news corp Annual Reports 2004


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news corp Annual Reports 2004

  1. 1. ANNUAL REPORT 2004 The Simpsons TM and © 2004 Twentieth Century Fox Film Corporation. All Rights Reserved.
  2. 2. N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 A constellation of media businesses News Corporation’s global operations encompass the fields of filmed entertainment, newspapers, pay and free-to-air television, cable network programming, book publishing, magazines and consumer marketing. Just as our assets span the world, our vision spans art and humor, audacity and compassion, information and innovation – whether in an American television series, an Indian game show, an Australian newspaper, an English sports broadcast or an international box-office hit. Every day, hundreds of millions of people are entertained and enlightened by the authors and actors, printers and producers, reporters and directors who fulfill our mission. That mission remains unchanged after a half a century of expansion and improvement: the creation and distribution of top-quality news, sports and entertainment around the world.
  3. 3. The News Corporation Filmed Entertainment KDFW Dallas, TX ESPN STAR Sports 50% KDFI Dallas, TX Channel [V] UNITED STATES WFXT Boston, MA Xing Kong Wei Shi Fox Filmed Entertainment (a) WTTG Washington DC Vijay Television Twentieth Century Fox Film WDCA Washington DC Corporation LATIN AMERICA WAGA Atlanta, GA Fox 2000 Pictures Cine Canal (b) 23% WJBK Detroit, MI Fox Searchlight Pictures Telecine (b) 13% KRIV Houston, TX Fox Music KTXH Houston, TX AUSTRALIA AND NEW ZEALAND Twentieth Century Fox Home KMSP Minneapolis, MN Premium Movie Partnership (b) 20% Entertainment WFTC Minneapolis, MN Twentieth Century Fox Licensing WTVT Tampa Bay, FL Cable Network and Merchandising KSAZ Phoeniz, AZ Twentieth Century Fox Television Programming KUTP Phoeniz, AZ Fox Television Studios WJW Cleveland, OH Twentieth Television UNITED STATES KDVR Denver, CO Regency Television (b) 50% FOX News Channel (a) WRBW Orlando, FL Blue Sky Studios Fox Cable Networks Group (a) WOFL Orlando, FL FX AUSTRALIA KTVI St. Louis, MO Fox Movie Channel Fox Studios Australia (b) 50% WDAF Kansas City, MO Fox Regional Sports Networks WITI Milwaukee, WI LATIN AMERICA (13 owned and operated) (c) KSTU Salt Lake City, UT Fox Studios Baja (a) Regional Programming Partners (b) 40% WBRC Birmingham, AL Canal Fox (a) Fox Sports World WHBQ Memphis, TN SPEED Channel WGHP Greensboro, NC FUEL Television KTBC Austin, TX Fox Pan American Sports (b) 38% WUTB Baltimore, MD Rogers Sports Net (b) 20% UNITED STATES WOGX Gainesville, FL National Sports Partners (b) 50% FOX Broadcasting Company (a) ASIA National Advertising Partners (b) 50% Fox Television Stations (a) STAR National Geographic Channel - WNYW New York, NY STAR Plus International (b) 50% WWOR New York, NY STAR Movies National Geographic Channel - KTTV Los Angeles, CA STAR News Domestic (b) 67% KCOP Los Angeles, CA STAR Mandarin Movies WFLD Chicago, IL AUSTRALIA STAR World WPWR Chicago, IL Fox Sports Australia 50% STAR Gold WTXF Philadelphia, PA STAR Chinese Channel (a) Held by News Corporation's 82%-owned Fox Entertainment Group (FEG) (b) Reflects percentage held by News Corporation's 82%-owned FEG (c) Fox Regional Sports Networks are all 100%- owned except Fox Sports Net South, which is 88%-owned. (d) Represents the Company's economic interest. The Company continues to hold a 36% equity interest.
