relationship. The Judicial Panel on Multidistrict Litigation has transferred the various 

class actions to the Honorable Denise L. Cote in the Southern District of New York. On January 20, 2012, plaintiffs filed a consolidated amended complaint, again alleging that certain named defendants, including HarperCollins, violated the antitrust and unfair competition laws by virtue of the switch to the agency model for eBooks. The actions seek as relief treble damages, injunctive relief and attorney’s fees. On June 25, 2012, Judge Cote issued a scheduling order for the multi-district litigation going forward. Additional information about In re MDL Electronic Books Antitrust Litigation, Civil Action No. 11-md-02293 (DLC), can be found on Public Access to Court Electronic Records (PACER). As set forth below, the final judgment in the State Attorneys General matter bars consumers from states and territories covered by the settlement from participating in the class actions.

Following an investigation, on April 11, 2012, the Department of Justice (the “DOJ”) filed an action in the U.S. District Court for the Southern District of New York against certain publishers, including HarperCollins, and Apple, Inc. The DOJ’s complaint alleges antitrust violations relating to defendants’ decisions to begin selling eBooks pursuant to an agency relationship. This case was assigned to Judge Cote. Simultaneously, the DOJ announced that it had reached a proposed settlement with three publishers, including HarperCollins, and filed a Proposed Final Judgment and related materials detailing that agreement. Among other things, the Proposed Final Judgment requires that HarperCollins terminate its agreements with certain eBook retailers and places certain restrictions on any agreements subsequently entered into with such retailers. On September 5, 2012, Judge Cote entered the Final Judgment. Additional information about the Final Judgment can be found on the DOJ’s website.

Following an investigation, on April 11, 2012, 16 State Attorneys General led by Texas and Connecticut (the “AGs”) filed a similar action against certain publishers and Apple, Inc. in the Western District of Texas. On April 26, 2012, the AGs’ action was transferred to Judge Cote. On May 17, 2012, 33 AGs filed a second amended complaint. As a result of a memorandum of understanding agreed upon with the AGs for Texas and Connecticut, HarperCollins was not named as a defendant in this action. Pursuant to the terms of the memorandum of understanding, HarperCollins entered into a settlement agreement with the AGs for Texas, Connecticut and Ohio on June 11, 2012. By August 28, 2012, forty-nine states (all but Minnesota) and five U.S. territories had signed on to that settlement agreement. On August 29, 2012, the AGs simultaneously filed a complaint against HarperCollins and two other publishers, a motion for preliminary approval of that settlement agreement and a proposed distribution plan. On September 14, 2012, Judge Cote granted the AGs’ motion for preliminary approval of the settlement agreement and approved the AGs’ proposed distribution plan. Notice was subsequently sent to potential class members, and a fairness hearing took place on February 8, 2013 at which Judge Cote gave final approval to the settlement. The settlement is now effective, and the final judgment bars consumers from states and territories covered by the settlement from participating in the class actions.

On October 12, 2012, HarperCollins received a Civil Investigative Demand from the Attorney General from the State of Minnesota. HarperCollins complied with the Demand on November 16, 2012 and is cooperating with that investigation. While it is not possible to predict with any degree of certainty the ultimate outcome of the inquiry, HarperCollins believes it was compliant with applicable antitrust laws.

The European Commission conducted an investigation into whether certain companies in the book publishing and distribution industry, including HarperCollins, violated the antitrust laws by virtue of the switch to the agency model for eBooks. HarperCollins settled the matter with the European Commission on terms substantially similar to the settlement with the DOJ. On December 13, 2012, the European Commission formally adopted the settlement.

Commencing on February 24, 2012, five purported consumer class actions were filed in the Canadian provinces of British Columbia, Quebec and Ontario, which relate to the decisions by certain publishers, including HarperCollins, to begin selling their eBooks in Canada pursuant to an agency relationship. The actions seek as relief special, general and punitive damages, injunctive relief and the costs of the litigations. While it is not 

possible to predict with any degree of certainty the ultimate outcome of these class actions, especially given their early stages, HarperCollins believes it was compliant with applicable antitrust and competition laws and intends to defend itself vigorously.

In July 2012, HarperCollins Canada, a wholly-owned subsidiary of HarperCollins, learned that the Canadian Competition Bureau (“CCB”) had commenced an inquiry regarding the sale of eBooks in Canada. HarperCollins currently is cooperating with the CCB with respect to its inquiry. While it is not possible to predict with any degree of certainty the ultimate outcome of the inquiry, HarperCollins believes it was compliant with applicable antitrust and competition laws.

On February 15, 2013, a purported class of independent bricks-and-mortar bookstores filed an action in the U.S. District Court for the Southern District of New York entitled The Book House of Stuyvesant Plaza, Inc, et. al. v. Amazon.com, Inc., et. al, which relates to the digital rights management protection (“DRM”) of certain publishers’, including HarperCollins’, e-books being sold by Amazon.com Inc. Plaintiffs filed an Amended Complaint on March 21, 2013. The case involves allegations that certain named defendants in the book publishing and distribution industry, including HarperCollins, violated the antitrust laws by virtue of requiring DRM protection. The action seeks declaratory and injunctive relief, reasonable costs and attorneys’ fees. On April 1, 2013, Defendants moved to dismiss the Amended Complaint. The court heard oral argument on Defendants’ motion to dismiss on April 25, 2013. While it is not possible to predict with any degree of certainty the ultimate outcome of this class action, HarperCollins believes it was compliant with applicable antitrust laws and intends to defend itself vigorously.

We are not able to predict the ultimate outcome or cost of the HarperCollins matters described above. During the nine months ended March 31, 2013 and 2012, the legal and professional fees and settlements incurred in connection with these matters were not material, and as of March 31, 2013, we did not have a material accrual related to these matters.

Other

Our operations are subject to tax in various domestic and international jurisdictions and as a matter of course, we are regularly audited by federal, state and foreign tax authorities. We believe we have appropriately accrued for the expected outcome of all pending tax matters and do not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on our consolidated financial condition, future results of operations or liquidity.

Geographical Information

Our primary operations are located in North America, Australia and the U.K. For the fiscal years ended 2012, 2011, and 2010, we generated revenue of approximately $3.7 billion, $3.8 billion and $3.8 billion in North America, $2.8 billion, $2.9 billion and $2.5 billion in Australia and $1.7 billion, $2.0 billion and $2.0 billion in the U.K., respectively. For additional information about our geographical operations, see “Note 13 to the Combined Financial Statements of New News Corporation"

SELECTED HISTORICAL COMBINED FINANCIAL DATA

The following table presents New News Corporation’s selected historical combined financial data as of March 31, 2013 and for the nine months ended March 31, 2013 and 2012, and as of and for each of the fiscal years in the five-year period ended June 30, 2012. The selected historical combined financial data as of March 31, 2013 and for the nine months ended March 31, 2013 and 2012 was derived from New News Corporation’s unaudited combined financial statements included elsewhere in this information statement. The selected historical combined financial data as of June 30, 2012 and 2011 and for each of the fiscal years in the three-year period ended June 30, 2012 was derived from New News Corporation’s audited combined financial statements included elsewhere in this information statement. The selected historical combined financial data as of June 30, 2010 and as of and for the fiscal years ended June 30, 2009 and 2008 was derived from New News Corporation’s unaudited combined financial statements that are not included in this information statement. In management’s opinion, the unaudited combined financial statements have been prepared on the same basis as the audited combined financial statements and include all adjustments, consisting only of ordinary recurring adjustments, necessary for a fair presentation of the information for the periods presented.

New News Corporation’s historical combined financial statements include certain expenses of Parent that were allocated to New News Corporation for certain functions, including general corporate expenses related to finance, legal, insurance, compliance, information technology and human resources activities. These costs may not be representative of the future costs New News Corporation will incur as an independent public company. In addition, New News Corporation’s historical financial information does not reflect changes that New News Corporation will experience in the future as a result of the distribution of New News Corporation by Parent, including changes in cost structure, personnel needs, tax structure, financing and business operations. Consequently, the financial information included here may not necessarily reflect New News Corporation’s financial position and results of operations in the future or what New News Corporation’s financial position and results of operations would have been had New News Corporation been an independent, publicly traded company during the periods presented.

For the nine months
ended March 31,
     For the years ended June 30,  
     2013 (a)      2012 (a)      2012 (b)     2011 (b)      2010 (b)      2009 (c)     2008 (d)  
                   (in millions)  

STATEMENT OF OPERATIONS DATA:

                                                            

Revenues

   $ 6,634       $ 6,520       $ 8,654     $ 9,095      $ 8,752      $ 8,338     $ 8,950  

Net income (loss) attributable to New News Corporation

     1,630         143         (2,075     678        243        (2,365     876  
                                                 
     As of
March 31,
2013
     As of June 30,  
        2012      2011      2010      2009      2008  
            (in millions)  

BALANCE SHEET DATA:

                                                     

Cash and cash equivalents

   $ 1,539       $ 1,133      $ 2,022      $ 1,080      $ 844      $ 573  

Total assets

     16,954         13,090        17,008        14,326        14,776        18,962  
(a) 

See Notes 2 and 3 to the Unaudited Combined Financial Statements of New News Corporation for information with respect to significant acquisitions, restructuring charges and other transactions during the nine months ended March 31, 2013 and 2012. Fiscal 2013 results include a non-cash, non-taxable gain of approximately $1.3 billion relating to the revaluation of existing holdings in FOX SPORTS Australia.

(b) 

See Notes 3, 4, 5, 7 and 10 to the Combined Financial Statements of New News Corporation for information with respect to significant acquisitions, disposals, impairment charges, restructuring charges, legal settlements and other transactions during fiscal 2012, 2011 and 2010.

(c) 

Fiscal 2009 results included non-cash impairment charges of approximately $3.1 billion ($2.8 billion, net of tax) consisting of a write-down of $2.4 billion of goodwill, a write-down of intangible assets of $0.5 billion and a write-down of fixed assets of $0.2 billion. In fiscal 2009, New News Corporation recorded

79

 

 

restructuring charges of approximately $111 million consisting of $78 million recorded at the newspaper businesses and $33 million recorded at the book publishing business.

(d) 

Fiscal 2008 results included New News Corporation’s acquisition of Dow Jones for consideration of approximately $5.7 billion. The consideration consisted of approximately $5.2 billion in cash, assumed net debt of $330 million and $200 million in equity instruments of Parent. In June 2008, New News Corporation sold a parcel of land it owned in the U.K., for total consideration of $163 million. The consideration at closing was comprised of $91 million in cash and a $72 million note, secured by the land, payable in three equal annual installments. New News Corporation recorded a pre-tax gain of $126 million on the transaction

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis presented below refer to and should be read in conjunction with the audited combined financial statements and related notes, the unaudited interim combined financial statements and related notes and the unaudited pro forma combined financial statements, each included elsewhere in this information statement. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were made. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this information statement, particularly in “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements.” We believe the assumptions underlying the combined financial statements are reasonable. However, the combined financial statements included herein may not necessarily reflect our results of operations, financial position and cash flows in the future or what they would have been had we been a separate, stand-alone company during the periods presented.

INTRODUCTION

The Proposed Distribution

On June 28, 2012, Parent announced its intent to pursue the separation of its business into two separate independent public companies, one of which will hold Parent’s global media and entertainment businesses and another which will hold the businesses comprising Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. On December 4, 2012, the board of directors of Parent authorized management to proceed with the proposed distribution, subject to the satisfaction or waiver of certain conditions and the board of directors’ ongoing consideration of the transaction and its final approval. On May 22, 2013, the board of directors of Parent approved the distribution and declared the dividend of our common stock to holders of record on June 21, 2013, to be paid on June 28, 2013, subject to the satisfaction or waiver of certain conditions and the board’s approval not being withdrawn prior to the distribution date. See “The Distribution—Conditions to the Distribution” for further discussion.

To effect the distribution, Parent will first undertake an internal reorganization. Following the internal reorganization, Parent will distribute all of the shares of New News Corporation common stock to its stockholders on a pro rata basis. After the distribution, Parent will not own any equity interest in New News Corporation, and New News Corporation will operate independently from Parent. Parent’s stockholders will not be required to vote to effectuate the distribution. However, in order to effectuate the distribution in the manner discussed in this information statement, Parent will be required to amend its Restated Certificate of Incorporation, and Parent will hold a Special Meeting in connection therewith.

The internal reorganization and, in turn, the distribution, are subject to the satisfaction, or waiver by Parent, of a number of conditions. Additionally, Parent may determine not to complete the internal reorganization or the distribution if, at any time, the board of directors of Parent determines, in its sole and absolute discretion, that the distribution is not in the best interest of Parent or its stockholders or is otherwise not advisable.

Costs related to the distribution of approximately $46 million have been incurred by Parent for the nine months ended March 31, 2013. These costs include accounting, legal, consulting and advisory fees. Parent has assumed all of these distribution costs incurred to date and Parent anticipates that it will be responsible for all similar costs incurred prior to the distribution.

Subsequent to the distribution, New News Corporation expects to incur expenditures consisting primarily of employee-related costs, costs to start up certain stand-alone functions, information technology systems and other 

transaction-related costs. Additionally, New News Corporation will incur costs as a result of becoming an independent, publicly-traded company, for transition services and from establishing or expanding the corporate support for its business, including information technology, human resources, treasury, tax, risk management, accounting and financial reporting, investor relations, governance, legal, procurement and other services. New News Corporation believes its cash flows from operations, together with its access to capital markets, will be sufficient to fund these corporate expenses.

We expect to experience changes in our ongoing cost structure when we become an independent, publicly-traded company. For example, Parent currently provides many corporate functions on our behalf, including, but not limited to, finance, legal, insurance, information technology, compliance and human resource activities. Our historical combined financial statements include allocations of these expenses from Parent of $69 million and $102 million for the nine months ended March 31, 2013 and year ended June 30, 2012, respectively. We believe these costs may not be representative of the future costs we will incur as an independent public company. We estimate that these costs could range between $140 million and $160 million on an annual basis.

Also included in the Other segment is our Strategy and Creative group as discussed in “Information Statement Summary” where we plan to invest in fiscal 2014 to identify new products and services across our businesses.

As of the distribution date, Parent’s net investment in our company will be distributed to Parent’s stockholders through the distribution of all of the outstanding common stock of New News Corporation. The number of outstanding shares of our common stock to be distributed by Parent will be based on the corresponding number of shares of Parent common stock outstanding at the record date adjusted for the distribution ratio of one share of New News Corporation Class A Common Stock for every four shares of Parent’s Class A Common Stock and one share of New News Corporation Class B Common Stock for every four shares of Parent’s Class B Common Stock.

Holders of our Class B Common Stock are entitled to one vote per share on all matters on which stockholders have the right to vote. Holders of our Class A Common Stock are entitled to vote together with the holders of our Class B Common Stock under a limited set of circumstances. Other than in those limited circumstances holders of our Class A Common Stock have no right to vote.

Following the distribution, as a result of their ownership of Parent Class B Common Stock immediately prior to the distribution, the Murdoch Family Trust, the K.R. Murdoch 2004 Revocable Trust, Mr. K. Rupert Murdoch, and certain members of Mr. K. Rupert Murdoch’s family, either directly or through a trust, will hold, in the aggregate, shares of our Class B Common Stock representing approximately 39.4% of the outstanding shares of our Class B Common Stock, see “Description of Our Capital Stock”.

Basis of presentation

These combined financial statements were prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of Parent. These statements reflect the combined historical results of operations, financial position and cash flows of Parent’s publishing businesses, its education division and other Australian assets in accordance with U.S. generally accepted accounting principles (“GAAP”). For ease of reference, these combined financial statements are collectively referred to as those of New News Corporation.

These financial statements are presented as if such businesses had been combined for all periods presented. All intercompany transactions and accounts within New News Corporation have been eliminated. The assets and liabilities in the combined financial statements have been reflected on a historical cost basis, as immediately prior to the separation all of the assets and liabilities presented are wholly-owned by Parent and are being transferred to the New News Corporation combined group at carry-over basis. The combined statements of operations include allocations for certain support functions that are provided on a centralized basis within Parent and not recorded at the business unit level, such as expenses related to finance, human resources, information technology, facilities, and legal, among others. Parent does not routinely allocate these costs to any of its business units.

These expenses have been allocated to New News Corporation on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of combined revenues, operating income, headcount or other measures of New News Corporation. Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses from Parent are reasonable. Nevertheless, the combined financial statements may not include all of the actual expenses that would have been incurred by New News Corporation and may not reflect New News Corporation’s combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented. Actual costs that would have been incurred if New News Corporation had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

The income tax benefit (expense) in the combined statements of operations has been calculated as if New News Corporation filed a separate tax return and was operating as a stand-alone business. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of New News Corporation’s actual tax balances prior to or subsequent to the distribution.

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of New News Corporation’s financial condition, changes in financial condition and results of operations for the fiscal periods presented. This discussion is organized as follows:

   

Overview of New News Corporation’s Business—This section provides a general description of New News Corporation’s businesses, as well as developments that occurred during fiscal 2012 or fiscal 2013 that New News Corporation believes are important in understanding its results of operations and financial condition or to disclose known trends.

   

Results of Operations—This section provides an analysis of New News Corporation’s results of operations for the nine months ended March 31, 2013 and 2012 and for the three fiscal years ended June 30, 2012, respectively. This analysis is presented on both a combined and a segment basis. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.

   

Liquidity and Capital Resources—This section provides an analysis of New News Corporation’s cash flows for the nine months ended March 31, 2013 and 2012 and for the three fiscal years ended June 30, 2012, respectively, as well as a discussion of New News Corporation’s financial arrangements and outstanding commitments, both firm and contingent, that existed as of June 30, 2012.

   

Critical Accounting Policies—This section discusses accounting policies considered important to New News Corporation’s financial condition and results of operations, and which require significant judgment and estimates on the part of management in application. In addition, Note 2 to the accompanying Combined Financial Statements of New News Corporation summarizes New News Corporation’s significant accounting policies, including the critical accounting policy discussion found in this section.

OVERVIEW OF NEW NEWS CORPORATION’S BUSINESSES

New News Corporation manages and reports its businesses in the following five segments:

   

News and Information Services—The News and Information Services segment includes the global product offerings of The Wall Street Journal and Barron’s publications, The Wall Street Journal Digital Network (“WSJDN”) and New News Corporation’s suite of information services, including Dow Jones Newswires and Factiva. In addition to WSJ.com and Barrons.com, WSJDN includes MarketWatch, AllThingsD and related services. New News Corporation also owns, among other publications, The AustralianHerald SunThe Daily Telegraph and The Courier Mail in Australia, The TimesThe Sunday Times and The Sun in the U.K. and the New York Post in the U.S. This segment also includes the integrated marketing services business, News America Marketing Group (“NAMG”), a leading provider of free-standing coupon inserts, in-store marketing products and digital-savings marketing solutions. NAMG’s customers include many of the largest consumer packaged goods advertisers in the U.S. and Canada.

Cable Network Programming—The Cable Network Programming segment consists of FOX SPORTS Australia, the leading sports programming provider in Australia with seven standard definition television channels, high definition versions of five of these channels, an interactive viewing application and one IPTV channel and rights to live sporting events in Australia including: National Rugby League, the domestic football league, English Premier League, Australian and international cricket as well as the NFL. Prior to the November 2012 acquisition of the portion of FOX SPORTS Australia that it did not own, New News Corporation accounted for its investment in FOX SPORTS Australia under the equity method of accounting. New News Corporation now owns 100% of FOX SPORTS Australia and its results are included within this new segment.

   

Digital Real Estate Services—New News Corporation owns 61.6% of REA Group Limited (“REA”), a publicly traded company listed on ASX (ASX: REA) that is a leading digital advertising business specializing in real estate services. REA operates Australia’s largest residential property website, realestate.com.au, as well as Australia’s leading commercial property website, realcommercial.com.au. REA also operates a market-leading Italian property site, casa.it, and other property sites and apps across Europe and Hong Kong.

   

Book Publishing—The HarperCollins book publishing segment is one of the largest English-language consumer publishers in the world, with particular strengths in general fiction, nonfiction, children’s and religious publishing, and an industry leader in digital publishing. HarperCollins includes over 60 branded publishing imprints including Avon, Harper, HarperCollins Children’s Publishers, William Morrow and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as J.R.R. Tolkien, Paulo Coelho, Rick Warren and Agatha Christie and popular titles such as The HobbitGoodnight Moon and To Kill a Mockingbird.

   

Other—The Other segment primarily consists of Amplify, New News Corporation’s digital education business focused on the K-12 learning market, and general corporate overhead expenses. Amplify focuses on three areas of business: data and analytics; digital content and curriculum; and mobile distribution systems designed for education. Amplify Insight, Amplify’s data and analytics division, which formerly operated under the brand Wireless Generation, Inc. (“Wireless Generation”), commenced operations in 2000 and was acquired by Parent in fiscal 2011. Amplify Insight provides premium data and analytics services to enable real-time personalization of educational content. Through its Amplify Learning division, Amplify is creating innovative digital curricula for K-12 education designed to enhance teaching and learning in English Language Arts, Science and Math. Through its Amplify Access division, Amplify is developing an open, tablet-based education platform that integrates its existing assessment and analytics tools and services with its digital curricula as well as third-party content and interactive applications.

News and Information Services

Revenue at the News and Information Services segment is derived from the sale of advertising space, circulation and subscriptions, as well as licensing. Adverse changes in general market conditions for advertising may affect revenues. Circulation and subscription revenues can be greatly affected by changes in the prices of New News Corporation’s and/or competitors’ products, as well as by promotional activities.

Operating expenses include costs related to paper, production, distribution, editorial and commissions. Selling, general and administrative expenses include promotional expenses, salaries, employee benefits, rent and other routine overhead.

The News and Information Services segment’s advertising volume, circulation and the price of paper are the key variables whose fluctuations can have a material effect on New News Corporation’s operating results and cash flow. New News Corporation has to anticipate the level of advertising volume, circulation and paper prices in managing its businesses to maximize operating profit during expanding and contracting economic cycles. New News Corporation continues to be exposed to risks associated with paper used for printing. Paper is a basis 

commodity and its price is sensitive to the balance of supply and demand. New News Corporation’s expenses are affected by the cyclical increases and decreases in the price of paper. The News and Information Services segment’s products compete for readership and advertising with local and national competitors and also compete with other media alternatives in their respective markets. Competition for circulation and subscriptions is based on the content of the products provided, pricing and, from time to time, various promotions. The success of these products depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising is based upon the reach of the products, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, distribution and quality of readership demographics.

Like other newspaper groups, New News Corporation faces challenges to its traditional print business model from new media formats and shifting consumer preferences. New News Corporation is also exposed to the impact of long-term structural movements in advertising spending, in particular, the move in classified advertising from print to digital. These new media formats could impact New News Corporation’s overall performance, positively or negatively.

As a multi-platform news provider, New News Corporation recognizes the importance of maximizing revenues from new media, both in terms of paid-for content and in new advertising models, and continues to invest in its digital products. The development of technologies such as smartphones, tablets and similar devices and their related applications provides continued opportunities for New News Corporation to make its journalism available to a new audience of readers, introduce new or different pricing schemes, develop its products to continue to attract advertisers and/or affect the relationship between publisher and consumer. New News Corporation continues to develop and implement strategies to exploit its content in new media channels, including the introduction of digital subscriptions.

Cable Network Programming

The Cable Network Programming segment consists of FOX SPORTS Australia which offers the following channels: FOX SPORTS 1, FOX SPORTS 2, FOX SPORTS 3, FOX FOOTY, FOX SPORTS NEWS, FUEL TV and SPEED. Revenue is derived from monthly affiliate fees received from cable television systems, direct broadcast satellite operators and other distribution systems based on the number of subscribers.

FOX SPORTS Australia competes primarily with ESPN, the FTA channels and certain telecommunications companies in Australia.

The most significant operating expenses of the Cable Network Programming segment are the acquisition and production expenses related to programming and the expenses related to operating the technical facilities of the broadcaster or cable network. Other expenses include promotional expenses related to improving the market visibility and awareness of the broadcaster or cable network and its programming. Additional expenses include sales commissions, as well as salaries, employee benefits, rent and other routine overhead expenses.

Digital Real Estate Services

The Digital Real Estate Services segment sells listing and subscription services on its residential real estate and commercial property advertising sites. Significant expenses associated with these sites include development costs, advertising and promotional expenses, salaries, employee benefits and other routine overhead.

Consumers are increasingly turning to the Internet and mobile devices for real estate information. The Digital Real Estate Services segment’s success depends on its continued innovation to provide products and services that make its websites and mobile applications useful for consumers and real estate and mortgage professionals and attractive to its advertisers.

Book Publishing

The Book Publishing segment derives revenues from the sale of general fiction, nonfiction, children’s and religious books in the U.S. and internationally. The revenues and operating results of the Book Publishing segment are significantly affected by the timing of releases and the number of its books in the marketplace. The book publishing marketplace is subject to increased periods of demand in the summer months and during the end-of-year holiday season. This marketplace continues to change due to technical innovations, electronic book devices and other factors. Each book is a separate and distinct product, and its financial success depends upon many factors, including public acceptance.

Major new title releases represent a significant portion of the Book Publishing segment’s sales throughout the fiscal year. Print-based consumer books are generally sold on a fully returnable basis, resulting in the return of unsold books. In the domestic and international markets, the Book Publishing segment is subject to global trends and local economic conditions.

Operating expenses for the Book Publishing segment include costs related to paper, printing, authors’ royalties, editorial, art and design expenses. Selling, general and administrative expenses include promotional expenses, salaries, employee benefits, rent and other routine overhead.

The book publishing business has been affected in recent years by new electronic distribution methods and models and New News Corporation expects that electronic books will represent an increasing portion of book publishing revenues in coming years.

Other

The Other segment consists primarily of Amplify, New News Corporation’s digital education business and general corporate overhead expenses. Amplify focuses on three areas of business: data and analytics; digital content and curriculum; and mobile distribution systems designed for education. Significant expenses associated with New News Corporation’s digital education business include salaries, employee benefits and other routine overhead.

Other Business Developments

In July 2011, Parent announced that it would close its publication, The News of the World, after allegations of phone hacking and payments to public officials. As a result of Parent’s approval of the shutdown of The News of the World, Parent reorganized portions of the U.K. newspaper business and recorded restructuring charges in fiscal 2013 and 2012 primarily for termination benefits and certain organizational restructuring at the U.K. newspapers. (See Note 4 to the Combined Financial Statements of New News Corporation). Parent and New News Corporation are subject to several ongoing investigations by U.K. and U.S. regulators and governmental authorities relating to phone hacking, illegal data access and inappropriate payments to public officials at The News of the World and The Sun and related matters (the “U.K. Newspaper Matters”). New News Corporation, together with Parent, is cooperating with these investigations. In addition, New News Corporation has admitted liability in many civil cases related to the phone hacking allegations and has settled many cases. Parent created an independently-chaired Management & Standards Committee (the “MSC”) to ensure cooperation with all relevant investigations and inquiries into the U.K. Newspaper Matters and all other related issues. The MSC conducts its own internal investigation where appropriate. The MSC has an independent Chairman, Lord Grabiner QC, and reports directly to Gerson Zweifach, Senior Executive Vice President and Group General Counsel of Parent. Mr. Zweifach reports to the independent members of the Board of Directors of Parent (the “Parent Board”) through their representative Viet Dinh, an independent director and Chairman of Parent’s Nominating and Corporate Governance Committee. The independent directors of the Parent Board have retained independent outside counsel and are actively engaged in these matters. The MSC conducted an internal investigation of the three other titles at NI Group Limited (“News International”) and engaged independent 

outside counsel to advise it on these investigations and all other matters it handles. As a result of these matters, News International has instituted governance reforms and issued certain enhanced policies to its employees. (See Note 10 to the Combined Financial Statements of New News Corporation.)

In July 2011, New News Corporation acquired Kidspot.com.au Pty Limited, a pregnancy and parenting website, for approximately $50 million in cash.

In May 2012, New News Corporation sold its former U.K. newspaper division headquarters located in East London, which it relocated from in August 2010, for consideration of approximately £150 million (approximately $235 million), of which £25 million (approximately $39 million) was received on closing of the sale. The remaining £125 million (approximately $196 million) is in the form of a secured note and New News Corporation will receive £25 million (approximately $39 million) on May 31, 2013, and annually thereafter until May 31, 2017.

In May 2012, Foxtel, in which New News Corporation at the time owned a 25% interest, purchased Austar United Communications Ltd (“Austar”) to create a national subscription television service in Australia. The transaction was funded by Foxtel bank debt and Foxtel’s shareholders made pro rata capital contributions in the form of subordinated shareholder notes based on their respective ownership interest. New News Corporation’s share of the funding contribution was approximately $230 million. The subordinated shareholder note has a maximum term of 15 years, with interest payable on June 30th each year and at maturity. The subordinated shareholder note can be repaid in 10 years provided that Foxtel’s senior debt has been repaid. Upon maturity, the principal advanced will be repayable.

In July 2012, New News Corporation acquired Thomas Nelson, Inc. (“Thomas Nelson”), one of the leading Christian book publishers in the U.S., for approximately $200 million in cash.

In July 2012, New News Corporation acquired Australian Independent Business Media Pty Limited (“AIBM”) for approximately $30 million in cash. AIBM publishes a subscription-based online newsletter for investors and a business news and commentary website.

In November 2012, New News Corporation acquired Consolidated Media Holdings Ltd. (“CMH”), a media investment company that operates in Australia, for approximately $2 billion in cash and assumed debt of approximately $235 million. This acquisition supports New News Corporation’s strategic priority of acquiring greater control of investments that complement its portfolio of businesses. CMH owned a 25% interest in Foxtel through its 50% interest in FOX SPORTS Australia. FOX SPORTS Australia is the leading sports programming provider in Australia with seven standard definition television channels, high definition versions of five of these channels, an interactive viewing application and one IPTV channel. FOX SPORTS Australia holds the programming rights to broadcast live Australian sporting events within Australia including: National Rugby League, the domestic football league, English Premier League, Australian and international cricket as well as the NFL. Foxtel is the largest pay-TV provider in Australia, serving approximately 2.3 million subscribing households in Australia, or over 30% of the country’s population. Foxtel’s 200-plus channel selection (which includes standard definition channels, high definition versions of some of those channels, and audio and interactive channels) provides premium and exclusive content and a wide array of digital and mobile features. The remaining 50% of Foxtel is owned by Telstra Corporation Limited, one of Australia’s leading telecommunications companies. The acquisition doubled New News Corporation’s stakes in FOX SPORTS Australia and Foxtel to 100% and 50%, respectively. Accordingly, the results of FOX SPORTS Australia are included within a new Cable Network Programming segment in New News Corporation’s combined results of operations beginning in November 2012. Prior to November 2012, New News Corporation accounted for its investment in FOX SPORTS Australia under the equity method of accounting. New News Corporation’s investment in Foxtel continues to be accounted for under the equity method of accounting.

In March 2013, New News Corporation sold its 44% equity interest in SKY Network Television Ltd. for approximately $675 million.

 

RESULTS OF OPERATIONS

Results of Operations—For the nine months ended March 31, 2013 versus the nine months ended March 31, 2012

The following table sets forth New News Corporation’s operating results for the nine months ended March 31, 2013 as compared to the nine months ended March 31, 2012.

