UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

For the fiscal year ended June 30, 20072008

or

For the transition period from              to             

Commission file number 001-32352

NEWS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

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

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

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

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.    Yes  ¨    No  x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a non-accelerated filer.smaller reporting company. See definitionthe definitions of “large accelerated filer,” “accelerated filerfiler” and large accelerated filer”“smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.Act.

Large Accelerated Fileraccelerated filer  x            Accelerated Filer  filer  ¨            Non-accelerated Filer  filer  ¨            Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934.1934).    Yes  ¨    No  x

As of December 29, 2006,28, 2007, which was the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of News Corporation’s Class A Common Stock, par value $0.01 per share, held by non-affiliates was approximately $45,435,573,995,$43,319,763,463, based upon the closing price of $21.48$20.60 per share as quoted on the New York Stock Exchange on that date, and the aggregate market value of News Corporation’s Class B Common Stock, par value $0.01 per share, held by non-affiliates was approximately $15,100,155,432,$14,442,088,830, based upon the closing price of $22.26$21.29 per share as quoted on the New York Stock Exchange on that date.

As of August 17, 2007, 2,141,871,2518, 2008, 1,810,522,293 shares of Class A Common Stock and 986,520,953798,520,953 shares of Class B Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required for Part III of this Annual Report on Form 10-K is incorporated by reference to the News Corporation definitive Proxy Statement for its 20072008 Annual Meeting of Stockholders, which shall be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, within 120 days of News Corporation’s fiscal year end.

TABLE OF CONTENTS

PART I

Background

News Corporation, a Delaware corporation, is a diversified entertainmentglobal media company with operations in eight industry segments, including (i) Filmed Entertainment, (ii) Television, (iii) Cable Network Programming, (iv) Direct Broadcast Satellite Television, (v) Magazines and Inserts, (vi) Newspapers and Information Services, (vii) Book Publishing and (viii) Other. The activities of News Corporation are conducted principally in the United States, the United Kingdom, Continental Europe, Australia, Asia and the Pacific Basin. For financial information regarding News Corporation’s segments and operations in geographic areas see “Item 8. Financial Statements and Supplementary Data.” Unless otherwise indicated, references in this Annual Report on Form 10-K (the “Annual Report”) to “we,” “us,” “our,” “News Corporation” or the “Company” means News Corporation’s predecessor corporation, TNCL (as defined below), and its subsidiaries prior to November 12, 2004 and News Corporation and its subsidiaries from November 12, 2004 forward. Descriptions of transactions contained in this Annual Report that occurred prior to the Reorganization (as defined below) have been adjusted to reflect the consummation of the Reorganization.

On November 12, 2004, a reorganization was completed (the “Reorganization”), whereby News Corporation became the parent company of News Holdings Limited (formerly known as The News Corporation Limited), a South Australia corporation (“TNCL”), and its subsidiaries. The Reorganization was completed pursuant to schemes of arrangements under Australian law in which all ordinary and preferred shares of TNCL were cancelled and, in exchange, holders of those shares received shares of News Corporation voting Class B common stock, par value $0.01 per share (“Class B Common Stock”), and non-voting Class A common stock, par value $0.01 per share (“Class A Common Stock”), respectively, on a one-for-two basis.

In March 2005, Fox Acquisition Corp., a direct wholly-owned subsidiary of News Corporation, completed an offer to the holders of Class A common stock of Fox Entertainment Group, Inc. (“FEG”) to exchange 2.04 shares of News Corporation’s Class A Common Stock for each outstanding share of FEG Class A common stock (the “FEG Offer”) that News Corporation did not already own. Shortly after the completion of the FEG Offer, News Corporation effected a merger of FEG with and into Fox Acquisition Corp. In the merger, each share of FEG Class A common stock not acquired in the FEG Offer, other than the shares owned by News Corporation, was converted into 2.04 shares of News Corporation’s Class A Common Stock. After the completion of the FEG Offer and the subsequent merger, Fox Acquisition Corp. changed its name to “Fox Entertainment Group, Inc.” (for periods following the completion of the FEG Offer and the subsequent merger, referred to as “FEG”). As a result of the transaction described above, News Corporation owns 100% of FEG.

In December 2006,2007, the Company enteredcompleted its acquisition of Dow Jones & Company, Inc. (“Dow Jones”) pursuant to the Agreement and Plan of Merger, dated as of July 31, 2007, by and among the Company, Ruby Newco LLC, a wholly-owned subsidiary of the Company (“Ruby Newco”), Dow Jones and Diamond Merger Sub Corporation, as amended (the “Merger Agreement”). Pursuant to the Merger Agreement, each outstanding share of Dow Jones common stock was converted into the right to receive, at the election of the holder, either (x) $60.00 in cash or (y) 2.8681 Class B common units of Ruby Newco. Each Class B common unit of Ruby Newco is convertible into a share of Class A Common Stock.

In February 2008, the Company closed the transactions contemplated by the share exchange agreement (the “Share Exchange Agreement”) with Liberty Media Corporation (“Liberty”). Under the terms of the Share Exchange Agreement,, whereby Liberty will exchangeexchanged its entire interest in the Company’s common stock (approximately 325 million shares of Class A Common Stock and 188 million shares of Class B Common Stock) for 100% of the stock of a News Corporationwholly-owned subsidiary (“Splitco”),of the Company whose holdings will consistconsisted of the Company’s approximately 39%approximate 41% interest (approximately 470 million shares) in The DIRECTV Group, Inc. (“DIRECTV”) constituting the Company’s entire interest in DIRECTV, three of the Company’s Regional Sports Networks (FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain (the “Three RSNs”))Mountain) and $588approximately $625 million in cash, subject to adjustment.

The transaction contemplated by the Share Exchange Agreement was approved by the Company’ Class B stockholders on April 3, 2007, but remains subject to customary closing conditions, including, among other things, regulatory approvals, the receipt of a ruling from the Internal Revenue Service and the absence of a material adverse effect on Splitco. If these conditions are satisfied, the transaction is expected to be completed in the fourth quarter of calendar 2007.cash.

On July 31, 2007,In May 2008, Macrovision Corporation completed the acquisition of Gemstar-TV Guide International, Inc. (“Gemstar-TV Guide”). In connection with this transaction, the Company entered intodisposed of its entire interest (approximately 41%) in Gemstar-TV Guide’s common stock in exchange for a definitive merger agreement (the “Merger Agreement”) with Dow Jones & Company, Inc. (“Dow Jones”), pursuant to which the Company will acquire Dow Jones in a transaction valued atcash payment of approximately $5.6 billion. Members$637 million and approximately 19 million shares of the Bancroft family and related trusts owning approximately 37%common stock of Dow Jones voting stock have agreed to vote their shares in favor of the transaction. Under the terms of the Merger Agreement, Dow Jones Stockholders will be entitled to receive $60 in cash for each share of Dow Jones stock they own, and up to 250 holders of record and not more than 10% of the shares of Dow Jones may elect to have their shares of Dow Jones converted into a number of units of a newly formed subsidiary of the Company (each unit of which will be exchangeable for one share of the Company’s Class A Common Stock in accordance with the terms and conditions of such subsidiary’s operating agreement)Macrovision Solutions Corporation (“Macrovision Solutions”). The Merger Agreement is subject to, among other things, the adoption of the Merger Agreement by Dow Jones’ stockholders, the execution of an editorial agreement (the form of which has been agreed by the parties), the establishment by the Company of a special committee as contemplated under such editorial agreement, the receipt of various regulatory approvals and other customary closing conditions. The Merger Agreement contains certain termination rights for both the Company and Dow Jones, including the right of Dow Jones to terminate the agreement to enter into an alternative transaction that constitutes a superior acquisition proposal. Upon termination of the Merger Agreement under specified circumstances, including a termination by Dow Jones to accept a superior acquisition proposal, Dow Jones would be required to pay the Company a termination fee of $165 million less any previously paid expenses. The transaction is expected to be completed in the fourth quarter of calendar 2007. The Company has agreed, upon consummationsold all of the transaction, to appoint a memberits shares of the Bancroft family or another mutually acceptable person to the Company’s Boardcommon stock of Directors.Macrovision Solutions.

The Company’s subsidiary, NDS Group plc (“NDS”), and certain of the companies in which the Company owns equity interests, either directly or indirectly, including British Sky Broadcasting Group plc (“BSkyB”), Gemstar-TV Guide International, Inc. (“Gemstar-TV Guide”) and DIRECTV,which the Company owns an equity interest in, are subject to the information requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, in accordance with the Exchange Act, file reports and other information with the Securities and Exchange Commission (“SEC”).

The Company maintains a 52-53 week fiscal year ending on the Sunday nearest to June 30 in each year. At June 30, 2007,2008, the Company had approximately 53,00064,000 full-time and part-time employees. The Company’s principal executive offices are located at 1211 Avenue of the Americas, New York, New York 10036 and its telephone number is (212) 852-7000. The Company’s website iswww.newscorp.com. The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available, free of charge, through the Company’s website as soon as reasonably practicable after the material is electronically filed with or furnished to the SEC.

Special Note Regarding Forward-Looking Statements

This document and the documents incorporated by reference into this Annual Report, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contain statements that constitute “forward-looking statements” within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933, as amended. The words “expect,” “estimate,” “anticipate,” “predict,” “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things, trends affecting the Company’s financial condition or results of operations. The readers of this document are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks, uncertainties and other factors is set forth under the heading “Item 1A. Risk Factors” in this Annual Report. The Company does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by the

Company with the SEC. This section should be read together with the audited consolidated financial statements of the Company and related notes set forth elsewhere in this Annual Report.

BUSINESS OVERVIEW

The Company is a diversified entertainmentglobal media company, which manages and reports its businesses in the eight segments described below.

Filmed Entertainment

The Company engages in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media worldwide, and the production and licensing of television programming worldwide.

Feature Film Production and Distribution

One of the world’s largest producers and distributors of motion pictures, Fox Filmed Entertainment (“FFE”), produces, acquires and distributes motion pictures throughout the world under a variety of

arrangements. During fiscal 2008, 2007 2006 and 2005,2006, FFE placed 25, 34 31 and 2331 motion pictures, respectively, in general release in the United States. Those motion pictures were produced and/or distributed by the following units of FFE: Twentieth Century Fox and Fox 2000, which produce and acquire motion pictures for mainstream audiences; Fox Searchlight Pictures, which produces and acquires specialized motion pictures; Fox Atomic, which produces and acquires motion pictures targeting the 17-24 year old demographic audience; and Twentieth Century Fox Animation, which produces feature length animated motion pictures. Motion pictures produced and/or distributed by FFE in the United States and international territories since the beginning of fiscal 20052006 includeSideways,I, Robot,Robots,Kingdom of Heaven, Star Wars Episode III: Revenge of the Sith (distributed for Lucasfilm Ltd.),Mr. and Mrs. Smith(distributed for New Regency),Fantastic Four, Walk the Line, Ice Age: The Meltdown, X-Men: The Last Stand, The Devil Wears Prada, Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan,Night at the Museum,Fantastic Four: Rise of the Silver Surfer,Live Free or Die Hard,Little Miss Sunshine,The Last King of Scotland,Eragon and,28 Weeks Later,Alvin and the Chipmunks,The Simpsons Movie,Dr. Seuss’ Horton Hears a Who!,Jumper,What Happens in Vegas,27 Dresses,Juno,The Savages,The Happening andAlien vs. Predator: Requiem. FFE has already released or currently plans to release approximately 3028 motion pictures in the United States in fiscal 2008,2009, includingThe Simpsons MovieX-Files: I Want to Believe,Horton Hears a Who,Jumper, AVP: Survival of the Fittest, Alvin and the Chipmunks, The Dark is Rising, The Darjeeling LimitedAustralia,The SavagesDay the Earth Stood Still,JunoMarley and Me,X-Men Origins: Wolverine,Night at the Museum 2,The ComebacksSecret Life of Bees,Notorious,Gentlemen Broncos,The Rocker,Max Payne,They Came from Upstairs,Bride Wars andStarship DaveDragonball.

Pursuant to an agreement with Monarchy Enterprises Holdings B.V. (“MEH”), the parent company of New Regency in which the Company has a 20% interest, and certain of MEH’s subsidiaries, FFE distributes certain New Regency films and all films co-financed by FFE and New Regency in all media worldwide, excluding certain international territories with respect to theatrical and home video rights and most international territories with respect to television rights. Among its fiscal 20082009 releases, FFE currently expects to distribute sevenfive films either fully financed by New Regency or co-financed by FFE and New Regency.

Motion picture companies, such as FFE, typically seek to generate revenues from various distribution channels. FFE derives its worldwide motion picture revenues primarily from four basic sources (set forth in general chronology of exploitation): (i) distribution of motion pictures for theatrical exhibition in the United States and Canada and markets outside of the United States and Canada (“international” markets); (ii) distribution of motion pictures in various home media formats; (iii) distribution of motion pictures for exhibition on pay-per-view, video-on-demand and premium pay television programming services; and (iv) distribution of motion pictures for exhibition on free television networks, other broadcast program services, independent television stations and basic cable programming services, including certain services which are affiliates of the Company. The Company does not always have rights in all media of exhibition to all motion pictures whichthat it releases, and does not necessarily distribute a given motion picture in all of the foregoing media in all markets.

The Company believes that the pre-release marketing of a feature film is an integral part of its motion picture distribution strategy and generally begins marketing efforts three to six months in advance of a film’s release date in any given territory. The Company markets and distributes its films worldwide principally through its own distribution and marketing companies.

Through Twentieth Century Fox Home Entertainment, Inc., the Company distributes motion pictures and other programming produced by units of FFE, its affiliates and other producers in the United States, Canada and international markets in all home media formats, including the sale and rental of DVDs. In fiscal 2007,2008, the domestic home entertainment division released or re-released approximately 711881 produced and acquired titles, including 3130 new FFE film releases, approximately 533624 catalog titles and approximately 147227 television and non-theatrical titles. In international markets, the Company distributed, produced and acquired titles both directly and through foreign distribution channels, with over 720786 releases in fiscal 2007,2008, including approximately 33 new FFE film releases, over 525608 catalog titles and approximately 161145 television and non-theatrical releases. In fiscal 2007,2008, the Company continued its worldwide home video distribution arrangement with Metro-Goldwyn-Mayer (“MGM”), releasing approximately 7901,473 and 510713 MGM home entertainment theatrical, catalog and television programs domestically and internationally, respectively. During fiscal 2007,2008, the Blu-ray high-definition (“HD”) disc format (“Blu-ray”) was established as the market’s sole HD disc format, and the Company expanded its product portfolio to includeincreased the high-definition

number of Blu-ray disc (“Blu-ray”) format.titles it released. During fiscal 2007,2008, the domestic home entertainment division released 2640 Blu-ray titles, including nine15 new FFE film releases and 1725 catalog titles. In international markets, the Company released 2567 Blu-ray titles, including eight16 new FFE film releases and 1751 catalog titles. The Company also distributed tensix Blu-ray titles (one(three new releasereleases and ninethree catalog titles) from MGM domestically and five16 titles (one new release and four15 catalog titles) internationally.

Units of FFE license motion pictures and other programs in the United States, Canada and international markets to various third party and certain affiliated subscription pay television, pay-per-view, video-on-demand and electronic sell-through services. The license agreements reflecting the subscription pay television arrangements generally provide for a specified number of exhibitions of the program during a fixed term in exchange for a license fee whichthat is based on a variety of factors, including the box office performance of each program and the number of subscribers to the service or system. Among third-partythird party license agreements that units of FFE have in place in the United States for television exhibition of their motion pictures are exclusive subscription pay television license agreements with Home Box Office (“HBO”), providing for the licensing of films initially released for theatrical exhibition through 2015, as well as arrangements with Starz Encore Group. The license agreements reflecting the pay-per-view and video-on-demand services arrangements generally provide for a license fee based on a percentage of the licensee’s gross receipts from the exhibition of the program, and in some cases, a guaranteed minimum fee. In addition, these agreements generally provide for a minimum number of scheduled pay-per-view exhibitions and a minimum video-on-demand exhibition period during a fixed term. Units of FFE also license motion pictures in the United States to direct broadcast satellite (“DBS”) pay-per-view services operated by DIRECTV and EchoStar Communications Corporation, as well as to pay-per-view and video-on-demand services operated by iN Demand L.L.C. In addition, units of FFE license motion pictures and other programs to third parties, including Wal-Mart, Apple and Amazon, for electronic sell-through over the Internet, enabling consumers in the United States to acquire the right to permanently retain such programs. In international markets, units of FFE license motion pictures and other programming to leading third-partythird party pay television, pay-per-view, video-on-demand and video-on-demandelectronic sell-through services, as well as to pay television and video-on-demand services operated by various affiliated entities.

Competition. Motion picture production and distribution are highly competitive businesses. The Company competes with other film studios, independent production companies and others for the acquisition of artistic properties, the services of creative and technical personnel, exhibition outlets and the public’s interest in its products. The number of motion pictures released by the Company’s competitors, particularly the other major film studios, in any given period may create an oversupply of product in the market, which may reduce the Company’s shares of gross box office admissions and may make it more difficult for the Company’s motion pictures to succeed. The commercial success of the motion pictures produced and/or distributed by the Company is affected substantially affected by the public’s unpredictable response to them. The competitive risks affecting the

Company’s home entertainment business include the number of home entertainment titles released by the Company’s competitors that may create an oversupply of product in the market, competition among home media formats, such as DVDs, and other methods of distribution, such as video-on-demand services.

The Company faces ongoing risks associated with controlling unauthorized copying and distribution of the Company’s programs. For a further discussion of issues relating to unauthorized copying and distribution of the Company’s programs, see “—Intellectual Property.”

Television Programming, Production and Distribution

Twentieth Century Fox Television (“TCFTV”). During fiscal 2007,2008, TCFTV produced television programs for the FOX Broadcasting Company (“FOX”), ABC Television Network (“ABC”), CBS Broadcasting, Inc. (“CBS”), NBC Television Network (“NBC”), The CW Television Network (“The CW”), E! Entertainment Television, Inc. (“E!”), and Fox News Channel (“Fox News”) and Turner Network Television (“TNT”). TCFTV currently produces, or has orders to produce, episodes of the following television series:24,American Dad, AnchorwomanBones,Back To You, BonesThe Cleveland Show,Dollhouse,Do Not Disturb,Family Guy, K-Ville, King of the Hill,Prison Break, The Simpsons andUnhitchedSit Down, Shut Upfor FOX; Boston Legal Miss/Guidedand Women’s Murder ClubLife on Mars

for ABC;The Ex List,How I Met Your Mother Shark,Game Show in My HeadandTheUnit for CBS; Journeyman and My Name Is Earl for NBC; andBeauty and the Geekfor The CW;The Simple LifeSons of Anarchy for E!; andHalf Hour News Hour for Fox News.FX. Generally, a network will license a specified number of episodes for exhibition on the network during the license period. All other distribution rights, including international and off-network syndication rights, are typically retained by TCFTV, utilized by other units of the Company or sold to third parties.

Generally, televisionTelevision programs generally are produced under contracts that provide for license fees whichthat may cover only a portion of the anticipated production costs. As these costs have increased in recent years, the resulting deficit between production costs and license fees for domestic first-run programming has also increased. Therefore, additional licensing is often critical to the financial success of a series. Successful U.S. network television series are, for example, (i) licensed for first-run exhibition in Canadian and international markets, (ii) released in DVD box sets, (iii) licensed for off-network exhibition in the United States (including in syndication or to cable programmers), (iv) licensed for further television exhibition in international markets and (v) made available for electronic sell-through and streaming, including individual episodes and full series. Generally, a series must be broadcast for at least three to four television seasons for there to be a sufficient number of episodes to offer the series in syndication in the United States or to cable and DBS programmers in the United States. The decision of a television network to continue a series through an entire television season or to renew a series for another television season depends largely on the series’ audience ratings.

Twentieth Television.Television. Twentieth Television licenses both television programming and feature films for domestic syndication to television stations and basic cable services in the United States. Twentieth Television distributes a program portfolio that includes the Company’s library of television and film assets, and first-run programming produced by its production companies for sales to the local stations, including the stations owned and operated by the Company, as well as to basic cable networks. First-run programs distributed by Twentieth Television include the court showsDivorce Court,Judge Alex andCristina’s Court, and the daytime talk show,The Morning Show with Mike and Julietand a new game show produced in concert with FremantleMedia calledTemptation.

Twentieth Television derives revenue from off-network, theatrical and first-run program sales in the form of cash license fees paid by both broadcast and cable licensees, and from the sales of national advertising units retained by Twentieth Television in its programs. Twentieth Television licenses such shows asMy Name Is Earl,Family Guy,The Bernie Mac Show,American Dad, King of the Hill, M*A*S*H, Boston Legal, Bones, Malcolm in the Middle 24andThe Simpsonsto cable and broadcast networks. Twentieth Television also manages and distributes the long running series,COPS andAmerica’s Most Wanted, and oversees the advertising sales of third party distributors.

Fox Television Studios (“FtvS”). FtvS is a program supplier to the major U.S. and international broadcast and cable networks. The studioFor the U.S. market, FtvS is currently producingBurn Noticefor the USA Network, (“USA”);Saving Grace for Turner Network Television (“TNT”);TNT,The Shield andThe Riches for FX;FX, the late-nightTalkshow with Spike Feresten for FOX; Crowned: The Mother of all Pageants, premiering in 2008 on The CW;FOX andThe Girls Next Door for E!. Through Regency Television (a partnershipFtvS is also producing, in conjunction with New Regency)Fox International Channels (“FIC”), productions includethe seriesNew AmsterdamMental, premiering fall 2007, andThe Return of Jezebel James, premieringwhich FIC will broadcast in 2008, both for FOX. Incertain international territories beginning in fiscal 2007, FtvS’ made-for-TV movies includedThe Mermaid ChairandWhat if God Were the Sun for Lifetime. In fiscal 2007, FtvS’ international format production arm, Fox World, consulted on more than 25 series and specials in production around the world, including the hit showsBeauty and the Geek andThe Simple Life.2009.

Competition. Similar to motion picture production and distribution, production and distribution of television programming is extremely competitive. The Company competes with other film studios, independent production companies and others for the acquisition of artistic properties, the services of creative and technical personnel, exhibition outlets and the public’s interest in its products. In addition, television networks have affiliated production companies from which they are increasingly obtaining their programming, which has reduced the demand for programming from other non-affiliated parties.

