NEWS CORPORATION Audio Webcast

NEWS CORPORATION (NWS)

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NEWS CORPORATION (NWS) Events

Company (Stock Code)	Date/Time	Event	Timezone: Australia/NSW
NEWS CORPORATION (NWS) Record Full Year Operating Income of $5.4Billion; Growth of 21% Over Fiscal 2007	Wed, 6 Aug 2008 07:30AM	NWS - 4th Quarter Fiscal 2008 Results - Mr Rupert Murdoch, Chairman and CEO
NEWS CORPORATION (NWS)	Thu, 8 May 2008 07:30AM	NWS - 3rd Quarter Fiscal 2008 Earnings Release - Mr Rupert Murdoch, Chairman and CEO
NEWS CORPORATION (NWS)	Tue, 5 Feb 2008 08:30AM	NWS - 2nd Quarter Fiscal 2008 Results - Mr Rupert Murdoch, Chairman and CEO
NEWS CORPORATION (NWS)	Thu, 8 Nov 2007 08:30AM	NWS - 1st Quarter Fiscal 2008 Results - Mr Rupert Murdoch, Chairman and CEO
NEWS CORPORATION (NWS)	Thu, 10 May 2007 08:40AM	NWS - 3rd Quarter Fiscal 2007 Results - Mr Rupert Murdoch, Chairman and CEO
NEWS CORPORATION (NWS)	Wed, 15 Oct 2008	Date Payable
NEWS CORPORATION (NWS)	Wed, 10 Sep 2008	Record Date
NEWS CORPORATION (NWS)	Thu, 4 Sep 2008	Ex Div Date
NEWS CORPORATION (NWS)	Wed, 6 Aug 2008	Full Year Results
NEWS CORPORATION (NWS)	Wed, 16 Apr 2008	Date Payable
NEWS CORPORATION (NWS)	Wed, 12 Mar 2008	Record Date
NEWS CORPORATION (NWS)	Wed, 5 Mar 2008	Ex Div Date
NEWS CORPORATION (NWS)	Thu, 7 Feb 2008	Interim Results
NEWS CORPORATION (NWS)	Fri, 19 Oct 2007 10:00AM	Annual General Meeting New York, USA
NEWS CORPORATION (NWS)	Wed, 17 Oct 2007	Date Payable
NEWS CORPORATION (NWS)	Wed, 12 Sep 2007	Record Date
NEWS CORPORATION (NWS)	Wed, 5 Sep 2007	Ex Div Date
NEWS CORPORATION (NWS)	Thu, 9 Aug 2007	Full Year Results
NEWS CORPORATION (NWS)	Wed, 14 Mar 2007	Record Date
NEWS CORPORATION (NWS)	Wed, 7 Mar 2007	Ex Div Date
NEWS CORPORATION (NWS)	Thu, 8 Feb 2007	Interim Results
NEWS CORPORATION (NWS)	Fri, 20 Oct 2006 10:00AM	Annual General Meeting Asia Society and Museum, 725 Park Avenue New York New York 10021
NEWS CORPORATION (NWS)	Wed, 18 Oct 2006	Date Payable
NEWS CORPORATION (NWS)	Wed, 13 Sep 2006	Record Date
NEWS CORPORATION (NWS)	Thu, 7 Sep 2006	Ex Div Date
Displaying 1-20 of 34 events		Display 10 results per page 20 results per page 50 results per page 100 results per page

NEWS CORPORATION (NWS)

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CONFERENCE WITH RUPERT MURDOCK, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF NEWS CORPORATION (NWS)

“Record Full Year Operating Income of $5.4Billion; Growth of 21% Over Fiscal 2007”

http://www.brr.com.au/event/49137

 

WEDNESDAY, AUGUST 6, 2008, 7:30 AM.

 

      Moderator  Welcome to our fourth quarter and fiscal 2008 year-end earnings conference call. I apologize to those of you in New York for our late start today. Joining

10                    me are Rupert Murdoch, Chairman and CEO of News; Peter Chernin, President and COO; and Dave DeVoe, our CFO. As is our custom, Dave will begin the call with a brief summary of the results, focusing on items not immediately obvious from the reading of the earnings release, which we assume you all now have. Rupert will then give some deeper commentary on

15                    a couple of our international initiatives, including Sky Italy and our international cable channels, and then offer some perspective on our print operations, including our latest acquisition, the Dow Jones & Company. Peter will then speak about what you can expect from our leading entertainment assets in fiscal 2009, including some forward commentary on our television

20                    and cable businesses, as well as an update on what is ahead at the film company. We will then of course take your questions.

