Media/Cable/Media Delivery Companies

America Online Time Warner (AOL)

See Time Warner below

Brokerage	Recommendation	Sentiment
Bear Stearns
Lehman Brothers
Wells Fargo Sec.

Blockbuster Inc. (BBI) Dallas, TX CEO John Antioco

· Viacom owns 82.3% of Blockbuster which it bought in 1994

· February 2004 – Viacom looking to sell its stake

· 5500 stores - 2004

Blockbuster Market Share and Stats:

· Video Rental Market share

· Has a 36% market share in the rental business

· Wants a 40% market in 5 yrs

· Profit Margin:

· Rentals – 65%

· Movie Sales – 15%

· 80% of Blockbuster’s total revenue is through rentals

Blockbuster Acquisitions and Stakes:

• Viacom bought Blockbuster in 1994 for $7.6B

· Buying Hollywood Entertainment for $700M – November 2004

o Represents a 17% premium at $11.50 a share – Hollywood video has 1920 stores

o February 2005 – deal now valued at $991M

o Blockbuster would control one half of the US rental business – Hollywood Video is the No.2 player behind Blockbuster

o Blockbuster contends that it would give them a 20% home-video market share in the US

o Will have over 6900 locations in the US

o Will be facing heavy regulatory scrutiny but will claim that Wal-Mart and Costco are their competitors with their extremely low priced DVD’s

o Increased bid to $991M – February 2005 and will assume $350M in debt (Movie Gallery put in a bid for $700M)

o CALLED OFF ACQUISITION – March 2005 – Claimed too regulatory concerns

Blockbuster General Info:

· Blockbuster and the 1990’s

· In 1996 and 1997 had weak sales – management in turmoil and ill conceived push towards merchandise in stores

· Gain’s in the late 1990’s was attributed to new revenue-sharing distribution deal that increases the number of popular new tapes in Blockbuster stores

· Studios receive some revenue

· Blockbuster pays far less for movie titles than their competitors

· Had a initiative with Enron to offer Video-On-Demand with Enron

· Stopped Video-On-Demand with Enron – Right before Enron went into Chapter 11

· The new Millennium for Blockbuster:

· Fixing Blockbuster was crucial to Redstone (Viacom)

· Going after smaller rivals like Hollywood Entertainment – Has a 36% market share – wants 50%

· Tried selling Direct TV (Hughes Electronics at the time) in stores

· A New Road for Blockbuster Stores - 2000

· Will be selling VCR’s, TV sets and DVD players in most of its 5000 US stores – Blockbusters will become a consumer electronics boutique

· Why the video and TV’s? – Their rental business has hardly been growing at all in the past ten years

· In three to five years wants non-video rental to contribute about 30% to Blockbuster

· Radio Shack will operate these areas of the store

· January 2001 – Totally scraped the idea

· In 1980’s cost per movie $22-$25 – now all less than $20

· CEO John Antioco:

· Became CEO in 1997

· Blockbuster isn’t going to compete on cost. “What we are about is convenience and selection. “ – John Antioco

· Blockbuster outside of the US:

· Closing its stores in Hong Kong by 2005 – claims pirated copies too cheap to deal with and high operating costs in Hong Kong

· Blockbuster failed in Europe

· “The market dynamics of home video have been significantly and permanently been altered, the rental market is 7% to 8% smaller today die to movie studios pricing DVD’s cheaply” – John Antioco – he expects the rental market to suffer another couple of percentage point declines in 2004 then leveling off in 2005

· Dropped the hated late fee – January 2005 – Late fees would have contributed between $250M to $300M in revenue for 2005

· Blockbuster Online: Movies-by-Mail

· Online/home delivery service similar to Netflicks

· Will be able to integrate the mail order service with the convenience of its 5500 stores in the US

· Wants to have 2M subscribers by 2006

· Enrolled 750,000 in the first seven months starting in 2004 – was only expecting 250,000