Motion Picture and Television Libraries

The Company’s motion picture and television library (the “Fox Library”) consists of varying rights to several thousand previously released motion pictures and many well-known television programs. The motion pictures in the Fox Library include many successful and well-known titles, such asThe Sound of Music,Mrs. Doubtfire,Planet of

the Apes,Dr. Dolittle, theX-Men trilogy,The Day After Tomorrow, theIce Age series,Sideways,Walk the Line,Fantastic Four,The Devil Wears Prada,Little Miss Sunshine,Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan,Night at the Museum,Alvin and seventhe Chipmunks,Fantastic Four: Rise of the Silver Surfer,Live Free or Die Hard,Juno,Dr. Seuss’ Horton Hears a Who!, and six of the top 25 domestic box office grossing films of all time, which areTitanic (together with Paramount Pictures Corporation),Star Wars,Star Wars Episode I: The Phantom Menace,Star Wars Episode II: Attack of the Clones,Star Wars Episode III: Revenge of the Sith, and Return of the Jedi andIndependence Day.

The Fox Library contains varying rights to many television series and made-for-television motion pictures. The television programming in the Fox Library consists of such classic series asThe Mary Tyler Moore Show,M*A*S*H,Hill Street Blues,Doogie Howser, M.D.,L.A. Law,The Wonder Years,Futurama,The Practice,Ally McBeal,Angel,Dharma & Greg,In Living Color,The X-Files,Buffy the Vampire Slayer andNYPD Blue, as well as such current hits asThe Simpsons,King of the Hill,24,Family Guy,Futurama,My Name Is Earl, How I Met Your Mother, Boston Legal,Prison Break,Bones,American Dad andSharkThe Unit.

Television

The Company is engaged in the operation of broadcast television stations, the broadcasting of network programming in the United States and the development, production and broadcasting of television programming in Asia.

Fox Television Stations

As of June 30, 2008, Fox Television Stations, currently operatesInc. (“Fox Television Stations”) owned and operated 35 full power stations, including stations located in nine of the top ten largest designated market areas (“DMAs”). Fox Television Stations owns and operates two stations in nine DMAs, including New York, Los Angeles and Chicago, the first, second and third largest DMAs, respectively.

Of the 35 full power stations, 25 stations are affiliates of FOX (“FOX Affiliates”). For a description of the programming offered to FOX Affiliates, see “—FOX Broadcasting Company.” In addition, Fox Television Stations owns and operates ten stations affiliated with MyNetworkTV, Inc. (“MyNetworkTV”).

In July 2008, Fox Television Stations completed the sale of eight of the Company’s 25 owned and operated FOX Affiliate television stations to an indirect, wholly owned subsidiary of Oak Hill Capital Partners III, L.P. for approximately $1.1 billion in cash (the “Stations Sale”). The television stations included in the Stations Sale were: WJW in Cleveland, Ohio; KDVR in Denver, Colorado; KTVI in St. Louis, Missouri; WDAF in Kansas City, Missouri; WITI in Milwaukee, Wisconsin; KSTU in Salt Lake City, Utah; WBRC in Birmingham, Alabama; and WGHP in Greensboro, North Carolina.

The following table lists certain information about each of the television stations owned and operated by Fox Television Station.Stations as of June 30, 2008, excluding the stations sold in connection with the Stations Sale. Unless otherwise noted, all stations are FOX Affiliates.

Source: Nielsen Media Research, January 20072008

UHF Discount. For more information regarding the FCC’s national station ownership cap, see “Regulation—Television.”

(2)	MyNetworkTV affiliate.

(3)	The Company also owns and operates KFTC, Channel 26, Bemidji, MN as a satellite station of WFTC, Channel 29, Minneapolis, MN.

(4)	The Company also owns and operates KFCT, Channel 22, Fort Collins, CO, as a satellite station of KDVR, Channel 31, Denver, CO.

In June 2007, the Company announced its plan to sell nine of the FOX Affiliates. The nine FOX Affiliates subject to potential sale are: WJW in Cleveland, Ohio; KDVR in Denver, Colorado; KTVI in St. Louis, Missouri; WDAF in Kansas City, Kansas; WITI in Milwaukee, Wisconsin; KSTU in Salt Lake City, Utah; WBRC in Birmingham, Alabama; WHBQ in Memphis, Tennessee; and WGHP in Greensboro, North Carolina. No agreement has yet been entered into with respect to the sale of any of these stations.

FOX Broadcasting Company (“FOX”)

FOX has 213216 FOX Affiliates, including 25 stations owned and operated by the Company, which reach approximately 99% of all U.S. television households. In general, each week FOX regularly delivers to its affiliates 15 hours of prime-time programming and 90 minutes of late-night programming on Saturday. FOX’s prime-time programming features such series as The Simpsons, Prison Break, Bones, 24 and House; unscripted series such as American Idol; and various movies and specials. In addition, a significant component of FOX’s programming consists of sports programming, with FOX providing to its affiliates live coverage (including post-season) of the National Football Conference of the National Football League (the “NFL”) and Major League Baseball (“MLB”), as well as live coverage of the premier racing series (the NextelSprint Cup series) of the National Association of Stock Car Auto Racing (“NASCAR”) and the Bowl Championship Series (“BCS”). FOX also provides a four-hour block of children’s programming on Saturday morning programmed by 4Kids Entertainment (“4Kids”), a children’s entertainment company. FOX’s agreement with 4Kids extends through the 2007-20082008-2009 broadcast season with an option to extend through the 2008-2009 season.

FOX’s prime-time line-up is intended to appeal primarily to target audiences of 18 to 49-year old adults, the demographic group that advertisers seek to reach most often. During the 2006-20072007-2008 traditional September to May broadcast season, FOX ranked first in prime-time programming based on viewership of adults aged 18 to 49 (FOX had a 4.14.3 rating and an 11 share, CBS and ABC each had a 3.73.0 rating and a 10 share, ABC had a 3.5 rating and a 10an 8 share and NBC had a 3.12.8 rating and an 8 share). The median age of the FOX viewer is 4143 years, as compared to 48 years for NBC, 4749 years for ABC and 5253 years for CBS.

FOX obtains programming from major television studios and independent television production companies pursuant to license agreements. The terms of those agreements generally provide FOX with the right to broadcast a television series for a minimum of four seasons. FOX licenses its film programming from major film studios and independent film production companies. National sports programming, such as the NFL, MLB and NASCAR programming, is obtained under license agreements with professional sports leagues or organizations. FOX’s current licenses with the NFL, MLB, and NASCAR extend until the 2011 NFL season, the 2013 MLB season and the 2014 NASCAR season. FOX also has the right to broadcast the BCS through 2010.

FOX provides programming to the FOX Affiliates in accordance with affiliation agreements of varying durations, which grant to each affiliate the right to broadcast network television programming on the affiliated station. Such agreements typically run three or more years and have staggered expiration dates. These affiliation agreements generally require FOX Affiliates to carry FOX programming in all time periods in which FOX programming is offered to those affiliates, subject to certain exceptions stated in the affiliation agreements.

MyNetworkTV

In September 2006, the Company launched MyNetworkTV is a primetime general entertainment broadcast television network. MyNetworkTV currently has 175 affiliates, including 10ten stations owned and operated by the Company, which reach approximately 97% of U.S. households.

MyNetworkTV’s 20072008 fall schedule includeswill focus on branded nights of programming, including entertainment shows on Monday, reality programming such asThe Academy,Jail,Decision House,crime shows on Tuesday, comedy on Wednesdays, movies on Thursdays and Saturdays andMeet My Folks,WWE Smackdown as well as various movies and specials. In addition, MyNetworkTV has partnered with International Fight League to broadcast mixed martial arts bouts and related content.on Fridays.

Competition. The network television broadcasting business is highly competitive. FOX and MyNetworkTV directly compete for programming, viewers and advertising with ABC, NBC, CBS and The CW. ABC, NBC and CBS each broadcasts a significantly greater number of hours of programming than FOX and MyNetworkTV and, accordingly, may be able to designate or change time periods in which programming is to be broadcast with greater flexibility than FOX or MyNetworkTV. FOX and MyNetworkTV also compete with other non-network sources of television service, including cable television and DBS services. Other sources of competition may include home video exhibition, digital video recorders (“DVR”), the Internet and home computer usage. In addition, future technological developments may affect competition within the television marketplace.

Each of the stations owned and operated by Fox Television Stations also competes for advertising revenues with other television stations and radio and cable systems in its respective market area and with other advertising media, such as newspapers, magazines, outdoor advertising, direct mail and Internet websites. All of the stations owned and operated by Fox Television Stations are located in highly competitive markets. Additional elements which are material to the competitive position of each of the television stations include management experience, authorized power and assigned frequency of that station. Competition for sales of broadcast advertising time is based primarily on the anticipated and actually delivered size and demographic characteristics of audiences as determined by various rating services, price, the time of day when the advertising is to be broadcast, competition from the other broadcast networks, cable television systems, DBS services and other media and general economic conditions. Competition for audiences is based primarily on the selection of programming, the acceptance of which is dependent on the reaction of the viewing public whichthat is often difficult to predict.

STAR

Star Group Limited (“STAR”) engages in the development, production and broadcasting of television programming to 53 countries throughout Asia. As of June 30, 2007, STAR was broadcastoffers 63 channels in ten languageslanguages. STAR’s owned and across 64affiliated channels with an additional channel launchedare distributed in July 2007. STAR divides its markets into sixthe following regions: India; Greater China; Indonesia; the rest of South East Asia; the Middle East;East and Pakistan. STAR estimates thatPakistan; United Kingdom and Europe; and North America, reaching approximately 300 million people in 143146 million households have access to STAR’s owned and affiliated channels. STAR’s owned and affiliated channels and its library content are also distributed in Africa, Europe, Australia and North America.households.

STAR’s programming is distributed primarily distributed via satellite to local cable and direct-to-home (“DTH”) operators for distribution to their subscribers. STAR is one of the leading providers of television programming in Asia. Of the 6563 channels currently offered by STAR, 2935 channels are wholly-owned and operated by STAR, including, XING KONG WEI SHI (“Xing Kong”) (a mainland China-oriented general entertainment channel that is broadcast in three-star or better hotels and other approved organizations and institutions throughout mainland China and in southern China whereamong others, STAR has been granted official landing rights), STAR PLUS, (a Hindi language general entertainment channel and the highest rated cable channel in India) and STAR CHINESE CHANNEL, (one of the leading general entertainment cable channels in Taiwan). STAR also owns and operates channels in other genres: CHANNEL [V], STAR’s music and youth entertainment television channels, STAR WORLD, an English language general entertainment channel, and STAR MOVIES, STAR CHINESE MOVIES and STAR GOLD, STAR’s English language, Chinese language and Hindi language movie channels, respectively.XING KONG WEI SHI. STAR’s channels are distributed both on a pay television and freefree-to-air basis.

In addition, STAR provides 3628 channels that are either owned and operated by third parties or are joint ventures between the Company and other entities, including NGC Networks Asia (National Geographic), Phoenix Satellite Television Holdings Limited (“Phoenix”), ESPN STAR Sports and Media Content & Communications Services (India) Private Limited (“MCCS”). STAR has an approximate 18% interest in Phoenix, a company listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited. Phoenix owns and operates Chinese language general entertainment, movie and current affairs channels, including Phoenix Chinese Channel, Phoenix Chinese News and Entertainment Channel, Phoenix North America Chinese Channel, Phoenix InfoNews Channel (a 24-hour news channel) and Phoenix Movies Channel, all of which are targeted at Chinese audiences around the world and are primarily distributed on a free or an encrypted basis via pay television platforms in Asia and Europe and pay television platforms in the United States. ESPN STAR Sports, a 50/50 joint venture between STAR and ESPN, is the leading sports broadcaster in Asia and operates 1517 channels in different languages. MCCS, an approximate 26% STAR owned joint venture with the Anand Bazaar Patrika Group, owns and operates three 24-hour news and current affairs channels, namely, STAR NEWS in Hindi, STAR ANANDA in Bengali and STAR MAJHA in Marathi.channels.

STAR owns an approximate 26% stake in Balaji Telefilms Limited (“Balaji”), which is one of the largest television content production companies in India, the shares of which are listed on The Stock Exchange, Mumbai and the National Stock Exchange of India. Balaji currently produces manycertain Hindi-language serials broadcast on STAR PLUS. In India, STAR has expanded into regional language programming with VIJAY, a Tamil general entertainment channel, the Bengali STAR ANANDA, and the Marathi STAR MAJHA. In April 2007, STAR entered into an agreement to form a joint venture with Balaji, in which STAR will hold a 51% interest, to own and operate VIJAY and to create a network of other regional language general entertainment channels in India. programming.

STAR also holds a 20% stake in Tata Sky Limited (“Tata Sky”), which owns and operates a DTH platform in India. Tata Sky commercially launched its DTH service in India in August 2006. STAR also has an approximate 22% stake in Hathway Cable & Datacom Private Limited, a multi-system cable operator in India whichthat also provides broadband Internet services. In January 2008, STAR formed a 50/50 joint venture with Den Digital Entertainment Networks Private Limited to operate a television channel distribution business in India, Nepal and Bhutan. The joint venture exclusively distributes STAR’s owned and affiliated channels in these territories.

STAR has minority interests in various cable systems throughout Taiwan, in which the Koos Group, a leading Taiwan business conglomerate, also has an interest. In July 2007, the Koos Group and STAR sold a majority of those Taiwan cable systems. STAR and Koos intend to sell the remaining cable systems in fiscal 2008.

STAR holds a 20% interest in PT Cakrawala Andalas Televisi, (“antv”), an Indonesian free over-the-airfree-to-air terrestrial television broadcaster. STAR also holds an almost 50%has a 49% interest in Channel [V] Thailand, a 24-hour music and youth-oriented channel that is mostly in the Thai language, andThailand. STAR has also licensed the Channel [V] brand in Australia and Korea.

The primary sources of programming on STAR’s owned and affiliated channels include rights to broadcast over many territories in Asia and other parts of the world: (i) original Indian and Chinese television programming produced, commissioned or acquired by STAR;STAR, including in HD; (ii) many of Asia’s most popular sporting events, such as English Premier League soccer;International Cricket Council cricket; (iii) Chinese feature films distributed by Emperor Motion Picture, Filmko, Media Asia, China Star, Universe Films and Mandarin Films;third parties; (iv) other feature films and general entertainment programs distributed by Twentieth Century Fox, Buena Vista International, Dreamworks SKG, MGM/United Artists, Universal Studios, Sony Pictures, Warner Bros. Studios and Paramount Pictures;third parties; (v) an extensive contemporary Chinese film library comprising over 600650 titles; and (vi) an extensive Hindi film library comprising over 400 titles;490 titles and (vii) high-definition Chinese telefeature films or programs produced by STAR.an extensive Hindi television program library comprising over 430 titles. STAR’s other sources of programming include rights to broadcast music videos, as well as music and youth-oriented programming, produced and carried on Channel [V].

Competition.Generally, STAR competes againstwith various channels for a share of subscription, distribution, channel position, ratings and programming.

India.In India, the pay television broadcasting industry has several participants. Competition forparticipants, and STAR’s Indian entertainment channels in the pay television sector is provided bycompete with both pay and free over-the-airfree-to-air channels since they are delivered by common cable. The competitionSTAR also competes in the general entertainment television sector is mainly from Zee Telefilms, Sony Entertainment Television, Sahara TV, SUN Network and Doordarshan (the government-owned broadcasting company which currently has a monopoly on terrestrial broadcasting). In addition, STAR, through MCCS, competes against Aaj Tak, NDTV, IBN7 and the news channels operated by Zee Telefilms in the Hindi, Bengali and Marathi language news television sector.

STAR competes against primarily Zee Telefilms, Sony Entertainment Television and Sahara TV in acquiringIndia to acquire both Hindi film and programming rights and, through its 50% owned sports joint venture, ESPN STAR Sports, for sports broadcast rights, such as cricket rights.

China.In mainland China, STAR competes primarily in two distinct markets for which it has received government approvals to distribute its services. One is among three-star and above hotels and other approved organizations and institutions that are allowed to receive overseas satellite television channels throughout mainland China. The second is among general households in Guangdong that can view local Chinese channels, as well as the Xing Kong channel via cable networks. In the hotel and other institutional market, STAR competes mainly with foreign satellite television providers, such as Discovery, HBO, AXN, MTV and CETV. In the Guangdong cable market, STAR competes with CETV and other Chinese and Hong-Kong based satellite television channels.

Taiwan.In Taiwan, STAR competes againstwith various local and foreign satellite channels, depending on programming genre. In the Mandarin Chinese language general entertainment genre, STAR CHINESE CHANNEL competes against local Taiwan channels, including TVBS and ETTV.

Cable Network Programming

The Company produces and licenses news, business news, sports, general entertainment and movie programming for distribution to distributors in the United States and internationally.

Fox News. Fox News owns and operates the Fox News Channel, a 24-hour all news national cable channel which is currently available to approximately 9293 million U.S. households according to Nielsen Media Research. Research, as well as Fox Business Network which launched to 30 million subscribers in October 2007.

Fox News also produces a weekend political commentary show, Fox News Sunday, for broadcast on local FOX television stations throughout the United States, and the nationally syndicated morning television program,The Morning Show with Mike and Juliet. Fox News, through its Fox News Edge service, licenses news feeds to FOX Affiliates and other subscribers to use as part of local news broadcasts throughout the United States and abroad. Fox News also produces and runs the website, FoxNews.com,websites, FOXNews.com and FOXBusiness.com, and owns and produces the national Fox News Radio Network which licenses news updates, and long form programs, and the Fox News Talk Channel, to local radio stations and to satellite radio providers.

FSN. Fox Sports Net, Inc. (“FSN, Inc.”) is the largest regional sports network (“RSN”) programmer in the United States, focusing on live professional and major collegiate home team sports events. FSN, Inc.’s sports programming business currently consists primarily of ownership interests in 1612 RSNs, including numerous sub-regional feeds (the “FSN RSNs”) and National Sports Programming, which operates FSN (“FSN”), a national sports programming service. FSN, Inc. also is also affiliated with, through FSN, an additional fivenine RSNs that

are not owned by FSN, Inc. (the “FSN Affiliated RSNs”). FSN provides the FSN RSNs and the FSN Affiliated RSNs with 24-hour national sports programming, featuring original and licensed sports-related programming and live and replay sporting events. The FSN RSNs and the FSN Affiliated RSNs reach approximately 8189 million U.S. households according to Nielsen Media Research and have rights to telecast live games of 6768 of 82 U.S. professional sports teams in MLB, the National Basketball Association (“NBA”) and the National Hockey League (“NHL”); numerous collegiate conferences; and college and high school sports teams.

As discussed above, FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain are part of the transactions contemplated by the Share Exchange Agreement. If consummated, the Company will not have any interest in these RSNs following the closing of the Share Exchange Agreement and these RSNs will become FSN Affiliated RSNs. For more information on the Share Exchange Agreement, please see discussion under the heading “Background.”

FX. Currently reaching approximately 9293 million U.S. households according to Nielsen Media Research, FX is a general entertainment network that telecasts a growing roster of original series and films, as well as acquired television series and motion pictures. FX’s lineup for the 2007-20082008-2009 season includes the following critically acclaimed and popular original programming: the Emmy^® and Golden Globe^® award-winning drama series,The Shield andNip/Tuck; the Morgan Spurlock documentary seriesThirty Days; and the critically acclaimedRescue Me. Also included in the 2007-20082008-2009 season line-up is the thirdfourth season of the comedy seriesIt’s Always Sunny in Philadelphia, the second season ofThe Riches, the second season ofEmmy^® and Golden Globe^® nominated drama series,DirtDamages,and the freshman series,DamagesSons of Anarchy, as well as the. Current and upcoming syndicated series includeKing of the Hill,Fear Factor,Cops,The Practice,Married…with Children,That 70’s Show,Spin City, Two and a Half Men, Malcolm in the MiddleandDharma and Greg.The Bernie Mac Show.During the 2007-20082008-2009 season, FX will also showcase the television premieres of theatrical motion pictures, including Batman Begins,Mr. & Mrs. Smith, Fantastic FourSuperman Returns, The Devil Wears Prada, The Departed andRobotsLive Free or Die Hard. The Company also produces and distributes FX HD, a 24-hour national programming service produced and distributed in HD, which launched in October 2007.

SPEED. Currently reaching approximately 7172 million households in the United States according to Nielsen Media Research, SPEED brings viewers into the world of auto and motorcycle racing, showcasing NASCAR races, events and original programming, as well as other top racing series, such as Formula One, Grand American Road Racing, American LeMans, American Motorcycle Association, World Superbike and Moto GPMotoGP racing and events. SPEED’s popular original seriesPINKS is aandPINKS All Outare reality-based racing showshows that pitspit amateur racers against each other in a unique drag racing format. SPEED also is distributed to subscribers in Mexico, Canada and Latin America. The Company also produces and distributes SPEED HD, a 24-hour national programming service produced and distributed in a high definition format, which launched in February 2008.

FUEL TV. FUEL TV is the only domestic 24-hour programming service dedicated to action sports and the lifestyle surrounding it. FUEL TV covers both competitive and performance action in the arenas of skateboarding, surfing, BMX, freestyle motocross, snowboarding and wakeboarding. Programming includes U.S. and international action sports events and competitions, as well as original series and specials about top action sports athletes and their music, art and culture from a global perspective.

Fox College Sports. Fox College Sports consists of three regionally-aligned networks, FCS Pacific, FCS Central and FCS Atlantic. Fox College Sports provides live and delayed collegiate events from the nation’s top collegiate conferences, coaches’ shows and collegiate highlight and magazine-format programming from the FSN RSNs and certain of the FSN Affiliated RSNs across the country.

Fox Movie Channel. Fox Movie Channel (“FMC”) is Hollywood’s first and only studio-based movie network. FMC airs Twentieth Century Fox films, as well as documentaries and original series that explore the moviemaking process from script to screen.

Fox Sports InternationalSoccer Channel. Fox Sports International owns Fox Soccer Channel a U.S.is an English-language programming English-language service offering comprehensive coverage of world-class soccer and Fox Sports Middle East, an English-language sports network airing in the Middle East, Turkey and Africa.United States.