 

                        Just some legalese. This call is of course governed by the Safe Harbor provisions. On this call, we will make statements that constitute forward-

25                    looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, including those described in News’ public filings with the SEC that could cause actual results to materially differ from those in the forward-looking statements. Finally, please note that

30                    certain financial measures we will use in this call, such as EPS and net income, are expressed on a non-GAAP basis and have been adjusted to exclude certain items. The GAAP to non-GAAP reconciliation will be posted on our website on our investor relations earnings release page. With all of that, I will now turn the call over to Dave.

35

            NWS   Gary, thank you and good afternoon, everyone. As you have seen in today’s earnings release, News Corporation once again posted very solid results, with double-digit revenue, operating income, and net income growth for both the fourth quarter and the full fiscal year.

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                        Let us start with our full year first. We achieved 21% operating income growth on a total company basis and 17% growth when you factor out those items we were excluding from our guidance, namely the $126 million gain on the U.K. land sale and the Dow Jones operating income contribution. This 17%

45                    growth is consistent with the upper end of the expectations we provided to you six months ago and well above the low teens guidance we provided about a year ago. This strong financial performance was driven by 15% overall revenue growth and double-digit earnings growth at our television, cable, DBS, and newspaper and information service segments.

 

                        Bottom line, the Company reported net income of $5.4 billion versus $3.4 billion last year. The related earnings per share was $1.81, a 68% improvement over last year’s reported earnings per share of $1.08.

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                        Included in net income in earnings per share are a couple of items I would like to highlight. We reported pretax other income of $2.3 billion, which includes a gain of approximately $1.7 billion related to the Liberty DIRECTV transaction. Gains from disposal of our interest in the Bay Area RSN in

10                    Gemstar, as well as the positive mark-to-market adjustment on our (inaudible) (0:03:16) liability. In addition, our equity earnings reflect a $485 million charge for our share of BSkyB’s write-down on its ITV investment. Excluding the net income effects of these items, adjusted earnings per share was $1.22 this fiscal year, an increase of 22% over similarly adjusted $1 in fiscal 2007.

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                        Now let us look at the fourth quarter. For the quarter, operating income of $1.48 billion was up 21% over the fourth quarter a year ago. This improvement reflects at least double-digit growth in all of our segments with the exception of television, which was below last year. The quarter’s results

20                    also include the $126 million gain on the United Kingdom land sale and Dow Jones operating income contributions that if excluded would reduce the quarter’s operating income improvement to 9% over the fourth quarter a year ago.

 

25                    Bottom line, the Company reported net income for the quarter of $1.13 billion, a 27% improvement over last year’s fourth quarter results. The related earnings per share for the quarter was $0.43, and this is a 54% improvement over last year’s earnings per share of $0.28.

 

30                    Similar to the full year result, the fourth quarter equity earnings included a write-down on BSkyB’s ITV investment, of which our share was $111 million. Additionally, our other income in the quarter was $433 million, reflecting gains on disposal of our interest in the Bay Area RSN in Gemstar as well as mark-to-market adjustments on our (inaudible) (0:04:55) liability. Excluding the net

35                    income effect of these items, adjusted earnings per share was $0.35 this quarter, an increase of 13% over a similarly adjusted $0.31 in the fourth quarter of fiscal 2007.

 

                        Given you all have the earnings release, I will not talk about all the

40                    operations. I want to just highlight a couple. Our largest driver of earnings growth in the quarter was filmed entertainment, which, with operating income of $220 million, this is more than double the $106 million reported in the fourth quarter a year ago. The strong performance includes continued worldwide DVD sales of Alvin and the Chipmunks and Juno, as well as the

45                    April DVD release of Aliens Vs. Predator in the United States.

 

                        Also in the quarter, we had lower releasing costs related to theatrical releases in the quarter versus a year ago, and higher profit contributions at Twentieth Century Fox Television, reflecting lower development cost from the production of fewer pilots as a result of the writers’ strike.