· Online/Delivery operations have proven to be costly from an operations stand point – Blockbuster has been undercutting Netflicks pricing since its launch and continuing in 2005

· By 2008, CEO John Antioco wants the online operations to be 30% of revenue

· Growth:

· Expects video rental sales to decline 3% a year from 2005

· From 2001 to 2004 – Sales down 17%

· Enter Carl Icahn – April 2005

· Carl Icahn trying to oust CEO John Antioco from Blockbusters board. Icahn wanted Antioco to pay dividends to shareholders and delay the election date for new candidates for the board. Antioco denied his request now Icahn is looking for his removal in the interest of the shareholders

· Mr. Icahn controls 8.6% of the voting shares of Blockbuster and gained a seat on the board along with two other dissent shareholders favorable to Mr. Icahn - May 2005

Brokerage	Recommendation	Sentiment
Morgan Stanley
UBS
Deutsche Securities

Cablevision Systems (CVC) CEO James Dolan Bethpage, NY http://www.cablevision.com/

· 6^th largest US cable company

· Serves 3M households in New York

· Units:

· Rainbow Media Holdings (RMG) – Rainbow Programming

· Operates programming businesses including AMC, WE (Women’ s Entertainment), The Independent Film Channel (IFC) and other national and regional services

· Rainbow is a 50 percent partner in Fox Sports Net

· Unit spun-off September 2004 – was once a tracking stock

· Rainbow DBS

· Voom

· Rainbow Developing

· Fuse, Fox National Sports, Metro Channels

· Regional Sport network

· 60% interest in Fox Sports Ohio, Florida, Chicago, and San Francisco

· Cablevision also owns a controlling interest and operates Madison Square Garden and its sports teams including the Knicks and Rangers

· Operates New York’s famed Radio City Music Hall and owns and operates Clearview Cinemas

Cablevision Stakes and Divestitures:

· Sold the Bravo channel to NBC in 2002 for $1.25B

· Buying News Corp’s 40% stake in Madison Square Garden’s, New York Knicks, Rangers, and four regional sport networks – Announced March 2005

· News Corp will get Cablevision’s 60% stake in Fox Sport Net and two regional sport networks

· Sold Rainbow Satellite to EchoStar for $200M

Cablevision General Info:

· Cable subscribers – Has 4.4M subscribers in New York

· Broadband Subscribers:

· 1.4M subscribers – almost one-third of its subscribers have broadband access – May 2005

· 1.6M – end of 2005

· Phone subscribers 601,00 – end of 2005

· Voom – Satellite TV Business

· Launched in 2003

· Subscribers

· 25,000 – June 2004

· End of 2004 – 26,000

· Voom lost $75.3M in 3Q2004 alone

· Voom lost a total of $661.4M in 2004

· Selling Most of Voom to EchoStar for $200M – January 2005

· Voom’s satellites cost $250M to build and launch and has 16 years left in orbit

· Charles Dolan buying the remaining assets of Voom which include 21 hi-def channels, including satellite licensing and customer agreements

· Will be leasing capacity on EchoStar’s satellites

· Deal has now collapsed and Cablevision will shutter the remaining assets of Voom – Announced March 2005

· April 2005 – Charles Dolan finally succeeded to pressure and dropped bid for Voom and agreed to shutter the unit

• Spinning-off Voom along with Clearview Cinemas, AMC, Independent Film Channel and WE Women’s Entertainment – May 2004

· Cancelled plans to spin-off Voom – Now may possible shutter the unit of look for a buyer – January 2005

· Recording a $100M to $130M loss on the shutdown of Voom – Announced June 2005

· Phone Subscribers:

· 70,800 - May 2004

· 115,000 – September 2004

· 364,000 – May 2005

· Offering VOIP as a new growth initiative from 2004 going forward

· Bundling cable with unlimited local and long distance phone service

· Company controlled by the Dolan Family

· Thomas Dolan – CEO of Rainbow

· James Dolan – CEO of Cablevision

· Charles Dolan (The Father) – Was Chairman of Cablevision but stepped down in 2004 – Now chairman of Rainbow – One of the founders of HBO