Fox Pan American Sports International owns approximately. The Company has a 38% ofequity interest in Fox Pan American Sports LLC (“FPAS”), with Hicks, Muse, Tate & Furst Incorporated owning the remainder. FPAS owns and operates Spanish-language sports businesses, including the Fox Sports Latin America network (a Spanish-language sports network distributed to subscribers in certain Caribbean and Central and South American nations outside of Brazil) and Fox Sports en Español (the first Spanish-language sports programming service to be distributed in the United States).

Fox Reality Channel. Fox Reality Channel is a 24-hour national programming service whichthat airs off-network and syndicated unscripted programming made popular on major U.S. networks, as well asand international unscripted programming.networks. Fox Reality Channel’s lineup for the 2007-20082008-2009 season includes the

following original programming: the daily reality magazineweekly seriesReality RemixBinge andReality Remix Weekend;Reality Revealed; The Academy; a second season ofSolitary v.2.0;The Search For The Next Elvira to launchwhich launched in October 2007;July 2008;Long Way Down to launch in JanuaryAugust 2008; the third annualParadise Hotel Fox Reality Channel Really Awards expectedandGimme My Reality Show to launch in MarchOctober 2008;My Bare Lady 2: Open for Business to launch in November 2008; and athe third season ofAmerican Idol ExtraSolitary (Solitary 3.0).to launch in January 2009. Fox Reality Channel’s 2007-20082008-2009 lineup also includes original programming for its website, includingNightclub ConfessionsReality Bingewebisodes.

Big Ten Network. The Company owns an approximate 49% interest in the Big Ten Network, a 24-hour national programming service dedicated to the Big Ten Conference and Big Ten athletics, academics and related programming. The Big Ten Network launched in August 2007 along with Big Ten Network HD, a 24-hour national programming service produced and distributed in HD.

Fox International Channels.Fox International Channels (“FIC”).FIC owns and operates channels in various countries in Europe, Latin America, the Caribbean and Asia, including: the Fox Channel, Fox Life, FX, SPEED and Utilisma in Latin America; FOX, Fox Crime, Fox Life, FX, CULT, NEXT and The History Channel in Italy; FOX in Germany, FX in the United Kingdom; FOX and Fox Life in JapanJapan; FOX, Fox Crime, Fox Life, Next and FX in Portugal; the Voyage Channel and Fox Life in France; FOX in Spain and Korea; The History Channel in India; and Fox Life and Fox Crime in several countries in Eastern Europe.Europe; Fox Life in Poland; Fox Life, FX, FX VOD, FOX Sports and FOX Sports HD in Turkey. FIC also manages the Universal channel in Latin America.

The FOX, FX and Fox Life branded channels have first-run and library series programming and theatrical movies acquired primarily from major film studios, as well as original productions. CULT is a factual entertainment channel featuring arts and cultural programming. The History Channel provides factual series and specials acquired primarily from A&E Television Networks. The Voyage Channel is focused on travel related programming. Fox Crime is focused on crime related programming and NEXT is a high-definitionHD documentary channel.

FIC also owns a 32.5% equity interest in LAPTV, a partnership which distributes three premium pay television channels (Movie City East and West, Cinecanal East and West and its multiplex channel Cinecanal 2) and one basic television channel (The Film Zone East and West) in Latin America (excluding Brazil). Such channels primarily feature theatrical motion pictures of Twentieth Century Fox and three other studio partners in the English language with Spanish subtitles. FIC has voting control over an additional 22.5% interest in LAPTV.

FIC also owns a 51% equity interest in Real Estate TV Limited, a company which owns and distributes both a television channel and a video-based website showcase to U.K.-based buyers of international properties in development, as well as a majority equity interest Elite Sports Limited, a company which owns and distributes BabyTV, a 24-hour channel dedicated to infants and toddlers under three years old to 65 countries outside of the partnership.United States.

National Geographic.The Company owns a 75%52.2% interest ofin NGC Network International LLC (“and NGC Network Latin America LLC (collectively “NGC International”), with NGT, Inc., a subsidiary of the National Geographic TelevisionSociety (“NGT”), holding a 26.8% interest, and a subsidiary of BSkyB holding the remaining 25%21% interest. NGC International produces and distributes the National Geographic Channel in various international markets,markets. NGC International also produces and distributes the National Geographic Channel HD, the Nat Geo Adventure channel, the Nat Geo Wild channel and the Nat Geo Music channel in international markets. The National Geographic Channel is currently shown in 34 languages and in approximately 166 countries internationally, including certain countries in Europe and Asia. the United States.

The Company and NGT also own interests of approximatelyholds an approximate 67% and 33%, respectively,interest in NGC Network Latin AmericaNGC-Network United States, LLC, which produces and distributes the National Geographic Channel throughout Latin America, Spain and Portugal.the National Geographic Channel HD in the United States, with NGT holding the remaining interest. The National Geographic Channel is currently shownreaches approximately 67.7 million households in approximately 162 countries internationally and in 28 languages, excluding the United States.States according to Nielsen Media Research.

Big Ten Network. In February 2007, the Company formed a joint venture with a subsidiary of

The Big Ten Conference, Inc. to create Big Ten Network, a 24-hour nationalNational Geographic Channels air documentary programming service devoted to the Big Ten Conferenceon such topics as natural history, adventure, science, exploration and Big Ten athletics, academics and related programming. The Big Ten Network is expected to launch at the end of August 2007.

Fox Business Channel. The Company has announced that it will launch the Fox Business Channel, a 24-hour national business news channel, in October 2007. Currently, there are more than 30 million subscribers under contract to carry the channel at launch.culture.

CompetitionCompetition..

General. Cable network programming is another highly competitive business. Cable networks compete for distribution and, when distribution is obtained, compete for viewers and advertisers with free over-the-airfree-to-air broadcast television, radio, print media, motion picture theaters, DVDs, Internet, wireless and portable viewing devices and other sources of information and entertainment. Important competitive factors include the prices charged for programming, the quantity, quality and variety of programming offered and the effectiveness of marketing efforts.

Fox News. Fox News’News Channel’s primary competition comes from the cable networks CNN, MSNBC CNBC and CNN Headline News. Fox Business Network’s primary competition comes from the cable networks CNBC and Bloomberg Television. Fox News Channel and Fox Business Network also competescompete for viewers and advertisers within a broad spectrum of television networks, including other non-news cable networks and free over-the-airfree-to-air broadcast television networks.

Sports programming operations.A number of basic and pay television programming services, such as ESPN and CSTV, as well as free over-the-airfree-to-air stations and broadcast networks, provide programming that targets the FSN RSNs’ audience. FSN is currently the onlyleading programming service distributing a full range of sports programming on both a national and regional level. On a national level, FSN’s primary competitor is ESPN and, to a lesser extent, ESPN2. In regional markets, the FSN RSNs compete with other regional sports networks, including those operated by team owners, cable television systems, local broadcast television stations and other sports programming providers and distributors.

In addition, the FSN RSNs and FSN compete, to varying degrees, for sports programming rights. The FSN RSNs compete for local and regional rights with local broadcast television stations, other local and regional sports networks, including sports networks launched by team owners and distribution outlets, such as cable television systems. FSN competes for national rights principally with the national broadcast television networks, a number of national cable services that specialize in or carry sports programming, including sports networks launched by the leagues and conferences, and television “superstations” that distribute sports. Independent syndicators also compete by acquiring and reselling such rights nationally, regionally and locally. Distribution outlets, such as cable television systems, sometimes contract directly with the sports teams in their service area for the right to distribute a number of those teams’ games on their systems. In certain markets, the owners of distribution outlets, such as cable television systems, also own one or more of the professional teams in the region, increasing their ability to launch competing networks and also limiting the professional sports rights available for acquisition by FSN RSNs.

FX. FX faces competition from a number of basic cable and pay television programming services, such as USA, TNT, Spike TV, HBO and Showtime, as well as free over-the-airfree-to-air broadcast networks that provide programming that targets the same viewing audience as FX. FX also faces competition from these programming services in the acquisition of distribution rights to movie and series programming.

Direct Broadcast Satellite Television

The Company engages in the direct broadcast satellite business through its subsidiary, SKY Italia. The Company also owns equity interests in BSkyB and DIRECTV,Premiere, which are engaged in the DBS business (for a description of the businesses of these equity interests, please see discussion under heading “—Equity Interests”).

SKY Italia

SKY Italia currently distributes over 100170 channels of basic, premium and premiumpay-per-view programming services via satellite and broadband directly to subscribers in Italy. This programming includes exclusive rights to popular sporting events, newly-released movies and SKY Italia’s original programming, such as SKY News, Italy’s first 24-hour news channel. As of June 30, 2007,2008, SKY Italia had approximately 4.2almost 4.6 million subscribers.

Competition. The number of pay television subscribers with services in Italy other than SKY Italia is minimal; however, competition in the Italian pay television market is growing and is expected to continue to increase. SKY Italia’s competition includes companies that offer video, audio, interactive programming, telephony, data and other information and entertainment services, including broadband Internet providers, digital terrestrial transmission (“DTT”) services, wireless companies and companies that are developing new media technologies. In fiscal 2005,2008, the competitive DTT services in Italy expanded to include a pay television service, as well as its existing pay-per-view offerings of soccer games previously available exclusively on the SKY Italia platform. The Company is currently prohibited from providing a DTT service under regulations of the European Commission. In addition, the Italian government previously offered a subsidy on the purchase of DTT decoders. Competition is encouraged through the regulatory environment which requires SKY Italia to wholesale its premium programming, to limit the length and exclusivity of certain of its premium programming contracts, as well as to provide third parties with access to the SKY Italia platform.

Magazines and Inserts

The Company engages in marketing operations, primarily the publication of free standingfree-standing inserts and the provision of in-store marketing products and services, and magazine publishing.

News America Marketing Group

The Company’s U.S. marketing operations are organized under News America Marketing Group (“NAMG”). NAMG consists primarily of free-standing insert publications and in-store marketing products and services.

NAMG is one of the two largest publishers of free-standing inserts in the United States. Free-standing inserts are multiple-page marketing booklets containing coupons, sweepstakes, rebates and other consumer offers, which are distributed to consumers through insertion primarily into local Sunday newspapers. Advertisers, primarily packaged goods companies, pay NAMG to produce free-standing inserts, and NAMG contracts with and pays newspapers to include the free-standing inserts primarily into the newspapers’ Sunday editions. NAMG produces over 69 million free-standing inserts more than 50 times a year, which are inserted in approximately 1,400 Sunday newspapers throughout the United States. NAMG, through an affiliate, also produces over six million free-standing inserts approximately 15 times annually, which are inserted into over 150 Canadian newspapers in Canada.

NAMG is a leading provider of in-store marketing products and services, primarily to consumer packaged goods manufacturers, with products in more than 36,000 supermarkets, drug stores and mass merchandisers worldwide.

SmartSource^® is the brand name that is linked with NAMG’s vast assortment of marketing products, including, among others, free-standing inserts and NAMG’s instant coupon machines. The SmartSource^® brand currently reaches approximately 150 million consumers weekly.

The SmartSource iGroup manages NAMG’s portfolio of database marketing and on-line marketing products and services. The database marketing business, branded SmartSource Direct, provides database marketing and technology solutions for both retailers and manufacturers. The SmartSource Savings Network, which includes SmartSource.com, is an Internet-based network of approximately 100 newspaper, retailer and lifestyle sites connected through a common platform that currently delivers printable coupons, samples and other consumer marketing to an audience of approximately 5065 million consumers.

Competition. NAMG competes against other providers of marketing products and services, including those that provide promotional or advertising inserts and direct mailers of promotional or advertising materials, as well as those that provide trade and in-store advertisements and promotions. Competition is based on, among other things, rates, availability of markets, quality of products and services provided and their effectiveness, and rate of coupon redemption.

Magazines

United States. The Company publishesThe Weekly Standard, a weekly magazine offering political commentary, in the United States.

Australia.News Magazines Pty. Ltd (“News Magazines”) produces both direct sale magazines and inserts for the Company’s Australian newspapers. TheNews Magazines publishes more than 20 direct sale magazines, include:including: INSIDEout, a home and lifestyle magazine;donna hay, a food and lifestyle magazine; andBig League, a custom magazine for the National Rugby League. With the April 2007 acquisition of Federal Publishing Company’s (“FPC”) magazine group, News Magazines now also publishes more than 20 additional magazines, includingLeague;Vogue Australia,;Vogue Living,;GQ Australia,;Australian Good Taste,;delicious.,;Notebook:; andGardening Australia. News Magazines also publishesSunday Magazine, which is an insert in the Company’s Australian newspapers in Sydney and Melbourne. In addition, News Magazines publishesALPHA, which is a sport and lifestyle men’s magazine, which only is only sold together with one of the Company’s Australian newspapers. 

Competition. The magazines all compete for circulation and advertising revenue with other published products, in their same categories, as well as other forms of media. Competition for circulation is based on the editorial and informational content of each publication and its price. Competition for advertising is based on circulation levels, reader demographics, advertising rates and advertiser results.

Newspapers and Information Services

The Company is engaged in the newspaper and magazine publishinginformation services business, in the United Kingdom, Ireland, Australiaprimarily through its subsidiaries News International, News Limited, Dow Jones and the United States.The New York Post.

United Kingdom and Ireland. News International Limited (“News International”) publishes

News International owns the companies which publishThe Times,The Sunday Times,The Sun and theNews of the World in the United Kingdom and Ireland. Sales of these four newspapers account for approximately one-third of all national newspapers sold in the United Kingdom. BothThe Times, a daily published Monday through Saturday, andThe Sunday Times are leading quality newspapers.The Sun, published each morning Monday through Saturday, and theNews of the World, published on Sunday, are both popular, mass market newspapers. The average paid circulation for each of these four national newspapers during the six months ended June 30, 20072008 was approximately:The Times—640,893;620,059;The Sunday Times—1,230,790;1,193,450;The Sun—3,073,046; —3,120,512; andNews of the World—3,315,976. In September 2006,3,207,103. News International launchedalso publishesthelondonpaper, a free newspaper distributed by hand in central London each afternoon Monday through Friday.

The printing of all four of News International’s national newspapers (except Saturday and Sunday supplements) takes place principally in its four printing facilities located in England, Scotland and Ireland. TheIn fiscal 2008, the Company is incompleted the processupdating of updating the printing facilities of all News International’s newspapers to high speed, full color printing presses. In May 2007, the Company’s printing facility in Glasgow, Scotland was moved to an updated facility in North Lanarkshire, Scotland. In addition, the current printing operations in Wapping (East London), England are expected to be moved to a new facility in Broxbourne, North London in 2008 and the Company expects to complete the expansion of its printing facility in Knowsley, England in late 2007.

News International also publishesowns the companies which publishThe Times Literary Supplement, a weekly literary review, andlove it!, a weekly real-life magazine.

Australia.News Limited

News Limited is the largest newspaper publisher in Australia, owning approximately 145147 daily, Sunday, weekly, bi-weekly and tri-weekly newspapers, of which three are free commuter titles and 105104 are suburban publications (including 17 of which News Limited has a 50% interest). News Limited publishes the only nationally distributed general interest newspaper in Australia, the leading metropolitan newspapers in each of the major Australian cities of Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart and Darwin and the leading suburban newspapers in the suburbs of Sydney, Melbourne, Adelaide, Brisbane and Perth. News Limited’s daily and Sunday newspapers account for more than 65%69% of the total circulation of all daily and Sunday newspapers (excluding suburban and regional newspapers) published in Australia.

News Limited’s principal daily newspapers in Australia are: The Australian; The Daily Telegraph, published in Sydney; the Herald Sun, published in Melbourne;The Courier-Mail, published in Brisbane;The Advertiser, published in Adelaide;The Mercury, published in Hobart; and theNorthern Territory News, published in Darwin.The Australian, which is Australia’s only general interest national daily newspaper, is printed in six cities and distributed nationwide. News Limited’s other principal daily newspapers in Australia are mass circulation, regional newspapers with broad-based readerships and are published and distributed regionally. The average Monday to Saturday paid circulation of each of these daily newspapers during fiscal 20072008 was approximately as follows: The Australian—161,000;163,000; The Daily Telegraph—380,000;369,000; the Herald Sun—530,000;524,000; The Courier-Mail—237,000;235,000;The Advertiser—203,000;201,000;The Mercury—49,000; and theNorthern Territory News—22,000.23,000.

News Limited’s principal Sunday newspapers in Australia are: The Sunday Telegraph, published in Sydney; the Sunday Herald Sun, published in Melbourne;The Sunday Mail, published in Brisbane; the Sunday Mail, published in Adelaide;The Sunday Times, published in Perth; theSunday Tasmanian, which is published in Hobart; and theSunday Territorian, published in Darwin. All these newspapers are mass circulation, metropolitan Sunday newspapers with broad-based readerships reflecting the diversity of the populations of the cities in which they are published. The average paid circulation of each of these Sunday newspapers during fiscal 20072008 was approximately as follows: The Sunday Telegraph—684,000;668,000; the Sunday Herald Sun—617,000;623,000; The Sunday Mail (Brisbane)—601,000;579,000; the Sunday Mail (Adelaide)—321,000;317,000;The Sunday Times—342,000;336,000; theSunday Tasmanian—60,000; and theSunday Territorian—22,00022,000..

The other newspapers which News Limited owns and publishes in Australia are distributed to a wide range of readers in urban, suburban and rural areas and are principally weekly publications. The majority of such newspapers are free-distribution suburban publications. In the Sydney suburban markets, News Limited owns 24 weekly newspapers; in Melbourne, 33 weekly newspapers; in Brisbane, 2019 weekly newspapers; in Adelaide, 11 weekly newspapers; and in Perth, News Limited’s 50% owned suburban group publishes 17 weekly newspapers. The aggregate average weekly circulations of these suburban newspapers for the six months ended March 31, 20072008 was approximately 5,200,000 homes (adjusted to reflect the acquisition of seven community newspapers from FPC in April 2007, which had an average weekly circulation of approximately 360,000 homes).5,209,000 homes.

In addition to these newspapers, News Limited and its 50% owned Perth suburban group also publish 18publishes 15 other publications (16(13 monthlies and two weeklies) with an average circulation for the six months ended March 31, 20072008 of approximately 560,000433,000 homes for the monthly titles and approximately 80,00081,000 for the two weekly titles (adjusted to reflect the acquisition of six publications from FPC in April 2007, which had an average circulation of approximately 180,000 homes for the period).titles.

News Limited’s suburban newspapers are leading publications in terms of advertising and circulation in each of their respective markets. News Limited’s other newspapers in Australia are regional newspapers, circulating throughout broader, less densely populated areas.

Except for 5341 of its suburban newspapers and threefour regional newspapers, News Limited’s Australian newspapers are produced and printed in facilities owned by the Company.

Dow Jones.

Dow Jones provides global business and financial news, information and insight through multiple channels of media. Dow Jones’ consumer media business includes The Wall Street Journal, Barron’s and MarketWatch franchises (including print, online, television and radio), and its enterprise media business includes Factiva, newswires, client solutions, indexes and other products and services. Dow Jones’ local media business provides news and information of general interest to local communities throughout the United States.

Consumer Media. Dow Jones’ consumer media business offers business and financial information content to the consumer market around the globe.

The Wall Street Journal. The Wall Street Journal is one of the United States’ largest daily national newspapers. During fiscal 2008, The Wall Street Journal had average print circulation of 1.7 million. The Wall

Street Journal’s three major national editions are printed at 17 owned printing plants located throughout the United States, as well as at additional contract printers. The Wall Street Journal also sells regional advertising in 18 regional editions and pre-printed advertisements in various subsets of the circulation.

Barron’s. Barron’s is a weekly magazine that caters to financial professionals, individual investors and others interested in financial markets. In the fiscal year ended June 30, 2008, Barron’s had an average weekly circulation of approximately 300,000. Barron’s is printed in all of The Wall Street Journal’s printing plants, as well as additional contract printers.

The Wall Street Journal Digital Network. The Wall Street Journal Digital Network consists of WSJ.com, Marketwatch.com, Barron’s.com, and related sites and, as of June 30, 2008, served more than 25 million visitors per month with more than 400 million page views. WSJ.com is the largest paid subscription news website on the Internet, with over one million subscribers as of June 30, 2008. Certain sections of WSJ.com are also available to non-subscribers. MarketWatch.com covers the pulse of the markets for engaged investors, and is a leading provider of business, company and market news, financial information and analytical tools. Barron’s Online is a stand-alone subscription product, which had more than 140,000 subscribers as of June 30, 2008.

International Editions of The Wall Street Journal. The Wall Street Journal Europe, which had an average circulation of 81,000 during fiscal 2008, is headquartered in Brussels, Belgium and printed in Belgium, France, Germany, Ireland, Israel, Italy, Spain, Switzerland, Turkey and the United Kingdom. The Wall Street Journal Asia, which had an average circulation of 80,000 during fiscal 2008, is headquartered in Hong Kong and printed in Hong Kong, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand. Dow Jones also publishes The Wall Street Journal Special Editions, which are a collection of The Wall Street Journal’s pages in local languages. As of June 30, 2008, Special Editions were distributed as part of 42 newspapers in 46 countries.

Other channels of distribution and publications.Dow Jones’ consumer media business also includes other channels of content distribution, including: television; radio/audio; online video; consumer electronic licensing; and The Wall Street Journal classroom, campus and Sunday editions. Dow Jones also publishes The Far Eastern Economic Review, a Hong Kong-based monthly periodical. In addition, eFinancialNews Holdings Ltd., based in London, serves the European financial services industry with print, online, training and events businesses.

Enterprise Media. Dow Jones’ enterprise media business offers business and financial information content to businesses and financial professionals around the globe.

.Content Technology Solutions.Content Technology Solutions provides real-time news and research tools to global enterprises through Dow Jones Factiva, Dow Jones Newswires and its licensing and consulting businesses.

Dow Jones Factiva is a leading provider of global business content, research products and services to global enterprises mainly in the finance, corporate, professional services and government sectors, with approximately 1.8 million paying subscribers as of June 30, 2008.

Dow Jones Newswires is a premier provider of real-time business news and information for financial professionals around the world. As of June 30, 2008, Dow Jones Newswires had a dedicated staff of approximately 850 journalists, in addition to drawing on the global resources of The Company ownsWall Street Journal and the Agence France-Presse.