  4. 4. Limited As of June 30, 2004 Direct Broadcast Newspapers Magazines and Inserts Satellite Television UNITED STATES UNITED STATES AND CANADA New York Post News America Marketing EUROPE In-Store SKY Italia 80% UNITED KINGDOM FSI (SmartSource Magazine) Sky Sport The Times SmartSource iGroup Calcio Sky The Sunday Times News Marketing Canada Sky Cinema The Sun The Weekly Standard Sky TG 24 News of the World Gemstar-TV Guide International 41% British Sky Broadcasting 35% TSL Education Sky News AUSTRALIA AUSTRALIA Sky Sports INSIDEout More than 100 national, metropolitan, Sky Travel donna hay suburban, regional and Sunday titles, Sky One including the following: Sky Movies The Australian Book Publishing UNITED STATES The Weekend Australian The DIRECTV Group (b) 34% The Daily Telegraph UNITED STATES, CANADA, EUROPE The Sunday Telegraph AND AUSTRALIA LATIN AMERICA HarperCollins Publishers Herald Sun Sky Latin America DTH Platforms: Sunday Herald Sun Mexico - Innova 30% The Courier-Mail 42% Brazil - Sky Brasil (d) 50% Other Sunday Mail (Brisbane) 42% Sky Multi-Country Partners 30% The Advertiser EUROPE Sunday Mail (Adelaide) AUSTRALIA NDS 78% FOXTEL 25% The Mercury Broadsystem Ventures Sunday Tasmanian Convoys Group ASIA The Sunday Times Sky Radio 93% Phoenix Satellite Television 38% Northern Territory News News Outdoor Group 75% Hathway Cable and Datacom 26% Sunday Territorian Balkan News Corporation China Network Systems (18 affiliated cable systems) various FIJI AUSTRALIA AND ASIA The Fiji Times National Rugby League 50% Sunday Times News Interactive Nai Lalakai Festival Mushroom Records Shanti Dut Newspoll 50% UTV Software Communications 12% PAPUA NEW GUINEA Post-Courier 63% 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 News Corporation Limited, its Directors or its Officers with respect to, among other things, trends affecting the group’s financial condition or results of operations. Readers of this document are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company does not ordinarily make projections of its future operating results and undertakes no 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.
  5. 5. N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 Chief Executive’s Review decisive strategic steps that Fiscal 2004 was an outstanding we believe position us for year for News Corporation. further growth in 2005 and Financially strategically and , beyond. operationally, the Company Most importantly, this met – and in most cases past April, we announced exceeded – all of its key our intention to change our objectives for the year: record place of incorporation from revenues and profits in US$ Australia to the United terms; record cash flow gen- States. We undertook this eration; double-digit profit move for one reason: to gains at nearly all operating create greater value for segments; the completion of our shareholders. For more the transformative DIRECTV than 80 years, the Company deal; the swift development has proudly called Australia of SKY Italia; and, with its home. It is where the the announcement of our Company was founded, nur- intention to reincorporate tured, and from where we get the Company in the United our entrepreneurial spirit. States later this calendar Australia is our spiritual year, the promise of a new home, and will always remain and more prosperous era for Rupert Murdoch, Chairman and Chief Executive so. But over the past two News Corp. shareholders. decades, as more of the Our success is due, in large our assets are of varying Last year, I wrote of our Company’s revenues and measure, to the diligence, maturities, neatly divided intention to be as “integrated” profits have come from our dedication and vision of the between those generating as we were “international,” US-based businesses, it has Company’s management and significant profits today and and as focused on delivering become increasingly clear employees. Above all else, those positioned to deliver short-term results as on to us that without a pri- each of us is guided by a growth tomorrow. building long-term value. mary listing on the New desire to give our customers This is why we were able Looking back on the achieve- York Stock Exchange and eli- the two things they most to deliver such solid results ments of the past 12 months, gibility on US indices, our demand from a media compa- this past year. Full year rev- it’s clear to me that our shareholders would never ny: quality and choice. enues rose 20 percent to US$21 commitment to these prin- experience the full benefits Whether in our films or TV billion and our operating ciples is what drove our of our achievements. shows, our newspapers or income increased 21 percent success. Consequently, using a books, our magazines or pay- to US$3.1 billion, both record We’ve now set the standard process that will allow TV distribution platforms, numbers for the Company. for how a media company us to move our domicile what inspires us at News Our Filmed Entertainment, of the 21st century should without financial cost to Corp. – this year as in every Cable Network Programming, look. Our assets are global, the Company or the over- year – is a desire to give