Twenty-First Century Fox 2014 Annual Report Download - page 62

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56
Cable Network Programming (39% and 37% of the Company’s consolidated revenues in fiscal 2013 and 2012,
respectively)
For fiscal 2013, revenues at the Cable Network Programming segment increased $1,557 million, or 17%, as
compared to fiscal 2012, primarily due to higher net affiliate fee revenues of approximately $1,075 million and
advertising revenues of approximately $300 million, partially offset by unfavorable foreign exchange fluctuations at
FIC and STAR. The strengthening of the U.S. dollar against local currencies resulted in a revenue decrease of
approximately $175 million for fiscal 2013, as compared to fiscal 2012.
Domestic affiliate fee revenues increased 12% for fiscal 2013, as compared to fiscal 2012, primarily due to
higher average rates per subscriber across most channels, additional subscribers due to the acquisition of an RSN in
Ohio and the launch of Fox Sports San Diego. For fiscal 2013, domestic advertising revenues increased 6%, as
compared to fiscal 2012, primarily due to higher pricing and ratings at FX and the National Geographic Channels,
which comprised 80% of the growth.
For fiscal 2013, international affiliate fee revenues increased 35% and international advertising revenues
increased 20%, as compared to fiscal 2012. Over half of the international affiliate fee revenues’ increase and three-
quarters of the international cable channels’ advertising revenues’ growth were due to local currency growth at the
non-sports channels at FIC and STAR. The balance of the growth was attributable to the international sports
channels, including FSLA, Fox Sports Asia, EMM, the launch of new channels and the new contracts to broadcast
cricket matches in India. These increases in international advertising revenues and international affiliate fee
revenues were partially offset by an 8% and 7% adverse impact from the strengthened U.S. dollar, respectively.
For fiscal 2013, Segment OIBDA at the Cable Network Programming segment increased $628 million, or
18%, as compared to fiscal 2012, primarily due to the revenue increases noted above, partially offset by expense
increases of $929 million. This increase was due to higher operating expenses primarily due to increased
programming costs from the inclusion of expenses from Fox Sports Asia, FSLA and EMM and the new cricket
contracts in India which accounted for 60% of this increase. The launch of new channels, as noted above, and higher
programming costs accounted for 30% of this increase. The higher programming cost was a result of new shows
launched on FX and new contracts for mixed martial arts matches, U.S. college football games and higher National
Basketball Association (“NBA”) costs due to the NBA lockout in fiscal 2012, partially offset by reduced NHL costs
resulting from the NHL lockout in fiscal 2013. The balance of the increase was due to higher selling, general and
administrative expenses primarily related to higher personnel costs as a result of the expansion of the business. The
strengthening of the U.S. dollar against local currencies resulted in a Segment OIBDA decrease of approximately
$80 million for fiscal 2013, as compared to fiscal 2012.
Television (18% and 19% of the Company’s consolidated revenues in fiscal 2013 and 2012, respectively)
For fiscal 2013, revenues at the Television segment increased $57 million, or 1%, as compared to fiscal 2012,
primarily due to higher affiliate fee revenues resulting from higher retransmission consent revenues which more than
doubled in comparison to fiscal 2012, partially offset by decreased advertising revenues of approximately $190
million. The decrease in advertising revenues was due to lower primetime ratings driven by declines at X-Factor and
American Idol.
For fiscal 2013, Segment OIBDA at the Television segment increased $64 million, or 8%, as compared to
fiscal 2012, primarily due to the revenue increases noted above and lower operating expenses of $43 million due to
reduced entertainment programming costs as a result of the final season of House in fiscal 2012 and lower licensing
fees for returning series. This decrease was partially offset by an increase in selling, general and administrative
expenses of $36 million primarily due to higher legal expenses for cases relating to the protection of the Company’s
intellectual property rights.
Filmed Entertainment (31% and 33% of the Company’s consolidated revenues in fiscal 2013 and 2012,
respectively)
For fiscal 2013, revenues at the Filmed Entertainment segment increased $279 million, or 3%, as compared to
fiscal 2012, primarily due to higher worldwide theatrical revenues of approximately $420 million. These revenue