· Dolan family controls 71% of Cablevision’s voting stock (Was 76% in the early 2000’s) and 20% of common stock

· Charles Dolan bought The Wiz Electronic retailers for $60M, put in $200M in operations and then had to liquidate it in 2003

· SEC investigation in AMC movie channel – 2003

· Found 6.2M in improper marketing expenses that were booked in 2002 instead of 2003

· In 2003 cablevision restated financial results for five quarters on 2002 and 2003 with $13M in accounting irregularities

· Executive Exodus:

· September 2004 – Three senior execs left, the controller, executive vice president and division controller for cable operations

· Cablevision rumored to be putting itself up on the auction block – March 2005

· March 2005 Board Room Shuffle:

· Charles Dolan rearranged the makeup of the board of Directors for Cablevision and replaced three of them, including John Malone of Liberty, with three that would give him a vote of confidence with his intended purchases of the remaining assets of Voom. The previous board shot down his request and suggested shuttering the remaining assets of Voom.

· New board agreed to Charles Dolan’s purchase of Voom

· April 2005 – Charles Dolan finally succeeded to pressure and dropped bid for Voom and agreed to shutter the unit

· Cablevision going private?. Announced June 2005.

· Dolan Family taking Cablevision private in a $7.9B deal

· Will still spin off Rainbow Media Holdings (Network Channels, Sport Teams, MSG, etc.)

· Cox Cable (Cox Enterprises) went private in 2004

· Benefits of going private:

· Cablevision will be able to take on more debt and make long term plans instead of appeasing Wall Street on a quarterly basis

· Will help them fend off threats from the teleco’s offering of TV and broadband

· Plan to take them private was halted

· New plan to pay shareholders roughly $10 a share in a special dividend for a total around $3 billion

· Cablevision was facing higher interest rates on its debt which would have made them one of the most highly leveraged cable companies in the U.S.

CBS (VIA) (VIAb)

· CEO Michael Jordan (will leave in 4yrs when he’s 65) Pres. Mel Karmazin

· Formerly Westinghouse

· Westinghouse bought CBS back in 1995 and renamed name CBS

· Sold off chunks of Westinghouse unit to go for a pure-play media concern – selling its nuclear –power business and smaller government operations unit to Morrison Knudson and British Nuclear Fuels Ltd.

· Bought out by Viacom (VIAB)

Brokerage	Recommendation	Sentiment
Morgan Stanley
Bear Stearns
AG Edwards

Charter Communication (CHTR) CEO Robert May St. Louis, MO http://www.chartercom.com/

· Fourth largest cable operator

· Controlled by Paul Allen of Microsoft fame

· Has 6.6M cable subscribers - 2004

· 6.0M cable subscribers – June 2005

· 23,000 telephony subscribers

· Has a debt load of $18B – March 2004

· In 2004 – has too much debt load for its current cash flow

· Company seen as only being able to handle $14B in debt with its current EBITDA

· Due to capital constraints – Unable to grow operations like their competitors such as VoIP or video on demand

· Jan 2005 - $19B in debt

· In 2001 – Charter was accused of improper accounting and bogus subscriber counts

· Paul Allen:

· Paul Allen, co-founder of Microsoft bought Charter in 1999 for $7.5 billion.

· He remains Chairman of Charter Communications

· Charter CEO Succession:

· Carl Vogel, CEO from September 2001 to January 2005

· Mr. Vogel was said to always be mad that Charter’s Chairman, Paul Allen, didn’t invest enough money into Charter or help relieve its heavy debt

· New CEO Neil Smit

· Mr. May was head of AOL’s access business and replaced interim CEO Robert May who held that position from January 2005 to August 2005

· 2005:

· Lost 125,000 cable subscribers during the first three quarters of fiscal 2005

· Failed to make 1Q2005 dividend payments on its preferred stock

· Charter has failed to reach their subscriber goals for 10 of the past 11 quarters ending in March of 2005

· Charter lost 83,100 cable subscribers in 4Q2004 making its worst loss ever

· Whay has Charter been stumbling?