For the nine months ended March 31,  
     2013     2012     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 3,221     $ 3,549     $ (328     (9 )% 

Circulation and Subscription

     1,965       1,778       187       11 

Consumer

     969       849       120       14 

Other

     479       344       135       39 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     6,634       6,520       114      

Operating expenses

     (4,040     (3,849     (191    

Selling, general and administrative

     (2,036     (2,069     33       (2 )% 

Depreciation and amortization

     (398     (358     (40     11 

Impairment and restructuring charges

     (231     (120     (111     93 

Equity earnings of affiliates

     81       87       (6     (7 )% 

Interest, net

     54       39       15       38 

Other, net

     1,569       (2     1,571       *
    

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax benefit (expense)

     1,633       248       1,385       *

Income tax benefit (expense)

     27       (81     108       *
    

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     1,660       167       1,493       *

Less: Net income attributable to noncontrolling interests

     (30     (24     (6     25 
    

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to New News Corporation

   $ 1,630     $ 143     $ 1,487       *
    

 

 

   

 

 

   

 

 

   

 

 

 

 

** not meaningful

evenues—Revenues increased 2% for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, primarily due to the inclusion of revenues resulting from the acquisition of Thomas Nelson and the consolidation of FOX SPORTS Australia (the “Acquisitions”), of approximately $137 million and $178 million, respectively, and higher U.K. newspapers revenues of approximately $80 million principally due to the inclusion of revenues from the launch of the Sunday edition of The Sun in February 2012. Also contributing to the revenue increases were higher advertising revenues at the Digital Real Estate Services segment of $43 million. These revenue increases were partially offset by lower revenues at the Australian newspapers of $265 million primarily reflecting lower newspaper advertising revenues principally due to the continued challenging economic environment in Australia and lower revenues at Dow Jones of $69 million reflecting lower advertising revenues.

Operating Expenses—Operating expenses increased 5% for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, primarily due to the Acquisitions.

Selling, general and administrative expenses—Selling, general and administrative expenses decreased 2% for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, primarily due to lower expenses of $108 million at the News and Information Services segment principally resulting from the positive impact of cost saving initiatives. This decrease was partially offset by a $44 million increase at the Other segment, the inclusion of approximately $28 million in expenses resulting from the Acquisitions and higher expenses of $14 million at the Digital Real Estate Services segment directly related to the revenue growth 

supporting innovation, development and the sale of real estate advertising products. The increase at the Other Segment was primarily due to an approximate $62 million increase at Amplify, partially offset by an approximate $7 million decrease in legal and professional fees related to the U.K. Newspaper Matters.

Depreciation and amortization—Depreciation and amortization increased 11% for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, primarily due to the inclusion of expenses resulting from the Acquisitions of approximately $22 million, higher depreciation expense at the News and Information Services segment of approximately $11 million and higher depreciation expense at the Other segment of $4 million.

Impairment and restructuring charges— During the nine months ended March 31, 2013, New News Corporation recorded restructuring charges of $231 million, of which $227 million related to the newspaper businesses. The restructuring charges primarily related to the reorganization of the Australian newspaper businesses which was announced at the end of fiscal 2012 and the continued reorganization of the U.K. newspaper businesses. The restructuring charges recorded are primarily for termination benefits in Australia and contract termination payments in the U.K.

During the nine months ended March 31, 2012, New News Corporation recorded restructuring charges of $110 million, of which $107 million related to the newspaper businesses. New News Corporation reorganized portions of the newspaper businesses and recorded restructuring charges primarily for termination benefits as a result of the U.K. Newspaper Matters, certain organizational restructuring at other newspapers and the shutdown of a regional newspaper. As a result of the shutdown of the regional newspaper, New News Corporation wrote-off associated intangible assets of approximately $10 million in the nine months ended March 31, 2012.

Equity earnings of affiliates—Equity earnings of affiliates decreased $6 million for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, primarily due to the consolidation of FOX SPORTS Australia

For the nine months ended March 31,  
       2013         2012         Change         % Change    
     (in millions, except %)  

Direct Broadcast Satellite and Cable Channel equity affiliates

   $ 82     $ 94     $ (12     (13 )% 

Other equity affiliates

     (1     (7     6       (86 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Equity earnings of affiliates

   $ 81     $ 87     $ (6     (7 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Other, net

                 
     For the nine months ended
March 31,
 
     2013     2012  
     (in millions)  

Gain on CMH transaction(a)

     1,258       —    

Gain on sale of investment in SKY Network Television Ltd.(b)

     321       —    

Other, net

     (10     (2
    

 

 

   

 

 

 

Total Other, net

   $ 1,569     $ (2
    

 

 

   

 

 

 
(a) 

See Note 2 to the Unaudited Combined Financial Statements of New News Corporation.

(b) 

See Note 4 to the Unaudited Combined Financial Statements of New News Corporation.

Income tax benefit (expense)—New News Corporation’s effective income tax rate for the nine months ended March 31, 2013 was lower than the statutory rate of 35%, primarily due to a 30% rate reduction due to 

the non-taxable gain and reversal of the historic deferred tax liability related to the consolidation of FOX SPORTS Australia, a 7% rate reduction due to the non-taxable gain on the sale of SKY Network Television Ltd. and a 1% rate reduction due to our foreign operations which are subject to lower tax rates, partially offset by a 1% rate increase due to permanent differences.

The effective income tax rate for the nine months ended March 31, 2012 was lower than the statutory rate of 35%, primarily due to a 12% rate reduction due to our foreign operations which are subject to lower tax rates, partially offset by a 10% rate increase due to permanent differences.

Net income —Net income increased $1.5 billion for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, primarily due to the gain on the CMH transaction and the gain on the sale of the investment in SKY Network Television Ltd.

Net income attributable to noncontrolling interests  Net income attributable to noncontrolling interests increased for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, due to higher results at REA.

Segment Analysis

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: Depreciation and amortization, impairment and restructuring charges, equity earnings of affiliates, interest expense, interest income, other, net, income tax expense and net income attributable to noncontrolling interests. Management believes that Total Segment EBITDA is an appropriate measure for evaluating the operating performance of New News Corporation’s business segments because it is the primary measure used by New News Corporation’s chief operating decision maker to evaluate the performance and allocate resources within New News Corporation’s businesses. Total Segment EBITDA provides management, investors and equity analysts a measure to analyze operating performance of each of New News Corporation’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing New News Corporation’s financial performance. The following table reconciles Total Segment EBITDA to Income before income tax benefit (expense).

For the nine months ended March 31,  
     2013     2012     Change     % Change  
     (in millions, except %)  

Revenues

   $ 6,634     $ 6,520     $ 114      

Operating expenses

     (4,040     (3,849     (191    

Selling, general and administrative expenses

     (2,036     (2,069     33       (2 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Segment EBITDA

     558       602       (44     (7 )% 

Depreciation and amortization

     (398     (358     (40     11 

Impairment and restructuring charges

     (231     (120     (111     93 

Equity earnings of affiliates

     81       87       (6     (7 )% 

Interest, net

     54       39       15       38 

Other, net

     1,569       (2     1,571       *
    

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax benefit (expense)

   $ 1,633     $ 248     $ 1,385       *
    

 

 

   

 

 

   

 

 

   

 

 

 

 

** not meaningful

90

 

                 
     For the nine months ended
March 31, 2013
 
     Revenues      Segment
EBITDA
 
     (in millions)  

News and Information Services

   $ 5,069      $ 584  

Cable Network Programming

     178        44  

Digital Real Estate Services

     254        122  

Book Publishing

     1,040        120  

Other

     93        (312
    

 

 

    

 

 

 

Total

   $ 6,634      $ 558  
    

 

 

    

 

 

 
                 
     For the nine months ended
March 31, 2012
 
     Revenues      Segment
EBITDA
 
     (in millions)  

News and Information Services

   $ 5,325      $ 678  

Digital Real Estate Services

     211        93  

Book Publishing

     899        97  

Other

     85        (266
    

 

 

    

 

 

 

Total

   $ 6,520      $ 602  
    

 

 

    

 

 

 

News and Information Services (76% and 82% of New News Corporation’s combined revenues in the first nine months of fiscal 2013 and 2012, respectively)

                                 
     For the nine months ended March 31,  
       2013         2012         Change         % Change    
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 2,927     $ 3,324     $ (397     (12 )% 

Circulation and Subscription

     1,785       1,749       36      

Other

     357       252       105       42 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     5,069       5,325       (256     (5 )% 

Operating expenses

     (3,108     (3,162     54       (2 )% 

Selling, general and administrative

     (1,377     (1,485     108       (7 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ 584     $ 678     $ (94     (14 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

For the nine months ended March 31, 2013, revenues at the News and Information Services segment decreased $256 million, or 5%, as compared to the corresponding period of fiscal 2012, primarily due to lower advertising revenues of $397 million principally reflecting the continued challenging economic environment in Australia and decreased advertising revenues at Dow Jones. The revenue decrease was partially offset by higher circulation and subscription revenues primarily due to the launch of the Sunday edition of The Sun in February 2012 and higher other revenues due to increased revenues from third party printing contracts. The strengthening of the U.S. dollar against local currencies resulted in a revenue decrease of approximately $6 million for the nine months ended March 31, 2013, as compared to the corresponding period of fiscal 2012.

For the nine months ended March 31, 2013, Segment EBITDA at the News and Information Services segment decreased $94 million, or 14%, as compared to the corresponding period of fiscal 2012, primarily due to the revenue decrease noted above and increased production and commission costs at the integrated marketing services business, partially offset by the positive impact of cost savings initiatives.

Cable Network Programming (3% and 0% of New News Corporation’s combined revenues in the first nine months of fiscal 2013 and 2012, respectively)

For the nine months ended
March 31,
    2013  2012   Change    (in millions) 

Revenues

Advertising

  $23  $—     $23 

Circulation and Subscription

   150   —      150 

Other

   5   —      5    

Total Revenues

   178   —      178 

Operating expenses

   (123  —      (123

Selling, general and administrative

   (11  —      (11   

Segment EBITDA

  $44  $—     $44    

For the nine months ended March 31, 2013, the Cable Network Programming segment revenue was $178 million and Segment EBITDA was $44 million which reflects the consolidation of FOX SPORTS Australia in November 2012 due to the acquisition of CMH.

On a stand-alone basis, revenues at FOX SPORTS Australia increased 6% for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012, primarily due to higher subscriber revenues resulting from an increase in subscribers and prices across both residential and commercial markets and also due to higher advertising revenues resulting from a stronger television advertising market. On a stand-alone basis, Segment EBITDA at FOX SPORTS Australia for the nine months ended March 31, 2013 was consistent with Segment EBITDA for the corresponding period of fiscal 2012.

Digital Real Estate Services (4% and 3% of New News Corporation’s combined revenues in the first nine months of fiscal 2013 and 2012, respectively)

 For the nine months ended March 31,      2013      2012      Change      % Change      (in millions, except %) 

Revenues

Advertising

  $254  $211  $43   20    

Total Revenues

   254   211   43   20 

Selling, general and administrative

   (132  (118  (14  12    

Segment EBITDA

  $122  $93  $29   31    

 

For the nine months ended March 31, 2013, revenues at the Digital Real Estate Services segment increased $43 million, or 20%, as compared to the corresponding period of fiscal 2012, primarily due to the take-up of depth listing products in Australia.

For the nine months ended March 31, 2013, Segment EBITDA at the Digital Real Estate Services segment increased $29 million, or 31%, as compared to the corresponding period of fiscal 2012, primarily due to the revenue increase noted above, partially offset by increased expenses directly related to the revenue growth supporting innovation, development and the sale of real estate advertising products.

Book Publishing (16% and 14% of New News Corporation’s combined revenues in the first nine months of fiscal 2013 and 2012, respectively)

For the nine months ended March 31,  
       2013         2012         Change         % Change    
     (in millions, except %)  

Revenues:

                                

Consumer

   $ 969     $ 849     $ 120       14 

Other

     71       50       21       42 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     1,040       899       141       16 

Operating expenses

     (771     (659     (112     17 

Selling, general and administrative

     (149     (143     (6    
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ 120     $ 97     $ 23       24 
    

 

 

   

 

 

   

 

 

   

 

 

 

For the nine months ended March 31, 2013, revenues at the Book Publishing segment increased $141 million, or 16%, as compared to the corresponding period of fiscal 2012, primarily due to the inclusion of revenues from Thomas Nelson which was acquired in fiscal 2013. During the nine months ended March 31, 2013, HarperCollins had 122 titles on The New York Times Bestseller List with 13 titles reaching the number one position.

For the nine months ended March 31, 2013, Segment EBITDA at the Book Publishing segment increased $23 million, or 24%, respectively, as compared to the corresponding period of fiscal 2012, primarily due to the inclusion of Segment EBITDA from Thomas Nelson in fiscal 2013.

Other (1% of New News Corporation’s combined revenues in both the first nine months of fiscal 2013 and 2012)

                                 
     For the nine months ended March 31,  
       2013         2012         Change         % Change    
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 17     $ 14     $ 3       21 

Circulation and Subscription

     30       29       1      

Other

     46       42       4       10 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     93       85       8      

Operating expenses

     (38     (28     (10     36 

Selling, general and administrative

     (367     (323     (44     14 
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ (312   $ (266   $ (46     17 
    

 

 

   

 

 

   

 

 

   

 

 

 

For the nine months ended March 31, 2013, revenues at the Other segment increased $8 million, or 9%, as compared to the corresponding period of fiscal 2012, primarily due to higher revenues at Amplify.

Segment EBITDA at the Other segment for the nine months ended March 31, 2013 decreased $46 million, or 17%, as compared to the corresponding period of fiscal 2012, primarily as a result of higher Selling, general and administrative expenses of $44 million principally due to a $62 million increase at Amplify primarily due to higher product development costs, partially offset by a decrease in legal and professional fees related to the U.K. Newspaper Matters of approximately $7 million,

Results of Operations—Fiscal 2012 versus Fiscal 2011

The following table sets forth New News Corporation’s operating results for fiscal 2012 as compared to fiscal 2011.

For the years ended June 30,  
     2012     2011     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 4,693     $ 4,945     $ (252     (5 )% 

Circulation and Subscription

     2,365       2,549       (184     (7 )% 

Consumer

     1,123       1,124       (1     —     

Other

     473       477       (4     (1 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     8,654       9,095       (441     (5 )% 

Operating expenses

     (5,122     (5,234     112       (2 )% 

Selling, general and administrative

     (2,750     (2,648     (102     4

Depreciation and amortization

     (483     (430     (53     12

Impairment and restructuring charges

     (2,763     (25     (2,738     *

Equity earnings of affiliates

     90       109       (19     (17 )% 

Interest, net

     56       47       9       19

Other, net

     (59     47       (106     *
    

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income tax benefit (expense)

     (2,377     961       (3,338     * * 

Income tax benefit (expense)

     337       (257     594       *
    

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (2,040     704       (2,744     *

Less: Net income attributable to noncontrolling interests

     (35     (26     (9     35
    

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to New News Corporation

   $ (2,075   $ 678     $ (2,753     * * 
    

 

 

   

 

 

   

 

 

   

 

 

 
** not meaningful

RevenuesRevenues decreased 5% for the fiscal year ended June 30, 2012 as compared to fiscal 2011, primarily due to lower revenues at the newspaper businesses in the U.K. of approximately $300 million, principally resulting from the absence of $226 million in revenues resulting from the closure of The News of the World in July 2011 and lower advertising and circulation revenues at the Australian newspapers of approximately $225 million partially offset by favorable foreign exchange rate fluctuations of approximately $120 million due to the weakening of the U.S. dollar against local currencies, primarily the Australian dollar. These decreases were partially offset by the inclusion of approximately $55 million in revenues from Wireless Generation, which was acquired in fiscal 2011.

Operating ExpensesOperating expenses decreased 2% for the fiscal year ended June 30, 2012 as compared to fiscal 2011, primarily due to a decrease at the News and Information Services segment of $99 million principally resulting from the absence of operating expenses resulting from the closure of The News of the World. Paper costs were relatively consistent year-over-year as lower volume was offset by higher pricing.

Selling, general and administrative expenses—Selling, general and administrative expenses increased 4% for the fiscal year ended June 30, 2012 as compared to fiscal 2011, primarily due to $199 million of legal and professional fees related to the U.K. Newspaper Matters and the inclusion of approximately $65 million in expenses related to Wireless Generation. These increases were partially offset by the positive impact from cost savings initiatives at Dow Jones of approximately $50 million. In addition, fiscal 2011 included a litigation settlement charge of $125 million at the News and Information Services segment which did not recur in fiscal 2012.

Depreciation and amortization—Depreciation and amortization increased 12% for the fiscal year ended June 30, 2012 as compared to fiscal 2011, primarily due to an increase in depreciation expense at the News and Information Services segment of $37 million principally resulting from additional property, plant and equipment placed into service and additional depreciation and amortization of approximately $10 million from the acquisition of Wireless Generation at the Other segment.

Impairment and restructuring chargesDuring the fourth quarter of fiscal 2012, New News Corporation completed its annual impairment review of goodwill and indefinite-lived intangible assets. As a result of the impairment review performed, New News Corporation recorded non-cash impairment charges of approximately $2.6 billion ($2.2 billion, net of tax) for the fiscal year ended June 30, 2012. The charges consisted of a write-down of New News Corporation’s goodwill of approximately $1.3 billion and a write-down of the indefinite-lived intangible assets (primarily newspaper mastheads and distribution networks) of approximately $1.3 billion. These impairment charges were primarily the result of adverse trends affecting several businesses in New News Corporation’s News and Information Services segment, including secular declines in the economic environment in Australia, a decline in in-store advertising spend by consumer packaged goods manufacturers in the U.S. and lower forecasted revenues from certain businesses utilizing various trade names owned by New News Corporation’s newspaper operations. The charges also reflected the expected sale of certain assets at a value below their carrying value.

In fiscal 2012, New News Corporation recorded restructuring charges of $156 million, of which $151 million related to the newspaper businesses. New News Corporation commenced the reorganization of portions of the newspaper businesses and recorded restructuring charges primarily for termination benefits as a result of the U.K. Newspaper Matters, certain organizational restructurings at other newspapers and the shutdown of a regional newspaper.

In fiscal 2011, New News Corporation recorded restructuring charges of approximately $25 million related to termination benefits recorded at the newspaper businesses.

Equity earnings of affiliates—Equity earnings of affiliates decreased $19 million for the fiscal year ended June 30, 2012 as compared to fiscal 2011, primarily due to a $14 million impairment of New News Corporation’s investment in a newspaper business in fiscal 2012.

For the years ended June 30,  
     2012     2011     Change     % Change  
     (in millions, except %)  

Direct Broadcast Satellite and Cable Channel equity affiliates

   $ 114     $ 114     $ —          —     

Other equity affiliates

     (24     (5     (19     *
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Equity earnings of affiliates

   $ 90     $ 109     $ (19     (17 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

 

** not meaningful

Interest, net—Interest, net for the fiscal year ended June 30, 2012 increased $9 million as compared to fiscal 2011, primarily due to interest from New News Corporation’s loan to Foxtel.

95

 

Other, net

                 
     For the years ended
June 30,
 
       2012         2011    
     (in millions)  

Loss on sale of U.K. newspaper headquarters (a)

   $ (22   $ —     

Gain on the financial indexes business transaction (a)

     —          43  

Investment write-offs (b)

     (30     —     

Other

     (7     4  
    

 

 

   

 

 

 

Total Other, net

   $ (59   $ 47  
    

 

 

   

 

 

 
(a) 

See Note 3 to the Combined Financial Statements of New News Corporation.

(b) 

See Note 5 to the Combined Financial Statements of New News Corporation.

Income tax benefit (expense)— New News Corporation’s tax benefit and tax rate for the fiscal year ended June 30, 2012 were lower than the statutory rate of 35% primarily due to a 16% rate reduction due to the impact of non-deductible goodwill impairment charges and a 4% rate reduction as a result of our foreign operations which are subject to lower tax rates.

New News Corporation’s tax provision and tax rate for the fiscal year ended June 30, 2011 were lower than the statutory rate of 35% primarily due to a 9% rate reduction as a result of our foreign operations which are subject to lower tax rates and a 2% rate increase due to permanent differences.

Net (loss) income— New News Corporation recorded a net loss for the fiscal year ended June 30, 2012 as compared to net income in fiscal 2011, primarily due to the higher impairment and restructuring charges and the revenue decreases noted above.

Net income attributable to noncontrolling interests— Net income attributable to noncontrolling interests increased for the fiscal year ended June 30, 2012 as compared to fiscal 2011, due to higher results at REA.

Segment Analysis

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: Depreciation and amortization, impairment and restructuring charges, equity earnings of affiliates, interest expense, interest income, other, net, income tax expense and net income attributable to noncontrolling interests. Management believes that Total Segment EBITDA is an appropriate measure for evaluating the operating performance of New News Corporation’s business segments because it is the primary measure used by New News Corporation’s chief operating decision maker to evaluate the performance and allocate resources within New News Corporation’s businesses. Total Segment EBITDA provides management, investors and equity analysts a measure to analyze operating performance of each of New News Corporation’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing New News Corporation’s financial performance. The following table reconciles Total Segment EBITDA to (Loss) income before income tax benefit (expense)

For the years ended June 30,  
       2012         2011         Change         % Change    
     (in millions, except %)  

Revenues

   $ 8,654     $ 9,095     $ (441     (5 )% 

Operating expenses

     (5,122     (5,234     112       (2 )% 

Selling, general and administrative expenses

     (2,750     (2,648     (102     4
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Segment EBITDA

     782       1,213       (431     (36 )% 

Depreciation and amortization

     (483     (430     (53     12

Impairment and restructuring charges

     (2,763     (25     (2,738       ** 

Equity earnings of affiliates

     90       109       (19     (17 )% 

Interest, net

     56       47       9       19

Other, net

     (59     47       (106     *
    

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income tax benefit (expense)

   $ (2,377   $ 961     $ (3,338     *
    

 

 

   

 

 

   

 

 

   

 

 

 
** not meaningful
For the year ended
June 30, 2012
 
            Segment
EBITDA
 
     Revenues     
     (in millions)  

News and Information Services

   $ 7,058      $ 939  

Digital Real Estate Services

     286        129  

Book Publishing

     1,189        86  

Other

     121        (372
    

 

 

    

 

 

 

Total

   $ 8,654      $ 782  
    

 

 

    

 

 

 

 

                 
     For the year ended
June 30, 2011
 
            Segment
EBITDA
 
     Revenues     
     (in millions)  

News and Information Services

   $ 7,576      $ 1,153  

Digital Real Estate Services

     235        102  

Book Publishing

     1,195        93  

Other

     89        (135
    

 

 

    

 

 

 

Total

   $ 9,095      $ 1,213  
    

 

 

    

 

 

 

 

News and Information Services (82% and 83% of New News Corporation’s combined revenues in fiscal 2012 and 2011, respectively)

                                 
     For the years ended June 30,  
         2012             2011             Change             % Change      
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 4,388     $ 4,694     $ (306     (7 )% 

Circulation and Subscription

     2,326       2,522       (196     (8 )% 

Other

     344       360       (16     (4 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     7,058       7,576       (518     (7 )% 

Operating expenses

     (4,195     (4,294     99       (2 )% 

Selling, general and administrative

     (1,924     (2,129     205       (10 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ 939     $ 1,153     $ (214     (19 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

For the fiscal year ended June 30, 2012, revenues at the News and Information Services segment decreased $518 million, or 7%, as compared to fiscal 2011, primarily due to lower circulation and advertising revenues in the U.K., principally resulting from the absence of $226 million in revenue resulting from the shutdown of The News of the World in July 2011 and lower advertising revenues of approximately $85 million at the U.K. newspapers, lower advertising and circulation revenues at the Australian newspapers of approximately $225 million and lower advertising revenues at the integrated marketing services business of approximately $30 million resulting from lower volume of in-store marketing products. The weakening of the U.S. dollar against local currencies, primarily the Australian dollar, resulted in a revenue increase of approximately $100 million for the fiscal year ended June 30, 2012 as compared to fiscal 2011.

For the fiscal year ended June 30, 2012, Segment EBITDA at the News and Information Services segment decreased $214 million, or 19%, as compared to fiscal 2011, primarily due to the advertising and circulation revenue decreases noted above and the absence of $122 million in Segment EBITDA resulting from the shutdown of The News of the World, partially offset by the positive impact of cost saving initiatives at Dow Jones. In addition, fiscal 2011 included a litigation settlement charge of $125 million at the integrated marketing services business which did not recur in fiscal 2012. The weakening of the U.S. dollar against local currencies, primarily the Australian dollar, resulted in an increase in Segment EBITDA of approximately $15 million for the fiscal year ended June 30, 2012 as compared to fiscal 2011.

Digital Real Estate Services (3% of New News Corporation’s combined revenues in fiscal 2012 and 2011, respectively)

                                 
     For the years ended June 30,  
     2012     2011     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 286     $ 235     $ 51       22 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     286       235       51       22 

Selling, general and administrative

     (157     (133     (24     18 
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ 129     $ 102     $ 27       26 
    

 

 

   

 

 

   

 

 

   

 

 

 

For the fiscal year ended June 30, 2012, revenues at the Digital Real Estate Services segment increased $51 million, or 22%, as compared to fiscal 2011, primarily due to increased take-up of value-added products and development of new products such as Diamond Subscription and Highlight. Media and developer revenues increased 36%, primarily due to developer display advertising and an ongoing focus on innovation.

For the fiscal year ended June 30, 2012, Segment EBITDA at the Digital Real Estate Services segment increased $27 million, or 26%, as compared to fiscal 2011, primarily due to the revenue increases noted above, partially offset by an increase in expenses resulting from increased marketing costs, employee costs and the continued expansion of the business.

Book Publishing (14% and 13% of New News Corporation’s combined revenues in fiscal 2012 and 2011, respectively)

 For the years ended June 30,    2012  2011  Change  % Change    (in millions, except %) 

Revenues         

Consumer

  $1,123  $1,124  $(1  —    

Other

   66   71   (5  (7)%    

Total Revenues

   1,189   1,195   (6  (1)% 

Operating expenses

   (886  (906  20   (2)% 

Selling, general and administrative

   (217  (196  (21  11   

Segment EBITDA

  $86  $93  $(7  (8)%    

For the fiscal year ended June 30, 2012, revenues at the Book Publishing segment decreased $6 million, or 1%, as compared to fiscal 2011, primarily due to lower print book sales of approximately $80 million, partially offset by strong growth in digital book sales of approximately $60 million and higher sales in the U.K. due to the success of The Game of Thrones series by George RR Martin of approximately $15 million. During the fiscal year ended June 30, 2012, HarperCollins had 144 titles on The New York Times Bestseller List with 17 titles reaching the number one position.

For the fiscal year ended June 30, 2012, Segment EBITDA at the Book Publishing segment decreased $7 million, or 8%, as compared to fiscal 2011, primarily due to the revenue decreases noted above and a fiscal 2012 litigation settlement of approximately $25 million related to an e-books antitrust action, partially offset by approximately $15 million in lower manufacturing costs reflecting the continued shift to digital book sales.

Other (1% of New News Corporation’s combined revenues in fiscal 2012 and 2011, respectively)

or the years ended June 30,  
     2012     2011     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 19     $ 16     $ 3       19

Circulation and Subscription

     39       27       12       44

Other

     63       46       17       37
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     121       89       32       36

Operating expenses

     (41     (34     (7     21

Selling, general and administrative

     (452     (190     (262     *
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ (372   $ (135   $ (237     *
    

 

 

   

 

 

   

 

 

   

 

 

 
** not meaningful

For the fiscal year ended June 30, 2012, revenues at the Other segment increased $32 million, or 36%, as compared to fiscal 2011, primarily due to the inclusion of revenues from Wireless Generation which was acquired in fiscal 2011.

Segment EBITDA declined at the Other segment for the fiscal year ended June 30, 2012 by $237 million as compared to fiscal 2011, primarily due to $199 million of legal and professional fees related to the U.K. Newspaper Matters and the inclusion of approximately $65 million in Selling, general and administrative expenses resulting from the Wireless Generation acquisition partially offset by the revenue increase noted above.

Results of Operations—Fiscal 2011 versus Fiscal 2010

The following table sets forth New News Corporation’s operating results for fiscal 2011 as compared to fiscal 2010.

For the years ended June 30,  
     2011     2010     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 4,945     $ 4,639     $ 306       7

Circulation and Subscription

     2,549       2,477       72       3

Consumer

     1,124       1,153       (29     (3 )% 

Other

     477       483       (6     (1 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     9,095       8,752       343       4

Operating expenses

     (5,234     (5,008     (226     5

Selling, general and administrative

     (2,648     (2,931     283       (10 )% 

Depreciation and amortization

     (430     (414     (16     4

Impairment and restructuring charges

     (25     (19     (6     32

Equity earnings of affiliates

     109       95       14       15

Interest, net

     47       28       19       68

Other, net

     47       (42     89       *
    

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

     961       461       500       *

Income tax expense

     (257     (202     (55     27
    

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     704       259       445       *

Less: Net income attributable to noncontrolling interests

     (26     (16     (10     63
    

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to New News Corporation

   $ 678     $ 243     $ 435       *
    

 

 

   

 

 

   

 

 

   

 

 

 
** not meaningful

OverviewRevenues increased 4% for the fiscal year ended June 30, 2011 as compared to fiscal 2010 primarily due to the weakening of the U.S. dollar against the Australian dollar and British pound sterling at the News and Information Services segment resulting in a revenue increase of approximately $290 million and higher advertising and circulation revenues of approximately $130 million at Dow Jones. Also contributing to the increase in revenues was increased advertising revenues of $63 million at the Digital Real Estate Services segment and the inclusion of approximately $15 million in subscription revenues from Wireless Generation which was acquired in fiscal 2011. These revenue increases were partially offset by lower revenues of $74 million at the Book Publishing segment, the absence of approximately $65 million in circulation revenues from the financial indexes business which was disposed of in fiscal 2010 and lower advertising revenues at the integrated marketing services business of approximately $50 million resulting from lower volume of in-store marketing products.

Operating expenses—Operating expenses increased 5% for the fiscal year ended June 30, 2011 as compared to fiscal 2010 primarily due to unfavorable foreign exchange rate fluctuations of approximately $155 million.

Selling, general and administrative expenses—Selling, general and administrative expenses decreased 10% for the fiscal year ended June 30, 2011 as compared to fiscal 2010 due to lower litigation settlement costs at the News and Information Services segment. In fiscal 2011, New News Corporation recognized litigation settlement costs of $125 million as compared to $500 million in fiscal 2010. The selling, general and administrative expenses decrease was partially offset by unfavorable foreign exchange rate fluctuations of approximately $90 million.

Depreciation and amortization—Depreciation and amortization for the fiscal year ended June 30, 2011 increased $16 million as compared to fiscal 2010 primarily due to additional property, plant and equipment placed into service

Impairment and restructuring charges—In fiscal 2011, New News Corporation recorded restructuring charges of approximately $25 million related to termination benefits recorded at the newspaper businesses.

In fiscal 2010, New News Corporation recorded restructuring charges of approximately $19 million related to termination benefits recorded at the newspaper businesses.

Equity earnings of affiliates—Equity earnings of affiliates for the fiscal year ended June 30, 2011 increased $14 million as compared to fiscal 2010, primarily due to improved results from Foxtel of approximately $10 million and SKY Network Television of approximately $10 million. The increase was partially offset by the absence of approximately $10 million in equity earnings resulting from sale of New News Corporation’s investment in STOXX AG during fiscal 2010.

For the years ended June 30,  
     2011     2010      Change     % Change  
     (in millions, except %)  

Direct Broadcast Satellite and Cable Channel equity affiliates

   $ 114     $ 94      $ 20       21

Other equity affiliates

     (5     1        (6     *
    

 

 

   

 

 

    

 

 

   

 

 

 

Total Equity earnings of affiliates

   $ 109     $ 95      $ 14       15
    

 

 

   

 

 

    

 

 

   

 

 

 
** not meaningful

Interest, net—Interest, net for the fiscal year ended June 30, 2011 increased $19 million as compared to fiscal 2010, primarily due to higher cash balances.

