Twenty-First Century Fox 2014 Annual Report Download - page 34

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uncertainty regarding the exchange rate that we can access to convert our Venezuelan Bolivar denominated
monetary assets to U.S. Dollars. Such measures can also affect our decision on which exchange rate(s) to use for
financial reporting purposes.
The Loss of Carriage Agreements Could Cause the Company’s Revenue and Operating Results to Decline
Significantly in any Given Period or in Specific Markets.
The Company’s broadcast stations and cable networks maintain affiliation and carriage arrangements that
enable them to reach a large percentage of cable and direct broadcast satellite households across the United States.
The loss of a significant number of these arrangements or the loss of carriage on basic programming tiers could
reduce the distribution of the Company’s broadcast stations and cable networks, which may adversely affect those
networks’ revenues from subscriber fees and their ability to sell national and local advertising time. The Company is
dependent upon the maintenance of affiliation agreements with third party owned television stations and there can
be no assurance that these affiliation agreements will be renewed in the future on terms acceptable to the Company.
The loss of a significant number of these affiliation arrangements could reduce the distribution of FOX and
MyNetworkTV and adversely affect the Company’s ability to sell national advertising time.
The Inability to Renew Sports Programming Rights Could Cause the Company’s Affiliate and Advertising Revenue
to Decline Significantly in any Given Period or in Specific Markets.
The sports rights contracts between the Company, on the one hand, and various professional sports leagues
and teams, on the other, have varying duration and renewal terms. As these contracts expire, renewals on favorable
terms may be sought; however, third parties may outbid the current rights holders for the rights contracts. In
addition, professional sports leagues or teams may create their own networks or the renewal costs could substantially
exceed the original contract cost. The loss of rights could impact the extent of the sports coverage offered by the
Company and its affiliates, as it relates to FOX, and could adversely affect the Company’s advertising and affiliate
revenues. Upon renewal, the Company’s results could be adversely affected if escalations in sports programming
rights costs are unmatched by increases in advertising rates and, in the case of cable networks, subscriber fees.
The Company Relies on Network and Information Systems and Other Technology Whose Failure or Misuse, Could
Cause a Disruption of Services or Improper Disclosure of Personal Data or Confidential Information, Resulting in
Increased Costs or Loss of Revenue.
Network and information systems and other technologies, including those related to the Company’s network
management, are important to its business activities. Network and information systems-related events, such as
computer hackings, computer viruses, worms or other destructive or disruptive software, process breakdowns, denial
of service attacks, malicious social engineering or other malicious activities, or any combination of the foregoing, as
well as power outages, natural disasters (including extreme weather), terrorist activities or human error that may
affect such systems, could result in disruption of our services or improper disclosure of personal data or confidential
information. In recent years, there has been a rise in the number of cyber attacks on companies’ network and
information systems by both state-sponsored and criminal organizations, and as a result, the risks associated with
such an event continue to increase. A significant failure, compromise, breach or interruption of the Company’s
systems could result in a disruption of its operations, customer or advertiser dissatisfaction, damage to its reputation
or brands and a loss of customers or revenues. If any such failure, interruption or similar event results in the
improper disclosure of information maintained in the Company’s information systems and networks or those of its
vendors, including personnel, customer and vendor information, the Company could also be subject to liability
under relevant contractual obligations and laws and regulations protecting personal data and privacy. Efforts by the
Company and its vendors to develop, implement and maintain security measures may not be successful
in preventing these events from occurring, and any network and information systems-related events could require
the Company to expend significant resources to remedy such event. Moreover, the development and maintenance of
these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to
overcome security measures become more sophisticated.
Technological Developments May Increase the Threat of Content Piracy and Signal Theft and Limit the Company’s
Ability to Protect Its Intellectual Property Rights.
Content piracy and signal theft present a threat to the Company’s revenues from products and services,
including, but not limited to, films, television shows, cable and other programming. The Company seeks to limit the