· Their cable operations are spread thinly over 39 states and include many rural areas that at the time are favoring satellite TV.

Brokerage	Recommendation	Sentiment
Smith Barney
Goldman Sachs
Schwab Soundview

Clear Channel Communications (CCU) San Antonio, TX CEO Mark P. Mays http://www.clearchannel.com/

· Nations largest radio group, broadcaster, concert promoter, and operator of concert venues

· Largest Spanish-language radio group and billboard in US

· 1233 radio stations in 280 markets

· Next biggest competitor – Cumulus Media with a total of 260 stations

Clear Channel Acquisitions and Stakes:

· Acquired Eller Media for $1.07B in 1997

· Became Clear Channel’s Outdoor Advertising Unit

· Acquired JCOR for $2.8B in 1998

· Merged with Chancellor Media Group (AMFM) for $23.8B ($17.4B) in 1999

· Needed to sell 99 radio stations in 27 markets to satisfy FCC regulations

· Needed to sell its 29% stake in Lamar advertising

· Assets included Outdoor Advertising and Capstar Advertising

· Chancellor was biggest pure play radio concern controlled by Hick Muse Tate at the time

· Acquired SFX Broadcasting in 2000 for $4.5B

· With SFX, Clear Channel obtained their dominant concert promotion division

· Acquired Ackerly Group for $497M – 18 TV stations including five Seattle radio stations

· Has a 4.6% stake in XM Satellite

· China:

· Entering China in a deal with Gehua Group’s Beijing Gehua Cultural Development Group – Announced March 2005

· Will bring concert and other US events such as sports to China under a 50 year partnership

Clear Channel General Info:

· Has 37 TV stations in throughout the US, 135 concert venues and 776,000 outdoor advertising displays

· Radio:

· Nations largest radio group, largest Spanish-language radio group with roughly 1233 stations in 280 markets

· Can only own 8 stations in a market but can form local marketing agreements and joint sales agreements with other stations

· Their radio profit margins are between 40% to 45%

· Has equity investments in over 240 radio stations overseas

· Converting at least 20 of their station into Spanish stations from 2004 to 2006

· Clear Channel currently has 18 Spanish stations and will compete against Univision’s 68 Spanish speaking stations

· Advertising:

· Clear Channel controls 10% of the nation’s total advertising and 20% of the industry’s advertising revenue

· Entertainment Division:

· Clear Channel is the No.1 Concert Promoter – No.2 AEG (Anshutz), No.3 House of Blues Entertainment

· Unit began in 2000 with the acquisition of SFX Broadcasting (Entertainment)

· Concert division profit margins are between 8% to 12% and have high expenses

· Early to mid 2000’s – Concert Division has been a drain on the company and poor performer

· Why has it been a poor performer?

· Major PR problems with Artists and the public as being perceived as a monopoly and too much dominance along with a major increases in ticket prices for concerts during the early 2000’s when money was tight more mush of their audience

· To get around this problem, Clear Channel will stop advertising its name in its venue’s and promotions but use the name of the local promoters it bought out in the past

· Spun off its Entertainment division CCE (CCE Spinco, Inc) – December 2005 – (LYV)

· CEO Succession:

· L. Lowry Mays and founder of Clear Channel, replaced by his son Mark P. Mays – 2004

· Mays family owns 6% to 7% of Clear Channel stock

· April 2005 – Announced they’d be spinning off their entertainment division (Clear Channel Entertainment) in an IPO along with 10% of their Outdoor advertising Unit

· Justice Department has two different investigations regarding its practices radio and concert business activities

· Announced they increase their dividend by 50% plus give shareholders a onetime $3 per share special dividend

· Hicks, Muse, Tate selling its 7% stake in Clear Channel – Announced May 2005

· Being acquired by Thomas H. Lee Partners and Bain Capital Partners.