Other, net—

For the years ended June 30,  
             2011                      2010          
     (in millions)  

Gain (loss) on the financial indexes business transaction (a)

   $ 43      $ (23

Investment write-offs (b)

     —           (3

Other

     4        (16
    

 

 

    

 

 

 

Total Other, net

   $ 47      $ (42
    

 

 

    

 

 

 
(a) 

See Note 3 to the Combined Financial Statements of New News Corporation.

(b) 

See Note 5 to the Combined Financial Statements of New News Corporation.

Income tax expenseNew News Corporation’s tax provision and tax rate for the fiscal year ended June 30, 2011 were lower than the statutory rate of 35% primarily due to a 9% rate reduction as a result of our foreign operations which are subject to lower tax rates and a 2% rate increase due to permanent differences.

New News Corporation’s tax provision and tax rate for the fiscal year ended June 30, 2010 were higher than the statutory rate of 35% primarily due to a 23% rate increase as a result of the disposition of the financial indexes business, which included non-deductible goodwill offset in part by a 14% rate reduction as a result of our foreign operations which are subject to lower tax rates.

Net incomeNet income increased for the fiscal year ended June 30, 2011 as compared to fiscal 2010, primarily due to the higher revenues and lower litigation settlement costs noted above.

Net income attributable to noncontrolling interestsNet income attributable to noncontrolling interests increased for the fiscal year ended June 30, 2011 as compared to fiscal 2010, due to higher results at REA.

Segment Analysis

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: Depreciation and amortization, impairment and restructuring charges, equity earnings of affiliates, interest expense, interest income, other, net, income tax expense and net income attributable to noncontrolling interests. Management believes that Total Segment EBITDA is an appropriate measure for evaluating the operating performance of New News Corporation’s business segments because it is the primary measure used by New News Corporation’s chief operating decision maker to evaluate the performance and allocate resources within New News Corporation’s businesses. Total Segment EBITDA provides management, investors and equity analysts a measure to analyze operating performance of each of New News Corporation’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing New News Corporation’s financial performance. The following table reconciles Total Segment EBITDA to Income before income tax expense.

For the years ended June 30,  
     2011     2010     Change     Change %  
     (in millions, except %)  

Revenues

   $ 9,095     $ 8,752     $ 343       4

Operating expenses

     (5,234     (5,008     (226     5

Selling, general and administrative expenses

     (2,648     (2,931     283       (10 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Segment EBITDA

     1,213       813       400       49

Depreciation and amortization

     (430     (414     (16     4

Impairment and restructuring charges

     (25     (19     (6     32

Equity earnings of affiliates

     109       95       14       15

Interest, net

     47       28       19       68

Other, net

     47       (42     89       *
    

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

   $ 961     $ 461     $ 500       *
    

 

 

   

 

 

   

 

 

   

 

 

 
** not meaningful
For the year ended
June 30, 2011
 
     Revenues      Segment
EBITDA
 
     (in millions)  

News and Information Services

   $ 7,576      $ 1,153  

Digital Real Estate Services

     235        102  

Book Publishing

     1,195        93  

Other

     89        (135
    

 

 

    

 

 

 

Total

   $ 9,095      $ 1,213  
    

 

 

    

 

 

 

 For the year ended
June 30, 2010
    Revenues   Segment
EBITDA
    (in millions) 

News and Information Services $7,242   $734 

Digital Real Estate Services 172    67 

Book Publishing 1,269    106 

Other 69    (94  

Total $8,752   $813    

News and Information Services (83% of New News Corporation’s combined revenues in fiscal 2011 and 2010, respectively)

For the years ended June 30,  
     2011     2010     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 4,694     $ 4,452     $ 242       5

Circulation and Subscription

     2,522       2,467       55       2

Other

     360       323       37       11
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     7,576       7,242       334       5

Operating expenses

     (4,294     (4,003     (291     7

Selling, general and administrative

     (2,129     (2,505     376       (15 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ 1,153     $ 734     $ 419       57 %

For the fiscal year ended June 30, 2011, revenues at the News and Information Services segment increased $334 million, or 5%, as compared to fiscal 2010. The increase in revenues was primarily due to the weakening of the U.S. dollar against the Australian dollar and British pound sterling resulting in a revenue increase of approximately $290 million for the fiscal year ended June 30, 2011 as compared to fiscal 2010 and higher advertising and circulation revenues of approximately $130 million at Dow Jones. These revenue increases were partially offset by the absence of approximately $65 million in circulation revenues from the financial indexes business which was disposed of in fiscal 2010, and lower advertising revenues at the integrated marketing services business of approximately $50 million resulting from lower volume of in-store marketing products.

For the fiscal year ended June 30, 2011, Segment EBITDA at the News and Information Services segment increased $419 million, or 57%, as compared to fiscal 2010 primarily due to $375 million of lower litigation settlement costs at the integrated marketing services business and favorable foreign exchange rate fluctuations at the Australian and U.K. newspapers. The weakening of the U.S. dollar against the Australian dollar and British pound sterling resulted in a Segment EBITDA increase of approximately $60 million for the fiscal year ended June 30, 2011 as compared to fiscal 2010.

Digital Real Estate Services (3% and 2% of New News Corporation’s combined revenues in fiscal 2011 and 2010, respectively)

For the years ended June 30,    2011  2010  Change  % Change    (in millions, except %) 

Revenues:    

Advertising

  $235  $172  $63   37   

Total Revenues

   235   172   63   37

Selling, general and administrative

   (133  (105  (28  27   

Segment EBITDA

  $102  $67  $35   52   

For the fiscal year ended June 30, 2011, Digital Real Estate Services segment revenues increased $63 million, or 37%, as compared to fiscal 2010, primarily due to increased advertising revenues in Australia. Australian residential agent revenues increased 35% on an Average Revenue per Agent increase of 29%. Commercial Agent revenues increased 33% while Media revenues increased 41%.

Segment EBITDA at the Digital Real Estate Services segment for the fiscal year ended June 30, 2011 increased $35 million, or 52% as compared to fiscal 2010, primarily due to the revenue increases noted above, partially offset by increased expenses resulting from the expansion of the business and an increased focus on brand and consumer marketing activities.

Book Publishing (13% and 14% of New News Corporation’s combined revenues in fiscal 2011 and 2010, respectively

For the years ended June 30,  
     2011     2010     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Consumer

   $ 1,124     $ 1,153     $ (29     (3 )% 

Other

     71       116       (45     (39 )% 
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     1,195       1,269       (74     (6 )% 

Operating expenses

     (906     (968     62       (6 )% 

Selling, general and administrative

     (196     (195     (1     1
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ 93     $ 106     $ (13     (12 )% 

For the fiscal year ended June 30, 2011, revenues at the Book Publishing segment decreased $74 million, or 6%, as compared to fiscal 2010, primarily due to lower other revenues resulting from the absence of approximately $35 million in revenues from licensing fees received from a settlement in fiscal 2010 and lower consumer revenues of $29 million. This decrease was principally due to the prior year success of Going Rogue by Sarah Palin which contributed approximately $40 million in revenues in fiscal 2010, with no comparable titles released in fiscal 2011. Partially offsetting this decrease was higher digital book sales. During the fiscal year ended June 30, 2011, HarperCollins had 166 titles on The New York Times Bestseller List with 18 titles reaching the number one position.

For the fiscal year ended June 30, 2011, Segment EBITDA at the Book Publishing segment decreased $13 million, or 12%, as compared to fiscal 2010, primarily due to the revenue decreases noted above, partially offset by lower royalty costs of approximately $30 million and lower manufacturing costs of approximately $20 million reflecting the shift to digital book sales.

Other (1% of New News Corporation’s combined revenues in fiscal 2011 and 2010, respectively)

For the years ended June 30,  
     2011     2010     Change     % Change  
     (in millions, except %)  

Revenues:

                                

Advertising

   $ 16     $ 15     $ 1       7

Circulation and Subscription

     27       10       17       *

Other

     46       44       2       5
    

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     89       69       20       29

Operating expenses

     (34     (37     3       (8 )% 

Selling, general and administrative

     (190     (126     (64     51
    

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA

   $ (135   $ (94   $ (41     44
    

 

 

   

 

 

   

 

 

   

 

 

 
** not meaningful

Revenues at the Other segment increased $20 million, or 29%, for the fiscal year ended June 30, 2011, as compared to fiscal 2010. The increases were primarily due to the inclusion of revenues from Wireless Generation which was acquired in fiscal 2011.

Segment EBITDA for the fiscal year ended June 30, 2011 decreased $41 million, or 44%, as compared to fiscal 2010, primarily due to the inclusion of losses from Wireless Generation.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

Historically, Parent has provided capital, cash management and other treasury services to New News Corporation. Parent will continue to provide these services to New News Corporation until the distribution is consummated. As part of these services, the majority of the domestic cash balances are swept to Parent on a daily basis and New News Corporation receives capital from Parent for New News Corporation’s domestic cash needs and Parent has transferred cash from foreign subsidiaries to also meet cash needs. As a result, the cash and cash equivalents balances presented in New News Corporation’s combined financial statements consist primarily of cash held at international subsidiaries for international cash needs. However, cash held at the Digital Real Estate Services segment is not readily accessible to New News Corporation.

New News Corporation’s primary future cash needs will be centered on operating activities, working capital and strategic investments. Following the distribution, New News Corporation’s capital structure and sources of liquidity will change significantly from its historical capital structure. New News Corporation will no longer participate in capital management with Parent, but rather New News Corporation’s ability to fund its cash needs will depend on its ongoing ability to generate and raise cash in the future. Although New News Corporation believes that its future cash from operations, together with its access to capital markets, will provide adequate resources to fund its operating and financing needs, its access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) its credit rating, (ii) the liquidity of the overall capital markets and (iii) the current state of the economy. There can be no assurances that New News Corporation will continue to have access to the capital markets on acceptable terms. See “Risk Factors” for a further discussion.

As of June 30, 2012, New News Corporation’s combined assets included $1.1 billion in cash and cash equivalents that was held by its foreign subsidiaries. New News Corporation earns income outside the U.S., which is deemed to be permanently reinvested in certain foreign jurisdictions. New News Corporation does not currently intend to repatriate these funds. Should New News Corporation require more capital in the U.S. than is generated by and/or available to its domestic operations, New News Corporation could elect to transfer funds held in foreign jurisdictions. The transfer of funds from foreign jurisdictions may be cumbersome due to local regulations, foreign exchange control and withholding taxes. Additionally, the transfer of funds from foreign jurisdictions may result in higher effective tax rates and higher cash paid for income taxes for New News Corporation.

New News Corporation’s principal source of liquidity is internally generated funds and cash and cash equivalents on hand. In accordance with the separation and distribution agreement, Parent is expected to make a cash contribution to New News Corporation such that at the distribution date, it expects to have approximately $2.6 billion of cash on hand. In addition, New News Corporation expects to establish a revolving credit facility and have access to the worldwide capital markets, subject to market conditions, in order to issue debt to satisfy other liquidity needs. New News Corporation expects these elements of liquidity will enable it to meet its liquidity needs in the foreseeable future.

The principal uses of cash that affect New News Corporation’s liquidity position include the following: operational expenditures including employee costs, paper purchases and capital expenditures; income tax payments; investments in associated entities and acquisitions.

In addition to the acquisitions, sales and possible acquisitions disclosed elsewhere, New News Corporation has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses. Such transactions may be material and may involve cash, the issuance of New News Corporation securities or the assumption of indebtedness.

New News Corporation’s board of directors has authorized a stock repurchase program in which, after the distribution, we may purchase up to an aggregate of $500 million of our Class A Common Stock. All decisions regarding future stock repurchases will be at the sole discretion of a duly appointed committee of our board of directors and management. The committee’s decisions regarding future stock repurchases will be evaluated from time to time in light of many factors, including our financial condition, earnings, capital requirements and debt facility covenants, if any, other contractual restrictions, as well as legal requirements (including compliance with the IRS private letter ruling), regulatory constraints, industry practice and other factors that the committee may deem relevant. The stock repurchase program may be modified, extended, suspended or discontinued at any time by our board of directors and our board of directors cannot provide any assurances that any shares will be repurchased.

Sources and Uses of Cash—For the nine months ended March 31, 2013 versus the nine months ended March 31, 2012

Net cash provided by operating activities for the nine months ended March 31, 2013 and 2012 was as follows (in millions):

                 

For the nine months ended March 31,

                 

For the nine months ended March 31,

   2013      2012  

Net cash provided by operating activities

   $ 420      $ 614   
    

 

 

    

 

 

 

The decrease in net cash provided by operating activities during the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012 primarily reflects lower Total Segment EBITDA, higher payments under restructuring programs, the inclusion of sports programming payments at FOX SPORTS Australia and higher payments for transfer taxes in connection with the prior year sale of property, partially offset by lower payments for legal settlements.

Net cash used in investing activities for the nine months ended March 31, 2013 and 2012 was as follows (in millions):

                 

For the nine months ended March 31,

   2013     2012  

Net cash used in investing activities

   $ (1,692 )   $ (399
    

 

 

   

 

 

 

The increase in net cash used in investing activities during the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012 was primarily due to cash utilized for the Acquisitions, partially offset by cash proceeds from the sale of the investment in SKY Network Television Ltd.

Net cash provided by (used in) financing activities for the nine months ended March 31, 2013 and 2012 was as follows (in millions):

                 

For the nine months ended March 31,

                 

For the nine months ended March 31,

   2013      2012  

Net cash provided by (used in) financing activities

   $ 1,663      $ (984
    

 

 

    

 

 

 

The change in net cash provided by (used in) financing activities for the nine months ended March 31, 2013 as compared to the corresponding period of fiscal 2012 was primarily due to net transfers from Parent and affiliates of $1.9 billion during the nine months ended March 31, 2013 as compared to net transfers to Parent and affiliates of $968 million in the corresponding period of fiscal 2012, partially offset by payment of debt acquired in the acquisition of CMH of approximately $235 million.

Sources and Uses of Cash—Fiscal 2012 vs. Fiscal 2011

Net cash provided by operating activities for the fiscal years ended June 30, 2012 and 2011 was as follows (in millions):

                 

For the years ended June 30,

   2012      2011  

Net cash provided by operating activities

   $ 851      $ 1,331  
    

 

 

    

 

 

 

The decrease in net cash provided by operating activities during the fiscal year ended June 30, 2012 as compared to fiscal 2011 was primarily due to lower advertising receipts, the absence of contributions from The News of the World of approximately $120 million and costs incurred for the U.K. Newspaper Matters of approximately $200 million.

Net cash used in investing activities for the fiscal years ended June 30, 2012 and 2011 was as follows (in millions):

                 

For the years ended June 30,

   2012     2011  

Net cash used in investing activities

   $ (659   $ (881
    

 

 

   

 

 

 

The decrease in net cash used in investing activities during the fiscal year ended June 30, 2012 as compared to fiscal 2011 reflects lower capital expenditures of approximately $174 million and lower cash paid for acquisitions of approximately $305 million. This decrease was partially offset by New News Corporation’s loan to Foxtel in fiscal 2012 of approximately $230 million. In fiscal 2012, New News Corporation utilized $92 million of cash for acquisitions primarily due to the acquisition of Kidspot.com.au Pty Limited. In fiscal 2011, New News Corporation utilized $397 million of cash for acquisitions primarily due to the acquisition of Wireless Generation.

Net cash (used in) provided by financing activities for the fiscal years ended June 30, 2012 and 2011 was as follows (in millions):

                 

For the years ended June 30,

   2012     2011  

Net cash (used in) provided by financing activities

   $ (1,006   $ 270  
    

 

 

   

 

 

 

The change in net cash (used in) provided by financing activities for the fiscal year ended June 30, 2012 as compared to fiscal 2011 was primarily due to net transfers to Parent and affiliates of $993 million in fiscal 2012 as compared to net transfers from Parent and affiliates of $293 million in fiscal 2011.

Sources and Uses of Cash—Fiscal 2011 vs. Fiscal 2010

Net cash provided by operating activities for the fiscal years ended June 30, 2011 and 2010 was as follows (in millions):

                 

For the years ended June 30,

   2011      2010  

Net cash provided by operating activities

   $ 1,331      $ 1,047  
    

 

 

    

 

 

 

The increase in net cash provided by operating activities during the fiscal year ended June 30, 2011 as compared to fiscal 2010 was primarily due to lower litigation settlement payments at the News and Information Services segment.

Net cash (used in) provided by investing activities for the fiscal years ended June 30, 2011 and 2010 was as follows (in millions):

                 

For the years ended June 30,

   2011     2010  

Net cash (used in) provided by investing activities

   $ (881   $ 405  
    

 

 

   

 

 

 

107

 

The change in net cash used in investing activities during the fiscal year ended June 30, 2011 as compared to net cash provided by investing activities in fiscal 2010 was primarily due to lower proceeds from dispositions, higher cash paid for acquisitions and higher capital expenditures. In fiscal 2010, New News Corporation received $856 million in proceeds from dispositions primarily due to the sale of the financial indexes businesses. In fiscal 2011, New News Corporation utilized $397 million of cash for acquisitions primarily due to the acquisition of Wireless Generation. In fiscal 2011, New News Corporation utilized $549 million for capital expenditures primarily for facility and equipment purchases at the News and Information Services segment.

Net cash provided by (used in) financing activities for the fiscal years ended June 30, 2011 and 2010 was as follows (in millions):

 

                 

For the years ended June 30,

   2011      2010  

Net cash provided by (used in) financing activities

   $ 270      $ (1,230
    

 

 

    

 

 

 

The change in net cash provided by (used in) financing activities for the fiscal year ended June 30, 2011 as compared to fiscal 2010 was primarily due to net transfers from Parent and affiliates of $293 million in fiscal 2011 as compared to net transfers to Parent and affiliates of $1,226 million in fiscal 2010.

Commitments and Guarantees

New News Corporation has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. The following table summarizes New News Corporation’s material firm commitments as of June 30, 2012.

 

                                         
     As of June 30, 2012  
     Payments Due by Period  
     Total      1 year      2-3 years      4-5 years      After 5
years
 
     (in millions)  

Purchase obligations (a)

   $ 2,581      $ 627      $ 771      $ 356      $ 827  

Operating leases (b)

                                            

Land and buildings

     747        116        182        134        315  

Plant and machinery

     22        11        10        1        —     
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commitments and contractual obligations

   $ 3,350      $ 754      $ 963      $ 491      $ 1,142  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
(a) 

New News Corporation has commitments under purchase obligations related to printing contracts, capital projects, marketing agreements, and other legally binding commitments.

(b) 

New News Corporation leases office facilities, warehouse facilities, printing plants and equipment. These leases, which are classified as operating leases, are expected to be paid at certain dates through fiscal 2062.

The table excludes New News Corporation’s direct pension, other postretirement benefits (“OPEB”) obligations and the gross unrecognized tax benefits for uncertain tax positions as New News Corporation is unable to reasonably predict the ultimate amount and timing. New News Corporation made contributions of $48 million and $45 million to its direct pension plans in fiscal 2012 and fiscal 2011, respectively. These contributions were a combination of required and voluntary contributions made to improve the funding status of the direct plans. Future direct plan contributions are dependent upon actual direct plan asset returns and interest rates and statutory requirements. Assuming that actual direct plan asset returns are consistent with New News Corporation’s expected plan returns in fiscal 2012 and beyond, and that interest rates remain constant, New News Corporation anticipates that it would make contributions similar to fiscal 2012. New News Corporation expects to make a required contribution of approximately $35 million to its direct pension plans and may make a voluntary contribution in fiscal 2013. Payments due to participants under New News Corporation’s direct

108

 

pension plans are primarily paid out of underlying trusts. Payments due under New News Corporation’s direct OPEB plans are not required to be funded in advance, but are paid as medical costs are incurred by covered retiree populations, and are principally dependent upon the future cost of retiree medical benefits under New News Corporation’s direct OPEB plans. New News Corporation expects its net direct OPEB payments to approximate $13 million in fiscal 2013 (See Note 11 to the Combined Financial Statements of New News Corporation for further discussion of New News Corporation’s pension and OPEB plans.)

The total firm commitments as of March 31, 2013 were $4,043 million. The increase from June 30, 2012 was primarily due to the consolidation of FOX SPORTS Australia in fiscal 2013.

 

                                         
     As of June 30, 2012  
     Total
Amounts
Committed
     Amount of Guarantees Expiration Per Period  

Contingent guarantees:

      1 year      2-3 years      4-5 years      After  5
years
 
     (in millions)  

Indemnity

   $ 774      $ 27      $ 54      $ 54      $ 639  

In connection with the transaction related to the Dow Jones Indexes business, New News Corporation agreed to indemnify CME Group Inc. (“CME”) with respect to any payments of principal, premium and interest CME makes under its guarantee of the venture financing. (See Note 3 to the Combined Financial Statements of New News Corporation for further discussion of this transaction.) The timing of the amounts presented in the table above reflect when the maximum contingent guarantee would expire.

New News Corporation’s guarantees as of March 31, 2013 have not changed significantly from disclosures included in the June 30, 2012 audited combined financial statements.

In April 2013, New News Corporation sold its 10% investment in its joint venture formed with CME. As a result of the transaction, New News Corporation was released from its agreement to indemnify CME with respect to any payment of principal, premium and interest CME makes under its guarantee of the third-party debt issued by the joint venture.

Contingencies

As disclosed in the notes to the Combined Financial Statements of New News Corporation, U.K. and U.S. regulators and governmental authorities are conducting investigations relating to the U.K. Newspaper Matters. New News Corporation, together with Parent, is cooperating with these investigations.

New News Corporation has admitted liability in many civil cases related to the phone hacking allegations and has settled many cases. New News Corporation also announced a private compensation scheme under which parties could pursue claims against it. While additional civil lawsuits may be filed, no additional civil claims may be brought under the compensation scheme after April 8, 2013.

New News Corporation is not able to predict the ultimate outcome or cost of the civil claims or criminal matters. As of June 30, 2012 and March 31, 2013, New News Corporation has provided for its best estimate of the liability for the claims that have been filed. It is not possible to estimate the liability for any additional claims that may be filed given the information that is currently available to New News Corporation. If more claims are filed and additional information becomes available, New News Corporation will update the liability provision for such matters.

New News Corporation and Parent will agree in the separation and distribution agreement that Parent will indemnify New News Corporation for payments made after the distribution date arising out of civil claims and investigations relating to the U.K. Newspaper Matters as well as legal and professional fees and expenses paid in connection with the criminal matters, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with New

109

 

News Corporation. In addition, violations of law may result in criminal fines or penalties for which New News Corporation will not be indemnified by Parent. Parent’s indemnification obligations with respect to these matters will be settled on an after-tax basis. It is possible that these proceedings and any adverse resolution thereof, including any fines or other penalties associated with any plea, judgment or similar result for which New News Corporation will not be indemnified, could damage its reputation, impair its ability to conduct its business and adversely affect its results of operations and financial condition.

New News Corporation’s operations are subject to tax in various domestic and international jurisdictions and as a matter of course, New News Corporation is regularly audited by federal, state and foreign tax authorities. New News Corporation believes it has appropriately accrued for the expected outcome of all pending tax matters and does not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on its combined financial condition, future results of operations or liquidity. Each member of the Parent consolidated group, which includes Parent, New News Corporation and Parent’s other subsidiaries, is jointly and severally liable for the U.S. federal income tax liability of each other member of the consolidated group. Consequently, New News Corporation could be liable in the event any such liability is incurred, and not discharged, by any other member of the Parent consolidated group. The tax sharing and indemnification agreement will require Parent to indemnify New News Corporation for any such liability. Disputes or assessments could arise during future audits by taxing authorities in amounts that New News Corporation cannot quantify. In addition, we have filed tax refund claims in a foreign jurisdiction which are currently in litigation. If we ultimately receive a refund, the tax sharing and indemnification agreement provides that we will pay the amount of such refund, including any interest net of any tax cost, to Parent.

CRITICAL ACCOUNTING POLICIES

An accounting policy is considered to be critical if it is important to New News Corporation’s financial condition and results and if it requires significant judgment and estimates on the part of management in its application. The development and selection of these critical accounting policies have been determined by management of New News Corporation. For New News Corporation’s summary of significant accounting policies, see Note 2 to the Combined Financial Statements of New News Corporation.

Principles of Combination

The combined financial statements include New News Corporation’s net assets and results of its operations. All significant intracompany transactions and accounts within New News Corporation’s combined businesses have been eliminated.

Intercompany transactions with Parent or its affiliates and New News Corporation are reflected in the historical combined financial statements. The Parent company equity balance represents Parent’s historical investment in New News Corporation and the net effect of transactions with and allocations from Parent.

Use of Estimates

The preparation of New News Corporation’s combined financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts that are reported in the combined financial statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that New News Corporation may undertake in the future, actual results may differ from the estimates.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost and are depreciated on a straight-line method over the estimated useful lives of such assets. Changes in circumstances, such as technological advances, changes to New News Corporation’s business model or capital strategy, could result in the actual useful lives differing from New

110

 

News Corporation’s estimates. In those cases, where New News Corporation determines that the useful life of buildings and equipment should be shortened, New News Corporation would depreciate the asset over its revised remaining useful life thereby increasing depreciation expense.

Intangible Assets

New News Corporation has a significant amount of intangible assets, including goodwill, newspaper mastheads, distribution networks, publishing rights and other copyright products and trademarks. Intangible assets acquired in business combinations are recorded at their estimated fair value at the date of acquisition. Goodwill is recorded as the difference between the cost of acquiring an entity and the estimated fair values assigned to its tangible and identifiable intangible net assets and is assigned to one or more reporting units for purposes of testing for impairment. The judgments made in determining the estimated fair value assigned to each class of intangible assets acquired, their reporting unit, as well as their useful lives can significantly impact net income.

New News Corporation accounts for its business acquisitions under the purchase method of accounting. The total cost of acquisitions is allocated to the underlying net assets, based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the tangible net assets acquired is recorded as intangibles. Amounts recorded as goodwill are assigned to one or more reporting units. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. Identifying reporting units and assigning goodwill to them requires judgment involving the aggregation of business units with similar economic characteristics and the identification of existing business units that benefit from the acquired goodwill. New News Corporation allocates goodwill to disposed businesses using the relative fair value method.

Carrying values of goodwill and intangible assets with indefinite lives are reviewed at least annually for possible impairment in accordance with ASC 350, “Intangibles—Goodwill and Other.” New News Corporation’s impairment review is based on, among other methods, a discounted cash flow approach that requires significant management judgments. New News Corporation uses its judgment in assessing whether assets may have become impaired between annual impairment assessments. Indicators such as unexpected adverse economic factors, unanticipated technological change or competitive activities, loss of key personnel and acts by governments and courts, may signal that an asset has become impaired.

New News Corporation’s goodwill impairment reviews are performed using a two-step process. The first step of the process is to compare the fair value of a reporting unit with its carrying amount, including goodwill. In performing the first step, New News Corporation determines the fair value of a reporting unit by primarily using a discounted cash flow analysis and market-based valuation approach methodologies. Determining fair value requires the exercise of significant judgments, including judgments about appropriate discount rates, long-term growth rates, relevant comparable company earnings multiples and the amount and timing of expected future cash flows. The cash flows employed in the analyses are based on New News Corporation’s estimated outlook and various growth rates have been assumed for years beyond the long-term business plan period. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. In assessing the reasonableness of its determined fair values, New News Corporation evaluates its results against other value indicators, such as comparable public company trading values. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment review is not necessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment review is required to be performed to estimate the implied fair value of the reporting unit’s goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the estimated fair value of the reporting unit

111

 

was the purchase price paid. The implied fair value of the reporting unit’s goodwill is compared with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

The methods used to estimate the fair value measurements of impaired goodwill and indefinite-lived intangible assets included those based on the income approach (including the discounted cash flow and relief-from-royalty methods) and those based on the market approach (primarily the guideline public company method). Significant unobservable inputs utilized in the income approach valuation methods were discount rates (ranging from 9.5%-12.5%), long-term growth rates (ranging from 0.5%-3.0%) and royalty rates (ranging from 2.0%-3.5%). Significant unobservable inputs utilized in the market approach valuation methods were EBITDA multiples from guideline public companies operating in similar industries and a control premium of 10%. Significant increases (decreases) in royalty rates, growth rates, control premium and multiples, assuming no change in discount rates, would result in a significantly higher (lower) fair value measurement. Significant decreases (increases) in discount rates, assuming no changes in royalty rates, growth rates, control premium and multiples, would result in a significantly higher (lower) fair value measurement. For instance, a hypothetical 10% decrease in the fair value of reporting units with goodwill impairments resulting from changes in the aforementioned assumptions, would result in an additional write-down of goodwill of approximately $220 million. Additionally, a hypothetical 10% decrease in the fair value of reporting units that were not impaired resulting from changes in the aforementioned assumptions, would result in the book values of two reporting units exceeding their fair values by an aggregate of approximately $200 million. If this were to occur, the second step of the goodwill impairment test would need to be performed for those reporting units to determine the ultimate amount of impairment loss to record. Had the fair values of indefinite-lived intangible assets been hypothetically lower by 10%, resulting from changes in the aforementioned assumptions, it would result in an additional write-down of indefinite-lived intangible assets of approximately $150 million.

As a result of the fiscal 2012 annual impairment review performed, New News Corporation recorded non-cash impairment charges of approximately $2.6 billion ($2.2 billion, net of tax) during the fiscal year ended June 30, 2012. The charges consisted of a write-down of goodwill of $1.3 billion and a write-down of indefinite-lived intangible assets of $1.3 billion. The News and Information Services and Other segments have reporting units with goodwill and intangible assets that continue to be at risk for future impairment. As of June 30, 2012, $3.6 billion of goodwill and intangible assets at these reporting units is at risk for future impairment because the fair values of the reporting units or indefinite lived intangible assets exceeded their carrying values by less than 10%. 

On May 24, 2013, New News Corporation concluded that certain of its goodwill and intangible assets were potentially impaired and that it expects to record a pre-tax non-cash impairment charge in the range of $1.2 billion to $1.4 billion in the quarter ending June 30, 2013 related to its News and Information Services segment.

New News Corporation tests goodwill for impairment on an annual basis in the fourth quarter and at other times if a significant event or change in circumstances indicates that it is more likely than not that the fair value of these assets has been reduced. The valuation of goodwill requires assumptions and estimates of many factors, including revenue and market growth, operating cash flows, market multiples and discount rates. During the fourth quarter of fiscal 2013, as part of New News Corporation’s long-range planning process in preparation for the distribution, New News Corporation adjusted its future outlook and related strategy principally with respect to the News and Information Services business in Australia and secondarily with respect to the News and Information Services businesses in the U.S. which resulted in a reduction in expected future cash flows. As a result, New News Corporation determined that the fair value of these reporting units declined below their respective carrying values and expects to record an impairment charge in the quarter ending June 30, 2013. Additionally, goodwill and intangible assets in the News and Information Services segment continue to be at risk for future impairment. New News Corporation is continuing its evaluation of the extent of the impairment of goodwill and intangible assets and the range noted above reflects our best estimate of the impairment at this time. The final results of the evaluation will be reflected in New News Corporation’s June 30, 2013 audited financial statements. However, we can make no assurances that such range will not change until the evaluation has been finalized.

112

 

Income Taxes

New News Corporation is subject to income taxes in the U.S. and foreign jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining New News Corporation’s tax expense and in evaluating its tax positions including evaluating uncertainties under ASC 740, “Income Taxes.”

New News Corporation records valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. In making this assessment, management analyzes future taxable income, reversing temporary differences and ongoing tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, New News Corporation would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income.