 

                        Also in the quarter, we had a very strong result at Sky Italia. Sky Italia

5                      achieved its highest quarter profitability ever. With $212 million of operating income, this is a 37% increase from the fourth quarter a year ago. Sky added 147,000 gross and 55,000 net subscribers in the quarter. This is 72% more net additions compared to the fourth quarter a year ago. This higher level of net additions is partially related to the free trial promotion offered in the third

10                    fiscal quarter of this year. For the year, Sky added 366,000 net new subscribers, increasing our year-end subscriber count to just over 4.6 million subscribers.

 

                        In addition, the annual churn rate remained low at approximately 10% for the

15                    fourth consecutive year. Monthly ARPU averaged approximately 44 euros per subscriber this year and SAC on an annual basis approximated 260 euros per subscriber, and this is about even with last year’s levels.

 

                        At our television segment, operating income in the quarter of $279 million

20                    declined 28% as compared to the fourth quarter a year ago with lower earnings reported by the stations, the Fox Network and Star. Station operating income decreased 26% in the quarter, primarily resulting from market ad sales declines averaging about 10% in our markets. The weakest ad sales categories continue to be automotive, telecommunications, and

25                    movies.

 

                        Revenues and operating income were also down in the quarter at the Fox Broadcasting Network due to lower ratings that more than offset the higher advertising pricing. At Star, the cost of programming initiatives at Star Plus

30                    and at Star World more than offset the higher advertising revenues.

 

                        At our cable networks, again, we had very solid growth in this segment in the fourth quarter. Our operating income contribution of $313 million is up $29 million over the fourth quarter a year ago. This is an especially good result

35                    considering we incurred start-up losses of about $36 million for the Big Ten and the Fox Business Channel in the quarter.

 

                        The largest year-over-year gains in the quarter were from the RSNs, which reflect higher affiliate rates; from the Fox News Channel due to higher affiliate

40                    rates, additional subscribers, and advertising revenue increases; and the international channels from advertising and affiliate increases led by our Latin American and European channels.

 

                        Our newspaper and information segment also reported a good quarter with

45                    operating income of $262 million, and this was up 29% over the fourth quarter a year ago. This increase largely reflects advertising and circulation revenue increases at our Australian papers, reduced cost from our U.K. print projects, favourable foreign exchange movements in both Australia and the United Kingdom, and the inclusion of Dow Jones.

 

                        At our other segment, we reported fourth quarter operating income of $69 million as compared to an operating loss of $17 million a year ago. The current quarter includes the $126 million gain on the sale of land in the United

5                      Kingdom. After talking about this for two years, we finally completed it in the quarter.

 

                        At Fox Interactive Media, revenues in the quarter of $225 million were up 23% compared to a year ago as a result of higher search and advertising

10                    revenues. The search component increase accounted for more than half of the overall revenue increase. FIM’s earnings contributions in the quarter of $6 million was down $24 million from a year ago levels as revenue gains were more than offset by planned increases in development and technical costs associated with MySpace domestic and international expansion and the

15                    addition of new features.

 

                        Finally, let me address our guidance for fiscal 2009, and as we measure this guidance, we are excluding from fiscal 2008 the $253 million in operating profit contributions from businesses or assets sold in fiscal 2008 which will no

20                    longer be included in our ongoing results, namely the eight TV stations, the three RSNs sold to Liberty, and the U.K. land sale. So as we look at measuring operating growth in fiscal 2009, we are comparing it to a base of $5.13 billion in operating profit for fiscal 2008. As we look at fiscal 2009, we expect many of our businesses will generate very good year-over-year

25                    earnings growth and these include continued growth at Sky Italia from new subscriber additions, further growth at our cable networks led by new affiliation deals at Fox News, and further expansion of our international channel, improved monetization of Internet traffic at MySpace, and the full-year consolidation of Dow Jones. But we are also facing some challenging

30                    comparisons from certain items that positively impacted fiscal 2008 that will not repeat in fiscal 2009, and these include the Fox Network and station’s broadcast of the most-watched Super Bowl this past February, reduced programming and production and pilot costs in fiscal 2008 at our TV production business and in the network related to the writers’ strike earlier

35                    this year, and at our film division, the timing of three of our most significant tent pole theatrical releases for fiscal 2009 will be in late fourth quarter and the first days of fiscal 2010, resulting in substantially all of the marketing expenditures being absorbed in fiscal 2009. At the same time, we also expect to be operating in a much more difficult economic environment than we did

40                    this past year, and in particular, a significantly more challenging local advertising environment for both broadcast television and newspapers.

