Twenty-First Century Fox 2014 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2014 Twenty-First Century Fox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 168

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168

52
Cable Network Programming (39% of the Company’s consolidated revenues in fiscal 2014 and 2013)
For fiscal 2014, revenues at the Cable Network Programming segment increased $1,392 million, or 13%, as
compared to fiscal 2013, primarily due to higher affiliate fee and advertising revenues as shown below:
Fiscal 2014
% Increase
Affiliate fees ........................................................................................................................... 15 %
Advertising ............................................................................................................................. 9 %
Other ....................................................................................................................................... 3 %
Total ........................................................................................................................................ 13 %
The 13% increase in total Cable Network Programming segment revenue is net of a 2% decline due to the
strengthening of the U.S. dollar against local currencies, and the absence of distributor credits recorded in fiscal
2013.
Domestic affiliate fee revenues increased 14% for fiscal 2014, as compared to fiscal 2013. Over 55% of the
increase during fiscal 2014 was due to higher average rates per subscriber across most channels led by the RSNs,
Fox News Channel (“FOX News”), FX Networks, LLC (“FX”), which includes FXX, and the conversion and
related launch of Fox Sports 1. In addition, over 15% of the increase in affiliate fee revenues during fiscal 2014 was
due to growth in subscribers, led by the conversion and related launch of new channels. The balance of the growth
was primarily attributable to the impact resulting from the acquisition of the majority interest in the YES Network in
February 2014 and the absence of distributor allowances resulting from the 2012-2013 National Hockey League
(“NHL”) lockout in fiscal 2013. Domestic advertising revenues increased 8% for fiscal 2014 as compared to fiscal
2013. Approximately 65% of the increase in domestic advertising revenues is primarily due to higher pricing and
volume, at FX, which includes FXX, at the National Geographic Channels and the conversion and related launch of
Fox Sports 1. The balance of the growth in domestic advertising revenue was primarily attributable to the
contributions from the YES Network and additional NHL games in fiscal 2014.
For fiscal 2014, international affiliate fee revenues increased 19% and international advertising revenues
increased 9% as compared to fiscal 2013. For fiscal 2014, the increase in international affiliate fee revenues was
substantially led by local currency growth, primarily at Fox International Channels (“FIC”), as a result of higher
pricing in Latin America and increase in subscribers in Latin America and Asia. The increase in international
advertising revenues in fiscal 2014 was significantly driven by local currency growth at FIC and STAR due to
higher pricing and volume in Latin America, higher pricing at STAR’s entertainment channels and STAR Sports’
broadcast of the Asia Cup and International Cricket Council cricket tournaments. Also contributing to the increase in
international affiliate fee and advertising revenues for fiscal 2014 was the conversion and related launch of STAR
Sports, the consolidation of Fox Sports Asia and the acquisition of EMM. The international affiliate fee and
advertising revenue increases in local currencies, for fiscal 2014, were partially offset by the adverse impact of the
strengthening of the U.S. dollar against local currencies, primarily in India and Latin America.
For fiscal 2014, Segment OIBDA at the Cable Network Programming segment increased $230 million, or 6%,
as compared to fiscal 2013, primarily due to the revenue increases noted above, partially offset by higher expenses
of $1,162 million, or 17% as compared to fiscal 2013. Operating expenses increased by approximately $1,070
million for fiscal 2014. Approximately one-half of this increase was due to the continued investment in new
channels and the Acquisitions. The remaining increase was primarily due to higher programming costs at FIC, the
RSNs and FX. These increases were due to a combination of continued investment in new shows and sports
programming and additional NHL games broadcast by the RSNs in fiscal 2014. Selling, general and administrative
expenses increased for fiscal 2014 by approximately $85 million primarily due to higher personnel costs and the
effect of the Acquisitions. The increase in Segment OIBDA for fiscal 2014, as compared to fiscal 2013, is net of a
decrease of approximately $130 million due to the strengthening of the U.S. dollar against local currencies.