our Television, Book Publishing with operations across whelming majority of its readers and viewers higher and Newspapers segments five continents. Our assets shareholders, we have put quality options when it posted record profits. At the are diversified, encompass- forth for your approval a plan comes to the news, sports, same time, we significantly ing businesses that create that the News Corporation and entertainment products strengthened our balance content and those that Board of Directors unani- they use. And if our financial sheet, continuing our pro- distribute that content. Our mously believes will make results prove nothing else, it gram to pay down debt. assets are balanced, between the Company a more attrac- is that this year, as in previ- And even as we enjoyed those whose revenues are tive investment for current ous years, we have delivered the success of this past dependent on advertising, and future shareholders. The on that promise. year, we were also taking and those that are not. And Financial Highlights (Australian dollars, in Millions except for Earnings Per Share) Year ended June 30, 2004 2003 2002 Revenues $ 29,428 $ 29,913 $ 29,014 Operating Income $ 4,302 $ 4,352 $ 3,542 Associated entities, before Other items $ 367 $ (159) $ (314) Income before Other items $ 2,366 $ 1,898 $ 1,217 Other items, net $ (54) $ (90) $ (13,179) Net Profit $ 2,312 $ 1,808 $ (11,962) Earnings per share Income before Other items $ 0.42 $ 0.36 $ 0.23 Net Profit $ 0.41 $ 0.34 $ (2.43) Financial Position Assets $ 73,738 $ 67,747 $ 71,441 Debt $ 12,470 $ 12,429 $ 15,441 4
  6. 6. N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 In more practical, everyday excellence to a company that December 2003, after nearly move will have no discernible terms, it means sharing had endured years of paraly- four years of exhaustive, impact on our operations, in our most talented employees sis as it awaited its sale. This often arduous negotiations, Australia or elsewhere. We across platforms and exploit- team has divested non-core we finally realized our dream will remain a proud and ing the knowledge they have assets such as PanAmSat, a of adding a US distribution vital part of the Australian gained at one system for the transaction that when com- system to our global satellite media landscape with a benefit of others. And it pleted will reap The DIRECTV pay-TV platform. With our listing on the Australian means leveraging our scale Group more than US$2.6 bil- investment in DIRECTV and Stock Exchange – now and and breadth to ensure that we lion net of taxes. It has its 13 million subscribers for generations to come. are paying less – and getting streamlined the operations of now housed within the What will be affected, more – for the products and Hughes Network Systems and Fox Entertainment Group, however, is our financial services we are using. announced the sale of its set News Corporation can boast flexibility. By becoming a But we didn’t just acquire top box manufacturing assets. nearly 30 million sub- US-domiciled company, we our interest in DIRECTV It has launched a new satellite scribers around the world, believe News Corporation for its strategic benefits. and expanded local-into-local stretching from Rome (SKY would have improved access We also believe it will be service and high definition Italia) to Rio (Sky Brasil), to a larger pool of invest- a great business with even television. But most impor- from Sydney (Foxtel) to ment capital – specifically, greater potential. Shortly tantly, it has infused this Seattle (DIRECTV), from the US$12 trillion US capital after assuming operational great company with a sense London (BSkyB) to Los market. In addition, the control, we put to work many of urgency. Cabos (Sky Mexico). Company would become eligi- of the best practices we Another new business that By combining our industry- ble for inclusion in US had learned from our other demonstrated great potential leading content businesses indices, including the S&P was our pay-TV service in with the world’s single 500 index, which we believe When we create compelling Italy: SKY Italia. Officially largest and most global dis- would generate billions of launched in August, 2003, tribution platform, we have dollars of increased demand content, it will be seen; SKY Italia has quickly compiled what I believe is from funds that previously expanded to nearly 2.7 mil- the industry’s most formida- have been precluded from when we distribute quality lion subscribers, well on ble grouping of assets, and owning our Company’s its way to the three million with it, the ability to better shares. This in turn is expect- content, we can ensure subscribers we forecast for control our own destiny in an ed to narrow the historic the end of this calendar year. uncertain and increasingly discount that has existed fair compensation. Monthly average revenue per consolidated global market- between News Corp’s voting user (ARPU) – a key indica- place. The ability to create and non-voting shares, an tor of a platform’s success – our own content and distrib- pay-TV businesses and the anomaly that has bedeviled is more than €40, reflecting ute it through