 

                        Taking all of these items into account and based on all of the assumptions inherent in our projections, we anticipate our operating income growth rate for

45                    fiscal 2009 to be in the 4% to 6% range, above the $5.13 billion fiscal 2008 result I discussed earlier.

 

                        With all of that, I would like to turn the call over to Rupert for some further comments. Rupert?

 

      Moderator  He may be on mute.

 

      Operator    It will be just one moment while we reconnect his line.

5

            NWS   Okay, thank you.

 

      Moderator  If everyone can just hang on one minute, we have some technical difficulties. Rupert is in Beijing on a separate line. We will get him shortly. I apologize.

10                    We are going to change over. Peter is going to go ahead and give his comments now.

 

            NWS   Yes, why do not I go first and then we will turn it back over to Rupert once he is reconnected. Before I go back to Rupert, I want to touch on a few of our

15                    core businesses that continue to perform well despite the increasing economic pressures that Dave just described and give a little more colour on why we think that they are positioned to weather the turbulence we are all currently feeling to some degree.

 

20                    Let me start with Fox Broadcasting, which finished its fourth straight season as the number one network with the largest margin of victory (inaudible) (0:13:36). In a first for any network in the past decade, Fox ranked number one across all key demos.

 

25                    We think this momentum will result in a ratings upswing as we enter the fall season in just a few weeks with a stable schedule of hits. House returns as the number one scripted show on television for the second year in a row. Terminator: The Sarah Connor Chronicles was last season’s top new scripted show on any network. Moment of Truth was the number one new series on

30                    broadcast television. Finally, American Idol continues to dominate primetime with a 57% advantage over its closest competitor last season.

 

                        Going forward, we believe we have the single most buzzed about new show…

35

            NWS   I apologize for that glitch, everybody. Good afternoon and thank you very much, Dave.

 

      Moderator  Rupert, hang on. Peter is in the middle of his because we did not have you on

40                    the line. He will finish his and then we will go to you, if that is okay.

 

            NWS   Okay.

 

      Moderator  Okay.

45

            NWS   Going forward, we have the single most buzzed about new show on network television in Fringe from J.J. Abrams. There is also tremendous excitement for the return of 24 in January, so much so that we are producing a two-hour prequel TV movie for November.

 

                        We had quite a strong up-front this year on our network in terms of volume with solid pricing increases, and thus far, a low level of cancellations. The scatter market also remains robust. Last month’s All-Star game beat our

5                      goals even without the extra innings. We are in the middle of the football up-front and pacing strongly ahead of last year. Our three big American Idol sponsors, Coke, Ford, and AT&T, have all already renewed for the upcoming season. In our top categories, spending is up across the board.

 

10                    While the network outlook is bright, our local stations are feeling the effects of a worsening economy. The total local ad market was down 10% in the fourth quarter and pacings for Q1 2009 continue to be weak. We are starting to see some presidential political spending in several markets, but spending in key categories like automotive and telecom and financial services remains down.

15                    While we continue to generate a growing market share of the ad markets, with actually a record market share in July, the overall local ad market is highly challenged at the moment.

 

                        Moving back to a bright front, moving back to cable, we are seeing significant

20                    growth on a number of fronts, especially internationally. Last year, Fox International channels launched 40 new channels and generated revenues close to $1 billion with margins of 25%, among the highest in the international cable industry. Notably, almost all of the revenue comes from either emerging markets or mature markets with low but growing cable and satellite

25                    penetration, so our revenue potential still has great upside.

 

                        In the past quarter, ad sales for Fox International channels continued to show robust growth, up 30%, and pacings for Q1 2009 also looked strong.

 

30                    Domestically, we also had a very strong cable entertainment up-front this year with FX and Nat Geo both up over 20%. On the news side, Fox News had a solid up-front as well, with strong spending gains across a number of categories like consumer products and pharmaceuticals. Additionally, our new Fox News affiliate deal with Time Warner, which begins later this month,

35                    was done at a significantly higher subscriber rate over the previous agreement and we are in negotiations with EchoStar and Comcast, which we hope to complete by the end of the year for similar rates.