Employee Costs

New News Corporation provides defined benefit pension, postretirement health care, defined contribution and medical benefits to New News Corporation’s eligible employees and retirees. Certain of New News Corporation’s employees participate in defined benefit pension plans sponsored by Parent. The combined statements of operations includes expenses related to these shared plans including direct expenses related to New News Corporation employees as well as allocations of expenses related to corporate employees through the corporate expense allocations (see Note 1 to the Combined Financial Statements of New News Corporation).

Certain employee benefit plans are the direct obligations of New News Corporation and have been recorded within New News Corporation’s historical combined financial statements. New News Corporation records amounts relating to these direct plans based on calculations specified by GAAP. The measurement and recognition of costs of New News Corporation’s direct pension and other postretirement benefit plans require the use of significant management judgments, including discount rates, expected return on plan assets, future compensation and other actuarial assumptions. For financial reporting purposes, direct net periodic pension expense (income) is calculated based upon a number of actuarial assumptions, including a discount rate for plan obligations and an expected rate of return on plan assets. Current market conditions, including changes in investment returns and interest rates, were considered in making these assumptions. In developing the expected long-term rate of return, the direct pension portfolio’s past average rate of returns, and future return expectations of the various asset classes were considered. The expected long-term rate of return is based on a direct asset allocation assumption of 38% equities, 46% fixed-income securities and 16% in cash and other investments. Total direct benefit plan net expenses recorded for these direct plans by New News Corporation were $31 million, $38 million and $53 million, for the years ended June 30, 2012, 2011 and 2010, respectively.

The discount rate reflects the market rate for high-quality fixed-income investments on New News Corporation’s annual measurement date of June 30 and is subject to change each fiscal year. The discount rate assumptions used to account for direct pension and other postretirement benefit plans reflect the rates at which the benefit obligations could be effectively settled. The rate was determined by matching New News Corporation’s expected benefit payments for the direct plans to a hypothetical yield curve developed using a portfolio of several hundred high-quality non-callable corporate bonds.

113

 

The key assumptions used in developing New News Corporation’s fiscal 2012, 2011 and 2010 net periodic pension expense for its direct plans consist of the following

                         
     2012     2011     2010  
     ($ in millions, except %)  

Discount rate used to determine net periodic benefit cost

     5.7     5.8     7.0

Assets:

                        

Expected rate of return

     7.0     7.0     7.0

Expected return

   $ 82     $ 74     $ 66  

Actual return

   $ 39     $ 157     $ 132  
    

 

 

   

 

 

   

 

 

 

(Loss)/Gain

   $ (43   $ 83     $ 66  
       

One year actual return

     2.7     13.8     15.3

Five year actual return

     1.6     3.5     3.4

The weighted average discount rate is volatile from year to year because it is determined based upon the prevailing rates in the U.S., the U.K. and Australia as of the measurement date. New News Corporation will utilize a weighted average discount rate of 4.5% in calculating the direct fiscal 2013 net periodic pension expense. New News Corporation will use a weighted average long-term rate of return of 6.75% for fiscal 2013 based principally on a combination of direct asset mix and historical experience of direct actual plan returns. The accumulated net pre-tax losses on New News Corporation’s direct pension plans as of June 30, 2012 were approximately $455 million which increased from approximately $313 million as of June 30, 2011. This increase of approximately $142 million was due primarily to a decrease in the discount rate used to measure the benefit obligation as of June 30, 2012. The accumulated pre-tax net losses as of June 30, 2012 were primarily the result of changes in discount rates and deferred asset losses. Lower discount rates increase present values of benefit obligations and increase New News Corporation’s deferred losses and also increase subsequent-year pension expense. Higher discount rates decrease the present values of benefit obligations and reduce New News Corporation’s accumulated net loss and also decrease subsequent-year pension expense. These deferred losses are being systematically recognized in future net periodic pension expense in accordance with ASC 715, “Compensation—Retirement Benefits.” Unrecognized losses in excess of 10% of the greater of the market-related value of plan assets or the plans projected benefit obligation are recognized over the average future service of the plan participants or average life expectancy for plan participants for plans where majority of plan participants aren’t accruing additional benefits.

New News Corporation made contributions of $48 million, $45 million and $51 million to its direct pension plans in fiscal 2012, 2011 and 2010, respectively. The majority of these contributions were voluntarily made to improve the funding status of the plans which were impacted by the economic conditions noted above. Future plan contributions are dependent upon actual plan asset returns, statutory requirements and interest rate movements. Assuming that actual plan returns are consistent with New News Corporation’s expected plan returns in fiscal 2012 and beyond, and that interest rates remain constant, New News Corporation anticipates that it would make contributions similar to fiscal 2012. New News Corporation will continue to make voluntary contributions as necessary to improve funded status (See Note 11 to the Combined Financial Statements of New News Corporation for further discussion of New News Corporation’s pension plans).

114

 

Changes in net periodic pension expense may occur in the future due to changes in New News Corporation’s expected rate of return on plan assets and discount rate resulting from economic events. The following table highlights the sensitivity of New News Corporation’s pension obligations and expense to changes in these assumptions, assuming all other assumptions remain constant:

         

Changes in Assumption

   Impact on Annual
Pension Expense
   Impact on PBO

0.25 percentage point decrease in
discount rate

   Increase $1 million    Increase $41 million

0.25 percentage point increase in
discount rate

   Decrease $1 million    Decrease $39 million

0.25 percentage point decrease in
expected rate of return on assets

   Increase $3 million                —  

0.25 percentage point increase in
expected rate of return on assets

   Decrease $3 million                —  

Recent Accounting Pronouncements

See Note 2 to the Combined Financial Statements and Note 1 to the Unaudited Combined Financial Statements of New News Corporation for discussion of recent accounting pronouncements.

115

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

New News Corporation has exposure to different types of market risk including changes in foreign currency exchange rates and stock prices. New News Corporation neither holds nor issues financial instruments for trading purposes.

The following sections provide quantitative information on New News Corporation’s exposure to foreign currency exchange rate risk and stock price risk. New News Corporation makes use of sensitivity analyses that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.

Foreign Currency Exchange Rates

New News Corporation conducts operations in three principal currencies: the U.S. dollar; the Australian dollar; and the British pound sterling. These currencies operate primarily as the functional currency for New News Corporation’s U.S., Australian and U.K. operations, respectively. Cash is managed centrally within each of the three regions with net earnings reinvested locally and working capital requirements met from existing liquid funds. To the extent such funds are not sufficient to meet working capital requirements, funding in the appropriate local currencies is made available from intercompany capital. New News Corporation does not hedge its investments in the net assets of its Australian and U.K. foreign operations.

Because of fluctuations in currency exchange rates, New News Corporation is subject to currency translation exposure on the results of its operations. Foreign currency translation risk is the risk that exchange rate gains or losses arise from translating foreign entities’ statements of earnings and balance sheets from functional currency to New News Corporation’s reporting currency (the U.S. Dollar) for consolidation purposes. New News Corporation does not hedge translation risk because it generally generates positive cash flows from its international operations that are typically reinvested locally. Currency exchange rates with the most significant impact to its translation include the Australian dollar and British pound sterling. As currency exchange rates fluctuate, translation of its Statements of Operations into U.S. dollars affects the comparability of revenues and operating expenses between years.

The table below details the percentage of revenues and expenses by the three principal currencies for the years ended June 30, 2012 and 2011:

                         
     U.S.
Dollars
    Australian
Dollars
    British Pound
Sterling
 

Year ended June 30, 2012

                        

Revenues

     52     32     16

Operating expenses

     53     28     19

Year ended June 30, 2011

                        

Revenues

     50     31     19

Operating expenses

     54     28     18

Based on the year ended June 30, 2012, a one cent change in both the U.S. dollar/Australian dollar and the U.S. dollar/British pound sterling rates will impact revenues by approximately $50 million annually, with an immaterial impact on Total Segment EBITDA.

Stock Prices

As of June 30, 2012, New News Corporation had two common stock investments in publicly traded companies that were subject to market price volatility. One of these investments was its equity method investment in SKY Network Television Ltd. and one was a cost method investment which was not material. These investments had an aggregate fair value of approximately $662 million as of June 30, 2012. A hypothetical decrease in the market price of these investments of 10% would have resulted in a fair value of approximately $596 million as of June 30, 2012. Such a hypothetical decrease would be immaterial as any changes in fair value

116

 

of New News Corporation’s equity method affiliates are not recognized unless deemed other-than-temporary. In March 2013, New News Corporation sold its equity interest in SKY Network Television Ltd. and as a result, now has limited exposure to stock price risk.

Credit Risk

Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.

New News Corporation’s receivables did not represent significant concentrations of credit risk as of March 31, 2013, June 30, 2012 or June 30, 2011 due to the wide variety of customers, markets and geographic areas to which New News Corporation’s products and services are sold.

New News Corporation monitors its positions with, and the credit quality of, the financial institutions which are counterparties to its financial instruments. New News Corporation is exposed to credit loss in the event of nonperformance by the counterparties to the agreements. As of March 31, 2013 and June 30, 2012, New News Corporation did not anticipate nonperformance by any of the counterparties.

117

 

MANAGEMENT

Executive Officers and Directors Following the Distribution

The following table sets forth information as of May 20, 2013 regarding individuals who are expected to serve as our executive officers and/or directors. After the completion of the distribution, we expect to have a board of directors initially consisting of 12 directors. Our amended and restated certificate of incorporation will provide that there be no fewer than three directors. A majority of our directors will be independent directors who meet the criteria for independence set forth in the NASDAQ Listing Rules. See “—Director Nomination Process” below for further information. In addition, we are committed to achieving a supermajority of independent directors as our company evolves after the distribution.

 

             

Name

  

Age

    

Position

K. Rupert Murdoch

     82       Executive Chairman

Robert J. Thomson

     52       Chief Executive Officer and Director

Bedi Ajay Singh

     53       Chief Financial Officer

Gerson Zweifach

     60       General Counsel

José María Aznar

     60       Director

Natalie Bancroft

     32       Director

Peter L. Barnes

     70       Director

Elaine L. Chao

     60       Director

John Elkann

     37       Director

Joel I. Klein

     66       Director

James R. Murdoch

     40       Director

Lachlan K. Murdoch

     41       Director

Ana Paula Pessoa

     46       Director

Masroor Siddiqui

     41       Director

Biographies of Executive Officers and Directors

K. Rupert Murdoch ACK. Rupert Murdoch AC will serve as our Executive Chairman. He has been Chief Executive Officer of Parent since 1979 and its Chairman since 1991. Mr. Murdoch served as a Director of British Sky Broadcasting plc (“BSkyB”) from 1990 to 2007, as a Director of Gemstar-TV Guide International Inc. (“Gemstar-TV Guide”) from 2001 to 2008 and as a Director of The DIRECTV Group, Inc. (“DIRECTV”) from 2003 to 2008.

Mr. K.R. Murdoch has been the driving force behind the evolution of Parent from the single, family-owned Australian newspaper he took over in 1953 to the global public media company it is today. Mr. K.R. Murdoch brings to our board of directors invaluable knowledge and expertise regarding our businesses and provides strong operational leadership and broad strategic vision for our future.

Robert J. Thomson—Robert J. Thomson will serve as our Chief Executive Officer. He has served as Editor-in-Chief of Dow Jones and Managing Editor of The Wall Street Journal since 2008. Mr. Thomson previously served as Publisher of Dow Jones from 2007 to 2008, after serving as Editor of The Times of London from 2002 to 2007. Prior to that role, he was Managing Editor of the U.S. edition of the Financial Times.

Mr. Thomson has extensive business, operational and international experience in the publishing industry through his career as a financial journalist, foreign correspondent and editor. Under his management and leadership, The Wall Street Journal has consistently been one of the most innovative and successful newspapers in the U.S. and has also greatly expanded its global reach through the digital initiatives of WSJ.com. As Managing Editor of the U.S. edition of the Financial Times, Mr. Thomson led its drive into the U.S. market, where sales trebled during his tenure. His keen understanding of the evolving U.S. and international markets in which we operate and his commitment to generating high quality content make him a valuable resource for our board of directors.

 

118

 


Table of Contents

Bedi Ajay Singh—Bedi Ajay Singh will serve as our Chief Financial Officer. He most recently served as President, Finance and Administration & CFO for MGM Studios from 2008 to 2010. Previously, Mr. Singh served as Chief Financial Officer at Gemstar-TV Guide from 2006 to 2008, as Chief Finance and Administration Officer at Novartis Pharma A.G. from 2004 to 2006 and as Executive Vice President and Chief Financial Officer of Sony Pictures Entertainment from 1999 to 2003. Before joining Sony Pictures Entertainment, he held a number of positions at Parent, including senior finance roles at News International as Financial Controller and Fox Filmed Entertainment as Deputy Chief Financial Officer. Mr. Singh is a Fellow of the UK Institute of Chartered Accountants and started his business career with Arthur Andersen in London.

Gerson Zweifach—Gerson Zweifach will serve as our General Counsel. Gerson Zweifach has been a Senior Executive Vice President and Group General Counsel of Parent since February 2012. He also serves as Chief Compliance Officer of Parent. Mr. Zweifach served as an attorney at Williams & Connolly LLP where he was a partner from 1988 to February 2012 and currently serves as Of Counsel. Mr. Zweifach has been a member of the Bar of the District of Columbia since 1981 and the Bar of the State of New York since 1980.

José María Aznar—José María Aznar has been a Director of Parent since 2006 and is a member of Parent’s Nominating and Corporate Governance Committee. Effective immediately prior to the distribution, Mr. Aznar will resign from Parent’s board of directors and become a Director of our company. Mr. Aznar has been the President of the Foundation for Social Studies and Analysis since 1989. Mr. Aznar was a Distinguished Scholar at the Edmund A. Walsh School of Georgetown University from 2004 to 2011. Since 2011, he has been a Distinguished Fellow at the Johns Hopkins University Paul H. Nitze School of Advanced International Studies, where he is also Chairman of the Atlantic Basin Initiative. Mr. Aznar has served as a member of the International Advisory Board of Barrick Gold Corporation since 2011. Mr. Aznar is the Honorific President of the Partido Popular of Spain and served as its Executive President from 1990 to 2004. Mr. Aznar was a member of The State Council of Spain from 2005 to 2006. Mr. Aznar served as the President of Spain from 1996 to 2004.

Mr. Aznar, with his extensive background, including serving as President of Spain, will bring knowledge, expertise and an international perspective to our board of directors, providing valuable insight into political and governmental matters throughout the world. He has a unique and deep knowledge with respect to several countries in which we operate.

Natalie Bancroft—Natalie Bancroft has been a Director of Parent since 2007 and is a member of Parent’s Nominating and Corporate Governance Committee. Effective immediately prior to the distribution, Ms. Bancroft will resign from Parent’s board of directors and become a Director of our company. Ms. Bancroft is a professionally trained opera singer, has studied journalism and is a graduate of L’Institut de Ribaupierre in Lausanne, Switzerland.

Ms. Bancroft has a culturally diverse background, having lived across Europe. She also speaks several languages fluently. Ms. Bancroft’s youth, female perspective and international experience and education will add valuable diversity and perspective to the deliberations of our board of directors.

Peter L. Barnes—Peter L. Barnes has been a Director of Parent since 2004 and serves as a member of Parent’s Audit and Compensation Committees. Effective immediately prior to the distribution, Mr. Barnes will resign from Parent’s board of directors and become a Director of our company. Mr. Barnes has been a Director of Metcash Limited since 1999, serving as its Chairman since 2010. Mr. Barnes served as a Director of Ansell Limited from 2001 to 2012 and as its Chairman from 2005 to 2012. Mr. Barnes served in various senior management positions in the United States, the United Kingdom and Asia at Philip Morris International Inc. from 1971 to 1998, including as President of Philip Morris Asia Inc.

Mr. Barnes will bring to our board of directors the leadership, operational and financial skills gained in his several roles at Philip Morris, as well as through his service as a Director at a number of private and public companies, including his service as Chairman of several of these companies.

119

 

Elaine L. Chao—Elaine L. Chao has been a Director of Parent since 2012 and serves as a member of Parent’s Nominating and Corporate Governance Committee. Effective immediately prior to the distribution, Ms. Chao will resign from Parent’s board of directors and become a Director of our company. Ms. Chao has been a Distinguished Fellow at The Heritage Foundation, a research and educational organization based in Washington D.C., since 2009. She previously served as the U.S. Secretary of Labor from 2001 to 2009. Ms. Chao also served as the President and Chief Executive Officer of United Way of America from 1992 to 1996. Her prior government service includes serving as Director of the Peace Corps and as Deputy Secretary at the U.S. Department of Transportation. Prior to her government service, she was Vice President of Syndications at Bank of America and a banker with Citicorp, N.A. Ms. Chao has served as a Director of Dole Food Company, Inc. since 2009 and as a Director of Wells Fargo & Company and Protective Life Corporation since 2011.

Ms. Chao’s work in the public, private and non-profit sectors includes vast experience leading large scale, complex and highly visible organizations. She will offer our board of directors valuable insights on macroeconomics, competitiveness, workforce issues and corporate governance as well as an extensive knowledge of the U.S. government at the federal and state levels.

John Elkann—John Elkann has been the Chairman and Chief Executive Officer of EXOR S.p.A., an investment company owning global companies in diversified sectors primarily in Europe and the United States, since 2011. He has served since 2010 as Chairman of Fiat S.p.A., where he has been a Director since 1997 and was Vice Chairman from 2004 to 2010. He has also served as Chairman of Editrice La Stampa since 2008, a non-Executive Director of The Economist Group since 2009, and as a Director of Fiat Industrial S.p.A. since 2010, SGS S.A. since 2011, and Gruppo Banca Leonardo S.p.A. since 2006.

Mr. Elkann has extensive experience in a number of industries including publishing and media. He will offer our board of directors strong leadership skills and a valuable perspective on industries relevant to our company.

Joel I. Klein—Joel I. Klein has been a Director and Executive Vice President, Office of the Chairman of Parent and Chief Executive Officer of Amplify since 2011. Effective immediately prior to the distribution, Mr. Klein will resign from Parent’s board of directors and become a Director of our company. He was the New York City schools chancellor from 2002 through 2010. He was the U.S. Chairman and Chief Executive Officer of Bertelsmann, Inc. and Chief U.S. Liaison Officer to Bertelsmann AG from 2001 to 2002. Mr. Klein also served with the Clinton administration in a number of roles, including Deputy White House Counsel from 1993 to 1995. Mr. Klein has served as a Director of Boston Properties, Inc. since January 2013.

As Chief Executive Officer of Amplify, Mr. Klein is a key member of our management team. His experience leading the largest public school system in the United States and contacts in the education industry position him as an excellent executive for our digital education business. Mr. Klein brings to our board of directors strong leadership skills gained from his decades of service in the private and public sectors.

James R. Murdoch—James R. Murdoch has been a Director of Parent since 2007 and its Deputy Chief Operating Officer and Chairman and CEO, International since 2011, after serving as Parent’s Chairman and Chief Executive, Europe and Asia beginning in 2007. Mr. J.R. Murdoch was the Chief Executive Officer of BSkyB from 2003 to 2007. Mr. J.R. Murdoch has served as a Director of BSkyB since 2003 and served as its Non-Executive Chairman from 2007 to April 2012. Mr. J.R. Murdoch was the Chairman and Chief Executive Officer of STAR Group Limited, a subsidiary of Parent, from 2000 to 2003. Mr. J.R. Murdoch previously served as an Executive Vice President of Parent, and served as a member of Parent’s board of directors from 2000 to 2003. Mr. J.R. Murdoch served as a Director of GlaxoSmithKline plc from 2009 to May 2012 and as a Director of Sotheby’s from 2010 to May 2012. Mr. J.R. Murdoch is the son of Mr. K.R. Murdoch and the brother of Mr. L.K. Murdoch.

Mr. J.R. Murdoch is a key member of Parent’s management team, as the Deputy Chief Operating Officer with continuing direct responsibility for Parent’s European and Asian operations. Mr. J.R. Murdoch has served in

120

 

a number of leadership positions within Parent and at its affiliates over the past 17 years. His broad-based experience, extensive knowledge of international markets, unique understanding of emerging technologies and strategic perspective of our business and operations enable him to be a valuable resource for our board of directors.

Lachlan K. Murdoch—Lachlan K. Murdoch has been a Director of Parent since 1996. Mr. L.K. Murdoch has served as a Director of Ten Network Holdings Limited since 2010 and as its Non-Executive Chairman since February 2012, after serving as its Acting Chief Executive Officer from 2011 to January 2012. Mr. L.K. Murdoch has served as the Executive Chairman of Illyria Pty Ltd, a private investment company, since 2005. He has served as Executive Chairman of DMG Radio Australia since 2009. Mr. L.K. Murdoch served as an advisor to Parent from 2005 to 2007, and served as its Deputy Chief Operating Officer from 2000 to 2005. Mr. L.K. Murdoch is the son of Mr. K.R. Murdoch and the brother of Mr. J.R. Murdoch.

Mr. L.K. Murdoch brings a wealth of knowledge regarding our operations, as well as management and strategic skills, to our board of directors. Mr. L.K. Murdoch has extensive experience serving in several senior leadership positions within Parent, including previously as Deputy Chief Operating Officer, and at various operating units within our company, in particular as head of News Limited and the New York Post.

Ana Paula Pessoa—Ana Paula Pessoa has been a Partner at Brunswick Group, an international corporate communications firm, since May 2012. She is a Partner of Black-Key Participações SA, a company she founded in 2011 which invests in digital start-up companies in Brazil. She is also the founder of Avanti SC, a strategic planning consulting firm, where she has served as a consultant since 2000. Ms. Pessoa previously served in numerous roles during her 18-year career at the Globo Organizations (“Globo”), a media group in South America, most recently as the Chief Financial Officer from 2001 to 2011 and New Business Director from 2008 to 2011 of Infoglobo, the newspaper, Internet and information services business of Globo. She also served as a Director of Globo’s subsidiaries including Valor Economico, a financial newspaper in Brazil, and Zap Internet, an online classified service in Brazil, from 2001 to 2011 and as a Director of SPIX Macaw Internet SA, an online news distribution start-up company, from 2009 to 2011.

During her tenure at Globo, Ms. Pessoa gained extensive experience in its newspaper, Internet, cable and satellite television and telecom operations. Along with this media expertise, she will bring to our board of directors strong business development and financial skills.

Masroor Siddiqui—Masroor Siddiqui is the Managing Partner of Naya Management LLP, an investment firm he co-founded in May 2012. He was previously a Partner at The Children’s Investment Fund Management (UK) LLP from 2009 to 2011 and a Managing Director at Canyon Partners from 2006 to 2009. Mr. Siddiqui previously served as a Senior Vice President at Putnam Investments, where he was responsible for a broad range of investments.

Mr. Siddiqui has significant experience in investing with a focus on media investments. He will offer our board of directors valuable insights on global markets and industries relevant to our businesses.

Committees of Our Board of Directors

Effective upon the completion of the distribution, our board of directors will have the following committees, each of which will operate under a written charter that will be posted to our website prior to the distribution.

Audit Committee

The Audit Committee will be established in accordance with Rule 10A-3 under the Exchange Act and the NASDAQ Listing Rules. The Audit Committee will assist the board of directors in its oversight of (i) the integrity of our financial statements and our financial reporting processes and systems of internal control, (ii) the

121

 

qualifications, independence and performance of our independent registered public accounting firm and the performance of our corporate auditors and corporate audit function, (iii) our compliance with legal and regulatory requirements involving financial, accounting and internal control matters, (iv) investigations into complaints concerning financial matters, (v) risks that may have a significant impact on our financial statements and (vi) the review, approval and ratification of transactions with related parties. The Audit Committee will provide an avenue of communication among management, the independent registered public accounting firm, the corporate auditors and the board of directors.

The Audit Committee will be comprised of members that meet the independence requirements set forth by the SEC and in the NASDAQ Listing Rules and the Audit Committee charter. Each of the members of the Audit Committee will be financially literate in accordance with NASDAQ Listing Rules. The Audit Committee will also have at least one member who meets the definition of audit committee financial expert under SEC rules. None of our Audit Committee members will simultaneously serve on more than two other public company audit committees unless the board of directors specifically determines that it would not impair the ability of an existing or prospective member to serve effectively on the Audit Committee. The initial members of the Audit Committee will be determined prior to the distribution date.

Compensation Committee

The primary responsibilities of the Compensation Committee will be: (i) to review and approve goals and objectives relevant to the compensation of our chief executive officer, to evaluate the performance of our chief executive officer in light of these goals and objectives and other factors the Compensation Committee deems appropriate, and, based on this review and evaluation, to recommend to our board of directors the compensation of our chief executive officer; (ii) to consider, authorize and oversee our incentive compensation plans and equity-based plans and recommend changes in such plans to our board of directors as needed, and to exercise all authority of our board of directors with respect to the administration of such plans, including the granting of awards under our incentive compensation plans and equity-based plans; (iii) to review and approve fixed and performance based compensation (including the measures and factors that the Compensation Committee deems appropriate for incentive awards including, without limitation, our financial and operating performance and individual contributions to financial and non-financial objectives, and the implementation and enforcement of effective compliance programs), benefits and terms of employment of our executive officers (as defined by the NASDAQ Listing Rules) and such other senior executives identified by the Compensation Committee after consultation with our chief executive officer and other members of management; (iv) to review and approve or ratify the principal employment terms for each employment arrangement (excluding arrangements for talent) where the sum of the base salary, bonus target and long-term incentive target for the contract period is equal to or greater than a threshold amount set by the Compensation Committee; (v) to review and approve separation obligations that exceed by more than a certain amount set by the Compensation Committee (excluding consideration for outstanding equity awards) those contractually provided for in an employment agreement approved or ratified by the Compensation Committee pursuant to (iv) above; (vi) to review our recruitment, retention, compensation, termination and severance policies for certain senior executives; (vii) to review and assist with the development of executive succession plans and to consult with our chief executive officer regarding the selection of senior executives; (viii) to review the compensation of non-executive directors for service on our board of directors and its committees and recommend changes in compensation to the board of directors; and (ix) to review our compensation policies and practices to determine whether they create risk-taking incentives that are reasonably likely to have a material adverse impact on us.

The Compensation Committee will be comprised of members that meet the independence requirements set forth by the SEC and in the NASDAQ Listing Rules and the Compensation Committee charter. The members of the Compensation Committee will be “non-employee directors” (within the meaning of Rule 16b-3 of the Exchange Act) and “outside directors” (within the meaning of Section 162(m) of the Code). None of our directors will have interlocking or other relationships with other boards, compensation committees or our executive officers that would require disclosure under Item 407(e)(4) of Regulation S-K. The initial members of the Compensation Committee will be determined prior to the distribution date.

122

 

Nominating and Corporate Governance Committee

The primary responsibilities of the Nominating and Corporate Governance Committee will be: (i) to review the qualifications of candidates for director suggested by board of director members, stockholders, management and others in accordance with criteria recommended by the Nominating and Corporate Governance Committee and approved by our board of directors; (ii) to consider the performance of incumbent directors in determining whether to nominate them for re-election; (iii) to recommend to our board of directors a slate of nominees for election or re-election to our board of directors at each annual meeting of stockholders; (iv) to recommend to our board of directors candidates to be elected to our board of directors as necessary to fill vacancies and newly created directorships; and (v) to advise and make recommendations to our board of directors on corporate governance matters. The Nominating and Corporate Governance Committee will also make recommendations to our board of directors as to determinations of director independence and conduct an annual self-evaluation for our board of directors.

The Nominating and Corporate Governance Committee will be comprised of members that meet the independence requirements set forth by the SEC and in the NASDAQ Listing Rules and the Nominating and Corporate Governance Committee charter. The initial members of the Nominating and Corporate Governance Committee will be determined prior to the distribution date.

Standards of Business Conduct and Code of Ethics

Prior to the completion of the distribution, we intend to adopt Standards of Business Conduct. These Standards of Business Conduct will confirm our commitment to conduct our affairs in compliance with all applicable laws and regulations and observe the highest standards of business ethics. The Standards of Business Conduct will also apply to ensure compliance with stock exchange requirements and to ensure accountability at a senior management level for that compliance. We intend that the spirit, as well as the letter, of the Standards of Business Conduct be followed by all directors, officers and employees of us and our subsidiaries and divisions. This will be communicated to each new director, officer and employee.

To promote further ethical and responsible decision-making, our board of directors intends to establish a Code of Ethics for the chief executive officer and senior financial officers that will be incorporated by reference into the Standards of Business Conduct.

A copy of our Standards of Business Conduct and Code of Ethics will be available on our website immediately prior to the distribution.

Director Nomination Process

Our initial board of directors has been selected by Parent’s board of directors. As part of its selection process, Parent’s board of directors considered, among other things, the candidate’s education and background; his or her leadership and ability to exercise sound judgment; his or her general business experience and familiarity with our businesses; and whether he or she possessed unique expertise or perspective that would be of value to us. Parent’s board of directors also assessed the independence of each candidate, taking into consideration the transactions and relationships between each candidate or any member of his or her immediate family and us or our subsidiaries and affiliates, as well as any transactions and relationships between each candidate or their affiliates and members of our senior management or their affiliates. As a result of the independence review conducted by Parent’s board of directors, Parent’s board affirmatively determined that

Mmes. Bancroft, Chao and Pessoa, and Messrs. Aznar, Barnes, Elkann and Siddiqui are independent of our company and our management under the standards set forth in the NASDAQ listing rules.

Following the distribution, our Nominating and Corporate Governance Committee will develop criteria for filling vacant board of director positions, taking into consideration such factors as it deems appropriate, which we

123

 

expect will include some or all of the factors used to select our initial board if directors. In addition, we believe candidates should not have any interests that would materially impair their ability to exercise independent judgment or otherwise discharge the fiduciary duties owed as a director to us and our stockholders. Directors must demonstrate personal integrity and ethical character, and value and appreciate these qualities in others. It is expected that each director will devote the necessary time to the fulfillment of his or her duties as a director. In this regard, the Nominating and Corporate Governance Committee will consider the number and nature of each director’s other commitments, including other directorships. Although we do not anticipate the board of directors will have a formal policy with respect to diversity in identifying director nominees, the Nominating and Corporate Governance Committee will seek to promote through the nomination process an appropriate diversity on the board of directors of professional background, experience, expertise, perspective, age, gender, ethnicity and country of citizenship.

After completing this evaluation, the Nominating and Corporate Governance Committee will make recommendations to the full board of directors which in turn will make the final determination whether to nominate or appoint the new director after considering the Nominating and Corporate Governance Committee’s recommendation.

124

 

EXECUTIVE COMPENSATION

Introduction

Prior to the distribution, we have been a wholly-owned subsidiary of Parent. Until the distribution, our compensation decisions will be made by Parent’s senior management and the compensation committee of Parent’s board of directors. We expect that our executive compensation program following the distribution will generally include the same elements as Parent’s executive compensation program. Our Compensation Committee will review all aspects of compensation and may make adjustments that it believes are appropriate in structuring our executive compensation arrangements. We have presented information below under “—Key Elements of Expected Compensation from New News Corporation” concerning future compensation from New News Corporation for each of our executive officers other than Mr. Zweifach, our General Counsel, whose services will be provided to us under a transition services agreement with Parent and who will receive no compensation directly from us.

Compensation Philosophy

The compensation philosophy of Parent and its compensation committee for our company is described below. Following the distribution, our Compensation Committee will review and consider this philosophy and may make adjustments as appropriate. The current compensation philosophy for our company aims to achieve the following:

   

Provide a compensation program that drives performance;

   

Ensure our compensation policies and practices support both annual and long-term growth for stockholders; and

   

Structure compensation packages to attract, retain and motivate the top executive talent necessary for our success.