Through Dow Jones Client Solutions, Dow Jones licenses news, data, investment tools and other online applications to financial services firms, media companies and corporations, and provides the consulting services to integrate this information into their intranets, CRM systems and retail websites.

Dow Jones Indexes licenses the Dow Jones Industrial Averages and other indexes as the basis for trading options, futures, unit trusts, annuities, exchange traded funds, mutual funds, derivatives and specialized

structured products. Dow Jones Indexes offers thousands of indexes, including a variety of specialty indexes. Dow Jones Indexes also has a family of hedge fund indexes. Through Dow Jones Reprint Solutions, Dow Jones sells print or electronic reprints of The Wall Street Journal’s and Barron’s stories.

Dow Jones Financial Information Services. Dow Jones Financial Information Services serves the areas of private equity, venture capital, debt/bankruptcy, hedge funds and energy/commodities with newsletters, conferences and databases.

Dow Jones Business & Relationship Intelligence. Dow Jones Business & Relationship Intelligence delivers timely and comprehensive executive and company information to sales and research professionals, plus media organizations, using unique, patented technologies and relationship mapping that harvest information from the Internet and alert users to business opportunities.

Local Media. Dow Jones’ local media business is comprised of its wholly-owned subsidiary Ottaway Newspapers, Inc. (“Ottaway”). Ottaway publishes local media print publications, including eight general interest dailies published in California, Maine, Massachusetts, New Hampshire, New York, Oregon and Pennsylvania. During fiscal 2008, average circulation for these dailies was approximately 268,500, with Sunday circulation of approximately 299,200. Ottaway also publishes 15 weekly newspapers and more than 36 other publications.

Strategic Alliances.

SmartMoney. SmartMoney is a 50/50 joint venture between Dow Jones and Hearst. SmartMoney magazine, published monthly, had circulation of more than 817,000 copies in the fiscal year ended June 30, 2008. SmartMoney also includes SmartMoney.com and SmartMoney Custom Solutions.

Vedomosti. Vedomosti is a joint venture owned equally by Dow Jones, Pearson Plc and Independent Media, that publishes a Russian language business daily. Vedomosti had circulation of approximately 63,000 in the fiscal year ended June 30, 2008, and includes original content and content from The Wall Street Journal and the Financial Times translated into Russian.

STOXX, Ltd. (“STOXX”). STOXX is a joint venture owned equally by Dow Jones, the Deutsche Borse and the Swiss Exchange. STOXX develops, maintains, distributes and markets the Dow Jones STOXX indices.

DJ/IAC Online Ventures, LLC(“DJ/IAC Online Ventures”). DJ/IAC Online Ventures is a 50/50 joint venture with IAC/InterActiveCorp (“IAC”). This joint venture is expected to launch a community-driven, personal finance website in the second half of calendar 2008.

New York Post

The New York Post (the “Post”), is a mass circulation, metropolitan morning newspaper that is published seven days a week and distributed in New York City, Baltimore, Boston, Florida and California. For the fiscal year ended June 30, 2007,2008, the newspaper had average dailyweekday circulation of approximately 715,000.680,000. The Company prints the Post in a printing facility in the Bronx, New York and uses third-partythird party printers in its other markets in the United States.

In fiscal 2007, the Company formed theThe Company’s Community Newspaper Group and acquiredalso owns several local newspapers and other publications distributed in the New York metropolitan area.

Competition

General.The newspapers published by the Company compete for readership and advertising with local and national newspapers and also compete with television, radio, the Internet and other communications media in

their respective locales. Competition for newspaper circulation is based on the news and editorial content of the newspaper, cover price and, from time to time, various promotions. The success of the newspapers published by the Company in competing with other newspapers and media for advertising depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising among newspapers is based upon circulation levels, readership levels, reader demographics, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, circulation and quality of readership demographics.

In recent years, the newspaper industry has experienced difficulty increasing circulation volume and revenues. This is 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. The Company believes that competition from new media formats and sources and shifting consumer preferences will continue to pose challenges within the newspaper industry.

Dow Jones Online Publications. Dow Jones’ online publications compete with other websites that offer continuously updated coverage of business news, as well as licensing of electronic content. Unlike WSJ.com, competitors do not, for the most part, utilize an online paid subscription model, and most remain free sites. Competitors of Dow Jones’ online publications include FT.com, New York Times Digital, TheStreet.com, Bloomberg, Forbes.com, Yahoo!Finance, CNET, CNN Money, MSNMoney/CNBC and Google Finance.

Dow Jones Enterprise Media. Dow Jones’ newswires compete with other global financial newswires, including Thomson Reuters and Bloomberg L.P., as well as many Internet-based providers of financial news and information. Dow Jones’ newswires maintain a stronger market position in North America than internationally. Dow Jones Indexes competes with the indexes distributed by various organizations, including Standard & Poor’s, the Financial Times and Morgan Stanley Capital International. Factiva competes with various business information service providers, including LexisNexis, Thomson Reuters, Hoover’s and OneSource. Factiva also competes with various Internet-based information search services, such as Google, Microsoft and Yahoo!.

Book Publishing

HarperCollins Publishers (“HarperCollins”) is engaged in English language book publishing on a worldwide basis and is one of the world’s largest English language book publishers. HarperCollins’ principal businesses are HarperCollins Publishers LLC (“HarperCollins U.S.”), headquartered in New York, HarperCollins Publishers Limited, headquartered in London, and The Zondervan Corporation LLC, (“Zondervan”), headquartered in Grand Rapids, Michigan. HarperCollins primarily publishes fiction and non-fiction, including religious books, for the general consumer. In the United Kingdom, HarperCollins publishes some titles for the educational market as well.

During fiscal 2007,2008, HarperCollins U.S. had 128 adult and children’s165 titles onThe theNew York Times bestseller list, with 1614 titles hitting number one, includingMarley & MeThe Dangerous Book for Boysby Conn Iggulden and Hal Iggulden,Deceptively Delicious by John Grogan,Jessica Seinfeld,My Grandfather’s Son by Clarence Thomas,The Reagan Diaries by Ronald Reagan,At the Center of the StormThe Perfect Wife by George Tenet,Victoria Alexander,The Measure of a Manby Sidney Poitier,The Pursuit of HappynessNext by Chris Gardner,Michael Crichton,The Volumetrics Eating PlanRead All About It! by Barbara Rolls,Laura Bush and Jenna Bush,A SeriesWarriors: Power of Unfortunate Events, #13: The EndThree #2: Dark River by Lemony Snicket,Erin Hunter,Fancy Nancy by Jane O’Connor,The Night Before Christmas by Clement C. Moore,Ana’s Story by Jenna Bush,Fancy Nancy and the Posh Puppyby Jane O’Connor,Bridge to Terabithia by Katherine Paterson,The Night before Christmas by Clement Moore, Is There Really a Human Race? by Jamie Lee Curtis,Bad Dog, Marley! by John Grogan, andCharlotte’s Web The Movie StorybookWizard by Kate Egan,Thanks to You by Julie Andrews and Emma Hamilton andWarriors: The New Prophecy andWarriors: Power of Three both by Erin Hunter.Jack Prelutsky.

Competition.The book publishing business operates in a highly competitive market and has been affected by consolidation trends. This market continues to change in response to technological innovations and other factors. Recent years have brought a number of significant mergers among leading book publishers. There have also been a number of mergers completed in the distribution channel. HarperCollins must compete with other publishers, such as Random House, Penguin Group, Simon & Schuster and Hachette Livre, for the rights to works by well-known authors and public personalities. Although HarperCollins currently has strong positions in each of its markets, further consolidation in the book publishing industry could place it at a competitive disadvantage with respect to scale and resources.

Other

NDS

The Company owns approximately 73%72% of the equity and approximately 96% of the voting power of NDS’s American Depositary Shares, which each represent one NDS Series A ordinary share, par value $0.01 per share, and which are quoted on The NASDAQ Stock Market under the symbol “NNDS.”

NDS supplies open end-to-end digital technology and services to digital pay television platform operators and content providers. NDS’s technologies include conditional access and microprocessor security, broadcast and broadband stream management, set-top box and residential gateway middleware, electronic program guides, DVR technologies and interactive infrastructure and applications. NDS provides technologies and services supporting standard definition and high definitionHD televisions and a variety of industry, Internet and Internet protocol standards.standards, as well as technology for mobile devices. NDS’s software systems, consultancy and systems integration services are focused on providing platform operators and content providers with technology to help them profit from the secure distribution of digital information and entertainment to consumer devices that incorporate various technologies supplied by NDS. For more information on NDS, please see its reports filed with the SEC.

Competition.In June 2008, the Company announced that it and two newly incorporated companies formed by funds advised by Permira Advisers LLP (“the Permira Newcos”) proposed a transaction to an independent committee of the NDS competesboard of directors, which would result in NDS ceasing to be a public company, and the Permira Newcos and the Company owning 51% and 49% of NDS’ outstanding equity, respectively. On August 5, 2008, NDS announced that the independent committee reached an agreement in principle with the Company and the Permira Newcos on a numberprice at which they would acquire all the issued and outstanding NDS Series A ordinary shares, including those represented by American Depositary Shares traded on The NASDAQ Stock Exchange, for per share consideration of companies, although$63 in cash. As part of this transaction, approximately 68% of the NDS Series B ordinary shares held by News Corporation would be cancelled in exchange for $63 per share in a mix of approximately $1.5 billion in cash and a $242 million note. The transaction is subject to negotiation and execution of final legal documentation, and is also conditioned upon approval by the holders of NDS’ Series A ordinary shares, court approval, the receipt of certain regulatory approvals and other customary closing conditions. There can be no single company competes with it in all of its product lines.assurance that the parties will enter into final legal documentation or that any transaction will be consummated.

Fox Interactive Media

Fox Interactive Media, Inc. (“FIM”) operates the majority of the Company’s Internet businesses, including MySpace.com, FoxSports.com, Scout.com, AmericanIdol.com, IGN.com, RottenTomatoes.com, AskMen.com, Photobucket.com Flektor.com and other Company web properties. In June 2007,2008, the FIM network of websites (excluding Photobucket.com and Flektor.com, which were acquired in July 2007 and May 2007, respectively) had approximately 164186 million unique visitors worldwide and approximately 8496 million unique visitors in the United States and, as of June 30, 2007,2008, was the fifth largest network of users on the Internet in the United States according to comScore Media Metrix (based on monthly unique users)page views). The FIM properties create original entertainment, news and information content and leverage the Company’s current and archived video assets.

FIM derives revenue principally from the sale of Internet advertising and sponsorships, as well as from subscription services and e-commerce, including the digital sale of video games, television programming and other entertainment products. FIM has a multi-year search technology and services agreement through 2010 with Google Inc. (“Google”), pursuant to which Google provides search and keyword targeted advertising on an exclusive basis for a majority of FIM’s web properties domestically and internationally. In furtherance of

The Fox Interactive Media Audience Network is the first online advertising network and technology services provider specializing in advanced targeting for FIM’s monetization strategy, it purchased an interactive advertising technology company, Strategic Data Corporation (“SDC”) in March 2007. SDC’s advanced, proprietary technology is designed to optimize the delivery of FIM’s online advertising.websites and third-party clients.

MySpace.com is the leading social networking site on the Internet, with over 188approximately 73 million registeredunique users worldwide as ofand 41 billion page views in the United States in June 30, 2007.2008 according to comScore Media Metrix. MySpace.com allows users, such as individuals, bands, comedians and film producers,filmmakers, to create and customize content-rich Internet profile pages, share user-generated video, participate in user groups and communicate with each other using various technologies, including instant messaging.

In April 2008, MySpace, Sony BMG Music Entertainment, Universal Music Group and Warner Music Group formed MySpace Music, LLC (“MySpace Music”), which will combine the MySpace music community with comprehensive catalogues of music content to offer music streaming, MP3 digital downloads, concert tickets, ringtones and other features. MySpace Music is expected to launch in the United States in the second half of calendar 2008.

MySpace provides localized experiences in 28 territories internationally, offering local content to users in those territories while maintaining global connectivity to MySpace.com. In addition, MySpace launched MySpace Latino (http://latino.myspace.com), a bilingual Latino experience focused on the interests of Hispanics online.

MySpaceTV announced video-focused content partnerships with a variety of content providers, and MySpace also has an international television syndication agreement with ShineReveille Intl. for the distribution of MySpace’s original web-based series formats.

MySpace launched a number of new features, services and initiatives during fiscal 2008, including: the MySpace Developer Platform, which gives software developers around the world the ability to build tools and applications that integrate into MySpace; MySpace Celebrity, a global content channel focused on entertainment culture and related news, blogs and videos; the MySpace Data Availability initiative, providing users the ability to use public portions of their MySpace profiles and information to engage with participating websites of their choice throughout the Internet; and MySpace Karaoke.

FIM’s IGN network of video game, lifestyle and entertainment-related Internet properties represent many of the top web properties in their respective categories across the Internet. IGN’s Games sites (IGN.com, GameSpy, FilePlanet, TeamXbox and others) are the number one gaming information network on the Internet with nearly 14 million unique users in the United States in June 2008 according to comScore Media Metrix. In addition, IGN’s Direct2Drive digital distribution site recently surpassed its one millionth game sold and IGN’s GameSpy Technology group provides technology for online game play in video games. IGN also owns and operates one of the most popular movie review websites on the Internet, RottenTomatoes.com, and one of the leading men’s lifestyle websites, AskMen.com. IGN properties are also expanding internationally.

FOX Sports Interactive, which includes FOXSports.com, FOX Sports Mobile, Scout Media and WhatifSports.com, is a leader in digital sports programming, offering sports fans a comprehensive mix of news, exclusive analysis, fantasy games and one of the Internet’s largest collections of online sports video. FOXSports.com, FOX Sports Interactive’s flagship site, had over 15 million unique users and 381 million page views in the United States during June 2008 according to comScore Media Metrix. FOX Sports Interactive produces more than four hours per day of original video specifically for the Internet, which is distributed on FOXSports.com, within MSN video and on millions of mobile devices in the United States. FOXSports.com’s video content ranges from event-based programming, such as live webcasts from the BCS Championship Game, MLB’s World Series and the NFL Playoffs—to studio shows, which feature both FOX Sports Television talent and the FOXSports.com’s leading editorial voices.

Photobucket.com, Inc., acquired by FIM in July 2007, operates one of the Internet’s most popular sites, linking billions of personal photos, graphics, slideshows and videos daily to hundreds of thousands of websites worldwide. In June 2007, MySpace.com2008, Photobucket had approximately 70over 24 million unique visitorsusers and 461.3 billion page views in the United States according to comScore Media Metrix.

During fiscal 2007, MySpace launched international sites in the United Kingdom, Australia, France, Germany, Italy, Spain, Canada, the Netherlands, Switzerland, Sweden, Austria and Mexico and expects to launch in additional countries in the coming year. The international MySpace sites provide unique local content to users in those countries while maintaining global connectivity to MySpace.com. In addition, FIM formed a joint venture with Softbank Corp. to launch MySpace Japan in November 2006. MySpace also licenses its trademarks and technology to a local company that operates a MySpace site in China, which launched in April 2007.

MySpace launched a number of new features and services during the past year, including the Impact Channel (http://impact.myspace.com), which provides a community for politicians, non-profit organizations and others to communicate with MySpace users, MySpace News (http://news.myspace.com), which provides users with access to news stories from over 8,000 sources across the Internet, and, most recently, MySpaceTV, an integrated component of the company’s worldwide community and content platform which provides users personalized video channels, exclusive and original content, user generated and partner driven branded channels. MySpace announced video-focused content deals and partnerships with a variety of content partners, including Broadband Emmy Awards, Michael Eisner’sProm Queen, Mark Burnett’sINDEPENDENT, the NBA, the NHL and The Sony Minisode Network. Branded channel partners include National Geographic, The New York Times and Reuters.

FIM’s IGN network of video game-related Internet properties (IGN.com, GameSpy, FilePlanet, TeamXbox, Direct2Drive and others) is the Web’s number one video game information destination and attracts one of the largest concentrated audiences of young males on the Internet. IGN also owns and operates the popular movie-related website, RottenTomatoes.com, and one of the leading male lifestyle websites, AskMen.com. In addition, IGN provides technology for online game play in video games. IGN has launched international versions of IGN.com in the United Kingdom and Australia and expects to launch in additional countries in the coming year. Collectively, IGN’s properties had approximately 36 million unique users worldwide in June 2007 according to comScore Media Metrix.

FoxSports.com, part of the MSN Network, is the leading general interest sports destination on the Internet in the United States. Through its strategic relationship with MSN.com, FoxSports.com surpassed ESPN.com in unique users in fiscal 2007, and grew over 16% over the prior year. In June 2007, FoxSports.com on the MSN Network had approximately 15 million unique visitors and 506 million page views in the United States according to comScore Media Metrix.

FIM acquired Photobucket.com, Inc. in July 2007 and Flektor, Inc. in May 2007. Photobucket.com is a web-based provider of photo- and video-sharing services, and Flektor.com is a next-generation website that provides users with a suite of web-based tools to transform their photos and videos into dynamic slideshows, postcards, live interactive presentations and video mash-ups.

Competition. FIM’s business and the Internet generally are highly competitive. FIM properties compete with other Internet sites for advertisers, users and traffic. FIM develops new tools and features to remain competitive in the Web 2.0 world. These new tools and features are key competitive factors in keeping users engaged with FIM properties.

News Outdoor

News Outdoor Group (“News Outdoor”) operates outdoor advertising companies. News Outdoor owns an approximately 73% interest in Media Support Services Limited (“MSS”), the largest outdoor advertising company in Russia. In certain limited circumstances, the minority stockholders of MSS have the right to sell, and News Outdoor has the right to purchase, the minority interests at fair market value. News Outdoor also owns or has interests in outdoor advertising companies in Poland, Romania, the Czech Republic, Ukraine, Turkey, Bulgaria, Israel India and Southeast Asia.

In June 2007, theThe Company has announced that it intends to explore strategic options for News Outdoor in connection with News Outdoor’s continued development plans. The strategic options include, but are not limited to, exploring the opportunity to expand News Outdoor’s existing shareholder group through new strategic and private equity partners. No agreement has yet been entered into with respect to any transaction.

Other Operations

In January 2007,The Company has a controlling interest in Jamba, a joint venture between the Company and VeriSign, Inc. (“VeriSign”) formedJamba (known as Jamster in the United States, Canada, the United Kingdom and other English-speaking territories) is a joint ventureleading international provider of mobile entertainment, offering mobile products directly via mobile phones, including branded content from content providers around the world. Such content includes music, mobile games, video and original content made exclusively for use on mobile phones. Jamba currently distributes content to provide entertainment content for mobile devices. The Company paid approximately $190 million for a controlling interestoperators in VeriSign’s wholly-owned subsidiary, Jamba, which was combined with certain ofover 25 territories around the Company’s Fox Mobile Entertainment assets.world.

The Company owns or has interests in the following free over-the-air,free-to-air, general entertainment television stations: bTV in Bulgaria; TV Puls in Poland; LNT and TV5 in Latvia; Fox Televizija in Serbia; and FOX TV in Turkey. The Company has also entered into agreements in principlean agreement to acquire interestsan interest in a television stations in Israel (Channel 10) and Georgia (TV IMEDI)., pending regulatory approval. In addition, the Company owns interests in Nashe Radio and Best FM, both Russian radio stations.

News Digital Media is the Company’s Australian online division. In addition to maintaining the Company’s Australian websites, News Digital Media is responsible for online advertising and transactions in Australia. News Digital Media sites include CareerOne.com.au, carsguide.com.au, news.com.au, MOSHTIX.com.au and truelocal.com.au.

The Company has a 58% interest in realestate.com.au Limited, a company listed on the Australian Stock Exchange, which provides online real estate advertising on its 21 websites which it operates CareerOne.com.au, CARSguide.com.au, NEWS.com.au, truelocal.com.au and FOXSPORTS.com.au.in ten countries throughout the world.

Equity Interests

BSkyB

The Company holds an approximate 39% interest in BSkyB. BSkyB’s ordinary shares are listed on the London Stock Exchange and its American Depositary Shares, each representing four BSkyB ordinary shares, are

listed on the New York Stock Exchange (“NYSE”), in each case under the symbol “BSY.” BSkyB is the leading pay television broadcast service in the United Kingdom and Ireland.Ireland, as well as broadband and telephony services. BSkyB acquires programming to broadcast on its own channels and also supplies certain of those channels to

cable operators for retransmission by the cable operators to their subscribers in the United Kingdom and Ireland. BSkyB also retails channels (both its own and those of third parties) to DTH subscribers and to certain of its own channels to a limited number of DSL subscribers. For more information on BSkyB, please see its reports filed with the SEC.

DIRECTV

The Company holds an approximate 39% interest in DIRECTV. DIRECTV’s common stock is listed on the NYSE under the symbol “DTV.” DIRECTV is the largest provider of DTH digital television services and the second largest provider in the multichannel video programming distribution (“MVPD”) industry in the United States, in each case based on the number of subscribers. DIRECTV is a leading provider of digital television entertainment in the United States and Latin America. DIRECTV acquires, promotes, sell and distributes digital entertainment programming via satellite to residential and commercial customers. For more information on DIRECTV, please see its reports filed with the SEC.

As discussed above, the Company’s interest in DIRECTV is part of the transactions contemplated by the Share Exchange Agreement. If consummated, the Company will not have any interest in DIRECTV following the closing of the Share Exchange Agreement. For more information on the Share Exchange Agreement, please see discussion under the heading “Background.”

Gemstar-TV Guide

The Company holds an approximate 41% interest in Gemstar-TV Guide. Gemstar–TV Guide’s common stock is quoted on The NASDAQ Stock Market under the symbol “GMST.” Gemstar–TV Guide is a media, entertainment and technology company that develops, licenses, markets and distributes products and services targeted at the video guidance and home entertainment needs of consumers worldwide. In July 2007, Gemstar-TV Guide announced that its board of directors authorized Gemstar-TV Guide and its advisors to explore strategic alternatives intended to maximize stockholder value, which may include a sale of the company. For more information on Gemstar–TV Guide, please see its reports filed with the SEC.