 

                        On the film side, we had record operating profit for the seventh consecutive

40                    year, which I think is quite a good feat in this industry. The outlook over the next several years and beyond is very healthy. In fact, over the next year-and-a-half, I think we have the strongest tent pole lineup we have had in many years, starting in November with Baz Luhrmann’s Australia, followed in December by The Day The Earth Stood Still and Marley & Me, based on the

45                    best-selling book, then late next spring we have two highly anticipated sequels I think will do strong business, X-Men Origins: Wolverine and Night at the Museum 2, and then the summer will kick off with Ice Age: Dawn of the Dinosaurs, the third in the very successful Ice Age franchise. Beyond expected big box office grosses, all should do very strong DVD business.

 

                        Speaking of DVDs, I think it is worth noting that despite the recent hand-wringing over the health of the DVD business, the retail space for the entire DVD market has actually widened by an estimated 5% over the last 12

5                      months. The Blu-Ray format is already ahead of DVD comparatively in terms of adoption at this point in its lifecycle, with sales of more than $200 million year-to-date through June, up about 300% for the same period in 2007.

 

                        Finally, turning to FIM, we are actually quite pleased with the momentum at

10                    MySpace. Revenues are up both quarter to quarter and year-over-year and in May, MySpace hit an all time high with nearly 74 million uniques in the U.S. for the month. Today, just over a month into our new fiscal year, we are very encouraged with what we are seeing. We are pacing well against internal expectations, user engagement continues to grow, and our recent redesign

15                    effort is being positively received by both users and advertisers alike. Right now, we feel good about where things are headed.

 

                        We are seeing dramatic increases in branded display advertising across a number of categories for the first month of Q1 2009 including financial

20                    services were up over 100% year-over-year, consumer packaged goods up over 150% year-over-year, and food and beverage actually up over 170% year-over-year. Overall pacings for all Q1 branded display are very strong and are exceeding those of a year ago by double digits.

 

25                    Our hyper-targeting initiative, which was written up in the papers this week, continues to gain traction with 50% of all orders now including some form of hyper-targeting. We have seen two straight quarters of hyper-targeted CPMs exceeding non-hyper-targeted CPMs more than two-fold. General Motors, Coke, Wells Fargo, Red Bull, and New Balance were among the major

30                    advertisers which included hyper-targeting in their campaigns in Q4.

 

                        One thing in particular I would like to point out is that advertisers are increasingly turning to MySpace homepage takeovers as a way to reach a mass audience. Up to 40 million people visit the homepage every single day.

35                    That is more people than who watched the finale of American Idol. The average user is spending more time on the homepage, up 54% during the week of July 22nd versus the same week last year. It is a very powerful promotional tool and we are seeing more big brands incorporate it into their marketing campaigns.

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                        To give you just one specific of the massive scale of the MySpace homepage, Warner Brothers did a homepage takeover for Batman: Dark Knight and had over 70 million streams of the trailer with a remarkable 27% of those users viewing the trailer in its entirety.

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                        Finally, next month, we will launch the highly anticipated MySpace music joint venture, offering users the ability to listen to free streaming music, purchase song downloads, ringtones, t-shirts, and concert tickets. With 65% of our user base already embedding music on their profiles, we see great potential for this business.

 

                        So despite overall concerns about the economy and serious issues with our

5                      local television station business, we feel our core businesses are all well-positioned for expansion in fiscal 2009.

 

                        With that, let me turn it back to Rupert.

 

10        NWS   Thank you very much, Peter, and good afternoon, everyone. I am sorry for that telephone glitch and I am sorry for the lateness of the call, but I am joining you, my New York colleagues, from Beijing. If I sound a little distant, you will new why.

 

15                    News Corporation is a global company and I have spent the past few days with our team in India, which is building a remarkably successful and very profitable television and multimedia operation. For all the talk of international downturn, even the gloomier Indian economists are still forecasting GDP growth in the coming year of at least 7%.

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                        As Dave just outlined, fiscal 2008 was a very good year operationally and financially. We finally completed our tax-fee asset swap with Liberty Media, recognizing a nearly $1.7 billion gain on our divestiture of DIRECTV while at the same time reducing our outstanding share count by 16%. We also

25                    completed our acquisition of Dow Jones with its information services businesses and the Wall Street Journal including arguably the most important and vibrant brands in business news worldwide. We also raised over $1.5 billion in capital by selling a non-strategic ownership position in Gemstar TV Guide, a minority interest in other cable assets, as Dave has already

30                    mentioned. In July, since the end of the year, we’ve just received $1.1 billion in proceeds from the sale of eight smaller television stations.

