Twenty-First Century Fox 2014 Annual Report Download - page 126

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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The Company’s contract with the Major League Baseball (“MLB”) gives the Company rights to broadcast
certain regular season and post-season games, as well as exclusive rights to broadcast MLB’s World Series and All-
Star Game through the 2021 MLB season.
The Company’s contracts with the National Association of Stock Car Auto Racing (“NASCAR”) give the
Company rights to broadcast certain races and ancillary content through calendar year 2024.
Under the Company’s contracts with certain collegiate conferences, remaining future minimum payments for
program rights to broadcast certain sporting events are payable over the remaining terms of the contracts.
Under the Company’s contract with Italy’s National League Football, remaining future minimum payments
for programming rights to broadcast National League Football matches are payable over the remaining term of the
contract through 2018.
Under the Company’s contract with the Board of Control for Cricket in India (“BCCI”), remaining future
minimum payments for program rights to broadcast international and domestic cricket matches and series are
payable over the remaining term of the contract through 2018. In connection with the agreement with BCCI, the
Company was required to obtain a bank guarantee covering its programming rights obligation.
In addition, the Company has certain other local sports broadcasting rights including the right to broadcast the
New York Yankees pre-season and regular season games through the 2042 MLB season.
Other commitments and contractual obligations
Primarily includes obligations relating to distribution agreements, marketing agreements and television rating
services.
Hulu indemnity
The Company owns an equity interest in Hulu LLC (“Hulu”), which is considered a variable interest entity
under ASC 810-10. However, the Company is not the primary beneficiary and hence accounts for its investment
under the equity method. In October 2012, Hulu redeemed Providence Equity Partners’ equity interest for $200
million. In connection with the transaction, Hulu incurred a charge primarily related to employee equity-based
compensation. Accordingly, the Company recorded approximately $60 million to reflect its share of the charge in
the second quarter of fiscal 2013. The Company has guaranteed $115 million of Hulu’s $338 million five-year term
loan which was used by Hulu, in part, to finance the transaction. The fair value of this guarantee was calculated
using Level 3 inputs and was included in the Consolidated Balance Sheet in Other liabilities. In July 2013, the
Company invested an additional $125 million in Hulu and has committed to invest an additional $125 million in
Hulu to maintain its ownership percentage of approximately 33%. The Company will continue to account for its
interest in Hulu as an equity method investment.
Pension and other postretirement benefits
In accordance with ASC 715, “Compensation—Retirement Benefits” (“ASC 715”), the total accrued net benefit
liability for pension and other postretirement benefit plans recognized as of June 30, 2014 was $773 million (See Note
17 – Pension and Other Postretirement Benefits). This amount is affected by, among other items, statutory funding
levels, changes in plan demographics and assumptions and investment returns on plan assets. Because of the current
overall funded status of the Company’s material plans, the accrued liability does not represent expected near-term
liquidity needs and, accordingly, this amount is not included in the contractual obligations table.