our own and results were immediate. us for many years. that nearly 90 percent of other platforms should ensure DIRECTV’s first full quarter There is, in short, a com- subscribers have opted for that we are beholden to no of operation saw it achieve the pelling logic to this proposal, a premium service, while one but the discriminating highest number of net new and I urge you to give it the piracy – the theft of our consumer. When we create subscribers in the company’s strongest possible considera- satellite signal – has been compelling content, it will be history. By the end of our tion when you study the tamed. Indeed, if our current seen; when we distribute qual- first half year of operation, detailed proposal materials. momentum continues, we ity content, we can ensure the company had very nearly Another transformative think we are well on our way fair compensation. And when equaled our full-year forecast event occurred during the to creating another BSkyB we want to launch new chan- for net new subscribers. year with the completion in Europe’s third most pros- nels or services, we know we The new management of our acquisition of a 34 perous market. The year have a national – indeed an team at DIRECTV has percent interest in Hughes ended with start-up losses of international – footprint, to brought a new energy, a Electronics, now re-named US$267 million, better than get us off the ground. new focus and a culture of The DIRECTV Group. In Financial Highlights (U.S. Dollars, in Millions except for Earnings Per ADR) Year ended June 30, 2004 2003 2002 Revenues $ 20,959 $ 17,474 $ 15,195 Operating Income $ 3,064 $ 2,532 $ 1,855 Associated entities, before Other items $ 261 $ (93) $ (165) Income before Other items $ 1,685 $ 1,100 $ 636 Other items, net $ (38) $ (54) $ (6,901) Net Profit $ 1,647 $ 1,046 $ (6,265) Earnings per ADR Income before Other items $ 1.20 $ 0.83 $ 0.49 Net Profit $ 1.17 $ 0.79 $ (5.09) Financial Position Assets $ 51,455 $ 44,963 $ 40,293 Debt $ 8,702 $ 8,249 $ 8,709 5
  7. 7. N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 question I was persistently Television Stations; and the forecast. At current growth Simpsons and M*A*S*H, we asked this year was: Is the mounting success of STAR. rates, we expect to achieve generated a significant new momentum at the film studio FOX Broadcasting Network operational breakeven in the revenue stream, demonstrat- sustainable? Frankly no one , again finished the year as the second half of this fiscal year. ing once again that the only knew for certain, given the number one rated network SKY Italia has become limit to our bottom line is historic vagaries of the film among teens and adults aged the laboratory of our pay- the limit of our creative industry. Today, however, I 18-34 and a strong number TV future. Fox channels are thinking. am pleased to report that two in the coveted 18-49 included on the service’s Like many of our peers, operating income reached demographic. And in its basic tier, while Fox films are however, we are not taking US$886 million, besting last third season, American Idol featured on its premium tier. the explosion of the DVD year’s number by 38 percent. cemented its place as a cul- FOX News Channel executives market for granted. One tural phenomenon, finishing have helped launch the SKY of the hallmarks of our the season as the number one Italia news channel at the Company’s success is our Gains were evenly rated program in primetime same time their FOX Sports ability to anticipate chal- and increasing its ratings colleagues helped design lenges early to address them , distributed across our nearly 10 percent. SKY Italia’s new studio sets. head-on and to craft durable, Despite the network’s Our own 78 percent-owned creative solutions. That is key operating segments. strong overall performance, NDS is ensuring the system’s precisely what we are doing we suffered bad ratings in the uncompromised conditional now with the issue of We are poised for first half of the year, particu- access and BSkyB, the most digital piracy If we are to . larly in the two months advanced satellite platform continue to reap the rewards great organic growth following our highly rated in the world, is helping mod- from our digital content, broadcast of post-season ernize its customer service. we must protect ourselves throughout the baseball. What became clear Indeed, BSkyB is the from the threat of its theft. Company. to us was this: we could model of a successful direct- Peter Chernin, the Company’s no longer abide the tradi- to-home satellite platform. President and COO, took tional September start to During 2004, BSkyB added a leading role in both the broadcast season if we Again, it was a combination more than half a million Hollywood and Washington wanted to remain competi- of smart film-making, better subscribers while maintain- this past year in formulat- tive. Something had to risk management, a focus ing its industry-low churn ing technological, legal and change. Beginning this past on profitability over market rate. At the same time, it educational answers to this summer, we moved to a 12 share and an exploding home is experiencing higher