In designing compensation for our executive officers, Parent and its compensation committee are guided by the following objectives:

   

Our compensation programs should incorporate a mix of fixed and performance-based compensation in the form of base salary, performance-based annual bonus compensation, long-term equity-based incentives and retirement and other benefit programs to enable us to attract the highest quality talent. Performance-related compensation is awarded at the sole discretion of the Compensation Committee and earned based on the company’s and the individual’s performance.

   

Our individual pay decisions should consider trends in the industry in which we operate and compete and the executive’s performance, contributions, breadth and complexity of the role, and individual skills.

   

Our compensation programs should be communicated and implemented as clearly, specifically and transparently as possible.

   

Our equity programs should align our executive officers’ compensation with our long-term performance and link our executive officers’ interests directly with our stockholders’ interests, and also provide a strong link between pay and performance.

Primary Elements of Compensation

Base Salary: One element of compensation needed to attract and retain an employee in any organization is base salary. Base salary is the fixed element of an executive officer’s annual cash compensation and does not vary with performance. We expect that the base salaries for our executive officers will be established in the context of the nature of the executive officer’s particular position, the responsibilities associated with that

125

 

position, length of service with the company, experience, expertise, knowledge and qualifications, market factors, the industry in which we operate and compete, recruitment and retention factors, our Executive Chairman’s and Chief Executive Officer’s recommendations (with the exception of their own base salaries) and our overall compensation philosophy. As further described below, the respective employment arrangements of our executive officers provide for a specified or minimum base salary determined in accordance with these criteria.

Annual Bonus Compensation: Our executive officers also are expected to be eligible for annual bonus compensation. The executive officers have a direct influence on our operations and strategy. We expect that our Compensation Committee will adopt an annual bonus framework which fosters a performance-driven, pay-for-performance culture that aligns our executive officers’ interests with those of our stockholders while also rewarding the executive officers for superior individual achievements. As further described below, the respective employment arrangements of our executive officers provide for an annual bonus with performance criteria to be determined in accordance with this framework.

Long-Term Equity-Based Incentive Awards: We anticipate having our executive officers participate in long-term equity incentive compensation programs. We are still evaluating and determining the design of our long-term equity incentive awards. We expect that our Compensation Committee will design a framework for equity awards that aligns our executives’ compensation with the long-term performance of our company and links our executives’ interests directly with those of our stockholders. As further described below, the respective employment arrangements of our executive officers provide for long-term incentive awards.

Executive Officers of New News Corporation

Our initial executive officers will consist of our Executive Chairman, Mr. K. Rupert Murdoch, our Chief Executive Officer, Mr. Robert J. Thomson, our Chief Financial Officer, Mr. Bedi Ajay Singh, and our General Counsel, Mr. Gerson Zweifach. Our company was formed in connection with this transaction, and we paid no compensation to our executive officers for the fiscal year ended June 30, 2012.

Key Elements of Expected Compensation from New News Corporation

The key elements of expected compensation for each of our executive officers are summarized below. With respect to performance targets for annual bonuses and performance-based equity awards, these targets will be determined at the sole discretion of the Compensation Committee (subject to any employment agreements) and will be earned based on our executive officers’ achievement of company and individual performance metrics.

K. Rupert Murdoch

Mr. K. Rupert Murdoch, our Executive Chairman, will receive compensation commensurate to his strategic role with us, with a significant portion of his total target compensation at-risk and linked to our performance. Accordingly, Parent’s compensation committee determined that Mr. Murdoch shall receive from us for fiscal 2014 a base salary at an annual rate of $1,000,000, a performance-based annual bonus with a target of $2,000,000 and a performance-based long-term equity-based award (“Performance Equity Awards”) with a target amount of $2,000,000.

Robert J. Thomson

On April 25, 2013, a subsidiary of Parent entered into an employment agreement effective as of January 1, 2013 with Mr. Thomson (the “Thomson Agreement”), which subsidiary will be transferred to us at the distribution. The term of the Thomson Agreement, under which, as of the distribution, Mr. Thomson serves as our Chief Executive Officer, extends through June 30, 2016. Pursuant to the Thomson Agreement, Mr. Thomson receives a base salary at an annual rate of not less than $2,000,000, and he will also be entitled to receive a

126

 

performance-based annual bonus with a target of $2,000,000. The criteria for the achievement of the performance-based bonus amount shall be based on metrics to be determined by our Compensation Committee, in consultation with Mr. Thomson, and the Compensation Committee will determine the extent to which the metrics have been satisfied and the amount of the annual bonus, if any.

Beginning in fiscal 2014, Mr. Thomson is entitled to receive annual grants of Performance Equity Awards with a target amount of $4,000,000. Our Compensation Committee will determine the design of the Performance Equity Awards, the extent to which the applicable performance metrics have been satisfied and the amount of the Performance Equity Awards, if any. If after the expiration date of the Thomson Agreement Mr. Thomson is not offered an extension or renewal on similar or better terms, he will be entitled to receive the full value of any Performance Equity Award granted during the term of his employment.

Mr. Thomson is entitled to participate in incentive or benefit plans or arrangements in effect or to be adopted by us or our affiliates and to such other perquisites as are applicable to our other senior executives of similar rank, including any stock option or purchase plan, stock appreciation rights plan or any bonus or other incentive compensation plan and any profit sharing, pension, group medical, dental, disability, life insurance or other similar benefit plans. Additionally, the Thomson Agreement provides for certain payments and benefits to Mr. Thomson upon his separation from us as described below in “—Potential Payments Upon Termination”.

Bedi Ajay Singh

On November 26, 2012, a subsidiary of Parent entered into an employment agreement with Mr. Singh (the “Singh Agreement”), which subsidiary will be transferred to us at the distribution. The term of the Singh Agreement, under which, as of the distribution, Mr. Singh serves as our Chief Financial Officer, extends through June 30, 2016. Pursuant to the Singh Agreement, Mr. Singh receives a base salary at an annual rate of not less than $1,100,000, and he will also be entitled to receive a performance-based annual bonus with a target of no less than $1,000,000. The criteria for the achievement of the performance-based bonus amount shall be based on metrics to be determined by our Compensation Committee, in consultation with Mr. Singh, and the Compensation Committee will determine the extent to which the metrics have been satisfied and the amount of the annual bonus, if any.

Beginning in fiscal 2014, Mr. Singh is entitled to receive annual grants of Performance Equity Awards with a target amount of no less than $1,000,000. Our Compensation Committee will determine the design of the Performance Equity Awards, the extent to which the applicable performance metrics have been satisfied and the amount of the Performance Equity Awards, if any. If after the expiration date of the Singh Agreement Mr. Singh is not offered an extension or renewal on similar or better terms, he will be entitled to receive the full value of any Performance Equity Award granted during the term of his employment. In addition, Mr. Singh received a one-time inducement equity grant equivalent in value to $500,000 in Parent Class A Common Stock (the “Initial Equity Grant”). This grant will be converted to the number of shares of our Class A Common Stock based on a ratio used to convert other Parent equity awards to our equity awards, and will vest over three years.

Mr. Singh is entitled to participate in incentive or benefit plans or arrangements in effect or to be adopted by us or our affiliates and to such other perquisites as are applicable to our other senior executives of equal rank, including any stock option or purchase plan, stock appreciation rights plan or any bonus or other incentive compensation plan and any profit sharing, pension, group medical, dental, disability, life insurance or other similar benefit plans. Mr. Singh also receives a car allowance in the amount of $1,200 per month. Additionally, the Singh Agreement provides for certain payments and benefits to Mr. Singh upon his separation from us as described below in “—Potential Payments Upon Termination”, and provides Mr. Singh with reimbursement for reasonable legal expenses up to $20,000 incurred by him in connection with the negotiation and preparation of the Singh Agreement.

127

 

Gerson Zweifach

In connection with the distribution, we entered into a transition services agreement with Parent pursuant to which we compensate Parent for the services that it provides to us. See “Certain Relationships and Related Person Transactions.” As part of that agreement, Parent will provide to us the services of its Group General Counsel, Mr. Zweifach. Mr. Zweifach will receive no compensation from us for those services.

Potential Payments Upon Termination

The employment agreements of each of Messrs. Thomson and Singh provide for certain payments and benefits upon a separation from us. There are no similar arrangements currently in place with respect to Mr. Murdoch or for Mr. Zweifach, who receives no compensation from us for his services. The provisions in the employment agreements of Messrs. Thomson and Singh are summarized below.

Robert J. Thomson

Pursuant to the Thomson Agreement, during any period that Mr. Thomson fails to perform his duties as a result of incapacity and disability due to physical or mental illness, or by reason of his death, Mr. Thomson is entitled to (or we will pay directly to his surviving spouse or legal representative of his estate):

   

continue to receive his full base salary until Mr. Thomson returns to his duties or until one year following his termination;

   

any annual bonus payable but not yet paid with respect to any fiscal year ended prior to the date of termination;

   

a pro-rata portion of the annual bonus he would have earned for the fiscal year of termination had no termination occurred, calculated based on the pre-determined target annual bonus amount and based on the number of days he was employed by us and Parent in the fiscal year during which his employment terminated compared to the total number of days in such fiscal year; and

   

vesting and payment of Performance Equity Awards as provided for in the applicable plan documents.

If Mr. Thomson’s employment is terminated by us for cause, Mr. Thomson will be entitled to receive:

   

his full base salary through the date of termination; and

   

any annual bonus payable but not yet paid with respect to any fiscal year ended prior to the date of termination.

If Mr. Thomson’s employment is terminated by us other than for cause, death or disability or by Mr. Thomson for good reason, Mr. Thomson will be entitled to receive, subject to his execution of a general release and waiver:

   

his full base salary and annual bonus for two years after the date of termination, with the annual bonus determined in accordance with his agreement;

   

any annual bonus payable but not yet paid with respect to any fiscal year ended prior to the date of termination; and

   

continued vesting of Performance Equity Awards granted prior to the date of termination in the same manner as though he continued to be employed for the remaining term of his employment.

For the purpose of Mr. Thomson’s employment agreement, the term “cause” means a material breach of the agreement by Mr. Thomson, which breach is not cured within 30 days after written notice to Mr. Thomson specifying such breach, or in the event of Mr. Thomson’s excessive unauthorized absenteeism, chronic substance abuse, fraud, embezzlement, or conviction of a felony (other than a vehicular felony). The term “good reason”

128

 

means (i) a material breach of the agreement by us, which breach if curable, is not cured within 30 days after written notice specifying such breach, (ii) if Mr. Thomson is required to be based and essentially render services in other than the New York City metropolitan area at our principal offices in such area or (iii) a material diminution in Mr. Thomson’s job description, title, authority, duties or responsibility.

Bedi Ajay Singh

Pursuant to the Singh Agreement, during any period that Mr. Singh fails to perform his duties as a result of incapacity and disability due to physical or mental illness, or by reason of his death, Mr. Singh is entitled to (or we will pay directly to his surviving spouse or legal representative of his estate):

   

continue to receive his full base salary until Mr. Singh returns to his duties or until one year following his termination;

   

any annual bonus payable but not yet paid with respect to any fiscal year ended prior to the date of termination;

   

a pro-rata portion of the annual bonus he would have earned for the fiscal year of termination had no termination occurred, calculated based on the annual bonus target amount and based on the number of days he was employed by us and Parent in the fiscal year during which his employment terminated compared to the total number of days in such fiscal year;

   

the Initial Equity Grant, which shall be deemed fully vested; and

   

vesting and payment of Performance Equity Awards as provided for in the applicable plan documents.

If Mr. Singh’s employment is terminated by us for cause, Mr. Singh will be entitled to receive:

   

his full base salary through the date of termination; and

   

any annual bonus payable but not yet paid with respect to any fiscal year ended prior to the date of termination.

If Mr. Singh’s employment is terminated by us other than for cause, death or disability or by Mr. Singh for good reason, Mr. Singh will be entitled to continue to receive:

   

his base salary and his annual bonus at the pre-determined target amount;

   

any annual bonus payable but not yet paid with respect to any fiscal year ended prior to the date of termination;

   

vesting and payment of Performance Equity Awards as provided for in the applicable plan documents; and

   

the Initial Equity Grant, which shall be deemed fully vested.

For the purpose of the Singh Agreement, the term “cause” means a material breach of the agreement by Mr. Singh, which breach is not cured within 30 days after written notice to Mr. Singh specifying such breach, or in the event of Mr. Singh’s excessive unauthorized absenteeism, chronic substance abuse, fraud, embezzlement, or conviction of a felony (other than a vehicular felony). The term “good reason” means, provided the following instances satisfy the term “Good Cause” within the meaning of Section 409A of the Internal Revenue Code, (i) a material breach of the agreement by us, which breach if curable, is not cured within 30 days after written notice specifying such breach, (ii) if Mr. Singh is required to be based and essentially render services in other than the New York City metropolitan area at our principal offices in such area or (iii) a material diminution in Mr. Singh’s job description, title, authority, duties or responsibility.

129

The amount and timing of any additional equity-based compensation to be paid to our executive officers at or following the distribution will be determined by our Compensation Committee. Any equity incentive awards granted to our executive officers following the distribution will generally be granted pursuant to the new equity incentive plan, which is described under “—New Equity Incentive Plan” below.

New Equity Incentive Plan

Prior to the distribution, we will adopt the New News Corporation 2013 Long-Term Incentive Plan (the “2013 LTIP”). Parent, as our sole stockholder, will approve the 2013 LTIP prior to the distribution date, and the 2013 LTIP will become effective on the distribution date. The following description is a summary of certain terms of the 2013 LTIP, which is filed as an exhibit to the registration statement on Form 10 of which this information statement is a part. This summary is qualified in its entirety by reference to the full text of the 2013 LTIP, which is incorporated by reference into this information statement. The terms of the 2013 LTIP that will be in effect following the distribution have not yet been finalized; changes to the 2013 LTIP, some of which may be material, may be made prior to our distribution from Parent.

Purpose

The purpose of the 2013 LTIP is to benefit and advance the interests of our company and its subsidiaries by making awards to certain employees, directors and other service providers of our company and its subsidiaries as an additional incentive for them to make contributions to our financial success.

Eligibility

Employees, officers or directors of our company or an affiliate of our company, and consultants and advisers currently providing services to our company or an affiliate of our company, are eligible to receive awards under the 2013 LTIP.

Plan Limits

We expect that an aggregate of thirty million (30,000,000) shares of New News Corporation Class A Common Stock will be authorized to be issued under the 2013 LTIP (the “2013 LTIP Limit”) and that the 2013 LTIP will include additional provisions on how shares would be counted against the 2013 LTIP Limit. If an award expires, or is cancelled, forfeited or terminated without having been exercised or paid, or is settled in cash, the number of shares previously subject to such award will be added back to the 2013 LTIP Limit and will again be available for future grant under the 2013 LTIP.

The 2013 LTIP will provide that no participant may be granted stock options or SARs with respect to more than a specified number of shares of New News Corporation Class A Common Stock in any one calendar year (the “Participant Limit”), except that a participant may be granted awards in respect of up to a specified number of shares of New News Corporation Class A Common Stock in the participant’s year of hire (the “New Hire Limit”). We will determine the Participant Limit and the New Hire Limit prior to the distribution. For all other awards intended to qualify for the Section 162(m) exception for “qualified performance-based compensation,” a maximum dollar amount for awards denominated in cash and a maximum share amount of New News Corporation Class A Common Stock for awards denominated in shares will be payable to any one participant during a one year performance period.

Duration

Unless earlier terminated by action of our board of directors, the 2013 LTIP will terminate on the tenth anniversary of the effective date of the 2013 LTIP, and no further awards may be granted under the 2013 LTIP after the end of the term.

130

Administration

The 2013 LTIP will be administered by our board of directors or the Compensation Committee. Subject to certain limitations, the Compensation Committee may delegate its authority under the 2013 LTIP to one or more (i) members of the Compensation Committee or (ii) company officers. The Compensation Committee selects the employees, directors and other service providers who receive awards under the 2013 LTIP and determines the type of award to be granted, the number of shares subject to awards or the cash amount payable in connection with an award and the terms and conditions of these awards in accordance with the terms of the 2013 LTIP. The Compensation Committee may, in its discretion, at any time accelerate the vesting date or dates of any award of stock options, SARs, restricted shares or restricted share units (“RSUs”). The Compensation Committee has full authority to interpret the 2013 LTIP and to establish rules for its administration. The Compensation Committee may also establish procedures for the deferral of payment of awards. With respect to any award that is intended to satisfy the requirements of the Section 162(m) exception for “qualified performance-based compensation,” the Compensation Committee will consist of at least the number of directors required to satisfy the exception for “qualified performance-based compensation” set forth in Section 162(m) of the Code, and each Compensation Committee member will satisfy the qualification requirements of such exception. Failure of any Compensation Committee member to meet these qualification requirements will not, however, invalidate any action taken or awards granted by the Compensation Committee.

Terms and Conditions of Awards

The 2013 LTIP will provide for the award of stock options, SARs, restricted and unrestricted shares, RSUs, dividend equivalents, performance awards and other equity-related awards and cash payments.

Stock Options

Stock options can be either incentive stock options within the meaning of Section 422 of the Code or options that do not qualify as incentive stock options for federal income tax purposes. The Compensation Committee will determine the number and kind of stock options granted, the date of grant, the exercise price, the vesting schedule, the period during which the stock options can be exercised (including the extent to which and the length of time during which the stock options may be exercised following the termination of the participant’s service) and any applicable performance goal requirements.

No stock option may be granted with a per share exercise price of less than 100% of the fair market value of a share of New News Corporation Class A Common Stock on the date of grant (with certain exceptions). Unless otherwise determined by the Compensation Committee, no stock option can be exercised more than ten years after the date of grant. The exercise price of a stock option will be paid in cash or, in the discretion of the Compensation Committee, in shares of New News Corporation Class A Common Stock or in a combination of cash and shares or with any other form of valid consideration acceptable to the Compensation Committee. The Compensation Committee may also allow a participant to pay all or a portion of the exercise price using a net share settlement procedure, through the withholding of shares or through a cashless exercise procedure.

SARs

The Compensation Committee may grant SARs under the 2013 LTIP alone or in tandem with other awards. No SAR that is granted alone may be granted with a per share exercise price of less than 100% of the fair market value of a share of New News Corporation Class A Common Stock on the date of grant (with certain exceptions). SARs granted alone or in tandem with awards other than stock options will be subject to the terms and conditions established by the Compensation Committee as set forth in the applicable award agreement (including the extent to which and the length of time during which the SARs may be exercised following the termination of the participant’s service). Unless the Compensation Committee determines otherwise, in no event may a SAR granted alone or in tandem with awards other than stock options be exercised following the earlier to occur of the

131

 

expiration of the SAR and the tenth anniversary of the date of grant. SARs granted in tandem with a stock option (either at the time the stock option is granted or by amendment at any time prior to the exercise, expiration or termination of such stock option) will become exercisable, be transferable and will expire according to the same vesting schedule, transferability rules and expiration provisions as the corresponding stock option.

The Compensation Committee may not reprice any stock option or SAR awarded under the 2013 LTIP without the approval of stockholders.

Restricted Shares, Restricted Share Units and Unrestricted Shares

The Compensation Committee may grant restricted shares, RSUs and unrestricted shares under the 2013 LTIP. A restricted share is a share of New News Corporation Class A Common Stock granted to the participant subject to restrictions determined by the Compensation Committee. An RSU is a contractual right to receive, in the discretion of the Compensation Committee, a share of New News Corporation Class A Common Stock, a cash payment equal to the fair market value of a share of New News Corporation Class A Common Stock or a combination of cash and New News Corporation Class A Common Stock, subject to terms and conditions as determined by the Compensation Committee. The Compensation Committee may also grant awards of unrestricted shares of New News Corporation Class A Common Stock to eligible employees in recognition of outstanding achievements and performance.

Restricted shares and RSUs will be subject to a vesting schedule, which may include any applicable performance goal requirements, established by the Compensation Committee. Subject to limited exceptions, vesting schedules must remain in effect (in whole or in part) until the first anniversary of the date of grant. The Compensation Committee will determine and specify the impact of the termination of the participant’s service on unvested restricted shares and RSUs.

For restricted shares, the participant will generally have all rights as a holder of New News Corporation Class A Common Stock. However, dividends paid on restricted shares that vest or are earned based upon the achievement of performance goals will be accrued during the applicable performance period and will vest and be paid only if the performance goals for the underlying restricted shares are achieved. If the performance goals are not achieved, the participant will forfeit all unvested dividends.

Performance Awards

The Compensation Committee may grant performance awards in the form of either performance shares or performance units. The terms and conditions of the performance awards will be determined by the Compensation Committee, and, unless the Compensation Committee determines otherwise, the grant, vesting and/or exercisability of performance awards will be conditioned in whole or in part on the achievement in whole or in part of performance goals during a performance period as selected by the Compensation Committee. Under the 2013 LTIP, the Compensation Committee may also condition the grant, vesting and/or exercisability of other types of awards upon the attainment of performance targets related to one or more performance goals over a performance period selected by the Compensation Committee. For awards intended to satisfy the Section 162(m) exception for “qualified performance-based compensation,” the Compensation Committee will establish the performance goals by reference to one or more performance criteria to be set forth in the 2013 LTIP, either on a company-wide basis or, as relevant, concerning one or more affiliates, divisions, departments, regions, functions or business units.

Dividend Equivalents

The Compensation Committee may allow any recipient of an award under the 2013 LTIP (other than a stock option or SAR) to receive, currently or on a deferred basis, interest, dividends or dividend equivalent payments, for the number of shares of New News Corporation Class A Common Stock covered by such award. The

132

Compensation Committee may also provide for the amount of such interest, dividend or dividend equivalent to be reinvested and/or subject to the same terms and conditions (including vesting and forfeiture provisions) as the related award. Dividends or dividend equivalents granted for an award that vests or is earned based upon the achievement of performance goals will be accrued during the applicable performance period and will vest and be paid only if the performance goals for the underlying award are achieved. If the performance goals are not achieved, the participant will forfeit all unvested dividends or dividend equivalents with respect to such award.

Other Awards

The Compensation Committee has the authority to grant other equity-related awards or cash payments based on one or more criteria determined by the Compensation Committee under the 2013 LTIP that are consistent with the purpose of the 2013 LTIP and our interests.

Adjustments

In the event of a merger, consolidation, stock split, reverse stock-split, dividend, distribution, combination, reclassification, reorganization, split-up, spin-off or recapitalization that changes the character or amount of the New News Corporation Class A Common Stock, an extraordinary cash dividend or other changes in our corporate structure, equity securities or capital structure, the Compensation Committee will make any adjustments it deems appropriate to the number and kind of securities subject to any outstanding award, the exercise price or purchase price, if any, of any outstanding award, and the maximum number or kind of securities that may be granted under the 2013 LTIP or the aggregate number or kind of securities that may be granted to any participant. These adjustments will not be considered a repricing under the 2013 LTIP. In the case of a merger, consolidation or similar transaction, the Compensation Committee may also (i) provide that outstanding awards will be terminated, and the vesting and payout of the awards accelerated, immediately prior to the consummation of the transaction, (ii) provide that outstanding awards may be cashed out (with certain limitations), and/or (iii) make such other adjustments as it deems appropriate, including providing for full vesting of awards for those participants whose service is terminated in connection with the transaction.

Transfer Restrictions

The rights of a participant to any award granted under the 2013 LTIP will be exercisable during the participant’s lifetime only by the participant and will not be transferable other than by will or the laws of descent and distribution. The Compensation Committee may, however, permit other transferability, subject to any conditions and limitations that it imposes.

Amendment and Termination

The board of directors may at any time alter, amend, suspend or terminate the 2013 LTIP, in whole or in part, except that no alteration or amendment will be effective without stockholder approval (if required by law or applicable stock exchange rules). No termination or amendment may materially adversely affect the terms of any then outstanding awards without the consent of the affected participant.

133

COMPENSATION OF DIRECTORS

Following the distribution, director compensation will be reviewed and recommended by the Compensation Committee of the board of directors and set by the board of directors.

It is anticipated that directors’ fees will not be paid to directors who are our executives or employees (the “executive directors”) because the responsibilities of board of directors membership are considered in determining compensation paid as part of the executives’ normal employment conditions.

However, we expect the Compensation Committee will periodically review the basic fees payable to the directors who are not our executives (collectively, the “non-executive directors”). Non-executive directors’ compensation will be evaluated against our peers and the Compensation Committee will consider the appropriateness of the form and amount of director compensation and make recommendations to the board of directors concerning director compensation with a view toward attracting and retaining qualified directors.

It is anticipated that such compensation will consist of an annual cash retainer and an annual deferred stock unit (“DSU”) retainer. In addition, we anticipate that the chairs of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive an additional cash retainer and that the members of each such committee will also receive an additional cash retainer. We also expect that all non-executive directors will be reimbursed for reasonable travel and other out-of-pocket business expenses incurred in connection with attendance at meetings of the board of directors and its committees.

The following table sets forth information concerning the fiscal year 2012 compensation paid by Parent to directors of Parent who are expected to be our directors after the distribution and who are not named executive officers. For fiscal 2012, the annual retainers paid by Parent to its non-executive directors who will become our directors effective immediately prior to the distribution consisted of: (i) an annual cash retainer of $100,000, (ii) an annual DSU retainer of $140,000, (iii) an annual retainer of $16,000 for members of the Audit Committee and (iv) an annual retainer of $11,000 for members of the Compensation or Nominating and Corporate Governance Committees. During fiscal 2012, Mr. Barnes served on Parent’s Audit Committee and, since October 2011, Parent’s Compensation Committee, and Mr. Aznar and Ms. Bancroft each served on Parent’s Nominating and Corporate Governance Committee beginning in October 2011.

Director Compensation of Parent for the Fiscal Year Ended June 30, 2012

                                                             

Director

   Fees Earned or
Paid in Cash ($)
   Stock
Awards(a)
  Option
Awards
   Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
  All Other
Compensation
  Total

José María Aznar

     $ 107,639        $ 140,000         n/a          n/a         n/a       $ 247,639  

Natalie Bancroft

     $ 107,639        $ 140,000         n/a          n/a         n/a       $ 247,639  

Peter L. Barnes

     $ 123,639        $ 140,000         n/a          n/a         n/a       $ 263,639  

Joel Klein

       n/a        $ 1,012,341 (c)       n/a          n/a       $  3,500,000 (d)     $ 4,512,341  

Lachlan K. Murdoch

     $  100,000        $ 140,000         n/a        $ 2,420,000 (b)       n/a       $ 2,660,000  
(a) The amounts set forth in the Stock Awards column represent the aggregate grant date fair value of stock awards granted during the fiscal year ended June 30, 2012. With respect to DSU awards granted to each non-executive director in fiscal 2012, the value of the Class A Common Stock underlying each DSU will be paid to the respective non-executive director in cash at the market value of our or Parent’s Class A Common Stock (as provided in the employee matters agreement) on the fifth anniversary date of when it was credited to that director’s account, unless that director leaves our board of directors before that date. Upon a non-executive director’s end of service on our board of directors, such director will be paid in cash the value of the shares of Class A Common Stock credited to his or her account at the market value of our or Parent’s Class A Common Stock (as provided in the employee matters agreement) as of the date of the director’s end of service.

134

 

(b) Mr. L.K. Murdoch was previously an employee of Parent and has vested pension benefits due to him. The value reported is theoretical as this amount is calculated pursuant to SEC requirements and is based on a retirement assumption of age 55 or current age, if later, and other assumptions used in preparing Parent’s audited consolidated financial statements for the fiscal years ended June 30, 2012 and June 30, 2011. The change in pension value in the fiscal year ended June 30, 2012 was primarily due to a reduction in prevailing interest rates in the credit markets. The discount rate used pursuant to pension accounting rules to calculate the present value of future payments decreased from 5.75% for fiscal 2011 to 4.25% for fiscal 2012 driving the substantial increases in the present value of future payments reported for fiscal 2012. However, the increase in pension value resulting from the change in the discount rate does not result in any increase in the benefits payable to Mr. L.K. Murdoch under the plan.
(c) Represents stock awards granted to Mr. Klein for service as an Executive Vice President, Office of the Chairman and Chief Executive Officer, Education Division of Parent. Mr. Klein does not receive any additional compensation for his service as a member of Parent’s board of directors.
(d) Includes a salary of $2,000,000 paid and an annual bonus for fiscal 2012 of $1,500,000 awarded to Mr. Klein.

135

 

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Procedures for Approval of Related Person Transactions

The Audit Committee will establish procedures for the review, approval or ratification of related party transactions. We expect that pursuant to these procedures, the Audit Committee will review and approve (i) all related party transactions when and if required to do so by applicable rules and regulations, (ii) all transactions between us and any of our executive officers, directors, director nominees, directors emeritus or any of their immediate family members and (iii) all transactions between us and any security holder who is known by us to own of record or beneficially more than five percent of any class of our voting securities, other than transactions that (a) have an aggregate dollar amount or value of less than $120,000 (either individually or in combination with a series of related transactions) and (b) are made in the ordinary course of business of our company and such related party.

Certain Relationships and Potential Corporate Opportunities

Additionally, our amended and restated certificate of incorporation will acknowledge that our covered stockholders, directors and officers are or may become stockholders, directors, officers, employees or agents of Parent and certain of its affiliates and that we may engage in material business transactions with such entities. Our amended and restated certificate of incorporation will provide that any such overlapping person will not be liable to us, or to any of our stockholders, for breach of any fiduciary duty that would otherwise exist by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of restricted business opportunities set forth in our amended and restated certificate of incorporation) to Parent instead of us. See “Description of Our Capital Stock—Certain Corporate Opportunities.”

Related Person Transactions

Mrs. Prudence MacLeod is the daughter of K. Rupert Murdoch and is a member of the board of directors of Times Newspapers Holding Limited, a subsidiary of New News Corporation. She receives customary director fees for such services.

Other than as set out in this information statement, no director of New News Corporation or any person named in this information statement as a proposed director of New News Corporation has or has had, as of the date of this information statement or within the two years prior to such date, any interest in the promotion of New News Corporation or in the property acquired or proposed to be acquired by it.

136

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Before the distribution, all of the outstanding shares of our common stock will be owned beneficially and of record by Parent. The following table sets forth information regarding the anticipated beneficial ownership of our Class A Common Stock and Class B Common Stock immediately following the completion of the distribution for each person who is known by us to beneficially own more than 5% of Parent Class B Common Stock. The beneficial ownership of our common stock presented in the table is based on beneficial ownership of Parent Class A Common Stock and Class B Common Stock, as set forth in the footnotes to the table and calculated as of May 20, 2013, and the distribution of one share of our Class A Common Stock and Class B Common Stock for every four shares of Parent Class A Common Stock and Class B Common Stock, respectively.