FOXTEL

The Company, Telstra Corporation Limited, an Australian telecommunications company, and Publishing and Broadcasting Limited,Consolidated Media Holdings, an Australian media and entertainment company, own and operate FOXTEL, a cable and satellite television service in Australia with 25%, 50% and 25% interests, respectively. At June 30, 2007,2008, FOXTEL had approximately 1.41.5 million subscribers (including subscribers to Optus, an Australian telecommunications company). At June 30, 2007,2008, 100% of the FOXTEL managed subscriber base was connected to FOXTEL’s digital service, which delivers over 100 channels on cable and satellite.

Other Investments

National Geographic Channel.The Company holds an approximate 67% non-controlling interest in the National Geographic Channel in the United States, with NGT holding the remaining interest. The National Geographic Channel currently reaches approximately 64.5 million households in the United States according to Nielsen Media Research. The National Geographic Channel airs documentary programming on such topics as natural history, adventure, science, exploration and culture. The Company and NGT also own interests of 25% and 75%, respectively, in NGC Network (UK) Limited, which produces and distributes the National Geographic Channel throughout the United Kingdom, Benelux, Scandinavia, Eastern and Central Europe, Russia, Israel, Greece, Africa, Australia and New Zealand.

Telecine.The Company owns a 12.5% equity interest in Telecine, Ltda., which distributes five premium pay television channels (Telecine Premium, Telecine Action, Telecine Emotion, Telecine Popcorn and Telecine Cult) in Brazil. Such channels primarily feature theatrical motion pictures of Twentieth Century Fox and three other studio partners in the English language with Portuguese subtitles, except that Telecine Popcorn is dubbed into Portuguese.

Premium Movie Partnership. The Company owns an approximate 20% equity interest in The Premium Movie Partnership, which distributes three premium pay television channels (Showtime and its multiplex channel, Showtime 2, and Showtime Greats) in Australia. Such channels primarily feature theatrical motion pictures of the Company and three other studio partners.

SkyNZ.SkyNZ.The Company owns an approximate 44% interest in Sky Network Television Limited (“SkyNZ”), a land-linked UHF network and digital DBS service in New Zealand.

News Corporation/NBC Universal Online Joint VentureHulu. In March 2007, theThe Company and NBC Universal announced the formation ofhas a joint venture to launch45% equity interest in Hulu, LLC (“Hulu”), which operates a website and an online video distribution network. The joint venture will be a platform for premium producednetwork, including video content from the Company,Fox, NBC Universal and a myriad ofmany other third party content partners. The joint venture’slicensors. Hulu’s content library willis also be distributed by partners such as AOL, MSN, MySpace, Yahoo! and Comcast. In August 2007, the

Premiere. The Company and NBC Universal entered intoowns an agreement with Providence Equity Partners (“Providence”), a media investment firm, pursuant to which Providence will invest $100 million and will acquire a 10%approximate 25% equity interest in Premiere AG, the joint venture.leading German pay television operator.

Government Regulation

General

Various aspects of the Company’s activities are subject to regulation in numerous jurisdictions around the world. The Company believes that it is in material compliance with the requirements imposed by those laws and regulations. The introduction of new laws and regulations in countries where the Company’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 the Company.

Filmed Entertainment

United StatesStates.

FFE is subject to the provisions of so-called “trade practice laws” in effect in 25 states relating to theatrical distribution of motion pictures. These laws substantially restrict the licensing of motion pictures unless theater owners are first invited to attend a screening of the motion pictures and, in certain instances, also prohibit payment of advances and guarantees to motion picture distributors by exhibitors. Further, pursuant to various consent judgments, FFE and certain other motion picture companies are subject to certain restrictions on their trade practices in the United States, including a requirement to offer motion pictures for exhibition to theaters on a theater-by-theater basis and, in some cases, a prohibition against the ownership of theaters.

Other International RegulationRegulation.

In countries outside of the United States, there are a variety of existing or contemplated governmental laws and regulations which may affect the ability of FFE to distribute and/or license its motion picture and television

products to cinema, television or in-home media, including copyright laws and regulations which may or may not be adequate to protect its interests, cinema screen quotas, television quotas, contract term limitations, discriminatory taxes and other discriminatory treatment of U.S. products. The ability of countries to deny market access or refuse national treatment to products originating outside their territories is regulated under various international agreements, including the World Trade Organization’s General Agreement on Tariffs and Trade and General Agreement on Trade and Services; however, these agreements have limited application with respect to preventing the denial of market access to audio-visual products originating outside the European Union.

Television

United StatesStates.

In general, the television broadcast industry in the United States is highly regulated by federal laws and regulations issued and administered by various federal agencies, including the FCC. The FCC regulates television broadcasting, and certain aspects of the operations of cable, satellite and other electronic media that compete with broadcasting, pursuant to the Communications Act of 1934, as amended (the “Communications Act”).

The Communications Act permits the operation of television broadcast stations only in accordance with a license issued by the FCC upon a finding that the grant of the license would serve the public interest, convenience and necessity. The FCC grants television broadcast station licenses for specific periods of time and, upon application, may renew the licenses for additional terms. Under the Communications Act, television broadcast licenses may be granted for a maximum permitted term of eight years. Generally, the FCC renews broadcast licenses upon finding that: (i) the television station has served the public interest, convenience and necessity; (ii) there have been no serious violations by the licensee of the Communications Act or FCC rules and regulations; and (iii) there have been no other violations by the licensee of the Communications Act or FCC rules and regulations which, taken together, indicate a pattern of abuse. After considering these factors, the FCC may grant the license renewal application with or without conditions, including renewal for a lesser term than the maximum otherwise permitted, or hold an evidentiary hearing. Fox Television Stations has pending renewal applications for a number of its television station licenses. NineSeven of the pending applications have been opposed by third parties. On June 13, 2007 and May 15, 2008, Fox Television Stations entered into agreements with the FCC that preclude it from objecting, on the grounds that such action is barred by certain statutes of limitations, to FCC or other governmental action relating to (i) petitions to deny or complaints that have been filed against several owned and operated stations relating to programming that is alleged to violate the prohibition against indecent broadcasts, or (ii) inquiries from the FCC regarding compliance with its sponsorship identification rules.

For information on the television stations owned and operated by the Company, see “—Fox Television Stations” above.

In February 1998, the FCC adopted a final table of digital channel allotments and rules for the implementation of digital television (“DTV”) service (including high-definitionHD television) in the United States. The digital table of allotments provides each existing full power television station licensee or permittee, including the 3527 stations currently owned and operated by Fox Television Stations, with a second broadcast channel in order to facilitate a transition from analog to digital transmission, conditioned upon the surrender of one of the channels at the end of the DTV transition period. By law, all full power television stations must cease transmission of analog signals by February 17, 2009. The law sets aside $1.5 billion in subsidies to help consumers obtain converter boxes that will allow analog television sets to receive digital broadcasts. All of the stations owned and operated by Fox Television Stations have launched digital facilities. Under FCC rules, television stations may use their second channel to broadcast either one stream of “high definition” digital programming or to “multicast” several streams of standard definition digital programming or a mixture of both. Broadcasters may also deliver data over these channels, provided that the supplemental services do not derogate the mandated, free over-the-airfree-to-air program service. Fox Television Stations is currently formulating plans for use of its digital channels. It is difficult to assess the impact of cessation of analog broadcasting and how the conversion to digital television will affect Fox Television Stations’ business.

On October 6, 2006 the FCC granted Fox Television Stations’ applications to transfer control of its television station licenses from Mr. K Rupert Murdoch to the Company through a recapitalization of FTH stock that reduced Mr. K. Rupert Murdoch’s voting interest to 14.8% and raised the Company’s voting interest to 85.2% (the “October 2006 Order”). The grant of the applications effected no change with respect to the equity held in FTH, the officers or directors of FTH or to its day-to-day operations.

On June 2, 2003, the FCC concluded the 2002 biennial review of its broadcast ownership regulations required by the 1996 Telecom Act by amending its rules governing the ownership of television and radio stations and by replacing its newspaper/broadcast cross-ownership ban and the radio/television cross-ownership restriction with a new set of cross-media ownership limits (the “June 2003 Order”). In the Consolidated Appropriations Act of 2004, Congress increased the national television station ownership cap to permit an entity to have an attributable ownership interest in an unlimited number of television stations nationally, so long as the

audience reach of those stations does not exceed, in the aggregate and after the application of the UHF Discount, 39% of U.S. television households.

Several parties appealed the June 2003 Order and, on September 3, 2003, theOrder. The United States Court of Appeals for the Third Circuit (the “Third Circuit”) issued an Order stayingstayed the effectiveness of the new rules. Onrules and, on June 24, 2004, the Third Circuit remanded the FCC’s June 2003 Order for additional justification or modification of the revisions the FCC had made to its ownership regulations. On June 21, 2006,February 4, 2008, the FCC commenced a proceeding to againissued an order that concluded its 2006 review of its mediabroadcast ownership rulesregulations and to addressaddressed the issues raised by the Third Circuit’s remand.remand (the “February 2008 Order”). The September 3, 2003 stay remains in effect pending the remand, and, therefore, the FCC broadcast ownershipCommission decided there should be no changes to its rules that were operative priorrelating to the June 2003 Order continue to govern the ownership of multiple television stations and cross-ownership.in the same market. Those rules (i) permit the ownership of two television stations with overlapping coverage areas if the stations are in separate DMAs; and (ii) permit the ownership of two stations in the same DMA if their Grade B coverage areas do not overlap or if eight independently owned full power television stations will remain in the DMA after the stations that had been independently owned become commonly owned, and one of the merged stations is not among the top four-ranked stations in the market, based on audience share; and (iii) prohibitshare. On the question of common ownership of a broadcast station and a newspaper in the same market. market, the Commission modified its rules to create a presumption that such combinations are in the public interest in the top 20 DMAs provided (i) only one television station and one newspaper are involved; (ii) at least eight “major media voices” will remain in the DMA after the combination; and (iii) the television station is not among the top four-ranked stations in the market, based on audience share. Any other newspaper/broadcast combination is presumed to be inconsistent with the public interest. The presumption may be overcome if certain criteria enumerated by the FCC are satisfied. The February 2008 Order has been appealed by several parties, including the Company, and the appeal is currently pending in the United States Court of Appeals for the Ninth Circuit. It is not possible to predict the timing or outcome of the Court’s action on this appeal or its effect on the Company.

Fox Television Stations is in compliance with the rules governing ownership of multiple stations in the same market and with the national station ownership cap established by Congress. It is not possible to predict the timing or outcome of the FCC’s action on remand or its effect on the Company.

Fox Television Stations retains an attributable interest in thePost and two television stations in the New York DMA. In theOn October 6, 2006, Order, the FCC reaffirmed the Company’s permanent waiver of the newspaper/broadcast cross-ownership rule, which allows the common ownership of thePost and WNYW(TV), and granted a two-year temporary waiver of the rule to continue to allow the common ownership of thePostand WWOR-TV.WWOR-TV (the “October 2006 Order”). The WWOR-TV/Post combination is not entitled to a positive presumption under the FCC’s revised newspaper cross-ownership rule because of the Company’s ownership of a second television station in the New York DMA. The Company is seeking a permanent waiver of the prohibition from the FCC on the grounds that it satisfies the criteria to overcome the negative presumption contained in the new rule. Parties opposed to the FCC’s decisionOctober 2006 Order filed a petition for reconsideration with the agency and an appeal to the D.C. Circuit Court of Appeals, both of which are pending. It is not possible to predict the timing or outcome of the FCC’s or the Court’s action on these filings or their effect on the Company.

FCC regulations implementing the Cable Television Consumer Protection and Competition Act of 1992 (the “1992 Cable Act”) require each television broadcaster to elect, at three-year intervals, either to (i) require carriage of its signal by cable systems in the station’s market (“must carry”) or (ii) negotiate the terms on which that broadcast station would permit transmission of its signal by the cable systems within its market (“retransmission consent”). Generally, the Company has elected retransmission consent for the stations owned and operated by Fox Television Stations. On February 10, 2005,November 30, 2007, the FCC resolved issues relating to carriage requirements for digital broadcast television signals on cable systems by concluding that cable operators are not required by law to carry simultaneously theensure that all “must carry” television signals remain viewable in homes with only analog and digital signals of local television stations during the period of transition from analog to digital broadcasting. equipment.

In addition, the FCC concludedreaffirmed that “must carry” stations that “multicast” several streams of digital programming and that elect “must carry” are entitled to the carriage by cable systems of only a single “primary” programming stream. The digital signals of stations that elect retransmission consent may be carried in any manner consistent with the agreement between the cable system and the broadcaster. The Satellite Home Viewer Improvement Act of 1999 required satellite carriers, as of January 1, 2002, to carry upon request all television stations located in markets in which the satellite carrier retransmits at least one local station pursuant to the copyright license provided in the statute.statute (“Carry One, Carry All”). FCC regulations implementing this statutory provision require affected stations to elect either elect mandatory carriage at the same three year intervals applicable to cable must carry“must carry” or to negotiate carriage terms with the satellite operators. TheSatellite carriers are expected to seamlessly replace stations’ analog signals with digital signals during the DTV transition period. In March 2008, the FCC has yetdecided that its Carry One, Carry All policy also applies to decide what obligationslocal stations’ HD DTV signals; however, satellite carriers will have with respect tomay phase in the carriage of digital broadcast signals.all HD DTV signals in a DMA over a four year period beginning in February 2010.

Legislation enacted in 1990 limits the amount of commercial matter that may be broadcast during programming designed for children 12 years of age and younger. In addition, under FCC license renewal processing guidelines, television stations are generally required to broadcast a minimum of three hours per week of programming, which, among other requirements, must serve, as a “significant purpose,” the educational and informational needs of children 16 years of age and under. A television station found not to have complied with the programming requirements or commercial limitations could face sanctions, including monetary fines and the possible non-renewal of its license.

FCC rules prohibit the broadcast by television and radio stations of indecent or profane material between the hours of 6:00 a.m. and 10:00 p.m. Beginning in March 2004, the FCC implemented a new policy regarding this prohibition and generally stepped up its enforcement of indecency violations. Under the new policy, the single use of certain forbidden expletives, or variations of those expletives, were deemed “indecent” and “profane.” The FCC also warned broadcasters that serious multiple violations of the indecency prohibition could lead to license revocation proceedings, and that fines could be imposed for each incident in a single broadcast. Under the new FCC policy, both complaints about indecency and FCC enforcement actions have increased, and several complaints alleging the broadcast of alleged indecent or profane material by Fox Television Stations are pending at the FCC. In 2004, the FCC notified Fox Television Stations of apparent liability for a $175,000 forfeiture relating to the broadcast of an episode of the programMarried by America by the Company’s FOX Affiliates, including its owned and operated FOX stations. On March 15, 2006, the FCC notified Fox Television Stations of apparent liability for a $27,500 forfeiture relating to the broadcast of the movieThe Pursuit of D.B. Cooper by its owned and operated station KTVI(TV) in St. Louis, Missouri (the “March 15 Order”). Fox Television Stations is contesting bothcontested the forfeitures. The statute of limitations for issuance of a final forfeiture order has run without additional action by the FCC.

In the March 15 Order, the FCC also determined that the 2002 and 2003Billboard Music Awards programs, both live broadcasts on FOX, violated the prohibitions against indecent and profane broadcasts because they contained isolated uses of the forbidden expletives. However, since these broadcasts preceded the FCC’s March 2004 policy, no forfeiture or other penalty was imposed. Nonetheless, in April 2006, Fox Television Stations appealed the March 15 Order to the Second Circuit Court of Appeals (the “Second Circuit”). On June 4, 2007 the Second Circuit granted Fox’s appeal, vacatedvacating the FCC’s decision in theBillboard Music Awardscases as well as the FCC’s new policy on “fleeting expletives” in its entirety on the grounds that both were arbitrary and capricious. The Court remanded the case to the FCC for further proceedings consistent with the Court’s opinion. The United States sought review by the U.S. Supreme Court, which was granted. The Supreme Court case is likely to be argued in late calendar 2008. It is not possible to predict the timing or outcome of the Supreme Court’s action on this case or its effect on the Company.

On February 22, 2008, the FCC issued an order imposing forfeitures of $7,000 each on 13 FOX Affiliates, including five stations owned and operated by the Company, on the grounds that an April 7, 2003 episode of the programMarried by America violated the prohibition against indecent broadcasts. On April 4, 2008, the United States commenced an action in federal district court in the District of Columbia against the five Company-owned stations to collect the forfeitures imposed by the FCC. The Company moved to dismiss the suit on several grounds, including that the FCC’s forfeiture order is unconstitutional. It is not possible to predict the timing or outcome of this case or its effect on the Company.

On June 15, 2006, the Broadcast Decency Enforcement Act was signed into law. This law raises the maximum amount the FCC can impose for a violation of the prohibition against indecent and profane broadcasts from $32,500 to $325,000 per incident. Some members of Congress have supported extending the indecency rules applicable to free over-the-airfree-to-air broadcasters to cable and satellite programming, and/or requiring MVPDs to provide their subscribers with the option of purchasing programming on a channel by channel (or à la carte) basis or to provide them with a family - -friendlyfamily-friendly program tier without obligating the subscriber to purchase any other programming channels or tiers.

Modifications to the Company’s programming to reduce the risk of indecency violations could have an adverse effect on the competitive position of Fox Television Stations and FOX. If indecency regulation is extended to cable and satellite programming, and such extension was found to be constitutional, some of the Company’s cable programming services could be subject to additional regulation that might affect subscription and viewership levels. Regulation requiring à la carte or family-friendly program options might decrease the distribution of the Company’s cable services and increase their marketing expenses, which could affect results of operations.

The FCC continues to enforce strictly its regulations concerning political advertising, children’s television, environmental concerns, equal employment opportunity, technical operating matters and antenna tower maintenance. FCC rules require the closed captioning of almost all broadcast and cable programming. Although not required by FCC regulation, the Company has committed to provide program ratings information for its broadcast network programming for use in conjunction with V Chip technology, a technology that blocks the display of television programming based on its rating. FCC regulations governing network affiliation agreements mandate that television broadcast station licensees retain the right to reject or refuse network programming in certain circumstances or to substitute programming that the licensee reasonably believes to be of greater local or national importance. Violation of FCC regulations can result in substantial monetary forfeitures, periodic reporting conditions, short-term license renewals and, in egregious cases, denial of license renewal or revocation of license.

Asia.

STAR broadcasts television programming over a “footprint” covering approximately 53 countries. Government regulation of direct reception and redistribution via cable or other means of satellite television signals, where it is addressed at all, is treated differently throughout STAR’s footprint. At one extreme are absolute bans on private ownership of satellite receiving equipment. Some countries, however, have adopted a less restrictive approach, opting to allow ownership of satellite receiving equipment by certain institutions and individuals but allowing them to receive only authorized broadcasts. At the opposite end of the spectrum are countries where private satellite dish ownership is allowed and laws and regulations have been adopted which support popular access to satellite services through local cable redistribution.

Most television services within STAR’s footprint, whether free over-the-airfree-to-air or pay television, are also subject to licensing requirements, although these requirements are imposed on the local broadcast operators who collect the subscription fees rather than on program suppliers, such as STAR, which license local broadcast operators to receive their programming. In addition, most countries in STAR’s footprint control the content offered by local broadcast operators through censorship requirements to which program suppliers, such as STAR, are subject. Certain countries also impose obligations to carry government-operated or terrestrial channels or require a minimum percentage of local content. Other countries require local broadcast operators to obtain government approval to retransmit foreign programming.

Most countries within STAR’s footprint, including in STAR’s keyprimary markets (India, mainland ChinaIndonesia and Taiwan)Greater China), have a regulatory framework for the satellite and cable television industry.

India.In India, private satellite dish ownership, including DTH, is allowed. Television viewers receive broadcast television signals primarily through terrestrial and cable delivery and in more recent years, DTH delivery.

All cable television operators are required to carry certain government-operated channels. Retransmissions of foreign satellite channels, such as STAR’s channels in India, are permitted, subject to licensing requirements and compliance with local applicable laws, including censorship codes. The Indian government also places certain restrictions on advertising and requires that certain media, whether produced in India or abroad, must be certified by the Central Board of Film Certification prior to exhibition in India. Recently the Indian government also amended its Advertising Code to restrict the telecast of advertisement of certain products, especially those relating to the tobacco & liquor industry.

Limits are imposed by the Indian government on the increase in the year-on-year prices payable by cable operators to broadcasters for certain channels, including certain STAR channels. In addition, maximum retail prices have been mandated for different categories of cities. There is no tariff regulation for DTH; however, broadcasters are required to offer their channels to DTH platforms at 50% of the rates charged byto analogue cable operators. Broadcasters such as STAR are required to publish basic distribution terms specifying the bouquet and “à la carte” rates within a price matrix formula to enable the distributors to take channels at their discretion. Broadcasters are also required to provide their channels on non-discriminatory terms to all distributors.

In certain metropolitan areas, viewers are required to buy or rent a set-top-box from cable operators to access pay television channels, which allows viewers to choose the pay television channels they wish to subscribe to on an à la carte basis, rather than on a bundled basis. Further, cable operators are required to provide a pay television channel at a capped retail price, of which the broadcasters’ share is restricted to 45%. Broadcasters and cable operators must execute standard format agreements regarding the provision of television signals in certain metropolitan areas.

China.In mainland China, private satellite dish ownership is prohibited except with special approval for hotels, government and foreign institutions which can receive only authorized broadcasts. Local cable and free over-the-airfree-to-air terrestrial operators are required to broadcast a minimum percentage of local content and retransmission of foreign satellite channels by local operators is prohibited except with special approval.

Taiwan.In Taiwan, private satellite dish ownership is allowed. The maximum subscription fee chargeable by cable television operators is set by both the national and local governments. Cable television operators offer analog basic channels in a single package and digital premium channels in packages or on an à la carte basis as a

buy through to their basic analog service. All channels offered in Taiwan must be licensed. Retransmission of foreign satellite programming by local cable operators is permitted, but local cable operators are also required to carry terrestrial channels and broadcast a minimum percentage of local content.

Additional categories of regulation of actual or potential significance to STAR within its footprint are restrictions on foreign investment in platform, television programming, production or channel businesses, uplink-downlink licensing regulations, content protection under copyright or communications law, limitations on exclusive arrangements for channel distribution and non-discrimination requirements for supply or carriage of programming.