 

                        The financial success we have enjoyed should come as no surprise. It is a steady continuation of the growth we have sustained really since 2002. In

35                    fact, over the last five years, using almost any metric, few if any companies in our sector have matched our revenue, operating income or earnings per share growth. Revenue growth of almost 14% a year on average with average operating income growth of 18% and earnings per share from continuing operations up 30% per year on average.

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                        As we look at the year ahead, we anticipate an increasingly difficult economic environment. The escalating price of energy, the contraction of real estate values, and liquidity and competence issues in the finance sector are creating economic shocks that will likely be felt by the vast majority of consumers in

45                    the U.S. as well as in Europe and maybe elsewhere. However, even in this recessionary environment, we believe we have the unique growth in our drivers (inaudible) (0:24:13) balance sheet strength not only to weather this storm but to strengthen and grow our businesses.

 

                        As Dave indicated a few minutes ago, we have considerable financial challenges in our local television businesses, but believe we can still maintain structural growth as several of our younger businesses that are coming to fruition, particularly at Sky Italia and at several of our cable businesses and at

5                      Fox Interactive.

 

                        Our strategies of investing and developing businesses, albeit a cost to short-term earnings not only differentiates us from our peers but delivers more consistent long-term growth.

10

                        Over the last four years, Sky Italia has grown in annual operating profit by almost $700 million in aggregate, transitioning from a $277 million loss in fiscal 2004 to about $420 million profit this last year. This growth was generated by the audience of 1.9 million net new subscribers over the period,

15                    achieving total subscriptions of close to 4.6 million. As we look ahead, we fully expect this growth should continue.

 

                        The television market in Italy is one of Europe’s largest with about 22 million television households that pay TV penetration in that country is barely topping

20                    20%. This compares to pay TV penetration of over 55% in Britain, 45% in Spain, 32% in France. Clearly, there are at least several more years of robust growth to be captured in Italy.

 

                        Similarly, over the last four years, our cable programming businesses have

25                    added over $780 million in additional annual operating profits, and that is inclusive of over $200 million spent on launching the Big Ten and Fox Business Network this last year. The popularity of the Fox News channel, the rapid expansion of our international Fox and National Geographic channels, and the solidifying of our regional sports networks with longer-term

30                    affiliate/carriage deals and long-term sports rights contracts have all contributed to cable’s success and strong competitive standings.

 

                        Our print operations are far more than just newspapers, and so they are experiencing rapid digital growth. In the six months to the end of June, the

35                    audience of wsj.com, the Wall Street Journal’s online operation, rose 87.9% compared to the same period last year and we are just getting started. In fact, in July, it was over 100% increase. The Sun and the Times in London, for example, are large and fast-growing online brands and their revenues, along with those generated by subscriptions at Dow Jones, where we are finding

40                    admirable elasticity, are an increasing share of our information services segment.

 

                        Our Australian titles are in extremely good shape and operating in an economic climate that seems to be quite different to that in the U.S. All of our

45                    newspapers have a complementary commercial strategy, exploiting the display space of print and repurposing content of the web where the inventory can be resold. That the newspaper sector is changing is clear. The companies willing to invest in new forms of delivery which have a commitment to quality will prosper.

 

                        Dow Jones is now developing a web-based delivery platform that will allow us to target customers far beyond the traditional institutional clients and it will extend our reach around the world in partnership with Star, Sky, and

5                      MySpace. We are fortunate to have an internal network that allows us to launch products across borders and across platforms.

 

                        We have a thriving index business. Earlier today, in Bombay, I christened two new indexes: The Global Dow, which includes established and emerging

10                    companies from around the world, and a new index tracking 30 prominent Indian companies and reflecting the world’s changing corporate landscape. I returned to Beijing from India even more convinced that our faith in Asia’s potential and that of its people will be rewarded many, many times over.

