Twenty-First Century Fox 2014 Annual Report Download - page 59

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53
Television (17% and 18% of the Company’s consolidated revenues in fiscal 2014 and 2013, respectively)
For fiscal 2014, revenues at the Television segment increased $436 million, or 9%, as compared to fiscal
2013, primarily due to higher advertising revenues and affiliate fees. Advertising revenues increased 5% for fiscal
2014, as compared to fiscal 2013, primarily due to the revenues arising from the broadcast of Super Bowl XLVIII in
February 2014 of approximately $350 million and from higher pricing and ratings driven by the strong National
Football League (“NFL”) regular and post season and the Major League Baseball (“MLB”) post season, including
the two additional MLB World Series games in fiscal 2014. These increases were partially offset by the effect of
lower primetime ratings, led by declines at American Idol and X-Factor, and lower political advertising due to the
absence of the benefit in fiscal 2013 from the 2012 elections. Affiliate fee revenues increased as a result of higher
retransmission consent revenues for fiscal 2014, as compared to fiscal 2013.
For fiscal 2014, Segment OIBDA at the Television Segment increased $27 million, or 3%, as compared to
fiscal 2013, primarily due to the revenue increases noted above partially offset by higher expenses of $409 million,
or 10%, as compared to fiscal 2013. Operating expenses increased by approximately $365 million for fiscal 2014.
This increase was primarily due to the broadcast of Super Bowl XLVIII in February 2014 and higher primetime
programming costs led by increased licensing fees for returning series and higher programming costs related to the
new season of 24 and Gang Related. Also contributing to the increase were higher advertising and marketing costs
to support the fall 2013 launch of new television series and higher sports programming costs primarily related to the
two additional MLB World Series games in fiscal 2014. Selling, general and administrative expenses increased by
approximately $45 million for fiscal 2014, as compared to fiscal 2013, primarily due to higher legal fees and costs
associated with the television station transactions.
Filmed Entertainment (30% and 31% of the Company’s consolidated revenues in fiscal 2014 and 2013,
respectively)
For fiscal 2014, revenues at the Filmed Entertainment segment increased $1,037 million, or 12%, as compared
to fiscal 2013. The increase in revenues was primarily due to higher worldwide theatrical revenues, an increase in
network and syndication revenues, led by Modern Family, and higher digital distribution revenues from the
licensing of television productions. The increase in digital distribution revenue was primarily due to the licensing of
online and mobile rights for various productions led by the licensing of series to Amazon, which includes 24 and
The Americans. Fiscal 2014 revenues included the worldwide theatrical success of X-Men: Days of Future Past and
Rio 2 and the worldwide theatrical, home entertainment and pay television performance of The Wolverine and The
Heat, as compared to fiscal 2013 which included the worldwide theatrical and home entertainment success of Ice
Age: Continental Drift, Life of Pi and Taken 2 and the worldwide theatrical success of The Croods.
For fiscal 2014, Segment OIBDA at the Filmed Entertainment segment increased $50 million, or 4%, as
compared to fiscal 2013, primarily due to the revenue increases noted above partially offset by higher expenses of
$987 million, or 13%, as compared to fiscal 2013. Operating expenses increased by approximately $975 million for
fiscal 2014 primarily due to increases in production amortization and participation costs, largely due to the mix of
theatrical films released in fiscal 2014, as compared to fiscal 2013, as well as increases related to television
productions. Also contributing to the operating expense increase was higher theatrical marketing costs as a result of
the increase in the number of significant theatrical releases in fiscal 2014, as compared to fiscal 2013, including X-
Men: Days of Future Past, Rio 2, The Secret Life of Walter Mitty and DreamWorks Animation’s Mr. Peabody and
Sherman and How To Train Your Dragon 2.
Direct Broadcast Satellite Television (19% and 16% of the Company’s consolidated revenues in fiscal 2014 and
2013, respectively)
For fiscal 2014, revenues at the DBS segment increased $1,591 million, or 36%, as compared to fiscal 2013,
primarily due to the inclusion of revenues resulting from the consolidation of Sky Deutschland from January 2013
and greater contribution from Sky Italia primarily due to the broadcast of the 2014 International Federation of
Football Association (“FIFA”) World Cup. The weakening of the U.S. dollar against the Euro also contributed to a
revenue increase of approximately $225 million for fiscal 2014, as compared to fiscal 2013.