Cable Network Programming

FCC regulations adopted pursuant to the 1992 Cable Act (the “Program Access Rules”) prevent a cable operator that has an attributable interest (including voting or non-voting stock ownership of 5% or more or limited partnership equity interests of 5% or more) in a programming vendor from exercising undue or improper influence over the vendor in its dealings with competitors to cable. The Program Access Rules also prohibit a cable programmer in which a cable operator has an attributable interest from entering into exclusive contracts with any cable operator or from discriminating among competing MVPDs in the price, terms and conditions of sale or delivery of programming. As a result of Liberty’s ownership interestthe closing in February 2008 of the Company and the conditions imposed on the Companytransactions contemplated by the FCC in connection with the Company’s acquisition of an interest in DIRECTV,Share Exchange Agreement, cable networks operated by the Company are no longer subject to the Program Access Rules. These regulations therefore restrict the ability of the Company’s cable programming services to enter into exclusive contracts. The rules also permit MVPDs (such as cable operators, multi-channel multi-point distribution services, satellite master antenna television services, DBS and DTH operators) to bring complaints against the Company to the FCC charging they are unable to obtain the affected programming networks on nondiscriminatory terms and conditions.

Program Access Conditions

In connection with its approval of the transfer of licenses controlled by DIRECTV to the Company, the FCC imposed the following conditions relating to the carriage and availability of its broadcast and cable programming services: (i) extended the requirements of the Program Access Rules to DIRECTV; (ii) extended the non-discrimination requirements of the Program Access Rules to any television station owned and operated or represented by the Company with respect to negotiations or agreements for retransmission consent and required the Company to negotiate in “good faith” over retransmission consent rights for as long as the Program Access Rules are in effect; (iii) required the Company to enter into commercial arbitration if negotiations with an MVPD over retransmission consent for its television stations’ signals and/or carriage of the regional sports networks it owns, controls or manages reach an impasse; and (iv) prohibited the Company from unduly or improperly influencing the decision of any affiliated program rights holder (a program rights holder that holds an attributable interest in the Company or in which the Company holds an attributable interest) to sell programming to an unaffiliated MVPD, or the prices, terms and conditions of such a sale. As a result of the closing in February 2008 of the transactions contemplated by the Share Exchange Agreement, all these conditions were terminated except for the commercial arbitration condition, which by its terms expires on January 14, 2010. The Company has asked the FCC for immediate termination of the arbitration condition on the grounds it is no longer necessary in light of the Company’s divestiture of its interest in DIRECTV. It is not possible to predict the timing or outcome of FCC action on this request.

Internet

The Children’s Online Privacy Protection Act of 1998 (“COPPA”) prohibits web siteswebsites 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 the Company may be subject to COPPA and CAN-SPAM requirements. Congress and individual states may also consider online privacy legislation that would apply to personal information collected from teens and adults.

In addition, theThe federal government and some state governments have introduced or considered legislation relating to Internet usage generally, including measures relating to privacy and data security, as well as specific legislation aimed at social networking sites, such as MySpace.com. Some foreign governments are raising similar safety, security and privacy concerns. Because most of such legislationactivity is in its

early stages, it is unclear how thisany government action would affect the Company’s business conducted on the Internet. TheCompanyThe Company monitors pending legislation and regulatory initiatives to ascertain relevance, analyze impact and develop strategic direction surrounding regulatory trends and developments withindevelopments. The Company is also working closely with other members of the industry.industry to engage in self-regulation to address government concerns wherever possible.

Raw Materials

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

Intellectual Property

The Company’s intellectual property assets include: copyrights in motion pictures, television programming, newspapers, books, magazines, websites and technologies; trademarks in names, logos and characters; domain names; patents or patent applications for inventions related to its products, business methods and/or services; and licenses of intellectual property rights of various kinds. The Company derives value from these assets through the theatrical release of films and the production, distribution and/or licensing of its films and television programming to

domestic and international television and cable networks, pay television services, pay-per-view, video-on-demand services and direct-to-home satellite services, operation of websites, and through the sale of products, such as DVDs, books, newspapers and magazines, among others.

The Company devotes significant resources to protecting its intellectual property in the United States and other key foreign territories. To protect these assets, the Company relies upon a combination of copyright, trademark, unfair competition, patent, trade secret and Internet/domain name statutes and 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 the Company’s products and services and related intellectual property is often difficult and the steps taken may not in every case prevent the infringement by unauthorized third parties of the Company’s intellectual property. The Company seeks to limit that threat through a combination of approaches, including offering legitimate market alternatives, deploying digital rights management technologies, 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. In addition, piracy,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 the Company’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 which could have an adverse effect on the Company’s operations. Moreover, effective intellectual property protection may be either unavailable or limited in certain foreign territories. Therefore, the Company 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.

ITEM 1A.     RISK FACTORS

Prospective investors should consider carefully the risk factors set forth below before making an investment in the Company’s securities.

A Decline in Advertising Expenditures Could Cause the Company’s Revenues and Operating Results to Decline Significantly in any Given Period or in Specific Markets.

The Company derives substantial revenues from the sale of advertising on or in its television stations, broadcast and cable networks, newspapers and inserts, websites and DBS services. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities. Demand for the Company’s products is also a factor in determining advertising rates. For example, ratings points for the Company’s television stations, broadcast and cable networks and circulation levels for the Company’s newspapers are factors that are weighed when determining advertising rates, and with respect to the Company’s television stations and broadcast and television networks, when determining the affiliate rates received by the Company. In addition, newer technologies, including new video formats, streaming and downloading capabilities via the Internet, video-on-demand, personal video recorders and other devices and technologies are increasing the number of media and entertainment choices available to audiences. Some of these devices and technologies allow users to view television or motion pictures from a remote location or on a time- delayedtime-delayed basis and provide users the ability for users to fast-forward, rewind, pause and skip programming. These technological developments are increasing the number of media and entertainment choices available to audiences and may cause changes in consumer behavior that could affect the attractiveness of the Company’s offerings to viewers, advertisers and/or distributors. A decrease in advertising expenditures or reduced demand for the Company’s offerings can lead to a reduction in pricing and advertising spending, which could have an adverse effect on the Company’s businesses.

Acceptance of the Company’s Film and Television Programming by the Public is Difficult to Predict, Which Could Lead to Fluctuations in Revenues.

Feature film and television production and distribution are speculative businesses since the revenues derived from the production and distribution of a feature film or television series depend primarily upon its acceptance by the public, which is difficult to predict. The commercial success of a feature film or television series also depends upon the quality and acceptance of other competing films and television series released into the marketplace at or near the same time, the availability of a growing number of alternative forms of entertainment and leisure time activities, general economic conditions and other tangible and intangible factors, all of which can change and cannot be predicted with certainty. Further, the theatrical success of a feature film and the audience ratings for a television series are generally key factors in generating revenues from other distribution channels, such as home entertainment and premium pay television, with respect to feature films, and syndication, with respect to television series.

The Loss of Carriage Agreements Could Cause the Company’s Revenue and Operating Results to Decline Significantly in any Given Period or in Specific Markets.

The Company is dependent upon the maintenance of affiliation agreements with third-partythird party owned television stations, and there can be no assurance that these affiliation agreements will be renewed in the future on terms acceptable to the Company. The loss of a significant number of these affiliation arrangements could reduce the distribution of FOX and MyNetworkTV and adversely affect the Company’s ability to sell national advertising time. Similarly, the Company’s cable networks maintain affiliation and carriage arrangements that enable them to reach a large percentage of cable and direct broadcast satellite households across the United States. The loss of a significant number of these arrangements or the loss of carriage on basic programming tiers could reduce the distribution of the Company’s cable networks, which may adversely affect those networks’ revenues from subscriber fees and their ability to sell national and local advertising time.

The Inability to Renew Sports Programming Rights Could Cause the Company’s Advertising Revenue to Decline Significantly in any Given Period or in Specific Markets.

The sports rights contracts between the Company, 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 the Company and its affiliates, as it relates to FOX, and could adversely affect the Company’s advertising and affiliate revenues. Upon renewal, the Company’s results could be adversely affected if escalations in sports programming rights costs are unmatched by increases in advertising rates and, in the case of cable networks, subscriber fees.

Technological Developments May Increase the Threat of Content Piracy and Signal Theft and Limit the Company’s Ability to Protect Its Intellectual Property Rights.

The Company seeks to limit the threat of content piracy and DBS programming signal theft; however, policing unauthorized use of the Company’s products and services and related intellectual property is often difficult and the steps taken by the Company may not in every case prevent the infringement by unauthorized third parties. Developments in technology, including digital copying, file compressing and the growing penetration of high-bandwidth Internet connections, increase the threat of content piracy by making it easier to duplicate and widely distribute pirated material. In addition, developments in software or devices that circumvent encryption technology increase the threat of unauthorized use and distribution of DBS programming signals. The Company has taken, and will continue to take, a variety of actions to combat piracy and signal theft, both individually and, in some instances, together with industry associations. There can be no assurance that the

Company’s efforts to enforce its rights and protect its products, services and intellectual property will be successful in preventing content piracy or signal theft. Content piracy and signal theft present a threat to the Company’s revenues from products and services, including, but not limited to, films, television shows, books and DBS programming.

Labor Disputes May Have an Adverse Effect on the Company’s BusinessBusiness..

In a variety of the Company’s business,businesses, the Company and its partners engage the services of writers, directors, actors and other talent, trade employees and others who are subject to collective bargaining agreements, including employees of the Company’s film and television studio operations and newspapers. If the Company or its partners are unable to renew expiring collective bargaining agreements, certain of which have or are expiring within the next year or so, 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 the Company’s business by causing delays in production or by reducing profit margins.

Changes in U.S. or Foreign Communications Laws and Other Regulations May Have an Adverse Effect on the Company’s Business.

In general, the television broadcasting and multichannel video programming and distribution industries in the United States are highly regulated by federal laws and regulations issued and administered by various federal agencies, including the FCC. The FCC generally regulates, among other things, the ownership of media, broadcast and multichannel video programming and technical operations of broadcast and satellite licensees. Further, the United States Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters, including technological changes, which could, directly or indirectly, affect the operations and ownership of the Company’s U.S. media properties. Similarly, changes in regulations imposed by governments in other jurisdictions in which the Company, or entities in which the Company has an interest, operate could adversely affect its business and results of operations.

Provisions in the Company’s Corporate Documents, Delaware Law and the Ownership of the Company’s Class B Common Stock by Certain Principal Stockholders Could Delay or Prevent a Change of Control of News Corporation, Even if That Change Would be Beneficial to the Company’s Stockholders.

The existence of some provisions in the Company’s corporate documents could delay or prevent a change of control of News Corporation, even if that change would be beneficial to the Company’s stockholders. The Company’s Restated Certificate of Incorporation and Amended and Restated By-laws, contain provisions that may make acquiring control of News Corporation difficult, including:

In addition, the Company currently has in placeOn April 15, 2008, as a stockholder rights plan, which would cause extreme dilution to any person or group that attempts to acquire a significant interest in the Company without advance approvalresult of the Board. closing of the transactions contemplated under the Share Exchange Agreement, the Board approved the elimination of the Company’s classified board structure beginning at the Company’s annual meeting of stockholders to be held in 2008, subject to stockholder approval at that meeting by the Company’s Class B common stockholders of an amendment to the Company’s Restated Certificate of Incorporation to allow for the annual election of directors.

Further, as a result of Mr. K. Rupert Murdoch’s ability to appoint certain members of the board of directors of the corporate trustee of the Murdoch Family Trust, which beneficially owns 1.6%0.5% of the Company’s Class A Common Stock and 30.1%37.2% of theits Class B Common Stock, Mr. K. Rupert Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the Murdoch Family Trust. Mr. K. Rupert Murdoch, however, disclaims any beneficial ownership of those shares. Also, Mr. K. Rupert Murdoch beneficially owns an additional 1.2%1.1% of the Company’s Class A Common Stock and 1.1%1.3% of theits Class B Common Stock. Thus, Mr. K. Rupert Murdoch may be deemed to beneficially own in the aggregate 2.7%1.7% of the Company’s Class A Common Stock and 31.2%38.6% of the Company’s Class B Common Stock. If the Share Exchange Agreement is consummated, the Company intends to redeem the rights issued under the stockholder rights plan at that time and to take the necessary steps to declassify its classified board structure. Further, if the Share Exchange Agreement is consummated,Company completes its previously announced stock repurchase program, the aggregate voting power represented by the shares of the Company’s Class B Common Stock held by Mr. K. Rupert Murdoch and the Murdoch Family Trust would increase to approximately 38.6%40.3% of the Company’s aggregate voting power, subject to further increase to approximately 40.0% if the Company completes its previously announced stock repurchase program.power.

None.

The Company owns and leases various real properties in the United States, Europe, Australia and Asia which 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. The Company’s policy is to improve and replace property as considered appropriate to meet the needs of the individual operation.

United States

The Company’s principal real properties in the United States are the following:

machinery, equipment facilities and threefour restaurants. FEG also leases office space at Fox Plaza, located adjacent to the Fox Studios Lot;

Europe

The Company’s principal real properties in Europe are the following:

In addition, SKY Italia has entered into an agreement for the construction and subsequent lease to SKY Italia of premises that will contain the new head offices and television production and transmission studios for SKY Italia operations in Milan. Pursuant to the agreement, SKY Italia will occupy approximately the majority of such space in MarchAugust 2008 and will occupy the remaining space by October 2009. SKY Italia also has an option to increase the total surface area of the portion of the space designated as office space.

Australia and Asia

The Company’s principal real properties in Australia and Asia are the following:

(c)

The leased facilities of News Digital Media and News Magazines in Sydney, Australia;

ITEM 3.

LEGAL PROCEEDINGS

NDS

Echostar Litigation

On June 6, 2003, Echostar Communications Corporation, Echostar Satellite Corporation, Echostar Technologies Corporation and Nagrastar L.L.C. (collectively, “Echostar”) filed an action against NDS in the United States District Court for the Central District of California. Echostar filed an amendedThat complaint on October 8, 2003, which purported to allege claims for violation of the Digital Millennium Copyright Act (“DMCA”), the Communications Act of 1934 (“CA”Communications Act”), the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California’s Unfair Competition statuteLaw (“UCL”) and the federal Racketeer Influenced and Corrupt Organizations (“RICO”) statute. The complaint also purported to allege claims for civil conspiracy, misappropriation of trade secrets and interference with prospective business advantage. The complaint sought injunctive relief, unspecified compensatory and exemplary damages and restitution. On December 22, 2003, allExtensive motion practice ensued regarding this complaint, regarding subsequent complaints filed by Echostar, and regarding counterclaims asserted by NDS.

The trial of this case began April 9, 2008. Echostar’s claims under the DMCA, the Communications Act, the California Penal Code, and RICO were tried to the jury, Echostar’s UCL claim was tried to the court and NDS’ counterclaim under the California Uniform Trade Secrets Act was tried to the jury. All other claims were either dismissed by the court except foror abandoned by the DMCA, CAparties.

On May 15, 2008, the jury returned its verdict. The jury found NDS not liable on three counts and unfair competition claims,awarded minimal damages on the remaining three counts. On those latter three counts, the jury awarded Echostar actual damages of $45.69 or, in the alternative, statutory damages of $1,000. NDS believes that these awards relate to a single incident involving a test of a card during the course of NDS’s anti-piracy efforts. The jury found Echostar not liable on NDS’s counterclaim.

One claim, Echostar’s UCL claim, has not yet been decided. By law, this claim must be decided by the judge rather than the jury. Any ruling on that claim must be consistent with the jury’s verdict, however, and the court limited these claimshas not yet provided a decision on the UCL claim. A hearing on the UCL claim has been set for August 19, 2008.

Echostar has expressed publicly an intention to acts allegedly occurring within three yearsseek an award of the filing of Echostar’s original complaint.

Afterattorneys’ fees and costs. NDS believes that any such claim by Echostar filed a second amended complaint, NDS filed a motion to dismiss this complaint on March 31, 2004. On July 21, 2004, the court issued an order directing Echostar to, among other things, file a third amended complaint within ten days correcting various deficiencies noted in the second amended complaint. Echostar filed its third amended complaint on August 4, 2004. On August 6, 2004, the court ruled that NDS was free to file a motion to dismiss the third amended complaint, which NDS did on September 20, 2004. The hearing occurred on January 3, 2005. On February 28, 2005, the court issued an order treating NDS’s motion to dismiss as a motion for a more definite statement, granting the motion and giving Echostar until March 30, 2005 to file a fourth amended complaint correcting various deficiencies noted in the third amended complaint. On March 30, 2005, Echostar filed a fourth amended complaint, which NDS moved to dismiss. On July 27, 2005, the court granted in part and denied in part NDS’s motion to dismiss, and again limited Echostar’s surviving claims to acts allegedly occurring within three years of the filing of Echostar’s original complaint. NDS’s management believes these surviving claims arewould be without merit and NDS intends to vigorously defend against them.

On October 24, 2005, NDS filed its Amended Answer with Counterclaims, alleging that Echostar misappropriated NDS’s trade secrets, violated the Computer Fraud and Abuse Act and engaged in unfair competition. On November 8, 2005, Echostar moved to dismiss NDS’s counterclaims for conversion and claim and delivery, arguing that these claims were preempted and time-barred. Echostar also moved for a more definite

statement of NDS’s trade secret misappropriationany such claim. On December 8, 2005, the court granted in part and denied in part Echostar’s motion to dismiss and for a more definite statement, but granted NDS leave to file amended counterclaims. On December 13, 2005, NDS filed a Second Amended Answer with Counterclaims, which Echostar answered on December 27, 2005. The court has set this case to go to trial in February 2008.

Sogecable Litigation

On July 25, 2003, Sogecable, S.A. and its subsidiary Canalsatellite Digital, S.L., Spanish satellite broadcasters and customers of Canal+ Technologies SA (together, “Sogecable”), filed an action against NDS in the United States District Court for the Central District of California. Sogecable filed an amended complaint on October 9, 2003, which purported to allege claims for violation of the Digital Millennium Copyright ActDMCA and the federal RICO Act.statute. The amended complaint also purported to allege claims for interference with contract and prospective business advantage. The complaint sought injunctive relief, unspecified compensatory and exemplary damages and restitution. On December 22, 2003, all of the claims were dismissed by the court. Sogecable filed a second amended complaint. NDS filed a motion to dismiss the second amended complaint on March 31, 2004. On August 4, 2004, the court issued an order dismissing the second amended complaint in its entirety. Sogecable had until October 4, 2004 to file a third amended complaint. On October 1, 2004, Sogecable notified the court that it would not be filing a third amended complaint, but would appeal the court’s entry of final judgment dismissing the suit to the United States Ninth Circuit Court of Appeals. On December 14, 2006, the appellate court issued a memorandum decision reversing the district court’s dismissal. On January 26, 2007, NDS filed its petition for rehearing by an en banc panel of the United States Ninth Circuit Court of Appeals. On February 21, 2007, the petition was denied. On June 11, 2007, NDS filed a petition for a Writ of Certiorari in the United States Supreme

Court seeking reversal of the Ninth Circuit Court of Appeals’ decision. On August 27, 2007, NDS renewed its motion to dismiss the second amended complaint on grounds not previously decided. On October 1, 2007, the petition for a Writ of Certiorari was denied. On January 25, 2008, the court issued an order granting-in-part and denying-in-part the Company’s renewed motion to dismiss Sogecable’s second amended complaint. The Companycourt dismissed Sogecable’s claim for tortious interference with prospective economic advantage, but allowed Sogecable to proceed on its RICO and DMCA claims, as well as its claim for tortious interference with contract. The court has set February 16, 2010 as the trial date. NDS believes that Sogecable’s claims are without merit and will continue to vigorously defend itself in this matter.

Intermix

FIM Transaction

On August 26, 2005 and August 30, 2005, two purported class action lawsuits captioned, respectively, Ron Sheppard v. Richard Rosenblatt et. al., and John Friedmann v. Intermix Media, Inc. et al., were filed in the California Superior Court, County of Los Angeles. Both lawsuits named as defendants all of the then incumbent members of the Intermix Board, including Mr. Rosenblatt, Intermix’s former Chief Executive Officer, and certain entities affiliated with VantagePoint Venture Partners (“VantagePoint”), a former major Intermix stockholder. The complaints alleged that, in pursuing the transaction whereby Intermix was to be acquired by FIM (the “FIM Transaction”) and approving the related merger agreement, the director defendants breached their fiduciary duties to Intermix stockholders by, among other things, engaging in self-dealing and failing to obtain the highest price reasonably available for Intermix and its stockholders. The complaints further alleged that the merger agreement resulted from a flawed process and that the defendants tailored the terms of the merger to advance their own interests. The FIM Transaction was consummated on September 30, 2005. TheFriedmann and Sheppard lawsuits were subsequently consolidated and, on January 17, 2006, a consolidated amended complaint was filed (the “Intermix Media Shareholder Litigation”). The plaintiffs in the consolidated action are seekingsought various forms of declaratory relief, damages, disgorgement and fees and costs. On March 20, 2006, the court ordered that substantially identical claims asserted in a separate state action filed by Brad Greenspan, captioned Greenspan v. Intermix Media, Inc., et al., be severed and related to theIntermix Media Shareholder Litigation. The defendants filed demurrers seeking dismissal of all claims in the Intermix Media Shareholder Litigation and the severed Greenspan claims, which were heard by the Courtcourt on July 6, 2006. On October 6, 2006, the court sustained the demurrers without leave to amend. On December 13, 2006, the court dismissed the complaints and entered judgment for the defendants. On February 6, 2007,Greenspan and plaintiffs in theIntermix Media Shareholder Litigation plaintiffs filed notices of appeal, and subsequently filed respective opening briefs on appeal in October 2007. Defendants filed opposing appellate briefs on April 16, 2008. The shareholder appellant reply brief was filed on July 10, 2008. Greenspan did not file a notice of appeal. Although their opening brief is currently due on August 24, 2007, plaintiffs have requested that the Court of Appeal grant them an extension of this due date to October 23, 2007.reply brief. The Court of Appeal has not yet ruled on this request. The matter will likely not be fully briefedheard argument in the matter. After the lower court sustained the demurrers in the Intermix Media Shareholder Litigation, co-counsel for certain of plaintiffs moved for an award of attorney’s fees and ready for oral argument untilcosts under a common law substantial benefit theory. On October 4, 2007, the first halfcourt granted the motion and denied defendants’ application to tax costs. Defendants filed a notice of 2008.appeal.