ARPU vexing problem. The solu- month season and the early entertainment market that as more customers opt for tions are not obvious, nor results have been promising generated our success. In premium services. Taken easily implemented. But I (if somewhat uneven), with fiscal 2004 and early in fiscal together, these factors have am pleased with the amount several new shows showing 2005, Twentieth Century Fox led to dramatically increased of attention and creative great potential for their films had an industry record associated income for News thought our executives have return in November. six films in a row open Corp. this year, with the given to the issue and I am Operating income at Fox to US$20 million-plus box expectation of even higher hopeful that, through our Television Stations rose 7 offices. Meanwhile, Day returns going forward. work and the work of others, percent over last year. Our After Tomorrow has grossed With all of the expertise in a new consensus can be duopoly strategy is clearly more than US$500 million satellite distribution that forged which will ultimately working, reflected in the worldwide. Worldwide home News Corp. now has at its dis- win this war. record market share the sta- entertainment and pay-TV posal, I convened a meeting At our Television segment, tions achieved this year as performances of X2: X-Men of the top executives from operating income rose US$106 well as lower overall costs. United, Cheaper by the Dozen each of our satellite plat- million to US$957 million, With nearly all of the cost and Daredevil, among others, forms in March. For three the result of a strong overall savings already realized from also contributed to our suc- days, we discussed the future advertising environment, our integration efforts, the cess, as did the continued of satellite technology and which pushed up pricing for focus now is to capitalize on growth in our home enter- covered in depth how we our primetime schedule and the revenue opportunities tainment sales of TV DVDs. can use our size to grow sports programming; higher available from owning nine This year, on sales of such subscription bases, improve advertising revenues and duopolies in some of the popular shows as 24, The offerings and lower costs. market share gains at our Fox That weekend meeting was a powerful example of how Operating Income by Industry Segment: 2004 versus 2003 (U.S. Dollars, in Millions) News Corp. is able to marshal the resources and expertise of its component parts to Filmed Entertainment lift the entire group, and 886 I anticipate holding many 641 more of these meetings in Television the future. 957 851 What enables us to Cable Network Programming embrace strategic opportu- 617 nities such as DIRECTV , 430 BSkyB and SKY Italia is Direct Broadcast Satellite Television the continued robust growth (267) we have achieved at our (68) Magazines and Inserts core assets. And once again, 271 these gains were evenly dis- 256 tributed across our key oper- Newspapers ating segments. Combined, 592 we are poised for great 400 organic growth throughout Book Publishing the Company . 158 133 In Fiscal 2004 at our I 2004 Other Filmed Entertainment seg- Note: These financial highlights are taken from the Concise I 2003 Financial Report. (150) ment, we achieved something Note: DBS segment was consolidated as of April 30, 2003 (111) few expected: another record and had only two months of results in prior year year of operating income. A 6
  8. 8. N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 major papers. Among some conference we convened in Cable Network Programming largest TV markets in the of the more significant devel- Mexico this past March. 200 segment. Fiscal 2004 operat- U.S. and to use our breadth to opments within this seg- employees from every aspect ing income increased 43 acquire quality program- ment, The Times took the of our newspaper operations percent – the third consecu- ming at fair prices. bold gamble of introducing came together for four days tive year of strong double STAR, our pan-Asian chan- a compact edition, and of intensive discussion on digit growth – with explosive nels business, continued its the public enthusiastically virtually every facet of news- gains achieved at all three positive momentum, report- embraced it. Defying the paper publishing. What made of our primary channels: ing a second consecutive skeptics and traditionalists, the conference so worthwhile FOX News, FX and Fox year of solid profitability. overall circulation for the was the frank exchange of Sports Net. Earnings were up substan- two papers was up following information. The opportuni- At FOX News, the story tially over last year, largely the compact’s introduction. ty to learn from one another was much the same as fiscal on the strength of rising The Sunday Telegraph, – to share ideas with the 2003, only better: ratings subscription and advertising Australia’s largest selling best minds in the industry supremacy matched with ris- revenues at our thriving paper, increased its margin from around the globe – is ing advertising revenues. Indian business and the devel- over its main competitor to something we intend to