Brokerage	Recommendation	Sentiment
Merrill Lynch
Prudential
Morgan Stanley

Comcast (CMCSK) (CCZ) (CMCSA) Philadelphia, PA Chairman Ralph Roberts, CEO and President Brian Roberts http://www.comcast.com/

· Divisions: Cable, Commerce, Content

· No.1 cable company in the US

· Was once the No. 3 cable company - AT&T broadband 16.1M subscribers, TWX has 12.8M, Comcast 8.5M – 2000

· Comcast’s cable reach - Reaches one in five US households

· Has three different classes of stock

· Controlled by the Roberts Family – has a 2% economic interest with 86% voting power

· Brain Roberts controls 33.3% of the voting shares himself - 2007 figure.

· Content – QVC TV Retailer, E! Entertainment (51%), The Golf Channel (99%), Outdoor Life (100%), Speedvision, Comcast Sportsnet, Comcast Sports Southeast, In Demand, Sunshine Network, Style (50%), G4 (94%), TV One (40%)

· Spectacor – Philadelphia 76’ers, Philadelphia Flyers, two indoor sport facilities in Philadelphia

Comcast Acquisitions and Stakes:

· Tried to acquire Media One in March of 1999 with a bid of $8.63B – AT&T outbid – their offer was $54B – AT&T sold them 2M subscribers so their merger with Media One would go through

· 15% stake in Sprint PCS

· Owns a controlling stake in Denver’s Jones Intercable from BCI of Canada

· MSFT has invested over $1B in Comcast

· Majority owner of the Philadelphia 76er’s and the Flyers

· Comcast and AT&T Broadband

· Bid $44.5B for AT&T Broadband – Summer of 2001

· Buying Reduced to $30B – November 2002 – Ended up paying $50.1M

· Initial called the venture AT&T Comcast and had 27M subscribers combined when announced

• Federal Appeals court struck down FCC rules barring cable companies from controlling more than 30% of the nations pay-TV market – Allowed the deal to go through

· AT&T Comcast will have 28.9% of the nations pay-TV market

· Comcast will get $2.1B in cash and $1.5B in AOL stock

· Comcast took over $20B in AT&T Broadband’s debt – will have total debt load of $30B

· AT&T Comcast broadband margin – 23% - a little over half of the cable industries average

· AT&T broadband’s operating margin – 20% - one of the industry’s lowest - 2003

· Will have no free cash flow in 2003 due to merger but will once again produce it in 2004

· Expecting to grow 20% a year EBITDA for 2002-2006

· Three companies now control more than 65% of the US cable business

· Stake in Time Warner Entertainment:

· Having to place its 26% stake in Time Warner Entertainment (Cable) in an irrevocable trust – Received from AT&T Broadband

· January 2004 – selling its now 17.9% stake in Time Warner Cable

· Sold its 57% majority stake in QVC to Liberty Media for around $8B – October 2003

· Submitted unsolicited $48.7B offer for Walt Disney – February 2004 – a 7% premium – February 2004

· Combined companies would have $45B in annual revenue

· The 7% premium was basically erased after the second day the news broke of the merger and now considered to give shareholders the idea that “if you’re unhappy with Mr. Eisner, let us run your company” – WSJ

· May 2004 – DROPPED BID

· Buying Tech TV from Paul Allen for around $300 – April 2004

· Tech TV is in 43M homes and will merge in into Comcast’s G4 video game network

· Sold its Liberty stake to Liberty for $1B while Liberty transfers its 10% stake in E! Entrainment and the International Channel in a tax-free exchange – July 2004

· Comcast and Time Warner submitting a joint bid for Adelphia Cable – Comcast offering between $1B-$2B plus its 26% stake in Time Warner Entertainment – Announced February 2005

· Bid for Adelphia is $17.6B – April 2005

· Adelphia is in Chapter 11 and has roughly 5M cable subscribers making it the fifth largest cable company in the US

