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Notes to the Consolidated Financial Statements (continued)
Shine was controlled by Ms. Elisabeth Murdoch, the daughter of Mr. K.R. Murdoch through April 2011. In April 2011, the Company
acquired Shine (See Note 3 – Acquisitions, Disposals and Other Transactions for further discussion). Prior to the acquisition, through the normal
course of business, certain subsidiaries of the Company entered into various production and distribution arrangements with Shine. Pursuant to
these arrangements, the Company paid Shine an aggregate of approximately $4.1 million in the period from July 1, 2010 through the date of
acquisition and approximately $11.9 million in the fiscal year ended June 30, 2010. No amounts were paid to Shine in fiscal year 2009. As of the
acquisition date, transactions with Shine are eliminated in consolidation.
Mr. Mark Hurd was a Director of the Company until October 2010 and was Chief Executive Officer of Hewlett-Packard Company (“HP”)
until August 6, 2010. Through the normal course of business, HP sells certain equipment and provides services to the Company and its
subsidiaries pursuant to a worldwide agreement entered into by the Company and HP in August 2007. Pursuant to this agreement, the Company
paid HP approximately $55 million and $47 million in the fiscal years ended June 30, 2010 and 2009, respectively.
Mr. Stanley Shuman, Director Emeritus, and Mr. Kenneth Siskind, son of Mr. Arthur M. Siskind, who is a Director and senior advisor to the
Chairman, are Managing Directors of Allen & Company LLC, a U.S. based investment bank, which provided investment advisory services to the
Company. Total fees paid to Allen & Company LLC were $13.6 million, nil and $17.5 million in fiscal 2011, 2010 and 2009, respectively.
The Company acquired an approximate 23% equity stake in Beyond Oblivion, a digital music start-up company, for approximately $9.2
million in April 2010. In April 2010, Mr. Shuman had an approximate 18% interest in Beyond Oblivion. Mr. Shuman also serves as a member of
its board of directors. Mr. Shuman does not receive compensation for his Beyond Oblivion board service. In fiscal 2011, the Company contributed
an additional $2 million to Beyond Oblivion. As of June 30, 2011, the Company and Mr. Shuman own approximately 20% and 14%,
respectively, of Beyond Oblivion.
Other related entities
In the ordinary course of business, the Company enters into transactions with related parties, such as equity affiliates, to purchase and/or sell
advertising, the sale of programming, administrative services and supplying digital technology and services for digital pay television platforms. The
following table sets forth the net revenue from related parties included in the consolidated statements of operations:
2011 2010 2009
For the years ended June 30, (in millions)
Related party revenue, net of expense $546 $503 $587
The following table sets forth the amount of accounts receivable due from and payable to related parties outstanding on the consolidated
balance sheets:
2011 2010
As of June 30, (in millions)
Accounts receivable from related parties $247 $230
Accounts payable to related parties 296 240
Rotana
During fiscal 2010, the Company acquired an approximate 9% interest in Rotana, which operates a diversified film, television, audio,
advertising and entertainment business across the Middle East and North Africa, for $70 million. A significant shareholder of the Company, who
owned approximately 7% of the Company’s Class B Common stock, owns a controlling interest in Rotana. The Company has an option to
purchase an approximate additional 9% interest for $70 million through November 2011. In May 2011, the Company exercised half of this
option and paid $35 million, increasing its ownership in Rotana to approximately 15%. The Company can purchase the remaining additional
interest for $35 million through November 2012. The Company also has an option to sell its interests in Rotana in February 2015 at the higher of
the price per share based on a bona fide sale offer or the original subscription price.
2011 Annual Report 67