Once considered a potential opment of our general enter- more than 200,000 copies, pursue even more aggressively long-term drag on earnings, tainment channel in China. while in Melbourne, The in the coming years. the channel is now one of We’ve also been very Herald Sun maintained daily Our other print businesses our key growth drivers, par- aggressive in devising new also achieved growth and ticularly once its original ways to reach advertisers sustained momentum. News affiliation agreements begin as audiences continue to The opportunity to learn America Marketing, our to expire in 2006 and we are decline at the U.S. broadcast coupon and in-store market- able to renegotiate carriage networks and personal video from one another – ing business, generated a rates in line with the chan- recorders (PVRs) become 6 percent improvement over nel’s superb performance. more common. The challenge to share ideas with the last year. HarperCollins, FX continued to distinguish for us – and for all broadcast- led by the astonishing per- itself with original pro- ers – is to stay ahead of these best minds in the formance of The Purpose gramming such as Nip/Tuck developments: to fashion Driven Life, had another and The Shield. Like FOX alternatives to the 30 second industry from around year of record profits and had News, it is poised for larger advertising spot that has 97 titles on the New York affiliate revenues as it been the industry’s lifeblood the globe – is something Times bestseller list. And our begins to renegotiate its for nearly 50 years. A team we intend to pursue Washington-based magazine original agreements. And at of executives today is hard The Weekly Standard is widely Fox Sports Net, higher sub- at work looking at such even more aggressively considered to be one of the scriber numbers and higher alternatives as in-show prod- most influential opinion affiliate rates contributed to uct placement and corporate in the coming years. journals on the American a double-digit revenue and sponsorship as ways to keep political scene today . profit increase at our local advertisers associated with Events such as our world- sports channels. our content. At the same wide newspaper conference We should all be proud of sales more than 350,000 ahead time, we are constantly exam- and the launch of SKY Italia the successes we achieved of its chief rival. And The New ining new ways to monetize are good examples of the across our newspaper busi- York Post continued its torrid our content, as we’ve done in tremendous power that can nesses, which performed well pace, recording its eighth launching the TV DVD mar- be realized from our global in highly competitive mar- straight double-digit increase ket. Like digital copyright, enterprise. By harnessing kets. The segment reported in circulation for a six-month this is an issue with immense the experience and practical revenue and operating profit reporting period. It is the long-term implications if wisdom that comes from increases of 26 percent and 48 fastest growing daily news- ignored and we are devoting operating in different envi- percent respectively due in , paper in the U.S., and is much time and effort into ronments and confronting part to the absence of a cover poised to soon surpass its staying ahead of it. different challenges, our price war at The Sun in the chief tabloid rival. One prominent area of the company has a great advan- U.K., but also due to higher One of the genuine high- Company that has certainly tage over our competitors. advertising and circulation lights of the past year was benefited from innovative The coming years will be a revenues at nearly all of our the worldwide newspaper and bold thinking is our time of dynamic change. Ideas not yet dreamed of Revenues by Industry Segment: 2004 versus 2003 (U.S. Dollars, in Millions) will surely reshape the media industry and our way of life. These days of swift Filmed Entertainment change can be a source of 5,187 either dizzying fear or 4,486 boundless excitement. Our Television tradition at News Corp. is 5,027 4,763 not only to embrace these Cable Network Programming transformations, but to drive 2,538 them. This is not a company 2,270 that sits still or basks in the Direct Broadcast Satellite Television light of past achievements. 1,665 We do not allow ourselves 220 the luxury of self-satisfac- Magazines and Inserts 979 tion. There is still so much 923 more that we can and will Newspapers accomplish. And it is with 3,425 tremendous excitement that 2,718 we look ahead to another Book Publishing year, and many more to 1,276 1,162 come, of building a media I 2004 Other company capable of great Note: These financial highlights are taken from the Concise I 2003 Financial Report. 862 things and the ability to 932 Note: DBS segment was consolidated as of April 30, 2003 better the lives of all our and had only two months of results in prior year readers and viewers. 7
  9. 9. GLOBAL EDITION N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 Cheaper by ##### the Dozen Garfield A solid performance Family Hit of the Holiday Season FOX MAKES WAVES 9