· E! Entertainment Channel – Comcast owns 51% of the company while Disney owns the other 49%

Comcast Stats:

· 21.5M subscribers in 41 states – March 2005

· Digital Subscribers:

· 6.3M digital cable subscribers – July 2003

· July 2003 - 30% of its subscribers are digital subscribers

· July 2004 – 37.5% of its subscribers digital

· Broadband Subscribers:

· 1.3M - November 2002

· 3.62M - 4Q2002

· 3.3M - July 2003

· 6.5M - October 2004

· 7.4M – April 2005

· Telecom subscribers:

· 1.3M – July 2003

· 1.22M – Full year 2004

· Goal of 8M by end of 2005

· Cable subscriber growth reached a plateau in 2005

Comcast General Info:

· Started in 1963 as a family business in Tupelo, Mississippi

· Top markets are Boston, Philadelphia, and Chicago

· Markets Excite at Home, Comcast at Home

· In-Demand Pay-per-view video-on-demand service – Owned by Comcast, Time Warner, and Cox

· Investment grade crisis in 2003:

· To maintain its investment grade rating, Comcast needed to reduce its debt by $4B and increase its cash flow by the end of 2003

· Stephen Burke – Hired in June 1998 to run Comcast’s Cable Systems

· Was at Walt Disney for 12 years and ran three division in his tenure

· Launched Disney stores and turned around Euro Disney, was the President of ABC Broadcasting

· Father, Daniel Burke - CEO of Capital Cities, Uncle James Burke - former CEO of J&J

· Phone Service:

· Looking to provide Voice over IP (VOIP) in late 2004 – Broad launch in 2005

• Offering phone service to 40M households by the end of 2006
• Using VoIP which is much cheaper than circuit-switch technology
• “We’re hopeful voice telephony will allow our industry yet again to have another growth product” – Brian Roberts – May 2004
• Half of its subscribers will have access by 2005 and all by 2006
• Level 3 and Sprint are likely candidates for Comcast to use their network for VOIP traffic
• COO Steve Burke on Telecom – “This is a growth engine we’re counting on for the next five to ten years” – January 2005
• Phone service could boost revenue by $3.8B by 2009 with 18M subscribers and profit margins of 40%
• Video phones – Testing video phones in 2005

• The cost of entry for cable companies is relatively low and extremely affordable for them especially when you take into account most of their labor force is not unionized

• New user costs for Comcast estimated to be roughly $300 per new user and cost will be recoup in eight months
• Margins for phone service expected to be 40%

· Video On Demand:

• “We are changing TV” – CEO Brian Roberts – January 2005

• Network TV is currently worried On-demand will kill advertising, reruns, DVD sales and TV shows and thus major contention between content providers and On-Demand cable initiatives

· Set-Top Boxes:

• Comcast primarily uses set-top boxes from Motorola

· March 2005 – Strengthened its alliance with Motorola and pledged to buy up to $1B in Motorola Digital Set-top boxes and will create a joint venture together to develop new access technology and will license it together

• Using Microsoft “Foundation” set-top box software in Seattle, WA only in 2005
• Announced deal with TiVo for interactive advertising capabilities – March 2005

· Wall Street still considers Comcast a growth company with revenue growth of 10% year and strong cash flow in the double digits – 2004/2005 sentiment

· Repurchasing $2B worth of stock – Announced July 2004

· Brian Roberts Vision – Wants to increase Comcast’s ownership of content

· 2Q2004 – Lost 96,000 cable subscribers

• Satellite and DSL starting to make inroads in the once thought un-penetrable cable domination

· With Sony - 2004

• Agreement with Sony for access to its movie titles
• Contributing $300M in Sony’s buyout of MGM

· Comcast is purchasing about 4B a year in content making it the world’s largest purchaser of content in 2004

· Comcast’s next frontier – Video phone, Video Chat, Interactive TV, Interactive Advertising

· CEO Brian Roberts

· “We no longer need to grow for growth’s stake” – September 2004

· See the future of TV with DVR and massive hours of storable programming as “Nirvana”

· On Broadband – “This product reminds all of us of cable TV in the beginning…once you have it you can’t go back” – 2004

· Fiber Initiative:

· Will lease 19,000 miles of fiber from Level 3 under a 20 year $100M deal connecting 95% of Comcast customers to video on demand and other fiber initiatives – Announced December 2004

· Plan to use fiber for On-demand video, etc.