Security Ownership of Certain Beneficial Owners

                                         
    Common Stock Beneficially Owned (1)  
    Number of
Shares Beneficially
Owned
    Option
Shares
    Percent
of Class (3)
 

Name (2)

  Non-Voting
Class A
Common
Stock
    Voting
Class B
Common
Stock (4)
    Non-Voting
Class A
Common
Stock
    Non-Voting
Class A
Common
Stock
    Voting
Class B
Common
Stock (4)
 

Murdoch Family Trust (5)

c/o McDonald Carano Wilson LLP

100 W. Liberty Street

10th Floor

Reno, NV 89501

    14,250        76,655,870        0        *        38.4

HRH Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud (6)

c/o Kingdom Holding Company

Kingdom Centre—Floor 66

P.O. Box Riyadh, 11321

Kingdom of Saudi Arabia

    0        14,059,478        0        0        7.0

K. Rupert Murdoch (7)

    2,197,808        78,723,534        0        *        39.4
* Represents beneficial ownership of less than one percent of the issued and outstanding Class A Common Stock or Class B Common Stock, as applicable, on May 20, 2013.
(1) This table does not include, unless otherwise indicated, any shares of Class A Common Stock or any shares of Class B Common Stock or other equity securities that may be held by pension and profit-sharing plans of other corporations or endowment funds of educational and charitable institutions for which various directors and officers serve as directors or trustees.
(2) The address for Mr. K.R. Murdoch is c/o New News Corporation, 1211 Avenue of the Americas, New York, New York 10036.
(3) Applicable percentage of ownership is based on 1,515,495,635 shares of Parent Class A Common Stock and 798,520,953 shares of Parent Class B Common Stock outstanding as of May 20, 2013, together with the exercisable stock options, for such stockholder or group of stockholders, as applicable. In computing the number of shares of Parent common stock beneficially owned by a person and the percentage ownership of that person, shares issuable upon the exercise of options that are exercisable within 60 days of May 20, 2013 are not deemed outstanding for purposes of computing the percentage ownership of any other person.
(4) Beneficial ownership of our Class B Common Stock as reported in the above table has been determined in accordance with Rule 13d-3 of the Exchange Act. Unless otherwise indicated, beneficial ownership of our Class B Common Stock represents both sole voting and sole investment power.
(5)

Beneficial ownership of 57,000 shares of Parent Class A Common Stock is as of November 10, 2008 as reported on Form 4 filed with the SEC on November 13, 2008. Beneficial Ownership of 306,623,480 shares of Parent Class B Common Stock is as of December 31, 2008, as reported on Schedule 13G/A filed with the SEC on February 17, 2009. Cruden Financial Services LLC, a Delaware limited liability company (“Cruden Financial Services”), the

 

137

 

 

corporate trustee of the Murdoch Family Trust, has the power to vote and to dispose or direct the vote and disposition of the reported Parent Class B Common Stock. In addition, Cruden Financial Services has the power to exercise the limited vote and to dispose or direct the limited vote and disposition of the reported Parent Class A Common Stock. As a result of Mr. K.R. Murdoch’s ability to appoint certain members of the board of directors of Cruden Financial Services, Mr. K.R. Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the Murdoch Family Trust. Mr. K.R. Murdoch, however, disclaims any beneficial ownership of such shares.

(6) Beneficial ownership of 56,237,915 shares of Parent Class B Common Stock is as of December 31, 2012 as reported on Schedule 13G/A filed by HRH Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud (“HRH”) on January 31, 2013. Based on the Schedule 13G/A, 9,780,557 shares of Parent Class B Common Stock are owned by Kingdom 5-KR-134, Ltd. (“KR-134”), 1,250,000 shares of Parent Class B Common Stock are owned by Kingdom 5-KR-137, Ltd. (“KR-137”), 3,300,000 shares of Parent Class B Common Stock are owned by Kingdom 5-KR-138, Ltd. (“KR-138”), 8,400,000 shares of Parent Class B Common Stock are owned by Kingdom 5-KR-146, Ltd. (“KR-146”), 21,659,246 shares of Parent Class B Common Stock are owned by Kingdom 5-KR-222, Ltd. (“KR-222”), and 11,848,112 shares of Parent Class B Common Stock are owned by Kingdom Holding Company (“KHC”). KR-134, KR-137 and KR-138 are wholly-owned subsidiaries of Kingdom 5-KR-11, Ltd. (“KR-11”). KR-11, KR-146 and KR-222 are wholly-owned subsidiaries of KHC. HRH, as the majority stockholder of KHC, has the power to elect a majority of the directors of KHC and, through this power, has the power to appoint a majority of the directors of KR-11, KR-146 and KR-222, and in turn, KR-11, as sole stockholder of KR-134, KR-137 and KR-138 has the power to appoint a majority of the directors of KR-134, KR-137 and KR-138. Accordingly, for purposes of Regulations 13D-G under the Exchange Act, HRH can indirectly control the disposition and voting of the shares of Parent Class B Common Stock held by KR-11, KR-134, KR-137, KR-138, KR-146, KR-222 and KHC.
(7) Beneficial ownership of 8,791,232 shares of Parent Class A Common Stock and 314,894,138 shares of Parent Class B Common Stock includes 57,000 shares of Parent Class A Common Stock and 306,623,480 shares of Parent Class B Common Stock beneficially owned by the Murdoch Family Trust. Mr. K.R. Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the Murdoch Family Trust. Mr. K.R. Murdoch, however, disclaims any beneficial ownership of such shares. Beneficial ownership also includes 8,250,000 shares of Parent Class B Common Stock held by the K. Rupert Murdoch 2004 Revocable Trust of which Mr. K.R. Murdoch holds a beneficial and trustee interest. Beneficial ownership also includes 4,800 shares of Parent Class A Common Stock and 4,540 shares of Parent Class B Common Stock held by certain members of Mr. K.R. Murdoch’s family. Beneficial ownership also includes 8,729,432 shares of Parent Class A Common Stock held by the GCM Trust that is administered by independent trustees for the benefit of Mr. K.R. Murdoch’s minor children. Mr. K.R. Murdoch, however, disclaims beneficial ownership of such shares.

 

138

 

Security Ownership of Directors and Named Executive Officers

The following table sets forth information regarding the anticipated beneficial ownership of our Class A Common Stock and Class B Common Stock immediately following the completion of the distribution by each of (1) our directors, (2) our named executive officers, and (3) our directors and named executive officers as a group. The beneficial ownership of our common stock presented in the table is based on beneficial ownership of Parent Class A Common Stock and Class B Common Stock, as set forth in the footnotes to the table and calculated as of May 20, 2013, and the distribution of one share of our Class A Common Stock and Class B Common Stock for every four shares of Parent’s Class A Common Stock and Class B Common Stock, respectively. The address of each director, director nominee and executive officer shown in the table below is c/o New News Corporation, 1211 Avenue of the Americas, New York, New York 10036.

                                         
     Common Stock Beneficially Owned  
     Number of Shares
Beneficially Owned
     Option
Shares
     Percent
of Class(1)
 

Name

   Non-Voting
Class A
Common
Stock
     Voting
Class B
Common
Stock
     Non-Voting
Class A
Common
Stock
     Non-Voting
Class A
Common
Stock
     Voting
Class B
Common
Stock
 

K. Rupert Murdoch(2)

     2,197,808         78,723,534         0         *         39.4

José María Aznar(3)

     1,087         0         0         *         0   

Natalie Bancroft(4)

     0         625         0         0         *   

Peter L. Barnes(5)

     1,989         0         0         *         0   

Elaine L. Chao

     0         0         0         0         0   

John Elkann

     0         0         0         0         0   

Joel I. Klein

     0         0         0         0         0   

James R. Murdoch(6)

     711,080         411         0         *         *   

Lachlan K. Murdoch(7)

     114         1,464         0         *         *   

Ana Paula Pessoa

     0         0         0         0         0   

Masroor Siddiqui(8)

     133,725         0         0         *         0   

Bedi Ajay Singh

     0         0         0         0         0   

Robert J. Thomson

     0         0         0         0         0   

Gerson Zweifach

     0         0         0         0         0   

All directors and executive officers as a group (14 members)(9)

     3,045,803         78,726,034         0         *         39.4
* Represents beneficial ownership of less than one percent of the issued and outstanding Class A Common Stock or Class B Common Stock, as applicable, on May 20, 2013.
(1) Applicable percentage of ownership is based on 1,515,495,635 shares of Parent Class A Common Stock and 798,520,953 shares of Parent Class B Common Stock outstanding as of May 20, 2013, together with the exercisable stock options, for such stockholder or group of stockholders, as applicable. In computing the number of shares of Parent common stock beneficially owned by a person and the percentage ownership of that person, shares issuable upon the exercise of options that are exercisable within 60 days of May 20, 2013 are not deemed outstanding for purposes of computing the percentage ownership of any other person.
(2)

Beneficial ownership of 8,791,232 shares of Parent Class A Common Stock and 314,894,138 shares of Parent Class B Common Stock includes 57,000 shares of Parent Class A Common Stock and 306,623,480 shares of Parent Class B Common Stock beneficially owned by the Murdoch Family Trust. Mr. K.R. Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the Murdoch Family Trust. Mr. K.R. Murdoch, however, disclaims any beneficial ownership of such shares. Beneficial ownership also includes 8,250,000 shares of Parent Class B Common Stock held by the K. Rupert Murdoch 2004 Revocable Trust of which Mr. K.R. Murdoch holds a beneficial and trustee interest. Beneficial ownership also includes 4,800 shares of Parent Class A Common Stock and 4,540 shares of Parent Class B Common Stock held by certain members of Mr. K.R. Murdoch’s family. Beneficial ownership also includes 8,729,432 shares of Parent Class A Common Stock held by the GCM Trust that is administered by

139

 

 

independent trustees for the benefit of Mr. K.R. Murdoch’s minor children. Mr. K.R. Murdoch, however, disclaims beneficial ownership of such shares.

(3) Beneficial ownership of 4,350 shares of Parent Class A Common Stock.
(4) Beneficial ownership of 2,500 shares of Parent Class B Common Stock.
(5) Beneficial ownership of 7,959 shares of Parent Class A Common Stock.
(6) Beneficial ownership of 2,844,320 shares of Parent Class A Common Stock and 1,644 shares of Parent Class B Common Stock includes 2,453,701 shares of Parent Class A Common Stock held by the JRM Family Trust, which is administered by an independent trustee for the benefit of Mr. J.R. Murdoch and his immediate family.
(7) Beneficial ownership of 456 shares of Parent Class A Common Stock and 5,857 shares of Parent Class B Common Stock.
(8) Beneficial ownership of 534,900 shares of Parent Class A Common Stock held by investment funds managed by Naya Management LLP, of which Mr. Siddiqui is the Chief Executive Officer and Chief Investment Officer. Mr. Siddiqui may be deemed to be a beneficial owner of these shares because he has the power to vote or direct the vote or dispose or direct the disposition of these shares.
(9) Beneficial ownership of 12,183,217 shares of Parent Class A Common Stock and 314,904,139 shares of Parent Class B Common Stock.

140

 

OUR RELATIONSHIP WITH PARENT FOLLOWING THE DISTRIBUTION

Following the distribution, we and Parent will operate separately, each as an independent public company. Prior to the distribution, we and Parent will enter into certain agreements that will effect the separation, provide a framework for our relationship with Parent after the distribution and provide for the allocation between us and Parent of Parent’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the distribution. The following is a summary of the terms of the material agreements that we intend to enter into with Parent prior to the distribution. When used in this section, “distribution date” refers to the date on which Parent distributes our common stock to the holders of Parent’s common stock.

The material agreements described below have been, or will be, filed as exhibits to the registration statement on Form 10 of which this information statement is a part, and the summaries of each of these agreements set forth the terms of the agreements that we believe are material. These summaries are qualified in their entireties by reference to the full text of the applicable agreements, which are incorporated by reference into this information statement. The terms of the agreements described below that will be in effect following the distribution have not yet been finalized; changes to these agreements, some of which may be material, may be made prior to our distribution from Parent.

The Separation and Distribution Agreement

The following discussion summarizes the material provisions of the separation and distribution agreement. The separation and distribution agreement sets forth, among other things, our agreements with Parent regarding the principal transactions necessary to separate us from Parent. It also sets forth other agreements that govern certain aspects of our relationship with Parent after the distribution date, including with respect to transition services, employee benefits, tax matters, intellectual property, commercial and financing arrangements. We and Parent will enter into the separation and distribution agreement prior to the distribution.

Internal Reorganization

The separation and distribution agreement will provide for the transfers of the entities and their related assets and liabilities that are necessary in advance of the distribution so that Parent retains the entities associated with Parent’s entertainment and media business and we retain the entities associated with Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. We are currently a wholly-owned subsidiary of Parent. In connection with the distribution, Parent will undertake a series of internal reorganization transactions so that we will hold only the entities associated with Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia and certain specified liabilities that we will assume and Parent will hold only the media and entertainment business entities and certain specified legacy liabilities.

Allocation of Liabilities

The separation and distribution agreement will provide that the liabilities assumed by us will generally include, without duplication, liabilities associated with the pre- and post-distribution operation and conduct of the businesses that comprise our company. However, Parent will, subject to our compliance with the terms of the separation and distribution agreement, indemnify us for payments made in connection with liabilities arising out of civil claims and investigations relating to the U.K. Newspaper Matters as well as legal and professional fees and expenses related to the criminal matters, in each case for amounts paid after the distribution date, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with us. Parent’s indemnification obligations with respect to these matters will be settled on an after-tax basis. See “—U.K. Newspaper and Related Matters” below. In

141

 

addition, as described under “Employee Matters Agreement” below, Parent will also retain certain employee-related legacy liabilities. We will not be responsible for any liabilities of Parent or any of its businesses that do not comprise our company, or for any liability relating to any indebtedness of Parent, which will be retained entirely by Parent.

Conditions to the Distribution

The separation and distribution agreement provides that the distribution is subject to the satisfaction (or waiver by Parent) of the following conditions:

   

the approval by the board of directors of Parent of the distribution and all related transactions (and such approval not having been withdrawn);

   

the affirmative vote of the holders of Parent’s Class A Common Stock and Class B Common Stock, each voting as a separate class, approving certain amendments to Parent’s Restated Certificate of Incorporation, as described more fully in the Proxy Statement filed under Schedule 14A by Parent;

   

the completion of the internal reorganization;

   

Parent’s receipt of the private letter rulings from the IRS in a form satisfactory to Parent in its sole and absolute discretion, to the effect that, among other things, subject to the accuracy of and compliance with certain representations, assumptions and covenants, the contribution of Parent’s newspapers, information services and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia to us and the distribution will qualify for non-recognition of gain or loss to Parent and its stockholders under Sections 368 and 355 of the Code, except to the extent of cash received in lieu of fractional shares;

   

Parent’s receipt of the ATO Class Ruling or other evidence in a form satisfactory to Parent in its sole and absolute discretion, confirming that, in the circumstances of the distribution and for Australian tax purposes (i) no part of the distribution of New News Corporation shares will be a dividend; and (ii) the Commissioner of Taxation will not make a determination under either section 45A or 45B of the Income Tax Assessment Act (1936) to deem all or part of the distribution of New News Corporation shares to be an unfranked dividend;

   

Parent’s receipt of an opinion from Hogan Lovells US LLP, in form and substance satisfactory to Parent in its sole and absolute discretion, that, subject to the accuracy of and compliance with certain representations, assumptions and covenants, (i) the distribution will qualify for non-recognition of gain or loss to Parent and Parent’s stockholders pursuant to Section 355 of the Code, except to the extent of cash received in lieu of fractional shares and (ii) the relevant aspects of the internal reorganization described under “Our Relationship with Parent Following the Distribution–The Separation and Distribution Agreement” will qualify for non-recognition of gain or loss to Parent pursuant to Sections 368 and 355 of the Code;

   

no order, injunction or decree that would prevent the consummation of the distribution will be threatened, pending or issued (and still in effect) by any governmental entity of competent jurisdiction and no other legal restraint or prohibition preventing consummation of the distribution will be in effect;

   

no events or developments having occurred prior to the distribution that, in the judgment of the board of directors of Parent, would result in the distribution having a material adverse effect on Parent or its stockholders;

   

Parent’s and New News Corporation’s execution of the separation and distribution agreement, the tax sharing and indemnification agreement, the transition services agreement, the employee matters agreement and all other ancillary agreements relating to the distribution;

   

Parent’s election of the individuals to be listed as members of our board of directors post-distribution, as described in this information statement, immediately prior to the distribution date;

142

   

the SEC having declared effective the Form 10, of which this information statement forms a part;

   

no rating agency action having occurred that is likely to result in either Parent or us being downgraded below investment grade after giving effect to the distribution;

   

our Class A Common Stock and Class B Common Stock having been approved for listing on NASDAQ and our Class A Common Stock and Class B Common Stock (trading as CDIs) having been approved for admission to the official list of ASX;

   

the Notice of Internet Availability or this information statement having been mailed to Parent’s stockholders;

   

all actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities laws and any other necessary and applicable consents having been taken, obtained and, where applicable, having become effective or been accepted;

   

Parent having established the record date for the distribution, given NASDAQ not less than ten days’ advance notice of such record date and given ASX not less than seven Business Days’ (as defined under ASX Listing Rules) advance notice of such record date; and

   

our amended and restated certificate of incorporation and amended and restated by-laws, each in substantially the form filed with the Form 10, having become effective at or prior to the distribution.

There can be no assurance that any or all of these conditions that are outstanding will be met. For further information about these conditions, see “The Distribution—Conditions to the Distribution.”

Representations and Warranties

In general, neither we nor Parent will make any representations or warranties regarding any assets or liabilities transferred or assumed, any consents or approvals that may be required in connection with these transfers or assumptions, the value or freedom from any lien or other security interest of any assets transferred, the absence of any defenses relating to any claim of either party or the legal sufficiency of any conveyance documents. Except as expressly set forth in the separation and distribution agreement, all assets will be transferred on an “as is,” “where is” basis.

Intercompany Accounts

All intercompany accounts payable or accounts receivable and intercompany borrowings, between us, on the one hand, and Parent and its affiliates, on the other hand, will be settled as of the distribution. All other agreements, arrangements, commitments and understanding between us, on one hand, and Parent and its affiliates, on the other hand, will continue after the distribution through the entry into the separation and distribution agreement, the transition services agreement, the tax sharing and indemnification agreement, and all other ancillary agreements entered into in connection with the separation and distribution agreement, except as specified in such agreements and arrangements.

Limitations on Acquiring or Owning Certain Types of Assets in the U.S.

The separation and distribution agreement will govern Parent’s and our agreements with regard to each party’s ability to comply with certain statutes or rules and regulations promulgated by the FCC. The FCC’s Broadcast Ownership Rules limit the ownership of radio and television broadcast stations, television broadcast networks and newspapers, including, among other things, prohibiting common ownership of a daily newspaper and television or radio broadcast stations operating in the same local market. In addition, the FCC’s Program Access Rules limit, among other things, the ability of a cable network programmer in which a cable television operator holds an ownership interest to offer different commercial terms and conditions for its programming to competing distributors. In general, the FCC’s rules provide that for purposes of determining ownership of the

143

media assets described above, any voting stock interest of 5% or greater in a corporation that holds media assets results in ownership of those assets being “attributed” to the stockholder. As a result of the Murdoch Family Trust’s ownership interest in both Parent and us following the distribution, each company’s businesses and assets will be attributable to the Murdoch Family Trust for purposes of determining compliance with the Broadcast Ownership Rules and the Program Access Rules. Consequently, our future conduct, including our acquisition of any newspapers in the same local markets in which Parent owns or operates television stations or our acquisition of an ownership interest in a cable operator, may affect Parent’s ability to own and operate its television stations or otherwise comply with the Broadcast Ownership Rules, or may subject Parent to the Program Access Rules.

Therefore, we and Parent will agree in the separation and distribution agreement that if we acquire, after the distribution date, newspapers, radio or television broadcast stations or television broadcast networks in the U.S. and such acquisition would impede or be reasonably likely to impede Parent’s business, then we will be required to take certain actions, including divesting assets, in order to permit Parent to hold its media interests and to comply with such rules. In addition, we will be prohibited from acquiring an interest in a multichannel video programming distributor, including a cable television operator, if such acquisition would subject Parent to the Program Access Rules to which it is not then subject. This agreement will effectively limit the activities or strategic business alternatives available to us if such activities or strategic business alternatives implicate the Broadcast Ownership Rules or Program Access Rules and would impede or be reasonably likely to impede Parent’s business. The restrictions described above will terminate when no person or entity is deemed to have an interest in both Parent and us that is attributable for purposes of the Broadcast Ownership Rules or Program Access Rules, as applicable.

Mutual Releases and Indemnification

General

In the separation and distribution agreement, effective as of the distribution date, we will generally release and discharge Parent from all liabilities relating to our businesses existing or arising from acts and events occurring, or failing to occur (or alleged to have occurred or to have failed to occur), and all conditions existing (or alleged to have existed) before, on or after the distribution date, and Parent will similarly release and discharge us from liabilities relating to its retained businesses, in each case, other than, among other things, liabilities provided in or resulting from continuing agreements between us and Parent, including the separation and distribution agreement.

We and Parent will each generally agree to indemnify the other against these liabilities, liabilities arising out of any breach of the separation and distribution agreement or any ancillary agreement, including any breach of the restrictions described in “—Limitations on Certain Acquisitions” above, and certain other liabilities incurred in connection with the distribution and our and Parent’s respective businesses. The amount of either Parent’s or our indemnification obligations will be reduced by any insurance proceeds the party being indemnified receives. The separation and distribution agreement will also specify procedures regarding claims subject to indemnification.

U.K. Newspaper & Related Matters

In addition to our general agreements regarding assumption of liabilities and indemnification, in the separation and distribution agreement, we and Parent will agree to specific arrangements regarding the U.K. Newspaper Matters. Under these arrangements, Parent will have the right to control the defense of any civil U.K. Newspaper Matters and will indemnify us for payments made in connection with any liabilities (including attorneys’ fees and other expenses) arising out of civil claims relating to the U.K. Newspaper Matters, other than fees, expenses and costs relating to employees who are not directors, officers or certain designated employees or co-defendants with us and subject to our compliance with certain agreements regarding Parent’s control over the civil U.K. Newspaper Matters and our consenting to settlements proposed by Parent. With regard to any criminal matters relating to the U.K. Newspaper Matters, Parent has agreed to reimburse us for our legal and professional fees with regard to such matters, other than fees, expenses and costs relating to employees who are not directors, officers or certain designated employees. We will retain all liability with regard to criminal fines or other penalties. Parent’s indemnification obligations with respect to the U.K. Newspaper Matters will be settled on an after-tax basis.

144

Further Assurances

On and after the distribution date, Parent and we shall cooperate to consummate the transactions contemplated by the separation and distribution agreement and the ancillary agreements.

Access to Information

We and Parent will agree to provide each other with reasonable access to information relating to the party requesting information. We and Parent will also agree to use reasonable best efforts to retain such information in accordance with our respective record retention policies as in effect on the distribution date or as amended after the distribution date in accordance with the separation and distribution agreement.

The Distribution

The separation and distribution agreement will govern Parent’s and our respective rights and obligations regarding the proposed distribution. Prior to the distribution, Parent will deliver all of the issued and outstanding shares of our common stock to the distribution agent. Following the distribution date, the distribution agent will electronically deliver the shares of our common stock to Parent’s stockholders based on the distribution ratio. Parent’s board of directors will have the sole and absolute discretion to determine the terms of, and whether to proceed with, the distribution.

Termination

At any time prior to the distribution, Parent may terminate the separation and distribution agreement without the prior approval of any person, including New News Corporation.

Transition Services Agreement

Prior to the distribution, we and Parent will enter into a transition services agreement pursuant to which Parent and we will provide to each other certain specified services on a transitional basis, including, among others, payroll, employee benefits and pension administration, information systems, insurance, legal and other corporate services, as well as procurement and sourcing support. The charges for the transition services are generally intended to allow the providing company to fully recover the allocated direct costs of providing the services, plus all out-of-pocket costs and expenses, generally without profit.

We have been preparing for the transition of the services to be provided by Parent under the transition services agreement from Parent, or third-party providers on behalf of Parent, to us. We anticipate that we will generally be in a position to complete the transition of most services (excluding certain insurance, sourcing and other services) on or before 24 months following the distribution date.

The services provided under the transition services agreement will terminate at various times specified in the agreement, but the receiving party may terminate certain specified services by giving prior written notice to the provider of such services.

Tax Sharing and Indemnification Agreement

Before the distribution, we will enter into a tax sharing and indemnification agreement with Parent that will govern our and Parent’s respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, tax contests and other matters regarding income taxes, non-income taxes and related tax returns.

Among other matters, as subsidiaries of Parent, we and each of our domestic subsidiaries have joint and several liability with Parent for the consolidated U.S. federal income taxes of the Parent consolidated group

145

relating to any taxable periods during which we or any of such subsidiaries are or were a member of the Parent consolidated group. Under the tax sharing and indemnification agreement, Parent will indemnify us for any such liability.

The tax sharing and indemnification agreement will provide that we will generally indemnify Parent against taxes attributable to our assets or operations for all tax periods or portions thereof after the distribution. In addition, we have filed tax refund claims in a foreign jurisdiction which are currently in litigation. If we ultimately receive a refund or the claimed amount is credited or applied against another tax for which we are otherwise liable, the tax sharing and indemnification agreement provides that we will pay the amount of such refund, including any interest net of any tax cost, to Parent. For taxable periods or portions thereof prior to the distribution, Parent will generally indemnify us against U.S. consolidated and combined taxes attributable to such periods, and we will indemnify Parent against our separately filed U.S. state and foreign taxes and foreign consolidated and combined taxes for such periods.

The tax sharing and indemnification agreement will also contain restrictions on our ability to take actions that could cause the distribution or certain internal transactions undertaken in anticipation of the distribution to fail to qualify for tax free treatment for U.S. federal income tax purposes. These restrictions will apply for the two year period after the distribution, unless we obtain the consent of Parent to take such an action.

Moreover, the tax sharing and indemnification agreement generally will provide that if the distribution or the internal transactions that were intended not to be subject to U.S. federal income tax are determined to be subject to U.S. federal income tax and such determination was the result of certain actions taken, or omitted to be taken, after the distribution by us or any of our subsidiaries that (1) were inconsistent with any representation or covenant made in connection with the private letter ruling or opinion of Hogan Lovells US LLP, (2) violated any representation or covenant in the tax sharing and indemnification agreement, or (3) we or any of our subsidiaries know or reasonably should expect may result in any such determination, we will be responsible for any taxes imposed on Parent as a result of such determination.

Employee Matters Agreement

Prior to the distribution, we and Parent will enter into an employee matters agreement that will govern our and Parent’s obligations with respect to employment, compensation, benefits and other related matters for employees of certain of our U.S.-based businesses. In general, the agreement addresses matters relating to employees transferring to our U.S. businesses and former employees of those businesses that participated in benefit plans and programs that will be retained by Parent following the distribution (the “Parent Plans”). “Parent Plans” include the News America Incorporated Employees’ Pension and Retirement Plan (the “Parent Pension Plan”), the News America Incorporated Supplemental Executive Retirement Plan (the “Parent Non-Qualified DB Plan”), the News America Consolidated Savings Plan (the “Parent 401(k) Plan”) and the health and welfare benefits plans retained by Parent following the distribution (the “Parent Health and Welfare Plans”). The employee matters agreement will also address equity compensation matters relating to employees of all of our businesses, both U.S. and non-U.S. See “–Other Employee Matters” below for a discussion of the other employment, compensation, benefits and related matters for employees not covered under the employee matters agreement.

Our employees who previously participated in the Parent Plans generally will become eligible to participate in New News Corporation benefit plans on or around the distribution date. We will credit each of these employees with his or her service with Parent prior to the distribution for purposes of eligibility and vesting under the New News Corporation benefit plans, so long as such crediting does not result in a duplication of benefits.

146

Retirement and Deferred Compensation Programs

We will establish a qualified defined benefit pension plan (the “New News Corporation Pension Plan”), which will be substantially similar to the Parent Pension Plan as of the distribution date. The New News Corporation Pension Plan will provide benefits to our eligible employees transferred in connection with the distribution who had participated in the Parent Pension Plan. The New News Corporation Pension Plan will accept assets and assume liabilities from the Parent Pension Plan which relate to the transferred employees. Transferred employees will be eligible to participate in the New News Corporation Pension Plan to the extent they were eligible to participate in the Parent Pension Plan immediately prior to establishment of the New News Corporation Pension Plan, and they will receive credit for Parent service to the extent credited under the Parent Pension Plan and recognition for compensation paid by Parent as though it were compensation paid by us. Accrued benefits for transferred employees under the Parent Pension Plan will be payable under the New News Corporation Pension Plan. We will also establish a non-qualified defined benefit pension plan, which will assume liabilities from the Parent Non-Qualified DB Plan for benefits payable to our employees transferred in connection with the distribution who are eligible to participate in our non-qualified defined benefit pension plan and had previously participated in the Parent Non-Qualified DB Plan. Parent will retain all liability for benefits payable to former employees under the Parent Pension Plan and the Parent Non-Qualified DB Plan, regardless of whether such employee’s last employment was with our or Parent’s businesses. Defined contribution accounts of our U.S. employees (including loans) will be transferred from the Parent 401(k) Plan to the corresponding New News Corporation plan for those transferred employees eligible to participate in our qualified defined contribution plan who had participated in the Parent 401(k) Plan.

Welfare Plans

Parent will retain all liability for claims incurred under the Parent Health and Welfare Plans prior to the distribution date. Following the distribution date, our U.S. employees that previously participated in the Parent Health and Welfare Plans will commence participation in New News Corporation health and welfare plans. Parent will generally retain all liability for U.S. workers’ compensation claims incurred by our employees prior to the distribution date.

Equity Compensation Awards

We will adopt the 2013 LTIP prior to the distribution date. Parent, as our sole stockholder, will approve the 2013 LTIP prior to the distribution date, and the 2013 LTIP will become effective on the distribution date. Except as described in the following sentence, outstanding equity awards held by our employees that were issued under the News Corporation 2005 Long-Term Incentive Plan (the “Parent 2005 LTIP”) will convert into an award under the 2013 LTIP having terms and features substantially similar to the original award and will be settled in, or by reference to, our Class A Common Stock or CDIs representing our Class A Common Stock, as equitably adjusted to reflect the distribution. Any option, restricted stock or bridge award unit or performance stock unit issued under the Parent 2005 LTIP and held by our employees that has an expiration, vesting or payment date, as applicable, on or prior to December 31, 2013, will continue under the Parent 2005 LTIP and will be settled in, or by reference to, Parent Class A Common Stock or CDIs representing Parent Class A Common Stock, as equitably adjusted to reflect the distribution.

Miscellaneous

The employee matters agreement will address other employee-related issues and certain special circumstances, including the treatment of equity awards for non-employee directors.

147

Other Employee Matters

Unless otherwise specified in the employee matters agreement, Parent will be responsible for liabilities associated with employees who continue service with Parent following the distribution date and liabilities associated with former employees whose last employment was not with our businesses, and we will be responsible for liabilities associated with our current and former employees, whether such liability arose before or after the distribution date.

Intellectual Property License Agreements

FOX SPORTS Trademark License

Prior to the distribution, our subsidiaries, Fox Sports Australia Pty Limited and Fox Sports Australia Investments Pty Limited (together, “FSA”), will enter into a license agreement with Twentieth Century Fox Film Corporation, a subsidiary of Parent (“TCFFC”), pursuant to which TCFFC will grant FSA a perpetual, royalty-free license to use and authorize the use of the trademark FOX SPORTS, together with certain associated logos and derivative marks (the “FOX SPORTS Marks”) in Australia and New Zealand. The license authorizes FSA to use the FOX SPORTS Marks in connection with “Sports Services,” which consist of the business of owning, operating, producing and distributing content, including statistics, and other services, primarily featuring sports or sports-related content, and related services. Sports Services also includes distribution, other than by way of commercial sale, of promotional and marketing-related items. The license allows FSA to hold domain names, operate websites and mobile telephony services (including apps) and have dedicated pages on social media sites using FOX SPORTS branding, provided they are targeted at users in Australia and/or New Zealand. In Australia, FSA’s license is exclusive, subject to certain limits, including the continued right for TCFFC and its affiliates to use the FOX SPORTS Marks to license sports programs and sports-related entertainment produced outside Australia, for distribution within Australia, and to use the FOX SPORTS Marks on goods and services on a multi-national basis, including in Australia, provided such goods and services are not targeted at individuals in Australia. In New Zealand, FSA’s license is non-exclusive.