In November 2005, plaintiff in a derivative action captioned LeBoyer v. Greenspan et al. pending against various former Intermix directors and officers in the United States District Court for the Central District of California filed a First Amended Class and Derivative Complaint (the “Amended Complaint”). The original derivative action was filed in May 2003 and arose out of Intermix’s restatement of quarterly financial results for its fiscal year ended March 31, 2003. Until the filing of the Amended Complaint, the action had been stayed by mutual agreement of the parties since its inception. A substantially similar derivative action filed in Los Angeles Superior Court was dismissed based on inability of the plaintiffs to adequately plead demand futility. Plaintiff LeBoyer’s November 2005 Amended Complaint added various allegations and purported class claims arising out of the FIM Transaction which are substantially similar to those asserted in the Intermix Media Shareholder Litigation. The Amended Complaint also addsadded as defendants the individuals and entities named in the Intermix Media Shareholder Litigation that were not already defendants in the matter. On July 14, 2006, the parties filed their briefing on defendants’ motion to dismiss and stay the matter. On October 16, 2006, the court dismissed the

fourth through seventh claims for relief, which related to the 2003 restatement, finding that the plaintiff is precluded from relitigating demand futility. At the same time, the court asked for further briefing regarding plaintiffs’ standing to assert derivative claims based on the standing issues andFIM Transaction, including for alleged violation of Section 14(a) of the Exchange Act, the effect of the state judge’s dismissal of the claims in the Greenspan case and the Intermix Media Shareholder Litigation on the remaining claims, which include two direct class action claims related to allegedalleging breaches of fiduciary duty and other common law claims leading up to the FIM Transaction and a third claim under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) asserted as a derivative claim and alleging material misstatements and omissions in the FIM Transaction proxy statement.Transaction. The parties filed the requested additional briefing in which the defendants requested that the court stay the federal court proceedingsdirect LeBoyer claims pending the resolution of any appeal in the Greenspan case and the Intermix Media Shareholder Litigation. The court vacated the scheduled November 27, 2006 hearing with respect to this briefing and took the matter under submission. The court denied the stay in anBy order dated May 22, 2007, the court granted defendants’ motion to dismiss the derivative claims arising out of the FIM Transaction, and asdenied the defendants’ request to stay the two remaining direct claims. As explained in more detail in the next paragraph, the court subsequently consolidated this case with theBrown v. Brewer action also pending before the court. On July 11, 2007, plaintiffs filed the consolidated first amended complaint. Pursuant to the stipulated briefing schedule ordered by the court, the parties’ joint brief is dueon defendants’ motion to bedismiss the consolidated complaint was filed on October 11, 2007.2007 and taken under submission. By order dated January 17, 2008, the court granted in part defendants’ motion to dismiss, with leave to amend, as explained in greater detail under the discussion of the consolidated case, Brown v. Brewer, below. On February 8, 2008, plaintiffs filed a consolidated Second Amended Complaint. Defendants filed motions to dismiss on February 28, 2008. Plaintiffs filed their consolidated opposition brief on March 28, 2008, and the defendants filed their reply briefs on April 18, 2008. By order dated July 15, 2008, the court granted in part and denied in part defendants’ motion to dismiss. The court ordered the remaining defendants to answer the remaining claims within 20 days.

On June 14, 2006, a purported class action lawsuit, captioned Jim Brown v. Brett C. Brewer, et al., was filed against certain former Intermix directors and officers in the United States District Court for the Central District of California. The plaintiff assertsasserted claims for alleged violations of Section 14a of the Exchange Act and SEC Rule 14a-9, as well as control person liability under Section 20a. The plaintiff allegesalleged that certain defendants disseminated false and misleading definitive proxy statements on two occasions: one on December 30, 2003 in connection with the shareholder vote on January 29, 2004 on the election of directors and ratification of financing transactions with certain entities of VantagePoint, Venture Partners (“VantagePoint”), a former large stockholder of Intermix, and another on August 25, 2005 in connection with the shareholder vote on the FIM Transaction. The complaint namesnamed as defendants certain VantagePoint related entities and the members of the Intermix Board who were incumbent on the dates of the respective proxy statements. Intermix iswas not named as a defendant, but has certain indemnity obligations to the former officer and director defendants in connection with these claims and allegations. Intermix believes that the claims are without merit and expects that the individual defendants will vigorously defend themselves in the matter. On August 25, 2006, plaintiff amended his complaint to add certain investment banks (the “Investment Banks”) as defendants. Intermix has certain indemnity obligations to the Investment Banks as well. After conferring with defendants concerning deficiencies in the amended complaint pursuant to local rule and entering a stipulation with defendants regarding a briefing schedule, plaintiffPlaintiff amended his complaint again on September 27, 2006. On October 19, 2006, defendants filed motions to dismiss all claims in the Second Amended Complaint. These motions were scheduled to be heard on February 12, 2007. On February 9, 2007, the case was transferred from Judge Walter to Judge George H. King, the judge assigned to the LeBoyer action on the grounds that it raises substantially related questions of law and fact as LeBoyer, and would entail substantial duplication of labor if heard by different judges. Judge King took the February 26, 2007 hearing date for the motions to dismiss off-calendar. On May 22,June 11, 2007, Judge King ordered a combined status conference with theLeBoyer action occur on June 11, 2007 at which he ordered theBrown case be consolidated with theLeBoyer action. Judge King also stated that he was not going to consider the pending motions to dismiss but ratheraction, ordered plaintiffs’ counsel to file a consolidated first amended complaint,

setting forth the causes of action in theLeBoyer andBrownmatters and further ordered the parties to file a joint brief regarding dismissal ofon defendants’ contemplated motion to dismiss the consolidated first amended complaint. On July 11, 2007, plaintiffs filed the consolidated first amended complaint. Pursuant to the stipulated briefing schedule ordered by the court, the parties’ joint brief is dueon defendants’ motion to bedismiss was filed on October 11, 2007. Intermix believes that2007 and was taken under submission without a hearing. By order dated January 17, 2008, Judge King granted defendants’ motion to dismiss the 2003 proxy claims (concerning VantagePoint transactions) and the 2005 proxy claims (concerning the FIM Transaction), as well as a claim against the VantagePoint entities alleging unjust enrichment. The court found it unnecessary to rule on dismissal of the remaining claims, which are without meritrelated to the 2005 FIM Transaction, because the dismissal disposed of those claims. On February 8, 2008, plaintiffs filed a consolidated Second Amended Complaint. Defendants filed

motions to dismiss on February 28, 2008. Plaintiffs filed their consolidated opposition brief on March 28, 2008, and expects the individual defendants will vigorously defend themselvesfiled their reply briefs on April 18, 2008. By order dated July 15, 2008, the court granted in part and denied in part defendants’ motion to dismiss. The court ordered the matter.remaining defendants to answer the remaining claims within 20 days.

Greenspan Litigation

On February 10, 2005, Brad Greenspan, Intermix’s former Chairman and Chief Executive Officer who was asked to resign as CEO and was removed as Chairman in the fall of 2003, filed a derivative complaint in Los Angeles Superior Court against Intermix, various of its former directors and officers, VantagePoint and certain of VantagePoint’s principals and affiliates. The complaint alleged claims of libel and fraud against Intermix and various of its then current and former officers and directors, claims of intentional interference with contract and prospective economic advantage, unfair competition and fraud against VantagePoint and certain of its affiliates and principals and claims alleging that Intermix’s forecasts of profitability leading up to its January 2004 annual stockholder meeting and associated proxy contest waged by Mr. Greenspan were false and misleading. These claims generally related to Intermix’s decision to consummate its Series C Preferred Stock financing with VantagePoint in October 2003, Mr. Greenspan’s contemporaneous separation from Intermix and matters arising during the proxy contest. The complaint also alleged that Intermix’s acquisition of the assets of a company known as Supernation LLC (“Supernation”) in July 2004 involved breaches of fiduciary duty. Mr. Greenspan sought remittance of compensation received by the various then current and former Intermix director and officer defendants, unspecified damages, removal of various Intermix directors, disgorgement of unspecified profits, reformation of the Supernation purchase, punitive damages, fees and costs, injunctive relief and other remedies. Intermix and the other defendants filed motions challenging the validity of the action and Mr. Greenspan’s ability to pursue it. Mr. Greenspan voluntarily dismissed this action in October 2005.

Prior to dismissing his derivative lawsuit, in August 2005, Mr. Greenspan filed another complaint in Los Angeles Superior Court against the same defendants. The complaint, for breach of fiduciary duty, included substantially the same allegations made by Mr. Greenspan in the above-referenced lawsuit. Mr. Greenspan further alleged that defendants’ actions have, with the FIM Transaction, culminated in the loss of Mr. Greenspan’s interest in Intermix for a cash payment allegedly below its value. On October 31, 2005, the defendants filed motions seeking dismissal of the lawsuit on the grounds that the complaint failsfailed to state any cause of action. Instead of responding to these motions, Mr. Greenspan filed an amended complaint on February 21, 2006, in which Mr. Greenspan omitted certain previously named defendants and added two other former directors as defendants. In this amended complaint, Mr. Greenspan assertsasserted seven causes of action. The first two causes of action, for intentional interference with prospective economic advantage and violation of California’s Business Professions Code section 17200, generally related to Intermix’s decision to consummate its Series C Preferred Stock financing with VantagePoint in October 2003 and allege that Mr. Greenspan was “forced” to resign. The third through sixth causes of action assertasserted various claims for breach of fiduciary duty related to the FIM Transaction and substantially mirrormirrored the allegations in the Intermix Media Shareholder Litigation. By Order of March 20, 2006, the court ordered that Mr. Greenspan’s claims based on the FIM Transaction be severed from the rest of his complaint and coordinated with the claims asserted in the Intermix Media Shareholder Litigation. TheMr. Greenspan asserted a seventh cause of action is asserted against Intermix for indemnification. In his amended complaint, Mr. Greenspan seekssought compensatory and consequential damages, punitive damages, fees and costs, injunctive relief and other remedies. Motions to dismiss the first six causes of action were filed and, on October 6, 2006, granted without leave to amend. On November 21, 2006, Mr. Greenspan dismissed with prejudice the seventh cause of action for indemnity, which was the only remaining claim and his sole cause of action against Intermix. On January 24, 2007, Mr. Greenspan filed a notice of appeal of the court’s October 6, 2006 ruling. Mr. Greenspan’s opening brief in the Court of Appeal is currently due August 24,was filed on October 23, 2007. The matter will likely Intermix Media Shareholder appeal and Greenspan appeal have been coordinated in the court of appeal. Defendants filed a joint opposing appeal brief in both matters on April 16, 2008. The shareholder appellant reply brief was filed on July 10, 2008. Greenspan did not be fully briefed and ready for oral argument until the first half of 2008.file a reply brief. No hearing date has been set yet.

News America Marketing

On January 18, 2006, Valassis Communications, Inc. (“Valassis”) filed a complaint against News America Incorporated, News America Marketing FSI,LLC and News America Marketing Services, In-Store, LLC (collectively “News America”) in the United States District Court for the Eastern District of Michigan. Valassis alleges that News America possesses monopoly power in a claimed in-store advertising and promotions market (the “in-store market”) and has used that power to gain an unfair advantage over Valassis in a purported market for coupons distributed by free standingfree-standing inserts (“FSIs”). Valassis alleges that News America is attempting to monopolize the purported FSI market by leveraging its alleged monopoly power in the purported in-store market, thereby allegedly violating Section 2 of the Sherman Antitrust Act of 1890, as amended (the “Sherman Act”). Valassis further alleges that News America has unlawfully bundled the sale of in-store marketing products with the sale of FSIs and that such bundling constitutes unlawful tying in violation of Sections 1 and 3 of the Sherman Act. Additionally, Valassis alleges that News America is predatorily pricing its FSI products in violation of Section 2 of the Sherman Act. Valassis also asserts that News America violated various state antitrust statutes and has tortiously interfered with Valassis’ actual or expected business relationships. Valassis’ complaint seeks injunctive relief, damages, fees and costs. On April 20, 2006, News America moved to dismiss Valassis’ complaint in its entirety for failure to state a cause of action. On September 28, 2006, the Magistrate Judge issued a Report and Recommendation granting the motion. On October 16, 2006, Valassis filed an Amended Complaint, alleging the same causes of action. On November 17, 2006, News America answered the three federal antitrust claims and moved to dismiss the remaining nine state law claims. On March 23, 2007, the Court granted News America’s motion and dismissed the nine state law claims. On April 12, 2007,The parties are engaging in discovery, which has been combined with the Court enteredCalifornia and Michigan state cases discussed below. News America expects a Scheduling Order, that provides that all discovery will be closed on or before October 12, 2007 and setsincluding a jury trial date, for February 5, 2008. The parties are in ongoing negotiations regarding discovery and production of responsive discovery is imminent.to be entered by the Court shortly.

On March 9, 2007, Valassis filed a two-count complaint in Michigan state court against News America. That complaint, which is based on the same factual allegations as the federal complaint discussed above, alleges that News America has tortiously interfered with Valassis’ business relationships and that News America has unfairly competed with Valassis. Valassis’ Michigan complaint seeks injunctive relief, damages, fees and costs. On May 4, 2007, News America filed a motion to dismiss or, in the alternative stay, that complaint. On August 14, 2007, the Court denied the motion. On July 7, 2008, Valassis filed an Amended Complaint alleging the same causes of action, based on essentially the same factual allegations. The parties are engaging in discovery, which has been combined with the federal case discussed above and the California state case discussed below. The trial is set to begin on January 12, 2009.

On March 12, 2007, Valassis filed a three-count complaint in California state court against News America. That complaint, which is based on the same factual allegations as the federal complaint discussed above, alleges that News America has violated the Cartwright Act (California’s state antitrust law) by unlawfully tying its FSI products to its in-store products, has violated California’s Unfair Practices Act by predatorily pricing its FSI products, and has unfairly competed with Valassis. Valassis’ California complaint seeks injunctive relief, damages, fees and costs. On May 4, 2007, News America filed a motion to dismiss or, in the alternative stay, that complaint. On June 28, 2007, the court issued a tentative ruling denying the motion and reassigned the case to the Complex Litigation Program. On July 19, 2007, the court denied the motion. The parties are engaging in discovery, which has been combined with the federal case and Michigan state cases discussed above. The trial is set to begin March 9, 2009.

News America believes that all of the claims in each of the complaints filed by Valassis are without merit and it intends to defend itself vigorously in the three matters.

Other

The Company experiences routine litigation in the normal course of its business. The Company believes that none of its pending litigation will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

The Company’s operations are subject to tax in various domestic and international jurisdictions and as a matter of course, the Company is regularly audited by federal, state and foreign tax authorities. The Company 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 consolidated financial condition, future results of operations or liquidity.

The Company held a special meeting of stockholders (the “Special Meeting”) on April 3, 2007. A brief description of the matters voted upon at the Special Meeting on such matters is set forth below.Not applicable.

Proposal 1: A proposal to approve the Share Exchange was voted upon as follows:

Proposal 2: A proposal to approve the adjournment or postponement of the Special Meeting, if necessary or appropriate, to solicit additional proxies for approval of the Share Exchange if there were insufficient votes at the time of the Special Meeting to approve the Share Exchange was voted upon as follows:

PART II

The Company’s Class A Common Stock and Class B Common Stock are listed and traded on the New York Stock Exchange (“NYSE”), its principal market, under the symbols “NWS.A” and “NWS”, respectively. CHESS Depositary Interests (“CDIs”) representing the Class A Common Stock and Class B Common Stock are listed and traded on the Australian Stock Exchange (“ASX”) under the symbols “NWS” and “NWSLV,” respectively. The Class A and Class B Common Stock are also traded on the London Stock Exchange. As of June 30, 2007,2008, there were approximately 54,00052,000 holders of record of shares of Class A Common Stock and 1,6001,500 holders of record of shares of Class B Common Stock.

The following table sets forth, for the fiscal periods indicated, the reported high and low closing sales prices for the Class A Common Stock and Class B Common Stock, as reported on the NYSE.

The total dividends declared related to fiscal 2008 results were $0.12 per share of Class A Common Stock and Class B Common Stock. In August 2008, the Company declared the final dividend on fiscal 2008 results of $0.06 per share for Class A Common Stock and Class B Common Stock. This, together with the interim dividend of $0.06 per share of Class A Common Stock and Class B Common Stock, constitute the total dividend relating to fiscal 2008.

The total dividends declared related to fiscal 2007 results were $0.12 per share of Class A Common Stock and $0.10 per share of Class B Common Stock. In August 2007, the Company declared the final dividend on fiscal 2007 results of $0.06 per share for Class A Common Stock and $0.05 per share for Class B Common Stock. This, together with the interim dividend of $0.06 per share of Class A Common Stock and a dividend of $0.05 per share for Class B Common Stock, constitute the total dividend relating to fiscal 2007.

The total dividends declared related to fiscal 2006 results were $0.12 per share of Class A Common Stock and $0.10 per share of Class B Common Stock. In August 2006, the Company declared the final dividend on fiscal 2006 results of $0.06 per share for Class A Common Stock and $0.05 per share for Class B Common Stock. This, together with the interim dividend of $0.06 per share of Class A Common Stock and a dividend of $0.05 per Class B Common Stock, constitute the total dividend relating to fiscal 2006.

In June 2005, the Company announced a stock repurchase program under which the Company is authorized to acquire from time to time up to an aggregate of $3 billion in Class A Common Stock and Class B Common Stock. In May 2006, the Company announced that the Board had authorized increasing the total amount of the stock repurchase program to $6 billion. Through June 30, 2007,2008, the Company had repurchased an aggregate of approximately 213234 million shares of its Class A Common Stock and Class B Common Stock for a total cost of purchase of $3,855approximately $4,244 million since the announcement of the stock repurchase program in June 2005. The Company did not purchase any of its Class B Common Stock during the fiscal year ended June 30, 2008. Below is a summary of the Company’s purchases of its Class A Common Stock and Class B Common Stock during the fiscal year ended June 30, 2007:2008:

The remaining authorized amount at June 30, 2007,2008 under the Company’s stock repurchase program, excluding commissions, was approximately $2,149$1,761 million.

In connection with the closing of the transactions contemplated by the Share Exchange Agreement in February 2008, Liberty exchanged its entire interest in the Company’s common stock (approximately 325 million shares of Class A Common Stock and 188 million shares of Class B Common Stock) for 100% of the equity of a subsidiary of the Company, whose holdings consisted of certain assets of the Company. (See Note 3—Acquisitions, Disposals and Other Transactions) The acquisition of these shares of the Company’s common stock from Liberty was not a part of the share repurchase program and does not impact the dollar value of the shares of the Company’s common stock that may be purchased under the share repurchase program.

ITEM 6.

SELECTED FINANCIAL DATA

The selected consolidated financial data should be read in conjunction with “Item 7—Management’s7-Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8—Financial8-Financial Statements and Supplementary Data” and the other financial information included elsewhere herein.

(3)(4)

Fiscal 2003 results include the Company’s acquisition of WPWR-TV for approximately $425 million. Fiscal 2003 results also include the Company’s acquisition of 80% of Telepiu, S.p.A. (“Telepiu”) for approximately $874 million. Telepiu was merged with Stream S.p.A., (“Stream”) and the combined platform was renamed SKY Italia. As a result of the acquisition, commencing April 30, 2003, the Company ceased to equity account its share of Stream’s results.

(4)	Basic and diluted earnings from continuing operations per share, basic and diluted earnings per share and cash dividend per share reflect per share amounts based on the adjusted share amounts to reflect the November 12, 2004 one-for-two share exchange in the reincorporation of News Corporation.

(5)

Class A common stock, par value $0.01 per share (“Shares of the Company’s Class A Common Stock”) carryStock carried rights to a greater dividend than shares of the Company’s Class B common stock, par value $0.01 per share (“Class B Common Stock”)Stock through fiscal 2007. As such, for the periods through fiscal 2007, net income available to the Company’s stockholders iswas allocated between theshares of Class A Common Stock and Class B Common Stock. The allocation between these classes of common stock was based upon the two-class method. See Notes 2 and 20 to the Consolidated Financial Statements of News Corporation for further discussion. Subsequent to the final fiscal 2007 dividend payment, shares of Class A Common Stock will ceaseceased to carry any rights to a greater dividend than shares of Class B Common Stock. Earnings per share based onSee Notes 2 and 19 to the total weighted average shares outstanding (Class A Common Stock and Class B Common Stock combined) are as follows:Consolidated Financial Statements of News Corporation for further discussion.

ITEM 7.

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

This document contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. The words “expect,” “estimate,” “anticipate,” “predict,” “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things, trends affecting the Company’s financial condition or results of operations. The readers of this document are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks, uncertainties and other factors is set forth under the heading “Risk Factors” in Item 1A of the Annual Report on Form 10-K. The Company does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by the Company with the Securities and Exchange Commission (the “SEC”). This section should be read together with the audited consolidated financial statements of the Company and related notes set forth elsewhere in this Annual Report.

REORGANIZATION

Effective November 12, 2004, the Company changed its corporate domicile from Australia to the United States and its reporting currency from the Australian dollar to the U.S. dollar (“the Reorganization”). As a result, the Company’s accompanying consolidated financial statements are stated in U.S. dollars as opposed to Australian dollars, which was the currency the Company previously used to present its financial statements, and have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP.

In the Reorganization, all outstanding The News Corporation Limited (“TNCL”) ordinary shares and preferred limited voting ordinary shares were cancelled and shares of Class A common stock, par value $0.01 per share (“Class A Common Stock”) and Class B common stock, par value $0.01 per share (“Class B Common Stock”) were issued in exchange, respectively, on a one-for-two share basis. The financial statements have been presented as if the one-for-two share exchange took place on July 1, 2004.

INTRODUCTION

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of News Corporation and its subsidiaries’ (together “News Corporation” or the Company’s“Company”) financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

•

Critical Accounting Policies—This section discusses accounting policies considered important to the Company’sCompany'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 consolidated financial statementsConsolidated Financial Statements of News Corporation summarizes the Company’sCompany's significant accounting policies, including the critical accounting policy discussion found in this section.