· “We’re trying to go all services, all devices, one network” – Comcast CTO David Fellows – December 2004

· Wireless and Comcast:

· “It’s no secret that we are exploring wireless operations with other cable operators and a variety of wireless companies” – CEO Brian Roberts – May 2005

· Would love to be able to bundle wireless, broadband , cable, phone and TV

· Developing a rival to ESPN (Walt Disney) – Announced July 2005

· Possible plans to transform its Outdoor Life Network into the new sports based network

· ESPN pulls in roughly $1B a year in cash flow for Disney

· Comcast will first focus on obtaining NHL rights that ESPN let expire in 2005

DirecTV Group (DTV) El Segundo, CA CEO Chase Carey www.directv.com

Formerly called Hughes Electronics – See Below for Historic Info

DirecTV’s three operating groups:

· DirecTV US

· Subscribers:

· 12.6M – March 31, 2004

· 13M – June 2004

· No.1 DBSTV service provider and No.2 MVPD provider

· Currently eight satellites – 2004

· 13.94M - End of 2004

· 14.5M – June 2005

· Churn

· 1.67% - 3Q2004

· DirecTV Latin America (DLA)

· Operates in South America, Central America, Mexico and the Caribbean

· DLLA LLC – 86% owned by DirecTV – Has 16 subsidiaries

· Has 1.5M subscribers in 28 countries

· Hughes Network Systems (HNS)

· Directway

· Satellite-based Internet access service

· 180,000 subscribers - 2003

· Spaceway – out 2005

· Looking to sell the unit but having difficulties finding a buyer in 2004

DirecTV General Info:

· Spending $1B from 2004 to 2007 purchase three Boeing Satellites

· Launching two satellites in 2005 with the third being kept for spare parts

· Spaceway

· Internet via Satellite for consumers

· Using two Boeing 702 satellites

· Shuttered Spaceway initiative for Internet connection though using the satellites for High Def TV

· Partnership with Verizon and Bell South to supply Sat TV to their customers

· DirecTV is not expected to generate free cash flow until 2006 due to its massive capital expenditures inherent with new satellites, marketing, and other pushes into interactive services

· Wants to have 15M subscribers by the end of 2006

· Consolidating Latin and South America operations – October 2004

· Paying $579M to consolidate and acquire its competitors Grupo Televisa (Mexico), Globo Communicaloes e Participacoes (Brazil) and Liberty Media International

· Will now have 3.4M subscribers - wants 5M in three to five years from 2004

· Buying News Corps. Latin America Sat TV for $496M

· Will shut down its Mexican Operations

· NFL – Football licensing deal

· NFL’s Sunday Ticket – Deal valued at $3.5B through 2010

· “The big monster s DirecTV’s deal with the NFL…we’re the ones who should be complaining” – CEO of Timer Warner, Richard Parson’s – April 2005

· Liberty Media controls a 40% stake of DirecTV Group.

Brokerage	Recommendation	Sentiment
Smith Barney
JP Morgan
Deutsche Sec.

