21 Century Fox equity, debt and subsidiaries

Accuracy score :
97%

21st Century Fox

 

Twenty-First Century Fox, Inc. (formerly known as News Corporation), a Delaware corporation, is a diversified global media and entertainment company with operations in the following segments: (i) Cable Network Programming; (ii) Television; (iii) Filmed Entertainment; and (iv) Other, Corporate and Eliminations. The activities of Twenty-First Century Fox, Inc. are conducted principally in the United States, the United Kingdom, Continental Europe, Asia and Latin America.

 

Twenty-First Century Fox’s Class A Common Stock and Class B Common Stock are listed and traded on the

NASDAQ Global Select Market (“NASDAQ”) under the symbols “FOXA” and “FOX”, respectively.

 

The Company’s principal own real properties are the following:

  • North America: The Fox Studios Lot, in Los Angeles, California containing sound stages, production facilities, administrative, technical and dressing room structures, screening theaters and machinery, equipment facilities and four restaurants;
  • South America: The broadcasting and transmission facility of FIC in Buenos Aires, Argentina.

 

On August 4, 2015, the Board of Directors again authorized the repurchase of an additional $5 billion of Class A Common Stock, excluding commissions. The Company expects to fully utilize this stock repurchase authorization over the twelve months period ending in August 2016. The remaining authorized amount under the Company’s stock repurchase program as of December 31, 2015, excluding commissions, was approximately $2.4 billion.

 

In March, 2016, Deadline.com reports that 21st Century Fox and Sky just took part in a $15 million Series B funding round for FuboTV, a U.S. company that sells a cable TV-like package of sports and entertainment channels over the Internet. The companies each kicked in $6 million, and will have seats on the board. The round will be used to grow the FuboTV’s expanding sports-first streaming video offering, develop new features and market the service to increase its subscriber base.

In July 2015, the Company invested approximately $150 million in cash for a minority equity interest in DraftKings, Inc. (“DraftKings”), a leading operator of online fantasy games and contests. The Company accounts for this investment at cost. Contemporaneous with the Company’s investment, DraftKings, as part of their wider media program, committed to spend a minimum of $250 million for media placements on the Company’s properties through December 2017.

 

In June 2015, the Company entered into an agreement to exit its investment in MundoFox Broadcasting LLC, an equity method investee where the Company held a 50% interest, for a cash payment of $75 million. The exit fees are included in Other, net in the Consolidated Statement of Operations.

 

In fiscal 2015, the Company sold its interest in Bona Film Group (“Bona”), a film distributer in China, for approximately $70 million in cash.

 

Summary at end of December (from latest quarterly report)

  • Market Capital: $52,607,997,000 (last share price is $27.43. Numbers of shares outstanding on March 10, 2016 was 1,917,970,000).
  • Total stockholders’ equity $14,504,000,000 down by $5,309,000,000 or 27% (2014: $19,813,000,000). A decrease was primarily due to lower retained earnings by $3,317,000,000 and due to decrease of paid-in capital by $1,526,000,000 primarily due to repurchase programs.
  • Current liabilities $7,268,000,000 or 15.1% out of total liabilities and equity is up by $29,000,000 or 0,4% (2014: $7,239,000,000)
  • Long-term debt $19,251,000,000 or 37.6% out of total liabilities and equity is up by $350,000,000 or 2% (2014: $18,901,000,000).
  • Cash and cash equivalents $4,293,000,000 is down by $5,758,000,000 or 57% (2014: $10,051,000,000) primarily due to repurchase programs.
  • Net sales $13,452,000,000 (six months Jul-Dec) down by 2,490,000,000 or 16% from 2014 (the same months of 2014: 15,942,000,000). An increase at the Cable Network Programming segment thanks to higher affiliate and advertising revenues being more than offset by lower revenues generated at the Filmed Entertainment segment due to lower theatrical revenues and the absence of revenues from Shine (Note: Shine Group ceased to be a consolidated subsidiary of the Company).
  • Net income $1,485,000,000 (Jul-Dec) down by 5,892,000,000 or 80% from 2014 (2014: 7,377,000,000) primarily due to the one-time gain on the sale of the Direct Broadcast Satellite Television (DBS) businesses in November 2014 ($4,984,000,000).

 

 

Summary for fiscal year 2015 ended June (from annual report)

  • Net sales $28,897,000,000 down by $2,880,000,000 or 9% from 2014 (2014: $31,867,000,000). A decrease was primarily due to the effect of the sale of the Direct Broadcast Satellite Television (DBS) businesses in November 2014. Excluding the activity of the DBS businesses, the Company’s revenues increased 3% for fiscal 2015, as compared to fiscal 2014, primarily due to higher affiliate fee revenues partially offset by a decrease in advertising revenues. The increase in affiliate fee revenues was primarily attributable to higher average rates per subscriber across most channels and the effect of the acquisition of the majority interest in the Yankees Entertainment and Sports Network (the “YES Network”) in February 2014. The decrease in advertising revenues for fiscal 2015 was primarily due to the comparative effect of the broadcast of Super Bowl XLVIII in February 2014 and lower general entertainment primetime ratings at FOX. The strengthening of the U.S. dollar against local currencies resulted in a revenue decrease of approximately $625 million for fiscal 2015, as compared to fiscal 2014.
  • Net income $8,537,000,000 up by $3,891,000,000 or 84% from 2014 (2014: $4,646,000,000) primarily due to the gain on the sale of the DBS businesses in November 2014 ($4,984,000,000).