 

15                    News Corp's varied sources of revenue and our global reach certainly give us a clear comparative advantage. We have a genuine momentum which will carry us through into the next year and well beyond. Our time in India made me realize how much more potential there is for cooperation amongst our business units, which are as aggressive as they are innovative. Other

20                    companies may indeed be struggling, but our competence and our ambition are buttressed by a very healthy balance sheet.

 

                        So thank you very much.

 

25  Moderator  Thank you. Operator, can we get right to the questions?

 

      Operator    Yes, thank you. Ladies and gentlemen, if you would like to ask a question, please press * then 1 on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from

30                    queue at any time by pressing the pound key. If you are using a speaker phone, please pick up the handset before pressing the numbers. The executive team will take questions first from members of the financial community and immediately move to the members of the press. In the interest of time, we ask that you please limit yourself to one question.

35

                        Our first question comes from the line of Rich Greenfield with Pali Capital. Please go ahead.

 

            Q         Thanks. Can you give us a sense of how big enterprise media now is within

40                    your newspaper segment and particularly within Dow Jones and what the growth profile of that business looks like? I think very often everyone just wants your entire newspaper business as a newspaper business and are missing the growth profile of that enterprise business. Just wondering how significant the earnings contribution now is within that overall newspaper

45                    segment and what its profile over the next few years could be. Then second, Dave made some comments about the difficulties in the advertising environment for both newspapers and TV. You sold TV stations at 10 times EBITDA earlier this month. I am wondering what your thought process is for shedding other assets, given the attractive valuation you were able to exit TV stations at recently. Thanks.

 

            NWS   I could just pick that certainly on the Dow Jones side. I know that more than

5                      half the profits really come from various digital efforts there, our digital delivered products, such as the Newswires, Factiva, the Indexes, and so on. All of these things are growing very fast. We see Dow Jones as being right at the forefront of sort of the digital revolution.

 

10                    For instance, just the very basic thing, wsj.com is expanding extremely fast. It leads into the subscription service, of which we have now well over 1.1 million subscribers at a healthy price and one that can be increased and will be increased, and that of course also leads into very specialized wires for which we can charge very high premiums.

15

                        It is an information service, not a newspaper, an information service which will be neutral to all platforms whether it comes on Kindle or a mobile telephone or a PC or whatever. That really goes for all our newspapers. Our newspapers should be seen as services to their public and their communities

20                    but will be available in every way.

 

      Operator    Thank you. Our next question comes from the line of Jessica Reif Cohen with Merrill Lynch. Please go ahead.

 

25  Moderator  Hang on one second, Jessica. Peter is going to answer.

 

            NWS   I think the second part of your question, Rich, was just about our television stations and would we sell anymore of those businesses in this environment. First of all, I am not sure. I think we sort of timed that sale pretty perfectly and

30                    felt good about the multiples we got for it. Secondly, I think it is important to point out that we have got a pretty good group of television stations right now, including I believe nine duopolies in major markets, so a big chunk of our television station inventory is now tied up in duopolies which continue to outperform the market. While I guess we would probably be open to

35                    discussing anything, I am not sure I would be looking for us to see us selling some additional television stations in the short term.

 

            NWS   I would support that. We need those major stations and that number of stations really to be the backbone of our network.

40

      Moderator  Jessica.

 

            Q         Thanks. Can you just talk about the leverage at FIM? It sounds like you pretty much have guaranteed double-digit revenue growth between branded

45                    pacings and the step up in search. So I was just wondering if you could talk about what your cost outlook is for fiscal 2009 and talk about your strategy there in terms of potentially getting bigger or gaining scale. Secondly, local advertising is clearly weak for everyone, but national still seems to be strong, and Peter, you have been quoted all over as saying a tale of two worlds today. Are you not seeing any spillover like in key categories like auto into national? Dave said 4% to 6% OI growth, what is your revenue guidance for 2009?

 

5          NWS   First, on the FIM side, I guess the key thing I would say, Jessica, is certainly we believe that we are still in a scale gain business, a very, very competitive environment, and it is important that we keep growing and we keep investing to grow, investing to grow in terms of development, in terms of technology, in terms of international, in terms of new features, in terms of content and we

10                    will continue to do so. That being said, our expectation is that we can grow our margins in the FIM business in fiscal 2009, so our costs will continue to grow, and right now, I think our projections are we are going to have revenue growth of 30%. Our costs will continue to grow, but we expect the margins to grow a