FOX Trademark License

Prior to the distribution, FSA will also enter into a license agreement with TCFFC pursuant to which TCFFC will grant FSA a perpetual, royalty-free non-exclusive license to use and authorize the use of the trademark FOX, together with certain associated logos and derivative marks (the “FOX Marks”), in Australia and New Zealand. The license authorizes FSA to use the FOX Marks in connection with Sports Services, as described above. The license specifically permits FSA to use the FOX Marks as part of the names of programs and channels, including interactive and/or video-on-demand channels, and in on- and off-air promotions for those programs and channels and the Sports Services. Website and social media use is also permitted, provided it is targeted at individuals in Australia and New Zealand, but FSA requires TCFFC’s consent to register any new domain names using the FOX Marks.

TCFFC can terminate each of the FOX SPORTS and FOX Trademark Licenses if FSA becomes insolvent, ceases to carry on any business in Australia and New Zealand, or has not made use of any of the FOX Sports Marks or FOX Marks, as applicable, for a continuous period of two years. Both agreements also contain customary provisions regarding maintenance, preservation and enforcement of the FOX SPORTS Marks or FOX Marks, as applicable, quality control, sub-licensing and liability.

148

 

DESCRIPTION OF OUR CAPITAL STOCK

Our certificate of incorporation and by-laws will be amended and restated prior to the distribution. The following is a summary of the material terms of our capital stock that will be contained in the amended and restated certificate of incorporation, the amended and restated by-laws and the stockholder rights agreement, and is qualified in its entirety by reference to these documents. You should refer to our amended and restated certificate of incorporation, amended and restated by-laws and stockholder rights agreement, the forms of which are included as exhibits to the registration statement of which this information statement is a part.

Authorized Capital Stock

Prior to the distribution date, Parent, as our sole stockholder, will approve and adopt our amended and restated certificate of incorporation, and our board of directors will approve and adopt our amended and restated by-laws. Under our amended and restated certificate of incorporation, our authorized share capital will consist of one billion five hundred million (1,500,000,000) shares of Class A common stock, par value $0.01 per share (“Class A Common Stock”), seven hundred fifty million (750,000,000) shares of Class B common stock, par value $0.01 per share (“Class B Common Stock”), twenty-five million (25,000,000) shares of Series Common Stock, par value $0.01 per share (“Series Common Stock”) and twenty-five million (25,000,000) shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”).

Description of Class A Common Stock and Class B Common Stock

Class A Common Stock Voting Rights

A holder of Class A Common Stock may only vote under the following circumstances:

   

on a proposal to dissolve New News Corporation or to adopt a plan of liquidation of New News Corporation, and with respect to any matter to be voted on by our stockholders following adoption of a proposal to dissolve New News Corporation or to adopt a plan of liquidation of New News Corporation;

   

on a proposal to sell, lease or exchange all or substantially all of New News Corporation’s property and assets;

   

on a proposal to adopt an agreement of merger or consolidation in which New News Corporation is a constituent corporation, as a result of which our stockholders prior to the merger or consolidation would own less than 60% of the voting power or capital stock of the surviving corporation or consolidated entity (or the direct or indirect parent of the surviving corporation or consolidated entity) following the merger or consolidation; and

   

with respect to any matter to be voted on by our stockholders during a period during which a dividend (or part of a dividend) in respect of the Class A Common Stock has been declared and remains unpaid following the payment date with respect to such dividend (or part thereof).

Other than as set forth in the preceding paragraph and as provided by law, a holder of a share of Class A Common Stock has no right to vote.

The holders of the Class A Common Stock entitled to vote on a particular matter shall vote in the same manner and subject to the same conditions as the holders of our Class B Common Stock, Preferred Stock or Series Common Stock.

At annual and extraordinary general meetings of stockholders:

   

a majority in voting power of all of the outstanding shares of the stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for all purposes; and

   

each holder of Class A Common Stock represented at a meeting of stockholders shall be entitled to cast one vote for each share of Class A Common Stock entitled to vote at the meeting.

149

 

All voting, except as may be required by law, including voting for the election of directors may be by a voice vote; provided, however, that upon demand by a stockholder entitled to vote or by his or her proxy, or upon resolution by our board of directors in its discretion or by action of the chairman of the meeting, in his or her discretion, a stock vote may be taken. Every stock vote shall be taken by written ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting.

Unless otherwise provided by our amended and restated certificate of incorporation, our amended and restated by-laws, the rules or regulations of any stock exchange applicable to us or applicable law or pursuant to any regulation applicable to us or our securities, (a) at all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect directors and (b) any other question brought before any meeting of stockholders shall be determined by the affirmative vote of a majority of the votes cast thereon by the holders represented and entitled to vote at the meeting.

Class B Common Stock Voting Rights

As a general matter, holders of Class B Common Stock are entitled to one vote per share on all matters on which stockholders have the right to vote.

All voting, except as may be required by law, including voting for the election of directors may be by a voice vote; provided, however, that upon demand by a stockholder entitled to vote or by his or her proxy, or upon resolution by our board of directors in its discretion or by action of the chairman of the meeting, in his or her discretion, a stock vote may be taken. Every stock vote shall be taken by written ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting.

Unless otherwise provided by our amended and restated certificate of incorporation, our amended and restated by-laws, the rules or regulations of any stock exchange applicable to us, applicable law or pursuant to any regulation applicable to us or our securities, (a) at all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect directors, and (b) any other question brought before any meeting of stockholders shall be determined by the affirmative vote of a majority of the votes cast thereon by the holders represented and entitled to vote at the meeting.

Ownership of Class A Common Stock and Class B Common Stock by the Murdoch Family Trust and K. Rupert Murdoch

As a result of his ability to appoint certain members of the board of directors of the corporate trustee of the Murdoch Family Trust, which, based on its current ownership of Parent common stock, will beneficially own less than one percent of our outstanding Class A Common Stock and 38.4% of our Class B Common Stock immediately following the distribution, K. Rupert Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the Murdoch Family Trust. K. Rupert Murdoch, however, disclaims any beneficial ownership of these shares. Also, K. Rupert Murdoch will, based on the current ownership of Parent common stock, beneficially own or be deemed to beneficially own an additional one percent of our Class B Common Stock and less than one percent of our Class A Common Stock immediately following the distribution. Thus, K. Rupert Murdoch may be deemed to beneficially own in the aggregate less than one percent of our Class A Common Stock and 39.4% of our Class B Common Stock immediately following the distribution. This concentration of voting power could discourage third parties from making proposals involving an acquisition of New News Corporation. Additionally, the ownership concentration of Class B Common Stock by the Murdoch Family Trust increases the likelihood that proposals submitted for stockholder approval that are supported by the Murdoch Family Trust will be adopted and proposals that the Murdoch Family Trust does not support will not be adopted, whether or not such proposals to stockholders are also supported by the other holders of Class B Common Stock.

150

 

Dividends

Holders of Class A Common Stock and Class B Common Stock are, generally, entitled to such dividends, if any, as may be declared by our board of directors from time to time in its sole discretion out of our assets or legally available funds, subject to the following provisions:

   

if dividends are declared on the Class A Common Stock or Class B Common Stock that are payable in shares of common stock, or securities convertible into, or exercisable or exchangeable for common stock (as defined in our amended and restated certificate of incorporation), the dividends payable to the holders of Class A Common Stock shall be paid only in shares of Class A Common Stock (or securities convertible into, or exercisable or exchangeable for Class A Common Stock), the dividends payable to holders of Class B Common Stock shall be paid only in shares of Class B Common Stock (or securities convertible into, or exercisable or exchangeable for Class B Common Stock), and such dividends shall be paid in the same number of shares (or fraction thereof) on a per share basis of the Class A Common Stock and Class B Common Stock (or securities convertible into, or exercisable or exchangeable for the same number of shares (or fraction thereof) on a per share basis of such class of common stock), respectively; and

   

in no event shall the shares of the Class A Common Stock or Class B Common Stock be split, divided, or combined unless the outstanding shares of the other class shall be proportionately split, divided or combined.

Any dividends declared by our board of directors on a share of common stock shall be declared in equal amounts with respect to each share of Class A Common Stock and Class B Common Stock (as determined in good faith by our board of directors in its sole discretion), provided that in the case of dividends payable in shares of our common stock, or securities convertible into, or exercisable or exchangeable for, our common stock, or dividends or other distributions (including, without limitation, any distribution pursuant to a stock dividend or a “spin-off,” “split-off” or “split-up” reorganization or similar transaction) payable in shares or other equity interests of any corporation or other entity which immediately prior to the time of the distribution is a subsidiary of New News Corporation and which possesses authority to issue class A common stock or equity interests and class B common stock or equity interests (or securities convertible into, or exercisable or exchangeable for, such shares or equity interests) with voting characteristics identical or comparable to those of New News Corporation Class A Common Stock and New News Corporation Class B Common Stock, respectively, such dividends shall be paid as provided for in our amended and restated certificate of incorporation.

Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Our Stockholder Rights Agreement

Size of Board and Vacancies; Removal

Subject to the rights of the holders of any series of Preferred Stock or Series Common Stock, our amended and restated certificate of incorporation and amended and restated by-laws provide that the total number of directors constituting the entire board of directors shall be not less than three (3), with the then-authorized number of directors being fixed from time to time exclusively by the board of directors. Subject to the rights of the holders of any series of Preferred Stock or Series Common Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the board of directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the board of directors. Any director so chosen shall hold office until the next election of directors and until his or her successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director.

151

 

Stockholder Action by Written Consent

Subject to the rights of the holders of any series of Preferred Stock or Series Common Stock, our amended and restated certificate of incorporation and amended and restated by-laws provide that our stockholders may act only at an annual or special meeting of stockholders and may not act by written consent.

Amendment of By-laws

Our amended and restated certificate of incorporation provides that the board of directors is authorized to adopt, repeal, alter or amend our by-laws by a vote of a majority of the entire board of directors. In addition to any requirements of law and any other provision of our amended and restated certificate of incorporation, our stockholders may, with the affirmative vote of holders of 65% or more of the combined voting power of the then outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, adopt, amend or repeal any provision of our by-laws.

Transfer Restrictions

Our amended and restated certificate of incorporation will provide that an Owner (as defined in our amended and restated certificate of incorporation) of shares of Class A Common Stock or Class B Common Stock may not sell, exchange or otherwise transfer Ownership (as defined in our amended and restated certificate of incorporation) of such shares to any person who has made an Offer (as defined in our amended and restated certificate of incorporation) pursuant to such Offer unless such Offer relates to both Class A Common Stock and Class B Common Stock, or another Offer or Offers are contemporaneously made with such Offer by such person such that, between all the Offers, they relate to both Class A Common Stock and Class B Common Stock, and the terms and conditions of such Offer or Offers as they relate to each of the shares of Class A Common Stock and the Class B Common Stock are Comparable (as defined in our amended and restated certificate of incorporation). We shall, to the extent required by law, note on the certificates of our common stock that shares represented by such certificates are subject to the restrictions set forth in this paragraph.

Additionally, it should be noted that based on existing shareholdings of Parent, we anticipate that New News Corporation will be subject to FATA following the distribution. As a result, an acquisition by a foreign person of the stock of New News Corporation may trigger section 18 of FATA. Failure to comply with the Australian legislation or policy may entitle the Australian Treasurer, upon a determination that the acquisition is against Australia’s national interest, to make a number of orders, including divestment of shares and the seeking of various other orders from an Australian court. An Australian court is specifically empowered under the legislation to make an order requiring New News Corporation to divest itself of its Australian businesses if such an order is considered the most appropriate means of protecting Australia’s national interest from excessive foreign control of Australian businesses. Our amended and restated certificate of incorporation will grant our board of directors the power to refuse to permit or honor transfers of our shares, or to redeem shares, where such transfers could result in any regulatory violation or certain other adverse consequences to our company.

The Australian Government has adopted a foreign investment policy in relation to investments in media (which includes daily newspapers, television and radio). Under this policy all foreign persons need to notify the Australian Government and get prior approval to make investments of 5% or more in the media sector, regardless of the value of the investment. There are also certain compulsory notification requirements under FATA where a person acquires a substantial interest in an Australian company, which may through the tracing provisions in FATA be triggered upon an acquisition of 15% or more of New News Corporation.

Stockholder Meetings

Subject to the rights of the holders of any series of Preferred Stock or Series Common Stock, our amended and restated certificate of incorporation and amended and restated by-laws provide that special meetings of stockholders (i) may be called by the board of directors pursuant to a resolution approved by a majority of the

152

 

total number of directors then constituting the entire board of directors, (ii) may be called by the chairman or a vice or deputy chairman of our board of directors or (iii) shall be called by the secretary of New News Corporation upon the written request of holders of record of not less than 20% of the outstanding shares of Class B Common Stock, proposing a proper matter for stockholder action under the Delaware General Corporation Law (“DGCL”) at such special meeting, provided that (a) no such special meeting of stockholders shall be called pursuant to clause (iii) if the written request by such holders is received less than 135 days prior to the first anniversary of the date of the preceding annual meeting of stockholders of New News Corporation and (b) any special meeting called pursuant to clause (iii) shall be held not later than 100 days following receipt of the written request by such holders, on such date and at such time and place as determined by the board of directors.

Requirements for Advance Notice of Stockholder Nominations and Proposals

Subject to the rights of the holders of any series of Preferred Stock or Series Common Stock, our amended and restated by-laws contain advance-notice and other procedural requirements that apply to stockholder nominations of persons for election to our board of directors at any annual meeting of stockholders and to stockholder proposals that stockholders take any other action at any annual meeting. In the case of any annual meeting, a stockholder proposing to nominate a person for election to our board of directors or proposing other business must give our secretary written notice of the proposal at our principal executive offices not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. These stockholder proposal deadlines are subject to exceptions if the annual meeting date is set more than 30 days before or 70 days after such anniversary date, in which case notice by such stockholder, to be timely, must be so delivered not earlier than the close of business on the 120th day prior to the date of the current year’s annual meeting and not later than the close of business on the later of the 90th day prior to the date of the current year’s annual meeting, or the 10th day following the day on which public announcement of the date of the current year’s annual meeting is first made. If a special meeting of stockholders is called for the election of directors, a stockholder proposing to nominate a person for that election must give our secretary written notice of the proposal at our principal executive offices not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting. Our amended and restated by-laws prescribe specific information that any such stockholder notice must contain, including, without limitation, a description of the proposal, the reasons for the proposal, and other specified matters.

These advance-notice provisions may have the effect of precluding a contest for the election of our directors or the consideration of stockholder proposals if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal, without regard to whether consideration of those nominees or proposals might be harmful or beneficial to us and our stockholders.

Stockholder Rights Agreement

On May 22, 2013, in connection with the distribution, our board of directors determined to adopt a stockholder rights agreement, to be executed shortly thereafter and prior to the distribution. Upon consummation of the distribution, each outstanding share of our common stock will have attached to it a right entitling its holder to purchase from us one one-thousandth of a share of Series A junior participating preferred stock (subject to antidilution provisions) upon the occurrence of certain triggering events. The purchase price for the Series A junior participating preferred stock shall be the exercise price of $90, subject to certain adjustments. Until a triggering events occurs, or the rights are earlier redeemed, exchanged, or expire, the rights will not be evidenced by separate certificates and may be transferred only with the common stock to which they are attached.

The rights will become exercisable, unless redeemed or exchanged, 10 business days after a public announcement that any person or group beneficially owns 15 percent or more of the outstanding shares of our Class B Common Stock (such person or group being an “acquiring person”), or 10 business days (or such later date as our board of directors may determine) after a person or group commences a tender or exchange offer the

153

 

consummation of which would result in any person or group beneficially owning 15 percent or more of the outstanding shares of our Class B Common Stock, whichever occurs first, the “rights distribution date”. In the event that the rights become exercisable, we will distribute separate rights certificates evidencing the rights to all holders of our common stock held on the date the rights become exercisable. In the event any person or group has become the beneficial owner of 15 percent or more of our Class B Common Stock, each right will entitle its holder (except the acquiring party whose rights become void) to purchase, in lieu of the Series A junior participating preferred stock, the number of shares of the applicable class of our common stock having a market value of two times the exercise price of the right.

If, following the date that a person or group becomes the beneficial owner of 15 percent or more of our Class B Common Stock, we merge into or consolidate with, or transfer 50 percent or more of our consolidated assets or earning power to another entity (other than New News Corporation or its subsidiaries) (any such transaction, a “flip-over event”), then each right will entitle its holder to purchase the number of shares of common stock of the acquiring entity having a market value of two times the exercise price of the right.

K. Rupert Murdoch, members of his immediate family, and the Murdoch Family Trust, as well as any other person who beneficially owns 15 percent or more of our Class B Common Stock at the time of public announcement of our board of directors’ determination to adopt the stockholder rights agreement (or would beneficially own 15 percent or more of our Class B Common Stock by virtue of the distribution, if such distribution were to be consummated at the time of such public announcement), will not be deemed to be acquiring persons under the stockholder rights agreement by virtue of such holdings (such persons being “exempt persons”). However, if, at any time after the public announcement of our board of directors’ determination to adopt the stockholder rights agreement, any exempt person (i) beneficially owns less than 15 percent of our Class B Common Stock or (ii) acquires any additional outstanding shares of our Class B Common Stock (other than by way of a pro rata stock dividend or a stock split or solely as a result of any unilateral grant of any security by us or through the exercise of any options, warrants, rights or similar interests (including restricted stock) granted by us to our directors, officers and employees pursuant to any equity incentive or award plan), such person shall no longer be an exempt person under the stockholder rights agreement. A person will not be deemed to be an acquiring person due to (i) the repurchase of our shares that causes a holder to become the beneficial owner of 15 percent or more of our Class B Common Stock, unless and until such person acquires beneficial ownership of additional shares representing one percent or more of our Class B Common Stock; (ii) acquisitions by way of a pro rata stock dividend or a stock split; (iii) acquisitions solely as a result of any unilateral grant of any security by us or through the exercise of any options, warrants, rights or similar interests (including restricted stock) granted by us to our directors, officers and employees pursuant to any equity incentive or award plan); or (iv) acquisitions of less than one percent of our total outstanding Class B Common Stock in addition to the shares that would cause such person to be an acquiring person, to the extent such acquisition is determined by our board of directors, in its sole discretion, to be inadvertent, provided, that following such acquisition, the acquirer promptly, but in any case within 10 business days, divests a sufficient number of shares so that such person would no longer otherwise qualify as an acquiring person.

The rights are not exercisable until the rights distribution date and will expire 12 months from the distribution date in connection with the separation, unless the rights are earlier redeemed or exchanged by us as described below.

The exercise price of the rights, the number of shares of Series A junior participating preferred stock issuable, and the number of outstanding rights will be adjusted to prevent dilution that may occur from any stock dividend, a stock split, or a reclassification of the Series A junior participating preferred stock or our common stock.

Our board of directors may redeem the rights, in whole, but not in part, at a price of $0.001 per right (subject to certain adjustments), or amend the agreement to change the expiration date of the rights at any time prior to the earlier of the date that is 10 business days (unless extended by the board of directors in certain circumstances) following such time as any person acquires 15 percent or more of our Class B Common Stock and the expiration date of the rights.

154

 

At any time after a person acquires 15 percent or more of our outstanding Class B Common Stock, but prior to such person becoming the beneficial owner of 50 percent or more of our outstanding Class B Common Stock or there occurs a “flip-over event,” our board of directors may cause us to exchange for all or part of the then-outstanding and exercisable rights shares of our common stock at an exchange ratio of one share of common stock per right, adjusted to reflect any stock split, stock dividend, or similar transaction. We will have the discretion to exchange the rights for Series A junior participating preferred stock (or equivalent preferred stock) at an exchange ratio of one right per one one-thousandth of a share of such preferred stock.

Until a right is exercised, its holder, as such, will have no rights as a stockholder with respect to such rights, including, without limitation, the right to vote or to receive dividends.

The rights will have certain anti-takeover effects. This is particularly true in light of the fact that K. Rupert Murdoch may be deemed to beneficially own 39.4% of our Class B Common Stock immediately following the distribution. For example, the rights will cause substantial dilution to any person or group who attempts, without approval of our board of directors, to acquire a 15% or greater interest in our Class B Common Stock following the first date of public announcement of our board of directors’ determination to adopt the stockholder rights agreement. As a result, the overall effect of the rights may be to render it more difficult or to discourage any attempt to acquire us, even if the acquisition would be in the best interests of our stockholders. Because of our board of directors’ ability to redeem the rights, the rights should not interfere with a merger or other business combination approved by our board of directors.

For so long as the rights continue to be associated with our common stock, each new share of our common stock issued will have attached to it a right. Stockholders will not be required to pay any separate consideration for the rights issued with our common stock.

Acquisitions of shares of our Class B Common Stock as a result of acquiring additional Parent Class B Common Stock prior to the distribution or shares representing our Class B Common Stock in the when-issued trading market or as a result of the distribution will each be included in determining the beneficial ownership of a person and all such acquisitions following the first date of public announcement of our board of directors’ determination to adopt the stockholder rights agreement will be taken into account in determining whether a person is an acquiring person. Therefore, a person might become an acquiring person simultaneously with the distribution of our Class B Common Stock. Even if a person is an exempt person, such person could lose such status as a result of pre-distribution acquisitions.

Authorized but Unissued Shares

Our authorized but unissued shares of common stock and Preferred Stock will be available for future issuance without your approval. We may use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions and as employee compensation. However, New News Corporation does not intend to raise additional capital through the issuance of shares for at least three months after the date of this information statement. The existence of authorized but unissued shares of common stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Liquidation

In the event of any voluntary or involuntary liquidation, dissolution or winding up of New News Corporation, after distribution in full of the preferential and/or other amounts to be distributed to the holders of shares of any outstanding series of Preferred Stock or Series Common Stock, the holders of shares of Class A Common Stock, Class B Common Stock and, to the extent fixed by our board of directors with respect thereto, the Series Common Stock and Preferred Stock shall be entitled to receive all of our remaining assets available for distribution to our stockholders, ratably in proportion to the number of shares held by them (or, with respect to any series of the Series Common Stock or Preferred Stock, as so fixed by our board of directors).

155

Preferred Stock and Series Common Stock

Our amended and restated certificate of incorporation will authorize our board of directors to designate and issue from time to time one or more series of Preferred Stock or Series Common Stock without stockholder approval, provided that our board of directors shall not issue any shares of Preferred Stock or Series Common Stock which entitle the holders thereof to more than one vote per share without an affirmative vote of the majority of the holders capital stock of New News Corporation entitled to vote generally in the election of directors. Under the terms of our amended and restated certificate of incorporation, our board of directors will be authorized, subject to limitations prescribed by the DGCL and by our amended and restated certificate of incorporation, to issue up to twenty-five million (25,000,000) shares of Preferred Stock and up to twenty-five million (25,000,000) shares of Series Common Stock, each in one or more series, without further action by the holders of our common stock. Our board of directors is vested with the authority to fix by resolution the designations, preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions thereof, including, without limitation, redemption rights, dividend rights, liquidation preferences and conversion or exchange rights of any class or series of preferred stock, and to fix the number of classes or series of Preferred Stock or Series Common Stock, the number of shares constituting any such class or series and the voting powers for each class or series.

Our board of director’s authority to issue Preferred Stock or Series Common Stock could potentially be used to discourage attempts by third parties to obtain control of us through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. See “Description of Our Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Our Stockholder Rights Agreement.” Our board of directors may issue Preferred Stock or Series Common Stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of common stock. Except pursuant to our stockholder rights agreement, there are no current agreements or understandings with respect to the issuance of Preferred Stock and our board of directors has no present intention to issue any shares of Preferred Stock or Series Common Stock.

Junior Participating Preferred Stock

Shares of our junior participating preferred stock, Series A, or “Series A preferred stock,” will be reserved for issuance upon exercise of the rights under our stockholder rights agreement. See “Description of Our Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and our Stockholder Rights Agreement.” Shares of our Series A preferred stock may be purchased only after the rights have become exercisable, and each share of Series A preferred stock:

   

will rank junior to any other class or series of our preferred stock with respect to the payment of dividends and the distribution of assets.

   

will entitle holders to a quarterly dividend in an amount per share equal to the greater of (1) $1.00, or (2) the product of (a) 1,000 (subject to antidilution adjustment) and (b) the aggregate per share amount of all dividends declared on our Class B Common Stock since the preceding dividend payment date.

   

will entitle holders to one vote on all matters submitted to a vote of our stockholders.

   

in the event of our liquidation, will entitle holders to a preferred liquidation payment equal to $100 per share, plus accrued and unpaid dividends, provided that holders shall be entitled to receive not less than an aggregate amount per share equal to the product of (1) 1,000 (subject to antidilution adjustment) and (2) the aggregate amount to be distributed per share to holders of our Class B Common Stock.

   

in the event of any consolidation, merger, combination, or other transaction in which shares of our common stock are exchanged for or changed into stock or securities of another entity, cash and/or other property, will be exchanged or changed into an amount per share equal to the product of (1) 1,000 (subject to antidilution adjustment) and (2) the aggregate amount of stock, securities, cash, and/or other property into which or for which each share of our Class B Common Stock is changed or exchanged.

156

The Series A preferred stock is not redeemable.

The exercise price of the rights, the number of shares of Series A preferred stock issuable, and the number of outstanding rights will adjust to prevent dilution that may result from a stock dividend, a stock split, or a reclassification of the Series A preferred stock or our common stock.

No Preemptive Rights

No holder of any New News Corporation common stock or any class authorized at the distribution date will have any preemptive rights to subscribe to any New News Corporation securities of any kind or class.

Listing

We intend to apply to list our shares of Class B Common Stock and Class A Common Stock on NASDAQ under the symbols “NWS” and “NWSA,” respectively and intend that CDIs representing an interest in underlying Class B Common Stock and Class A Common Stock will be listed on ASX, initially under temporary trading symbols, and then under the symbols “NWS” and “NWSLV,” respectively.

Sale of Unregistered Securities

In connection with the internal reorganization, we will issue to Parent one share of our Class A Common Stock for every four shares of Parent Class A Common Stock outstanding on the record date and one share of our Class B Common Stock for every four shares of Parent Class B Common Stock outstanding on the record date. We will not register the issuances of these shares under the Securities Act because such issuances will not constitute public offerings.

Limitation of Liability for Officers and Directors and Insurance

The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors. Our amended and restated certificate of incorporation and amended and restated by-laws include provisions that exculpate and indemnify, to the fullest extent allowable under the DGCL, the personal liability of directors or officers for monetary damages by reason of the fact that he or she is or was a director or officer of New News Corporation or any of its direct or indirect subsidiaries or is or was serving at the request of New News Corporation as a director or officer of any other corporation, partnership, joint venture, trust or other enterprise against any expense, as the case may be. Our amended and restated by-laws also provide that we must indemnify and advance reasonable expenses to our directors and officers, subject to our receipt of an undertaking from the indemnified party as may be required under such by-laws or the DGCL. We are also expressly authorized to carry directors’ and officers’ insurance, at our own expense, to protect us, our directors, officers and certain employees for some liabilities, whether we would have the power to indemnify our directors, officers or employees from such liabilities under the DGCL or not. The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated by-laws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. However, this provision does not limit or eliminate our rights, or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s duty of care. The provisions will not alter the liability of directors under the federal securities laws. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

We intend to obtain insurance policies that insure our directors and officers and those of our subsidiaries against certain liabilities they may incur in their capacity as directors and officers. The insurance will provide coverage, subject to its terms and conditions, if New News Corporation is unable to (e.g., due to bankruptcy) or unwilling to indemnify the directors and officers for a covered wrongful act.

157

 

Certain Corporate Opportunities

Our amended and restated certificate of incorporation will contain provisions relating to certain corporate opportunities that may simultaneously be of interest to us and to Parent. These provisions will provide that in the event that any of our stockholders who are: (x) K. Rupert Murdoch, his wife, child or more remote issue, or brother or sister or child or more remote issue of a brother or sister (the “Murdoch Family”) or (y) any person directly or indirectly controlled by one or more members of the Murdoch Family (a “Murdoch Controlled Person”); provided that a trust and the trustees of such trust shall be deemed to be controlled by any one or more members of the Murdoch Family if a majority of the trustees of such trust are members of the Murdoch Family or may be removed or replaced by any one or more of the members of the Murdoch Family and/or Murdoch Controlled Persons (each, a “Covered Stockholder”) (so long as such Covered Stockholders continue to own, in the aggregate, 10% or more of the voting stock of each of Parent and us) or any of our directors and officers (the “Overlap Persons”) that are or may become stockholders, directors, officers, employees and agents of Parent and its affiliates (each an “Other Entity”) is presented, offered, or otherwise acquires knowledge of a potential business opportunity for us (a “Potential Business Opportunity”):

   

such Overlap Person will have no duty to refrain from referring such Potential Business Opportunity to any Other Entity and, if such Overlap Person refers such Potential Business Opportunity to an Other Entity, such Overlap Person shall have no duty or obligation to refer such Potential Business Opportunity to us and will not be liable to us for such referral or for any failure to give us notice of, or refer us to, such Potential Business Opportunity,

   

any Other Entity may participate, engage or invest in any such Potential Business Opportunity notwithstanding that such Potential Business Opportunity may have been referred to it by an Overlap Person, and

   

if an Overlap Person refers a Potential Business Opportunity to an Other Entity, then, as between us and such Other Entity, we shall be deemed to have renounced, to the fullest extent permitted by law, any interest or right to such Potential Business Opportunity.

Notwithstanding the foregoing, if the Overlap Person believed that we possessed, or would reasonably be expected to be able to possess, the resources necessary to exploit such opportunity and substantially all of such opportunity is a Covered Business (as defined below), the foregoing does not apply and such Potential Business Opportunity will be a “Restricted Potential Business Opportunity” in which we retain all interests and rights, and any Overlap Person will have fiduciary obligations to us to the fullest extent permitted by law with regard to such matters.

A “Covered Business” is any of the following, either alone or in combination: (i) a business that primarily derives its revenue from the newspaper business in Australia, the United States or the United Kingdom, (ii) a business that primarily derives its revenue from providing free-standing inserts and in-store advertising and merchandising in the United States, (iii) a digital advertising business primarily deriving its revenue from real estate services in Australia, (iv) a business that primarily derives its revenue from book publishing in the United States or the United Kingdom or (v) a digital education business focused on the K-12 learning market in the United States. Such Covered Business “primarily derives its revenue” from a business if it derives a greater percentage of its revenue from that certain business and specific geographical area, as applicable, than from any other business and specific geographic area, and in any event at least 25% of its revenue.

Our amended and restated certificate of incorporation will provide that we renounce to the fullest extent permitted by law any interest or expectancy in any Potential Business Opportunity that is not a Restricted Potential Business Opportunity. In the event our board of directors declines to pursue a Restricted Potential Business Opportunity, Overlap Persons shall be free to refer such Restricted Potential Business Opportunity to an Other Entity or, to the extent consistent with their duties owed to us, engage in such Restricted Business Opportunity on their own.

 

158

 

Parent will not have a similar provision regarding corporate opportunities in its certificate of incorporation; however, Parent will amend its by-laws to permit Overlap Persons to comply with our amended and restated certificate of incorporation as it relates to Restricted Potential Business Opportunities. The effect of these provisions in our amended and restated certificate of incorporation and Parent’s amended by-laws could result in the Overlap Persons submitting any corporate opportunities other than Restricted Potential Business Opportunities to Parent.