 

 

 

Acquisitions during fiscal 2015

 

At the end of 2015, the Company acquired National Geographic Partners. The Fox took full control of NatGeo’s major assets – its stake in the TV network, its flagship magazine, its TV studio – in a $725m deal.

 

In February 2015, the Company entered into an agreement to acquire the broadcast business of MAA Television Network Limited (“MAA TV”), an entity in India that broadcasts and operates Telugu language entertainment channels, for approximately $375 million in cash.

 

In February 2015, the Company acquired trueX media inc. (“true[X]”), a video advertising company specializing in consumer engagement and on-demand marketing campaigns, for an estimated total purchase price of approximately $175 million in cash including deferred payments which are subject to the achievement of service and performance conditions.

 

In October 2014, the Company acquired two San Francisco-Bay area television stations, KTVU-TV FOX 2 and KICU-TV 36, with a fair value of approximately $220 million from Cox Media Group in exchange for the Company’s FOX Broadcasting Company (“FOX”) affiliated stations WHBQ-TV FOX 13 and WFXT-TV FOX 25,

located in the Memphis and Boston markets, respectively.

 

In September 2013, the Company acquired the 22% interest it did not already own in Latin America Pay Television (“LAPTV”), an entity that distributes premium and basic television channels in Latin America, for approximately $75 million in cash. As a result of this transaction, the Company now owns 100% of LAPTV. The transaction was accounted for as the purchase of subsidiary shares from noncontrolling interests.

 

On February 28, 2014, the Company acquired an additional 31% interest in the YES Network, increasing the

Company’s ownership interest to 80%, for approximately $680 million, net of cash acquired.

In December 2012, the Company acquired a 49% equity interest in the Yankees Entertainment and Sports

Network (“YES Network”), a Regional Sports Network (“RSN”) primarily broadcasting pre-season and regular season games for the New York Yankees and the Brooklyn Nets, for $584 million. Simultaneous with the closing of this transaction, the Company also paid approximately $250 million of upfront programming costs on behalf of the YES Network.

 

In November 2012, the Company acquired a controlling 51% ownership stake in Eredivisie Media &Marketing CV (“EMM”) for approximately $350 million, of which $325 million was cash and $25 million was contingent consideration. EMM is a media company that holds the collective media and sponsorship rights of the Dutch Premier League.

 

In November 2012, the Company acquired the remaining 50% interest in ESPN Star Sports, now operating as Fox Sports Asia, that it did not already own for approximately $220 million, net of cash acquired.

 

In December 2012, the Company acquired SportsTime Ohio, a RSN serving the Cleveland, Ohio market, for

an estimated total purchase price, including post-closing costs, of approximately $285 million, of which $135 million was in cash.

 

Total up investments in standalone subsidiaries and acquisitions in balance sheet at end of December 2015 was $4,053,000,000.

The Company’s investment in Sky had a market value of $11 billion as of June 30, 2015 and was valued using the quoted market price on the London Stock Exchange.

 

Dispositions during fiscal 2015

 

On November 12, 2014, the Company sold its 100% and 57% ownership stakes in Sky Italia and Sky Deutschland, respectively, to Sky for approximately $8.8 billion in value comprised of approximately $8.2 billion in cash received, net of $650 million of cash paid to acquire Sky’s 21% interest in NGC Network International LLC and NGC Network Latin America LLC (collectively “NGC International”), increasing the Company’s ownership stake in NGC International to 73%. In connection with this transaction, the Company participated in Sky’s equity offering in July 2014 by purchasing additional shares in Sky for approximately $900 million and maintained the Company’s 39% ownership interest. As a result of the transaction, Sky Italia and Sky Deutschland ceased to be consolidated subsidiaries of the Company.

 

The Company and funds managed by Apollo Global Management, LLC (“Apollo”) formed Endemol Shine Group in December 2014, to which the Company contributed its interests in Shine Group and cash, comprising an aggregate carrying value of approximately $830 million. The joint venture, a global multi-platform content provider, is comprised of Shine Group, Endemol and CORE Media Group. The Company and Apollo have an equal ownership interest in the joint venture. As a result of the transaction, Shine Group ceased to be a consolidated subsidiary of the Company.

 

Opinion about the company

Fundamentally, it is good company. Recent sharp fluctuation in revenues and balance sheet are because of acquisitions and dispositions. However, beside decline of revenues in Filmed Entertainment, because of change of public acceptance, which is difficult to predicty, the Company now aggressive moving and gain results at Cable Network Programming segments primarily in sports and news, which became very core the Company’s strategy.