  10. 10. N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 21st Century Records For 20th Century Fox tional territories. Its outstanding movie Man on Fire; and June’s by an outstanding opening for A string of hit movies and record performance continued into fis- goofball comedies Dodgeball Garfield. A week later, the num- home entertainment sales gave cal 2005 and the film has earned and Garfield. ber one opening for Dodgeball 20th Century Fox Film, News more than US$500 million at the Master and Commander, gave Fox its fourth straight Corporation’s 82 percent-owned worldwide box office. released in November 2003, US$20 million-plus opening Fox Entertainment Group’s film Day After Tomorrow was the received tremendous critical weekend at the box office. studio, record operating profits biggest in a string of successful acclaim, garnering 10 Academy Dodgeball has since gone on to for the third straight year in films for Fox in fiscal 2004, start- Award nominations. It was gross more than US$100 million fiscal 2004. ing with League of Extraordinary soon followed by the surprise in the U.S. Soon after the end Fox’s most successful film of Gentlemen in the first quarter, family hit of the holiday season, of the fiscal year, I, Robot and the year at the box office was and continuing through Oscar- Cheaper by the Dozen. Alien vs. Predator both opened at Day After Tomorrow. Following winner Master and Commander; Man on Fire opened at num- number one, giving Fox its fifth its May 2004 release, the film holiday-season comedy Cheaper ber one at the box office and and sixth consecutive movie was a hit in North America and by the Dozen; April’s action was followed two months later openings above US$20 million. number one in many interna- Television Studios: Critical TALE OF THE TAPE: DVD AND VIDEO SALES SOAR Acclaim and High Ratings Armed with a large library of The Company’s main TV Fox movies and television production studio, 20th Century series, the Company’s home Fox Television (TCFTV), has entertainment division sold received network orders for 21 more DVDs and videos than series – including 12 returning ever before. and nine new series – for the In the United States, five upcoming TV season. titles – X2: X-Men United, FOX ordered 15 series, CBS Cheaper by the Dozen, Master ordered three, ABC ordered and Commander, Daredevil two and the WB ordered one. and League of Extraordinary TCFTV series were hits Gentlemen – reached sales of among both viewers and critics, more than US$70 million. with the studio netting a string of Illustrating the strength of the award nominations. The studio home entertainment market as received 25 Emmy nominations, an important revenue stream, including eight for 24, seven In the U.S., Fox’s Home video releases that the series – the U.S. video release of for Arrested Development and Entertainment division was currently in hiatus – will be Phone Booth and League of four for The Practice. Arrested named Wal-Mart Supplier of brought back to broadcast Extraordinary Gentlemen both Development also received five the Year for 2003, and home television next season. Other beat their U.S. box office returns. Television Critics Association electronics retailer Best Buy strong performances from TV But it wasn’t just the Awards nominations – the most awarded Fox its Bravo Award series during the year included Company’s film titles that of any show – and won two. as best vendor for 2004, an Buffy the Vampire Slayer and 24. attracted consumer interest. In primetime animation, indication of the incredible As well as new releases, hit Sales of Fox-produced televi- the studio again demonstrated sales success the Company has movies released on video in sion series on video were also its established expertise when had in home entertainment. previous years – known as cat- strong. Fox had three of the top Family Guy became the number In May 2004, Fox Home alog titles – continued to make five TV DVD titles in fiscal one-selling TV title on DVD and Entertainment acquired the significant contributions. The 2004: the third season of The was put back into production for rights to distribute on VHS and high-performing catalog titles Simpsons; volume one of Family FOX and The Cartoon Network. DVD one of the year’s biggest in fiscal 2004 included Ice Guy and volume two of Family Meanwhile, Fox Television box office hits, The Passion of Age, Super Troopers, X-Men, Guy. In fact, such was the Studios (FTS) produced tele- the Christ, which was released Office Space, Cast Away and success of the Family Guy movie Redemption, the highest- on August 31. Unfaithful. rated movie of the year to air on Fox’s general entertainment channel, FX. Malcolm in the Middle, pro- duced by Fox Entertainment Group’s 50 percent-owned Regency Television, was sold into syndication, and The Bernie Mac Show, jointly produced by Regency Television and TCFTV, received critical acclaim and two prestigious Humanitas Award nominations. 10
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  12. 12. WORLD TELEVISION EXCLUSIVE N E W S C O R P O R AT I O N A N N U A L R E P O R T 2 0 0 4 IDOLIZED FOX the Idol of Young Adults and Teens Most competitive season in FOX’s 18-year history. See next page for details 13