Twenty-First Century Fox 2006 Annual Report Download - page 43

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Management’s Discussion andAnalysisofFinancial Condition and
Results of Operations (CONTINUED)
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 stream management, set-top
box middleware, electronic program guides, digital video recording technologies and interactive infrastructure and applica-
tions. NDS’ software systems, consultancy and systems integration services are focusedonproviding platform operators and
content providers with technology to help them profit from the secure distribution of digital information and entertain-
ment toconsumer devices which incorporate various technologies supplied by NDS.
News Outdoor
The Company sells, through its News Outdoor businesses, advertising space on various media, including billboards, street
furniture and transit shelters, unique boards, airport transit advertising and in-store point of sale displays in shoppingmalls
and supermarkets. It has outdoor advertising operations primarily in Russia and Eastern Europe.
Fox Interactive Media
The Company sells, through its Fox Interactive Media (“FIM”) division, advertising, sponsorships and subscription services
on the Company’s various Internet properties. Web properties include the social networking site MySpace.com, IGN.com,
AmericanIdol.com, Scout.com and Foxsports.com. The Company also has adistribution agreementwith Microsoft’s MSN
for Foxsports.com.
Other Recent Business Developments
During fiscal 2006, the Company broadened its international video distributionagreement withMetro-Goldwyn-Mayer
(“MGM”) into aworldwide home video distributionarrangement, commencing September 1, 2006 for most territories. The
Company released approximately 350 MGM home entertainment theatrical, catalog and television programs internation-
ally in fiscal 2006.
In January 2006, CBS Corporation, owner of the UPN network (“UPN”), and Time Warner Inc., owner of the WB net-
work (the “WB”), announced that UPN and the WB would combine to form a new network, which is expected to launch in
September 2006. The Company owns nine major-market television stationsthat are currently affiliated with UPN. In
February 2006, the Company announced it would launch MyNetworkTV, a new primetime program network in September
2006. MyNetworkTV will provide primetime programming to the Company’s nine stations that had been affiliated with
UPN, the Company’s independent station, as well as to numerous affiliate stations. To the extent MyNetworkTV is not
successful, the Company’s operating results in the Television segmentmaybe adversely impacted.
In May 2006, the Company acquired aregional cablesports channel for approximately $375 million.This channel has
rights to the National Hockey League’s (the “NHL”) Atlanta Thrashers and shares rights to MLB’s Atlanta Braves and the
National BasketballAssociation’s (the “NBA”) Atlanta Hawks with one of the Company’s existing regional sports networks.
In July 2006, the Company and an independent third party agreed to acquire TGRT, anational, general interest broad-
cast television station in Turkey, for approximately $100 million from Ilhas Yahin Holding and other individual share-
holders. The closing of this transaction is subject tocustomary closing conditions, including Turkish regulatory approval.
In August 2006, the Company announced that its FIM division entered into amulti-year search technology and serv-
ices agreement with Google, Inc. (“Google”), pursuant towhich Google will be the exclusive search and keyword targeted
advertising sales provider for a majority of FIM’s web properties. Under the terms of the agreement, Google will be obli-
gated to make guaranteed minimum revenue share payments to FIM of $900 million based on FIM’s achievement of certain
traffic and other commitments. These guaranteed minimum revenue share payments are expected to be made over the
period beginning the first quarter of calendar 2007 and ending in the second quarter of calendar 2010.
ANNUAL REPORT 43