Twenty-First Century Fox 2007 Annual Report Download - page 100

NEWS CORPORATION
Notes to the Consolidated Financial Statements (continued)
(d) The Company is upgrading its printing presses with new automated technology that once fully on line, are expected to lower
production costs and improve newspaper quality, including expanded color. As part of this initiative, the Company entered into
several third party printing contracts in the United Kingdom expiring in fiscal 2022.
The Company has an eight year agreement with Nielsen Media Research (“Nielsen”) under which Nielsen provides audience
measurement services for 49 of the Company’s subsidiaries and affiliates.
(e) A joint-venture in which the Company owns a 50% equity interest, entered into an agreement for global programming
rights. Under the terms of the agreement, the Company and the other joint-venture partner have jointly guaranteed the pro-
gramming rights obligation.
(f) The Company has guaranteed a bank loan facility of $65 million (¥7.97 billion) for an affiliate. The facility covers a term loan
which matures in June 2008, and an agreement for an overdraft. The Company would be liable under this guarantee, to the
extent of default by the affiliate.
As of June 30, 2007 the Company was contractually obligated for approximately $242 million and $42 million in the United King-
dom and Australia, respectively, for new printing plants and related costs. All firm commitments related to these projects are
included in the capital expenditure lines disclosed in the commitments table above.
In accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” and SFAS No. 106, “Employers’ Accounting for Post-
retirement Benefits Other Than Pensions,” the total accrued benefit liability for pension and other postretirement benefit plans
recognized as of June 30, 2007 was $344 million (see Note 16 Pensions and Other Postretirement Benefits). This amount is effected
by, among other items, statutory funding levels, changes in plan demographics and assumptions, and investment return on plan
assets. Because of the current overall funded status of our material plans, the accrued liability does not represent expected near-term
liquidity needs and accordingly the Company did not include this amount in the contractual obligations table.
Contingencies
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 amended 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”), the Electronic Communications Privacy Act, the
Computer Fraud and Abuse Act, California’s Unfair Competition statute and the federal Racketeer Influenced and Corrupt Orga-
nizations (“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, all of the claims were dismissed by the court, except for the DMCA, CA and unfair
competition claims, and the court limited these claims to acts allegedly occurring within three years of the filing of Echostar’s origi-
nal complaint.
After 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 correct-
ing 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 Echos-
tar’s original complaint. NDS’s management believes these surviving claims are without merit and 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 misappropriation 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 Dis-
trict of California. Sogecable filed an amended complaint on October 9, 2003, which purported to allege claims for violation of the
Digital Millennium Copyright Act and the federal RICO Act. The amended complaint also purported to allege claims for interference
NEWS CORPORATION 2007 Annual Report 99