OVERVIEW OF THE COMPANY’S BUSINESS

The Company is a diversified entertainmentglobal media company, which manages and reports its businesses in eight segments:

Filmed Entertainment

The Filmed Entertainment segment derives revenue from the production and distribution of feature motion pictures and television series. In general, motion pictures produced or acquired for distribution by the Company are exhibited in U.S. and foreign theaters, followed by DVDs,home entertainment, video-on-demand and pay-per-view television, premium subscription television, network television and basic cable and syndicated television exploitation. Television series initially produced for the networks and first-run syndication are generally licensed to domestic and international markets concurrently and subsequently released in seasonal DVD box sets. More successful series are later syndicated in domestic markets. The length of the revenue cycle for television series will vary depending on the number of seasons a series remains in active production and, therefore, may cause fluctuations in operating results. License

fees received for television exhibition (including international and U.S. premium television and basic cable television) are recorded as revenue in the period that licensed films or programs are available for such exhibition, which may cause substantial fluctuations in operating results.

The revenues and operating results of the Filmed Entertainment segment are significantly affected by the timing of the Company’s theatrical and home entertainment releases, the number of its original and returning television series that are aired by television networks and the number of its television series in off-network syndication. Theatrical and home entertainment release dates are determined by several factors, including timing of vacation and holiday periods and competition in the marketplace. The distribution windows for the release of motion pictures theatrically and in various home entertainment formats have been compressing and may continue to change in the future. A further reduction in timing between theatrical and home entertainment releases could adversely affect the revenues and operating results of this segment.

The Company enters into arrangements with third parties to co-produce many of its theatrical productions. These arrangements, which are referred to as co-financing arrangements, take various forms. The parties to these arrangements include studio and non-studio entities, both domestic and foreign. In several of these agreements, other parties control certain distribution rights. The Filmed Entertainment segment records the amounts received for the sale of an economic interest as a reduction of the cost of the film, as the investor assumes full risk for that portion of the film asset acquired in these transactions. The substance of these arrangements is that the third-party investors own an interest in the film and, therefore, receive a participation based on the respective third-party investor’s interest in the profits or losses incurred on the film. Consistent with the requirements of Statement of Position 00-2, “Accounting by Producers or Distributors of Films” (“SOP 00-2”),Films,” the estimate of thea third-party investor’s interest in profits or losses incurred on the film is determined by reference to the ratio of actual revenue earned to date in relation to total estimated ultimate revenues.

Operating costs incurred by the Filmed Entertainment segment include: exploitation costs, primarily theatrical prints and advertising and home entertainment marketing and manufacturing costs; amortization of capitalized production, overhead and interest costs; and participations and talent residuals. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead.

The Company competes with other major studios, such as Disney, Paramount, Sony, Universal, Warner Bros., and independent film producers in the production and distribution of motion pictures and DVDs. As a producer and distributor of television programming, the Company competes with studios, television production groups and independent producers and syndicators, such as Disney, Sony, NBC Universal, Warner Bros. and Paramount Television, to sell programming both domestically and internationally. The Company also competes to obtain creative talent and story properties which are essential to the success of the Company’s filmed entertainment businesses.

Television and Cable Network Programming

The Company’s U.S. television operations primarily consist of the FOX Broadcasting Company (“FOX”), MyNetworkTV, Inc. (“MyNetworkTV”) and, as of June 30, 2008, the 35 television stations owned by the Company. The Company’s international television operations consist primarily of STAR Group Limited (“STAR”).

The U.S. television broadcast environment is highly competitive and the primary methods of competition are the development and acquisition of popular programming. Program success is measured by ratings, which are an indication of market acceptance, with the top rated programs commanding the highest advertising prices. FOX and MyNetworkTV compete for audience, advertising revenues and programming with other broadcast networks, such as CBS, ABC, NBC and The CW, independent television stations, cable program services, as well as other media, including DBS services, DVDs, video games, print and the Internet. In addition, FOX and MyNetworkTV compete with the other broadcast networks to secure affiliations with independently owned television stations in markets across the country.

The television stations owned by the Company compete for programming, audiences and advertising revenues with other television stations and cable networks in their respective coverage areas and, in some cases, with respect to programming, with other station groups, and in the case of advertising revenues, with other local and national media. The competitive position of the television stations owned by the Company is largely influenced by the strength of FOX and MyNetworkTV, and, in particular, the prime-time viewership of the respective network, as well as the quality of the syndicated programs and local news programs in time periods not programmed by FOX and MyNetworkTV.

In Asia, STAR’sSTAR's channels are primarily distributed to local cable operators or other pay-television platform operators for distribution to their subscribers. STAR derives its revenue from the sale of advertising time and affiliate fees from these pay-television platform operators.

The Company’s U.S. cable network operations primarily consist of the Fox News Channel (“Fox News”), the FX Network (“FX”) and the Regional Sports Networks (“RSNs”). The Company’s international cable networks consist of the Fox International Channels (“FIC”) with operations primarily in Latin America and Europe.

Generally, the Company’s cable networks, which target various demographics, derive a majority of their revenues from monthly affiliate fees received from cable television systems and DBS operators based on the number of its subscribers. Affiliate fee revenues are net of the amortization of cable distribution investments (capitalized fees paid to a cable operator or DBS operator to facilitate the launch of a cable network). The Company defers the cable distribution investments and amortizes the amounts on a straight-line basis over the contract period. Cable television and DBS are currently the predominant means of distribution of the Company’s program services in the United States. Internationally, distribution technology varies region by region.

The Company’s cable networks compete for carriage on cable television systems, DBS systems and other distribution systems with other program services, as well as other uses of bandwidth, such as retransmission of free over-the-air broadcast networks, telephony and data transmission. A primary focus of competition is for distribution of the Company’s cable network channels that are not already distributed by particular cable television or DBS systems. For such program services, distributors make decisions on the use of bandwidth based on various considerations, including amounts paid by programmers for launches, subscription fees payable by distributors and appeal to the distributors’ subscribers.

The most significant operating expenses of the Television segment and the Cable Network Programming segment are the acquisition and production expenses related to programming and the production and technical 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 paid to the in-house advertising sales force, as well as salaries, employee benefits, rent and other routine overhead expenses.

The Company has several multi-year sports rights agreements, including contracts with the National Football League (“NFL”) through fiscal 2012, contracts with the National Association of Stock Car Auto Racing (“NASCAR”) for certain races and exclusive rights for certain ancillary content through calendar year 2014, a contract with Major League Baseball (“MLB”) through calendar year 2013 and a contract for the Bowl Championship Series (“BCS”) through fiscal year 2010. These contracts provide the Company with the broadcast rights to certain national sporting events during their respective terms. The costs of these sports contracts are charged to expense based on the ratio of each period’s operating profit to estimated total operating profit for the remaining term of the contract.

The profitability of these long-term national sports contracts is based on the Company’s best estimates at June 30, 20072008 of directly attributable revenues and costs; such estimates may change in the future and such changes may be significant. Should revenues decline from estimates applied at June 30, 2007,2008, a loss may be

recorded. Should revenues improve as compared to estimated revenues, the Company may have an improved operating profit related to the contract, which may be recognized over the estimated remaining contract term.

While the Company seeks to ensure compliance with federal indecency laws and related Federal Communications Commission (“FCC”) regulations, the definition of “indecency” is subject to interpretation and there can be no assurance that the Company will not broadcast programming that is ultimately determined by the FCC to violate the prohibition against indecency. Such programming could subject the Company to regulatory review or investigation, fines, adverse publicity or other sanctions, including the loss of station licenses.

Direct Broadcast Satellite Television

The DBS segment’s operations consist of SKY Italia, which provides basic and premium programming services via satellite and broadband directly to subscribers in Italy. SKY Italia derives revenues principally from

subscriber fees. The Company believes that the quality and variety of video, audio and interactive programming, quality of picture, access to service, customer service and price are the key elements for gaining and maintaining market share. SKY Italia’s competition includes companies that offer video, audio, interactive programming, telephony, data and other information and entertainment services, including broadband Internet providers, digital terrestrial transmission (“DTT”) services, wireless companies and companies that are developing new media technologies.

In fiscal 2005, competitive DTT services in Italy expanded to include pay-per-view offering of soccer games previously available exclusively on the SKY Italia platform. The Company is currently prohibited from providing a pay DTT service under regulations of the European Commission. In addition, the Italian government previously offered a subsidy on the purchase of DTT decoders.

SKY Italia’s most significant operating expenses are those related to the acquisition of entertainment, movie and sports programming and subscribers and the production and technical expenses related to operating the technical facilities. Operating expenses related to sports programming are generally recognized over the course of the related sport season, which may cause fluctuations in the operating results of this segment.

Magazines and Inserts

The Magazine and Inserts segment derives revenues from the sale of advertising space in free-standing inserts, in-store marketing products and services, promotional advertising, subscriptions and production fees. Adverse changes in general market conditions for advertising may affect revenues. Operating expenses for the Magazine and Inserts segment include paper, costs, promotional, printing, retail commissions, distribution expenses and production costs. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead.

Newspapers and Information Services

The Newspapers and Information Services segment derives revenues primarily from the sale of advertising space, and the sale of published newspapers.newspapers, and subscriptions. Adverse changes in general market conditions for advertising may affect revenues. Circulation revenues can be greatly affected by changes in competitors’ cover prices and by promotionpromotional activities.

Operating expenses for the Newspapers and Information Services segment include costs related to newsprint, ink, printing costs and editorial content. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead.

The Newspapers and Information Services segment’s advertising volume, circulation and the price of newsprint are the key uncertainties whose fluctuations can have a material effect on the Company���sCompany’s operating results and cash flow. The Company has to anticipate the level of advertising volume, circulation and newsprint prices in managing its businesses to maximize operating profit during expanding and contracting economic cycles. Newsprint is a basic commodity and its price is sensitive to the balance of supply and demand. The Company’s costs and expenses are

affected by the cyclical increases and decreases in the price of newsprint. The newspapers published by the Company compete for readership and advertising with local and national newspapers and also compete with television, radio, Internet and other media alternatives in their respective locales. Competition for newspaper circulation is based on the news and editorial content of the newspaper, service, cover price and, from time to time, various promotions. The success of the newspapers published by the Company in competing with other newspapers and media for advertising depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising among newspapers is based upon circulation levels, readership levels, reader demographics, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, circulation and quality of readership demographics.

In recent years, the newspaper industry has experienced difficulty increasing circulation volume and revenues. This is 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.

The Newspapers and Information Services segment also derives revenue from the provision of subscriber-based information services and the licensing of products and content to third-parties. Losses in the number of subscribers for these information services may affect revenues. The information services provided by the Company also compete with other media sources (free and subscription- based) and new media formats. Licensing revenues depend on new and renewed customer contracts, and may be affected if the Company is unable to generate new licensing business or if existing customers renew for lesser amounts, terminate early or forego renewal.

The Company believes that competition from new media formats and sources and shifting consumer preferences will continue to pose challenges within the newspaper industry.Newspapers and Information Services industries.

Book Publishing

The Book Publishing segment derives revenues from the sale of general and children’s books in the United States and internationally. The revenues and operating results of the Book Publishing segment are significantly affected by the timing of the Company’s 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. 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 Company’s sales throughout the fiscal year. Consumer books are generally sold on a fully returnable basis, resulting in the return of unsold books. In the domestic and international markets, the Company 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 operates in a highly competitive market and has been affected by consolidation trends. This market continues to change in response to technological innovations and other factors. Recent years have brought a number of significant mergers among the leading book publishers. There have also been a number of mergers completed in the distribution channel. The Company must compete with other publishers such as Random House, Penguin Group, Simon & Schuster and Hachette Livre, for the rights to works by well-known authors and public personalities. Although the Company currently has strong positions in each of its book publishing markets, further consolidation in the industry could place the Company at a competitive disadvantage with respect to scale and resources.

Other

NDS

NDS supplies open end-to-end digital technology and services to digital pay-television platform operators and content providers. NDS technologies include conditional access and microprocessor security, broadcast and broadband stream management, set-top box and residential gateway middleware, electronic program guides, digital video recording technologies and interactive infrastructure and applications. NDS provides technologies and services supporting standard definition and high definition televisions and a variety of industry, Internet and Internet protocol standards.standards, as well as technology for mobile devices. NDS’ software systems, consultancy and systems integration services are focused on

providing platform operators and content providers with technology to help them profit from the secure distribution of digital information and entertainment to consumer devices which incorporate various technologies supplied by NDS. Significant NDS expenses include smart card costs, royalties for the use of certain intellectual properties, salaries, employee benefits, travel, rent and other routine overhead.

FIM

The Company sells, through its FIM division, advertising, sponsorships and subscription services on the Company’s various Internet properties. Significant FIM expenses include development costs, advertising and

promotional expenses, salaries, employee benefits and other routine overhead. The Company’s Internet properties include the social networking site MySpace.com, IGN.com, FOXsports.com, Scout.com, RottenTomatoes.com, Askmen.com and Photobucket.com. The Company also has a distribution agreement with Microsoft’s MSN for FOXsports.com and a search technology and services agreement with Google.

News Outdoor

The Company sells, through its News Outdoor businesses, outdoor advertising space on various media, primarily in Russia and Eastern Europe.

FIM

The Company sells, through its FIM division, advertising, sponsorships Significant expenses associated with the News Outdoor business include site lease costs, direct production, maintenance and subscription services on the Company’s various Internet properties. The Company’s Internet properties include the social networking site MySpace.com, IGN.com, AmericanIdol.com, Scout.com and Foxsports.com. The Company also has a distribution agreement with Microsoft’s MSN for Foxsports.com.

Other Business Developments

In August 2006, the Company announced that its FIM division entered into a multi-year search technology and services agreement with Google, Inc. (“Google”), pursuant to which Google is the exclusive search and keyword-targeted advertising sales provider for a majority of FIM’s web properties. Under the terms of the agreement, Google is obligated to make guaranteed minimum revenue share payments to FIM of $900 million, of which the $50 million that was due was paid as of June 30, 2007. These guaranteed minimum revenue share payments, which are based on FIM’s achievement of certain trafficinstallation expenses, salaries, employee benefits and other commitments, are expected to be made through the second quarter of calendar 2010.

On December 22, 2006, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Liberty Media Corporation (“Liberty”). Under the terms of the Share Exchange Agreement, Liberty will exchange its entire interest in the Company’s common stock (approximately 325 million shares of Class A Common Stock and 188 million shares of Class B Common Stock) for 100% of a News Corporation subsidiary (“Splitco”), whose holdings will consist of an approximately 39% interest (approximately 470 million shares) in The DIRECTV Group, Inc. (“DIRECTV”) constituting the Company’s entire interest in DIRECTV, three of the Company’s RSNs (FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain (the “Three RSNs”)) and $588 million in cash, subject to adjustment. The transaction contemplated by the Share Exchange Agreement was approved by the Class B common stockholders on April 3, 2007, but remains subject to customary closing conditions, including, among other things, regulatory approvals, the receipt of a ruling from the Internal Revenue Service and the absence of a material adverse effect on Splitco. If these conditions are satisfied, the transaction is expected to be completed in the fourth quarter of calendar 2007. The Company will enter into a non-competition agreement with DIRECTV and non-competition agreements with each of the Three RSNs, in each case, restricting its right to compete for a period of four years with DIRECTV and the Three RSNs in the respective regions in which such entities are operating on the date the Share Exchange Agreement is consummated.

In January 2007, the Company and VeriSign, Inc. (“VeriSign”) formed a joint venture to provide entertainment content for mobile devices. The Company paid approximately $190 million for a controlling interest in VeriSign’s wholly-owned subsidiary, Jamba, which was combined with certain of the Company’s Fox Mobile Entertainment assets. The results of the joint venture have been included in the Company’s consolidated results of operations since January 2007. The Company and VeriSign have various call and put rights related to VeriSign’s ownership interest including VeriSign’s right to put its share of the joint venture to the Company for $150 million and $350 million, in fiscal 2010 and 2012, respectively.

routine overhead. In June 2007, the Company announced its plan to sell nine of its FOX-affiliated television stations. No agreement has yet been entered into with respect to the sale of any of these stations.

In June 2007, the Company announced that it intendsintention to explore strategic options for News Outdoor in connection with News Outdoor’s continued development plans. The strategic options include, but are not limited to, exploring the opportunity to expand News Outdoor’s existing shareholder group through new strategic and private equity partners. No agreement has yet been entered into with respect to any transaction.these strategic options.

Other Business Developments

In JulyDecember 2007, Gemstar-TV Guide International, Inc. (“Gemstar-TV Guide”) announced that its boardthe Company completed the acquisition of directors authorized Gemstar-TV GuideDow Jones pursuant to the Agreement and its advisors to explore strategic alternatives intended to maximize stockholder value, which may include a salePlan of the company. The Company currently holds an approximate 41% interest in Gemstar-TV Guide. For more information on Gemstar–TV Guide, please see its reports filed with the SEC.

OnMerger, dated as of July 31, 2007, by and among the Company, entered intoRuby Newco LLC, a definitive merger agreement (the “Merger Agreement”wholly-owned subsidiary of the Company (“Ruby Newco”) with, Dow Jones & Company, Inc. (“Dow Jones”), pursuant and Diamond Merger Sub Corporation, as amended (the “Merger Agreement”). Pursuant to which the Company will acquire Dow Jones in a transaction valued at approximately $5.6 billion. Under the terms of the Merger Agreement, Dow Jones Stockholders will be entitled to receive $60 in cash for each outstanding share of Dow Jones common stock they own, and upwas converted into the right to 250 holders of record and not more than 10%receive, at the election of the sharesholder, either (x) $60.00 in cash or (y) 2.8681 Class B common units of Ruby Newco. Each Class B common unit of Ruby Newco is convertible into a share of News Corporation Class A Common Stock. The consideration for the acquisition was approximately $5,700 million which consisted of: $5,150 million in cash, assumed net debt of approximately $330 million and approximately $200 million in equity instruments. The results of Dow Jones may elect to have their sharesbeen included in the Company’s consolidated statements of operations from December 13, 2007, the date of acquisition.

In November 2007, Dow Jones converted into a number of units of a newly formed subsidiaryannounced that it would explore strategic alternatives for the Ottaway Community Newspapers (the “Ottaway Newspapers”), which the Company acquired as part of the Dow Jones transaction. In June 2008, the Company (each unit of which will be exchangeable for onedetermined that it would not sell the Ottaway Newspapers.

In February 2008, the Company closed the transactions contemplated by the share exchange agreement (the “Share Exchange Agreement”) with Liberty Media Corporation (“Liberty”). Pursuant to the terms of the Share Exchange Agreement, Liberty exchanged its entire interest in the Company’s common stock (approximately 325 million shares of Class A Common Stock and 188 million shares of Class B Common Stock for 100% of the stock of a wholly owned subsidiary whose holdings consisted of the Company’s approximate 41% interest (approximately 470 million shares) in accordanceThe DIRECTV Group, Inc. (“DIRECTV”) constituting the Company’s entire interest in DIRECTV, three of the Company’s Regional Sports Networks (FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain) (the “Three RSNs”) and approximately $625 million in cash (the “Exchange”). The Exchange resulted in the divestiture of the Company’s entire interest in DIRECTV and the Three RSNs to Liberty. A tax-free gain of $1.7 billion on the Exchange was recognized in Other, net in the consolidated statements of operations for the fiscal year ended June 30, 2008. Upon the closing of the Exchange, the Company entered into a non-competition agreement with DIRECTV and non-competition agreements with each of the Three RSNs, in each case, restricting its right to compete for a period of four years with DIRECTV and the Three RSNs in the respective regions in which such entities were operating on the closing date of the Share Exchange Agreement.

In May 2008, the Company disposed of its entire interest (approximately 41%) in Gemstar-TV Guide International Inc.’s (“Gemstar”) common stock in exchange for a cash payment of approximately $637 million

and approximately 19 million shares of Macrovision Solutions Corporation (“Macrovision”) common stock. The Company sold all of its shares of Macrovision common stock in June 2008. The Company recorded a net gain of approximately $112 million on the disposals which is included in Other, net in the consolidated statements of operations.

During fiscal 2008, the Company, through a series of transactions, acquired a 25% ownership interest in Premiere AG for cash consideration of approximately $666 million.

In June 2008, the Company announced that it and two newly incorporated companies formed by funds advised by Permira Advisers LLP (“the Permira Newcos”) proposed a transaction to an independent committee of the NDS board of directors, which would result in NDS ceasing to be a public company, and the Permira Newcos and the Company owning 51% and 49% of NDS’ outstanding equity, respectively. On August 5, 2008, NDS announced that the independent committee reached an agreement in principle with the termsCompany and conditionsthe Permira Newcos on a price at which they would acquire all the issued and outstanding NDS Series A ordinary shares, including those represented by American Depositary Shares traded on The NASDAQ Stock Exchange, for per share consideration of such subsidiary’s operating agreement).$63 in cash. As part of this transaction, approximately 68% of the NDS Series B ordinary shares held by News Corporation would be cancelled in exchange for $63 per share in a mix of approximately $1.5 billion in cash and a $242 million note. The Merger Agreementtransaction is subject to negotiation and execution of final legal documentation, and is also conditioned upon approval by the holders of NDS’ Series A ordinary shares, court approval, the receipt of certain regulatory approvals and other customary closing conditions, including, among other things, adoptionconditions. There can be no assurance that the parties will enter into final legal documentation or that any transaction will be consummated.

In July 2008, the Company completed the sale of eight of the Merger Agreement by the affirmative voteCompany’s owned and operated FOX affiliate television stations to an indirect, wholly owned subsidiary of Dow Jones stockholders holding a majority of the voting power of Dow Jones’ outstanding common stockOak Hill Capital Partners III, L.P. for approximately $1.1 billion in cash. The stations included: WJW in Cleveland, OH; KDVR in Denver, CO; KTVI in St. Louis, MO; WDAF in Kansas City, MO; WITI in Milwaukee, WI; KSTU in Salt Lake City, UT; WBRC in Birmingham, AL; and Class B common stock voting together, the execution of an editorial agreement, the establishment by the Company of a special committee as contemplated under such editorial agreement and regulatory approvals. The transaction is expected to be completedWGHP in the fourth quarter of calendar 2007. The Company believes that this acquisition will position it as a leader in the financial news and information market and will enhance its ability to adapt to future challenges and opportunities within the Company’s Newspapers segment and across the Company’s other related business segments.Greensboro, NC.

RESULTS OF OPERATIONS

Results of Operations—Fiscal 2008 versus Fiscal 2007

The following table sets forth the Company’s operating results for fiscal 2008 as compared to fiscal 2007.