Our amended and restated certificate of incorporation will provide that no agreement or transaction entered into between us and Parent before the distribution shall be void or voidable or be considered unfair to us solely because Parent is a party thereto, or because any directors, officers or employees of Parent participated in any meeting of our board of directors that authorized such agreement or transaction. Additionally, we may enter into and perform additional agreements or transactions with an Other Entity and, to the fullest extent permitted by law and the provisions of our amended and restated certificate of incorporation, no such agreement or transaction, nor the performance thereof by us or by an Other Entity, shall be considered contrary to any fiduciary duty owed to us, or to any of our stockholders, by any Overlap Person by reason of the fact that such person is an Overlap Person and no Overlap Person shall have or be under any fiduciary duty to us, or to any of our stockholders, by reason of the fact that such person is an Overlap Person, to refrain from acting on behalf of us or Parent in respect of any such agreement or transaction or performing any such agreement or transaction in accordance with its terms. Each such Overlap Person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests, and shall be deemed not to have breached his or her duties of loyalty to us or any of our stockholders, and not to have derived an improper personal benefit therefrom.

No amendment or repeal of, or adoption of any provision inconsistent with, the foregoing provisions will have any effect upon any agreement or arrangements entered into prior to the time of such amendment, repeal or adoption, including any allocation of any business opportunity between us and any Other Entity or any duty or obligation owed by any Overlap Person to us with respect to any corporate opportunity prior to such time.

Transfer Agent and Registrar

After the distribution, the transfer agent and registrar for our common stock will be Computershare Trust Company, N.A.

 

159

 

CHESS DEPOSITARY INTERESTS AND OTHER AUSTRALIAN MATTERS

Chess Depositary Interests (“CDIs”)

Introduction

A CDI is a financial product quoted on ASX. CDIs are units of beneficial ownership in securities issued by a non-Australian company. Investors can trade interests in non-Australian securities by trading the relevant CDIs on ASX. Legal title to the securities represented by CDIs is held by an Australian depositary entity, CHESS Depositary Nominees Pty Ltd (“CDN”), a subsidiary of ASX.

CDIs representing Parent’s Class B Common Stock and Class A Common Stock currently trade on ASX, and following the distribution will continue to trade on ASX under the symbols “FOX” and “FOXLV,” respectively. See “The Distribution—Trading Prior to the Distribution Date” for additional details. Each of those CDIs represents a beneficial interest in one share of Parent Class A Common Stock or Class B Common Stock, as applicable.

Under the distribution:

   

each holder of CDIs representing beneficial interests in shares of Parent Class A Common Stock will receive, for every four such CDIs held on the record date, one New News Corporation CDI, representing a beneficial interest in one share of New News Corporation Class A Common Stock (a “Class A CDI”); and

   

each holder of CDIs representing beneficial interests in shares of Parent Class B Common Stock will receive, for every four such CDIs held on the record date, one New News Corporation CDI, representing a beneficial interest in one share of New News Corporation Class B Common Stock (a “Class B CDI”).

Each holder of Parent CDIs will, shortly after the distribution, receive a holding statement which specifies the number of our Class A CDIs and Class B CDIs (together the “New News Corporation CDIs”) held by that person.

The key features of the New News Corporation CDIs are summarized below.

Voting

If holders of New News Corporation CDIs wish to attend and vote at New News Corporation’s stockholder meetings in the United States, they will be able to do so, provided that holders of Class A CDIs may vote only in the limited circumstances where holders of New News Corporation Class A Common Stock are entitled to vote, as described in “Description of Our Capital Stock,” and other than in those circumstances have no right to vote.

In order to vote, the CDI holders have the following options:

   

completing and returning the instruction form instructing CDN, as the issuer of the CDIs, how to vote the New News Corporation common stock underlying their New News Corporation CDIs;

   

informing New News Corporation that they wish to nominate themselves or another person as CDN’s proxy for the purpose of attending and voting at a stockholder meeting; or

   

converting their New News Corporation CDIs into a holding of shares of New News Corporation common stock and voting these at the meeting. See below for information on the conversion process.

160

 

Converting from a CDI holding to a direct holding of New News Corporation common stock

Holders of New News Corporation CDIs can at any time convert their CDIs to New News Corporation Class A Common Stock or Class B Common Stock, as applicable, by contacting New News Corporation’s Australian share registry either:

   

directly in the case of New News Corporation CDIs on the issuer sponsored subregister operated by New News Corporation. New News Corporation’s Australian share registry will provide holders with the applicable request form for completion and return; or

 

   

through their controlling participant (generally a stockbroker) in the case of New News Corporation CDIs which are sponsored on the CHESS subregister. In this case, the sponsoring participant will arrange for completion of the applicable request form.

In both cases, once New News Corporation’s Australian share registry has received the applicable request form, direction will be given to New News Corporation’s transfer agent for the shares to be registered in accordance with the instructions in the request form. It is expected that this process will generally take approximately two to three business days to complete, following the initial conversion request being made, although the time for conversion may take longer.

Once the conversion process is complete, the New News Corporation shares will be traded on NASDAQ, but cannot be traded on ASX, as only New News Corporation CDIs will be traded on ASX.

The processing of requests for conversions between New News Corporation common stock and New News Corporation CDIs will commence on or about the first trading day after the distribution date.

Communications from New News Corporation

We will communicate directly with holders of New News Corporation CDIs with respect to corporate actions and will send notices and other documents to holders of New News Corporation CDIs at the same time as they are sent to New News Corporation stockholders.

Dividends and other shareholder entitlements

The ASX Settlement Operating Rules have force by virtue of the Corporations Act and grant New News Corporation CDI holders the right to receive all dividends and other entitlements which attach to the underlying shares.

The ASX Settlement Operating Rules state that CDI holders are to receive all direct economic benefits and other entitlements in relation to the underlying shares (such as dividends, rights issues and bonus issues) as if they held the underlying New News Corporation shares. If a cash dividend or any other cash distribution is declared, New News Corporation will distribute this dividend or distribution to New News Corporation CDI holders in accordance with each holder’s entitlement.

Takeovers

If a takeover bid is made in respect of any of the New News Corporation shares of which CDN is the registered holder, CDN is prohibited from accepting the offer made under the takeover bid except to the extent that acceptance is authorized by the relevant New News Corporation CDI holders in accordance with the ASX Settlement Operating Rules.

161

 

Other rights

As CDI holders will not appear on the New News Corporation share register as legal holders of New News Corporation common stock, any other right conferred on holders of New News Corporation shares may be exercised by the CDI holders by means of instructions to CDN. As to the right to vote at stockholder meetings, see “Description of Our Capital Stock.”

Fees

A New News Corporation CDI holder will not incur any additional fees or charges as a result of holding CDIs rather than shares of New News Corporation common stock.

Australian Regulatory Matters

ASIC relief

ASIC has granted Parent and New News Corporation exemptions and modifications from provisions of the Corporations Act, in particular:

   

an exemption under subsection 926A(2)(a) to provide relief to New News Corporation from subsection 911A(1) of the Corporations Act in relation to any financial service consisting of New News Corporation arranging for CDN to issue CDIs; and

   

an exemption under subsection 741(1)(a) to provide relief to Parent, New News Corporation and holders of New News Corporation common stock and CDIs from Chapters 6D.2 and 6D.3 of the Corporations Act.

New News Corporation has applied to ASIC for exemptions under sections 741(1), 911A(2)(I), 992B(1)(a), 1020F(1)(a) and 1020F(1)(b) to provide relief from Chapters 6D and 7 on a similar basis to Class Order 03/184 in respect of offers of awards under the 2013 LTIP:

   

in the 12 months following the listing of New News Corporation on ASX or an approved foreign market, but without requiring New News Corporation shares to have been quoted on the relevant financial market throughout the 12 month period prior to the offer of awards under the 2013 LTIP;

   

in circumstances where the awards allow for the issue of New News Corporation CDIs in lieu of New News Corporation shares; and

   

in circumstances where the awards are issued on terms such that they are or may be cash settled and therefore technically derivatives for the purposes of the Corporations Act.

ASIC has not indicated whether or not it will grant the requested relief.

ASX relief

Parent has received confirmation from ASX that none of ASX Listing Rules 10.1, 11.1, 11.2 and 7.17 will apply in respect of the distribution.

New News Corporation has received in principle advice from ASX that ASX is likely to grant a waiver of Item 56 of the Information Checklist so that New News Corporation is not required to provide to ASX a pro forma statement of financial position that has been reviewed by an auditor, on the basis that the non-inclusion of this reviewed balance sheet would not result in any detriment to New News Corporation stockholders and that the registration statement (of which this information statement forms a part) complies with the SEC requirements.

162

 

New News Corporation has applied to ASX for certain waivers, confirmations and approvals from or in respect of certain ASX Listing Rules, ASX Operating Rules and ASX Settlement Operating Rules. New News Corporation has sought the following:

   

waivers, confirmations and approvals from or in respect of the following ASX Listing Rules, which relate to New News Corporation’s application for admission to the official list of ASX:

  for the purpose of Condition 2 of Listing Rule 1.1, confirmation that the amended and restated certificate of incorporation and amended and restated by-laws (in the forms included as an exhibit to the registration statement of which this information statement forms a part) will be considered as New News Corporation’s constitution;
  for the purpose of Condition 3 of Listing Rule 1.1 and in relation to ASX’s pro forma Information Form and Checklist (“Information Checklist”):
  i. a waiver of Item 19 of the Information Checklist so that New News Corporation need not disclose its issued share capital as of the date of listing on ASX;
  ii. a waiver of Item 28 of the Information Checklist so that the registration statement (of which this information statement forms a part) need only disclose the number of New News Corporation shares that will be on issue post-conversion of New News Corporation to a Delaware corporation and as of the date of the distribution, rather than needing to disclose details of all issues of securities since New News Corporation was formed in December 2012;
  iii. a waiver of Item 54 of the Information Checklist so that New News Corporation is not required to provide to ASX a balance sheet as of June 30, 2010, on the basis that the non-inclusion of such balance sheet will not result in any detriment to New News Corporation securityholders;
  iv. confirmation that the signing of the registration statement (of which this information statement forms a part) by K. Rupert Murdoch (on behalf of himself and each other New News Corporation director) satisfies the requirements of Listing Rule 1.4.3;
  v. a waiver of part of Listing Rule 1.4.7 so that the registration statement (of which this information statement forms a part) need not contain a statement that New News Corporation has not raised any capital for the 3 months prior to the date of issue of the registration statement; and
  vi. a waiver of Listing Rule 1.4.8 (which requires that an entity which provides an information memorandum include a statement in the information memorandum that the entity will issue a supplementary information memorandum if the entity becomes aware of certain information between the issue of the information memorandum and the date of quotation of the entity’s securities) on the basis that SEC rules govern the requirements for New News Corporation to provide supplementary disclosures and such disclosures will also be released to ASX;
  confirmation that, for the purpose of Condition 8 of Listing Rule 1.1, ASX considers that the pro-forma balance sheet provided to ASX is sufficient for New News Corporation to meet the assets test in Listing Rule 1.3;
  a waiver from the requirement under Listing Rule 3.19A.1 (which requires an entity to lodge an Appendix 3X in respect of each director on the date of the entity’s admission to the official list) on the basis that the same matters will be covered by relevant SEC filings by New News Corporation;
  approval for the purpose of Listing Rule 6.2 of the New News Corporation Class A Common Stock as an additional class of ordinary shares;

163

 

  a waiver of Listing Rules 6.8 and 6.9 (which regulate voting rights attached to shares) to the extent necessary to permit the issue and existence of New News Corporation Class A Common Stock with limited voting rights – see “Description of Class A Common Stock and Class B Common Stock – Class A Common Stock Voting Rights”;

 

  in respect of the New News Corporation amended and restated certificate of incorporation and amended and restated by-laws:
  i. confirmation that the terms of Article IV, Section 5 of the amended and restated certificate of incorporation are appropriate and equitable for the purposes of Listing Rules 6.10.5 and 6.12.3; and
  ii. a waiver from Listing Rule 8.10 (which prohibits an entity from interfering with registrations of transfers in its securities) to the extent necessary to permit New News Corporation to apply a holding lock (or request ASX Settlement Pty Ltd to prevent or refuse the registration of a transfer of shares) in certain situations, and a confirmation that the same will apply to CDIs;
  in respect of securities to be issued or transferred to employees and directors of New News Corporation under the distribution:
  i. confirmation that none of the securities that will be received by executives and directors of New News Corporation (“Officer Distribution Securities”) will be considered ‘restricted securities’ for the purpose of Listing Rule 9;
  ii. confirmation that Listing Rule 10.11 (which provides that shareholder approval is required for the issue of securities to an entity’s directors and other related parties) does not apply to the Officer Distribution Securities;
  iii. a waiver of Listing Rule 15.12 (which provides that an entity’s constitution must contain certain provisions in respect of ‘restricted securities’) on the basis that New News Corporation will not have any ‘restricted securities’ within the meaning of the Listing Rules; and
  iv. a waiver of Listing Rules 6.22, 6.23.2, 6.23.3 and 6.23.4 (which deal with changes to an option’s exercise price, changes to the number of underlying securities on exercise of an option and other changes to option terms) in respect of awards granted to employees under the 2013 LTIP as described in “Equity Compensation Awards”; and
  a waiver of Listing Rule 15.15 (which provides that a foreign company’s constitution must not include provisions relating to takeovers or substantial holdings) to the extent necessary to permit the New News Corporation amended and restated certificate of incorporation to contain the following provisions:
  i. provisions by which the holders of New News Corporation Class A Common Stock and Class B Common Stock are to receive parity of treatment in a takeover; and
  ii. an election that New News Corporation not be governed by section 203 of the DGCL; and
   

a waiver under ASX Operating Rule 3331(a) to facilitate New News Corporation’s CDIs trading on a conditional market, notwithstanding that there is no sale price or issue price for the CDIs prior to the commencement of conditional trading;

   

a waiver under ASX Settlement Operating Rules 13.9.4 and 13.9.9 to suspend conversions between ASX and NASDAQ in respect of Parent’s common stock and Parent’s CDIs for the period between the ex-distribution date and the distribution record date to account for differing settlement and transfer procedures operating in the two markets and to keep both registers and the respective security holders on an equal footing;

164

 

   

waivers, confirmations and approvals from or in respect of the following ASX Listing Rules, which are of an ongoing nature:

  a waiver of Listing Rule 3.8A to the extent necessary to permit New News Corporation not to lodge an Appendix 3E at least half an hour before the commencement of trading on the business day after any day on which shares are bought back, on the condition that an Appendix 3E is lodged by the close of trading on ASX;
  a waiver of Listing Rule 7.33 in respect of any share buy-back which New News Corporation might undertake in the future to the extent necessary to permit New News Corporation to buy back shares on NASDAQ at a price which is greater than 5 percent above the average of the market price for securities in that class calculated over the last five days on which sales in the shares were recorded before the day on which the purchase under the buy-back was made, on the basis that New News Corporation conducts the buy-back on NASDAQ in accordance with US laws and regulations;
  a waiver from the requirement in Listing Rules 3.19A.1, 3.19A.2 and 3.19A.3 to lodge an Appendix 3X, Appendix 3Y or Appendix 3Z for New News Corporation (as applicable) at any time in the future on the basis that the filings which New News Corporation is required to make with the SEC in respect of New News Corporation directors cover the same matters;
  a waiver of Listing Rules 6.22, 6.23.2, 6.23.3 and 6.23.4 (which deal with changes to an option’s exercise price, changes to the number of underlying securities on exercise of an option and other changes to option terms) with respect to any stock options or other equity awards which New News Corporation may issue in the future (whether under the 2013 LTIP or otherwise) on the basis that an alternative mechanism will apply under the NASDAQ Listing Rules which adequately addresses the policy underlying those ASX Listing Rules;
  a waiver of Listing Rule 7.1 so that issues of additional New News Corporation Class A Common Stock and securities convertible into New News Corporation Class A Common Stock are not subject to the limits in that rule; and
  a waiver of Listing Rule 14.3 (which requires an entity to accept nominations for directors up to a certain time before each general meeting) to the extent necessary to permit nominations for the election of directors of New News Corporation to occur in accordance with the timetable set out in the amended and restated certificate of incorporation and amended and restated by-laws.

There can be no guarantee that all or any of these waivers will be granted or confirmations provided. In addition, New News Corporation may seek additional waivers or confirmations from ASX if a need to do so is identified prior to the distribution date.

Supplemental Information Required In Connection With ASX Listing Application

As New News Corporation is not incorporated under the laws of Australia, its general corporate activities (apart from any offering of securities in Australia) are not regulated by the Corporations Act or by ASIC but instead are regulated by the DGCL. New News Corporation is also subject to regulation by the SEC under the Securities Act, and the rules and regulations promulgated thereunder, and the Exchange Act, and the rules and regulations promulgated thereunder. By virtue of our anticipated listing on ASX, and in order to comply with the applicable ASX listing rules, this information statement must include the following summary overview regarding certain aspects of these laws and their application to us and our stockholders. The summary overview does not contain all of the information that may be important to our stockholders. Stockholders should refer to the underlying statutes and rules and regulations referenced herein, as well as our amended and restated certificate of incorporation, and amended and restated by-laws, the forms of which are included as exhibits to the registration statement of which this information statement is a part.

165

 

Summary Overview of Delaware Law and NASDAQ Listing Rules Relating to Certain Corporate Activities

 

     
Transactions Requiring Stockholder Approval   Share issuances. Under our amended and restated certificate of incorporation, our board of directors has the power to issue additional shares of our common stock, Preferred Stock and Series Common Stock, provided that we shall not, without the affirmative vote of the holders of a majority of outstanding shares of capital stock entitled to vote generally in the election of directors, issue any shares of Series Common Stock or Preferred Stock which entitle the holders thereof to more than one vote per share. See “Description of Capital Stock—Preferred Stock and Series Common Stock.”
   
   

Additionally, NASDAQ Listing Rule 5635(d) requires stockholder approval prior to the issuance of additional shares of our common stock, subject to limited exceptions, in the following circumstances:

 

•     when the issue or potential issue will result in a change of control of New News Corporation;

   

•     in connection with the acquisition of the stock or assets of another company if:

 

–       where, due to the present or potential issue of our common stock (including issued pursuant to an earn-out or similar provision), or securities convertible into or exercisable for our common stock, other than a public offering for cash: (A) our common stock has or will have upon issuance voting power equal to or in excess of 20% of the voting power outstanding before the issuance of stock or securities convertible into or exercisable our common stock; or (B) the number of our common stock to be issued is or will be equal to or in excess of 20% of the number of our common stock outstanding before the issuance of the stock or securities; or

 

–       any of our directors, officers or substantial stockholders has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction or series of related transactions and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common shares or voting power of 5% or more; or

 

•     in connection with a transaction other than a public offering involving:

 

–       the sale, issue or potential issue by us of our common stock (or securities convertible into or exercisable for our

common stock) at a price less than the greater of book or market value which together with sales by our officers, directors or substantial stockholders equals 20% or more of our common stock or 20% or more of the voting power outstanding before the issuance; or

166


Table of Contents
     
   

 

–       the sale, issue or potential issue by us of our common stock (or securities convertible into or exercisable for our common stock) equal to 20% or more of our common stock or 20% or more of the voting power outstanding before the issuance for less than the greater of book or market value of the shares.

 

Business Combinations. Generally, Under the DGCL, a merger, consolidation, or sale of all or substantially all of a corporation’s assets must be adopted by the board of directors and by a vote of at least a majority of the outstanding shares of the corporation entitled to vote thereon.

   
   

Our amended and restated certificate of incorporation requires that, in connection with (i) a proposal to sell, lease or exchange all or substantially all of our property and assets, and (ii) a proposal to adopt an agreement of merger or consolidation in which we are a constituent corporation, as a result of which our stockholders prior to the merger or consolidation would own less than sixty percent (60%) of the voting power or capital stock of the surviving corporation or consolidated entity (or the direct or indirect parent of the surviving corporation or consolidated entity) following the merger or consolidation, the approval of a majority vote of our Class A and Class B stockholders, voting as a single class, at the meeting is required. In all other merger or sale transactions, the holders of our Class A Common Stock are not entitled to vote. See “Description of Capital Stock—Description of Class A Common Stock and Class B Common Stock.”

   
Right of Stockholders to Request a Meeting; Requisition; Action by Written Consent  

Our amended and restated certificate of incorporation and amended and restated by-laws provide that special meetings of stockholders shall be called by our secretary upon the written request of holders of record of not less than 20% of the outstanding shares of our Class B Common Stock, proposing a proper matter for stockholder action under the DGCL at such special meeting, provided that (a) no such special meeting of stockholders shall be called if the written request by such holders is received less than 135 days prior to the first anniversary of the date of our preceding annual meeting of stockholders and (b) any special meeting called by stockholders shall be held not later than 100 days following receipt of the written request by such holders, on such date and at such time and place as determined by our board of directors. See “Description of Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Our Stockholder Rights Agreement—Stockholder Meetings.”

 

Subject to the rights of the holders of any series of Preferred Stock or Series Common Stock, our amended and restated certificate of incorporation and amended and restated by-laws provide that our stockholders may act only at an annual or special meeting of stockholders and may not act by written consent.

 

167

 

     
Right of Stockholders to Appoint Proxies to Attend and Vote at Meetings   Our amended and restated by-laws provide that at any meeting of our stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting.
   
    Generally, under the DGCL, proxies are revocable unless coupled with an interest sufficient in law to support an irrevocable power.
   
Changes to the Rights Relating to the Securities   Amendments to Our Certificate of Incorporation: The DGCL generally provides the certificate of incorporation of a corporation may be amended by an affirmative vote of majority of stock outstanding entitled to vote thereon, and a majority of each class of stock entitled to vote thereon as a class. Our amended and restated certificate of incorporation provides that in addition to requirements relating under the DGCL, amendments to provisions of our amended and restated certificate of incorporation relating to regulatory restrictions on transfer and related rights of redemption, size and classification of board of directors, amendments to amended and restated certificate of incorporation and amended and restated by-laws and director exculpation require the affirmative vote of 65% of the combined voting power of the then outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class.
   

 

Amendment to Our By-Laws: The DGCL generally provides that the power to adopt, alter or repeal the by-laws of a company is vested in its shareholders, except to the extent that a company’s certificate of incorporation also confers such power to its board of directors. Our amended and restated certificate of incorporation provides that our board of directors is authorized to amend, alter or repeal our amended and restated by-laws by a majority vote, or such greater vote as may be set forth in our amended and restated by-laws. Additionally, our amended and restated certificate of incorporation provides that our stockholders may amend, alter or repeal our amended and restated by-laws by affirmative vote of shares representing 65% of the combined voting power of the then outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class. See “Description of Capital Stock—Anti-Takeover Effects of Various Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Our Stockholder Rights Agreement.”

 

Amendments to the DGCL: Generally, the DGCL may be amended through adoption of such proposed legislation by the Delaware legislature and the execution into law by the Governor of the State of Delaware, in accordance with such state’s laws, practices and procedures.

 

NASDAQ Listing Rules: Generally, the NASDAQ Listing Rules may be proposed or changed under Section 19(b)(1) of the Exchange Act and Rule 19b-4 thereunder.

   
Right of Stockholders to Seek Relief From Oppressive Conduct   Under the Corporations Act, any holder of shares in an Australian company can seek relief from the Court on the grounds that the conduct of the company’s affairs (or an actual or proposed act or omission by or on behalf of the company, or a resolution or proposed resolution of shareholders or a class of shareholder of the company) is either contrary

 

168

 


Table of Contents
     
    to the interests of the stockholders as a whole, or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, any stockholder in their capacity as stockholder or themselves in their capacity other than as a stockholder. The DGCL does not provide for an equivalent right of action.
   
Right of Stockholders to Bring Derivative Lawsuits   Under Delaware corporation law, a stockholder may bring a derivative action on behalf of and for the benefit of the corporation seeking to assert claims that belong to the corporation (and to the stockholders collectively). However, pursuant to Delaware law, a stockholder who wishes to bring such a derivative suit must first meet certain threshold requirements before a suit can proceed. Specifically, a stockholder must satisfy standing requirements, including a requirement that the plaintiff has been a stockholder of the corporation at the time of the act of which he complains and that he maintain his status as a stockholder throughout the course of the litigation. In addition, a derivative plaintiff must make a pre-suit demand on the directors of the corporation to assert the corporate claim or demonstrate why making such demand would be futile. This requirement recognizes that it is the board of directors of a company that has the authority to decide whether to pursue company claims and thus a stockholder cannot proceed unless it makes a demand or demonstrates why the board is incapable of making that decision. Settlement or dismissal of a derivative action requires the approval of the court in which the case is brought and notice to stockholders of the proposed dismissal.
   
Remuneration Votes   The Corporations Act contains a “two strikes” rule in relation to the remuneration reports of an Australian company. In summary, the rule is that, if at two successive annual general meetings more than 25% of the votes cast on the remuneration report resolution are ‘no’ votes, then at the second annual general meeting, the stockholders will vote on whether all of the directors (except the managing director) are required to stand for re-election. If such ‘board spill’ resolution is passed by simple majority vote of such stockholders, then another general meeting must be held within 90 days to vote on the re-election of the directors.
   
    The DGCL does not provide for an equivalent vote on remuneration.
 
Overview of Disclosure Obligations Regarding Accumulations of Substantial Stockholdings Under U.S. Securities Laws and Regulation of Takeovers Under U.S. Laws
   
Disclosure of Substantial Stockholding   Under Section 13(d) of the Exchange Act, a person is generally required to disclose the purchase of a significant position in the equity securities of a publicly held company. Section 13(d) generally provides that any person who acquires, directly or indirectly, beneficial ownership of more than 5% of the class of securities must, within 10 days after such acquisition, file a statement of disclosure on Schedule 13D. Certain persons (generally institutional investors and investment advisors) who would otherwise be obligated to file a Schedule 13D may, in lieu thereof, file a Schedule 13G (which is required to be filed within 45 days after the end of the calendar year in which the person acquires 5% of the class of securities of the publicly held company). Generally, a Schedule 13G is applicable if such person acquires the securities in the ordinary course of business and not with the purpose nor with the effect of changing or influencing the control of the issuer, nor in connection with or as a participant in any transaction having such purposes or effect.

 

169

 


Table of Contents
     
Regulation of U.S. Takeovers
   
   

Overview of takeovers regime

 

Under the Corporations Act, a person is restricted to holding a 20% interest in the voting shares of an ASX-listed Australian company. Acquisitions which would result in a person moving beyond the 20% threshold can only occur via a specified exception such as a takeover bid, scheme of arrangement or with target shareholder approval (or via some other exception).

 

There is no equivalent or comparable takeovers threshold under the DGCL or under any other U.S. federal securities laws that apply to a company such as New News Corporation. However, the acquisition of control of a company such as New News Corporation must comply with the laws of the state of incorporation of such company, U.S. federal securities laws and the rules and regulations of any other governmental entities with competent jurisdiction over the company.

 

In general terms, there are two principal methods typically employed by a person in seeking to obtain control of a widely-held public company such as New News Corporation:

 

•    one-step merger—merger with the approval and recommendation of the target board, target shareholder approval, and, in certain cases where shares are being issued as consideration in the acquisition, acquiror shareholder approval; or

 

•    two-step merger—tender offer for the shares of the company, and, if majority voting control of the target company is achieved in such tender offer, a second step merger to complete the acquisition.

   
   

It should be noted that, based on the domicile, jurisdiction or listing of the counterparty to any such takeover transaction (whether such party is the acquiror or acquiree in any such transaction), we may be subject to additional disclosure requirements based on the rules, regulations and laws governing such party.

 

170

 


Table of Contents

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form 10 with the SEC with respect to the shares of our common stock being distributed as contemplated by this information statement. This information statement is a part of, and does not contain all of the information set forth in, the registration statement and the exhibits and schedules to the registration statement. For further information with respect to us and our common stock, please refer to the registration statement, including its exhibits and schedules. Statements made in this information statement relating to any contract or other document are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contract or document. You may review a copy of the registration statement, including its exhibits and schedules, at the SEC’s public reference room, located at 100 F Street, N.E., Washington, D.C. 20549, by calling the SEC at 1-800-SEC-0330 as well as on the Internet website maintained by the SEC at www.sec.gov. Information contained on any website referenced in this information statement is not incorporated by reference in this information statement or the registration statement filed on Form 10.

As a result of the distribution, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with the Exchange Act, we will file periodic reports, proxy statements and other information with the SEC, which will be available on the Internet website maintained by the SEC at www.sec.gov.

We intend to furnish holders of our common stock with annual reports containing consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles and audited and reported on, with an opinion expressed, by an independent registered public accounting firm.

You should rely only on the information contained in this information statement or to which we have referred you. We have not authorized any person to provide you with different information or to make any representation not contained in this information statement.

171

 

NEW NEWS CORPORATION

INDEX TO FINANCIAL STATEMENTS

         
     Page  

Audited Annual Combined Financial Statements:

        

Report of Independent Registered Public Accounting Firm

     F-2   

Combined Statements of Operations for the fiscal years ended June 30, 2012, 2011 and 2010

     F-3   

Combined Statements of Comprehensive (Loss) Income for the fiscal years ended June  30, 2012, 2011 and 2010

     F-4   

Combined Balance Sheets as of June 30, 2012 and 2011

     F-5   

Combined Statements of Cash Flows for the fiscal years ended June 30, 2012, 2011 and 2010

     F-6   

Combined Statements of Equity for the fiscal years ended June 30, 2012, 2011 and 2010

     F-7   

Notes to the Combined Financial Statements

     F-8   

 

         
     Page  

Unaudited Interim Combined Financial Statements:

        

Unaudited Combined Statements of Operations for the nine months ended March 31, 2013 and 2012

     F-56   

Unaudited Combined Statements of Comprehensive Income (Loss) for the nine months ended March  31, 2013 and 2012

     F-57   

Combined Balance Sheets as of March 31, 2013 (Unaudited) and June 30, 2012 (Audited)

     F-58   

Unaudited Combined Statements of Cash Flows for the nine months ended March 31, 2013 and 2012

     F-59   

Notes to the Unaudited Combined Financial Statements

     F-60   

 

F-1

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of News Corporation:

We have audited the accompanying combined balance sheets of New News Corporation (the Company) as of June 30, 2012 and 2011, and the related combined statements of operations, comprehensive (loss) income, cash flows, and equity for each of the three years in the period ended June 30, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of New News Corporation at June 30, 2012 and 2011, and the combined results of its operations and its cash flows for each of the three years in the period ended June 30, 2012, in conformity with U.S. generally accepted accounting principles.

/s/    Ernst & Young LLP New York, New York December 20, 2012

NEW NEWS CORPORATION

COMBINED STATEMENTS OF OPERATIONS

(IN MILLIONS)

 

                         
     For the years ended June 30,  
     2012     2011     2010  

Revenues:

                        

Advertising

   $ 4,693      $ 4,945      $ 4,639   

Circulation and Subscription

     2,365        2,549        2,477   

Consumer

     1,123        1,124        1,153   

Other

     473        477        483   
    

 

 

   

 

 

   

 

 

 

Total Revenues

     8,654        9,095        8,752   

Operating expenses

     (5,122     (5,234     (5,008

Selling, general and administrative

     (2,750     (2,648     (2,931

Depreciation and amortization

     (483     (430     (414

Impairment and restructuring charges

     (2,763     (25     (19

Equity earnings of affiliates

     90       109       95  

Interest, net

     56       47       28  

Other, net

     (59     47       (42
    

 

 

   

 

 

   

 

 

 

(Loss) income before income tax benefit (expense)

     (2,377     961       461  

Income tax benefit (expense)

     337       (257     (202
    

 

 

   

 

 

   

 

 

 

Net (loss) income

     (2,040     704       259  

Less: Net income attributable to noncontrolling interests

     (35     (26     (16
    

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to New News Corporation

   $ (2,075   $ 678     $ 243  
    

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these audited combined financial statements.