EchoStar (DISH) Littleton, CO CEO Charles Ergen www.echostar.com

· Two units: Dish Network and EchoStar Technology Corp (ETC)

· Subscribers

· 8.2M subscribers to its Dish Network – No. 2 satellite – 4Q2002 (Comcast 21.3M, DirecTV 11.2M, TWX 10.9M)

· 9.5M subscribers – March 2004

· 10.1M – June 2004 with churn rate of 1.71%

· 11.3M – May 2005

· Subscriber acquisition cost:

· $56.11 – 3Q2004

· Vivendi owns a 10% stake in EchoStar

· Charles Ergen – Ergen family controls 90% of the voting share of EchoStar

· Tried to acquiring Hughes Electronics – Has 12M subscribers

· Justice Department and FCC rejected its $18B takeover of Hughes on antitrust

· No longer trying to acquire Hughes

· Concentrating on 60 metropolitan area representing 65% of the US population

· Joining with SES Global to offer residential Internet access

· EchoStar will lease all the capacity of SES satellites that will launch in 2004

· Submitted $1.8B bid to acquire Loral Space and Communication – Loral currently in Chapter 11 – October 2003

· TiVo suing EchoStar over patents Digital Video Recorder technology

· “The name of the game for EchoStar is subscriber acquisition” SES CEO Roman Bausch – March 2004

· Cost to acquire a new subscriber, $604 – May 2004

· Alliance with SBC to supply Sat TV to SBC customers

· Buying Voom from Cablevision for $200M –January 2005 – See Cablevision above

· Satellite Internet Access:

• Offering Internet access in late 2005 and will use satellites from SES
• EchoStar lost over $100M in past attempt in offering satellite internet access

· Banned from broadcasting local sports and broadcasts outside the “home area.” Ruling by Federal District Judge in Fort Lauderdale Florida – 2006

• Labeled as a National Wire Injunction
• Seen as a victory for News Corp.

Brokerage	Recommendation	Sentiment
Smith Barney
JP Morgan

Gemstar – TV Guide International (GMST) (GMSTE) Pasadena, CA CEO Jeff Shell www.gemstartvguide.com

· Formed through the merger of Gemstar International Group and TV Guide in July of 2000

Gemstar’s Three Units:

· Technology and Licensing Sector:

· Interactive Program guides – GUIDE Plus+ and TV Guide Interactive

· VCR+, Gemstar eBook

· Interactive Platform Sector:

· Manages recurring income from their proprietary interactive devices such as TV Guide Interactive and Guide Plus+, TV Guide Online and Gemstar eBook

· Media and Services Sector:

· Operates TV Guide Magazines, TV Guide Channel, TVG Network

Gemstar General Info:

· Interactive TV – Has intellectual property rights to the electronic programming guide

· Controls the patents behind the scrolling TV guide on cable channels

· Gemstar eBook

· Leading promoter of electronic books (e-books)

· Owns Softbook Press and Nuvo Media – makes e-book devices

· News Corp. has a 43% stake in Gemstar – News Corp has written off $6B in Gemstar

· Founder and Chairman Henry Yuen resigned November 2002 – Succeeded by Jeff Shell

· Forced to resign from pressure from News Corp.

· Yuen tried to protect Gemstar’s patents buy suing tons of companies on patent infringement but these were the same companies that Gemstar needed to do business with, instead it acted as a bridge burner

• Henry Yuen became a wanted man – April 18, 2003 – Failed to show up in court for an SEC investigation

· Pleaded guilty to Felony obstruction of Federal Securities Anti-trust for over stating revenue from 1999 through 2002. Received only six months of home detention and a $250,000 fine. – September 2005

· Gemstar’s SEC problems:

· Company expected to charged with civil fraud from the SEC – January 2004

• Paying SEC $10M over Gemstar overstating revenue by $250M from 1999 through 2002 – June 2004

• KMPG conducted improper accounting methods from 1999 to 2002 by allowing Gemstar to record revenue without having the actual customer contracts – October 2004

· KPMG paying Gemstar shareholders $11M in restitution

· Licensing its programming guide to EchoStar for $190M and thus ending their patent dispute that began in 2000 – March 2004

· Selling its Superstar/Netline Group UUTV distribution and space communication units to EchoStar for $48M

· “Gemstar’s stock is an option on the growth of digital TV worldwide” – Morris Mark – Mark Asset Management

· CEO Jeff Shell – Former exec at News Corp.

· Shell instituted a new focus on mending relationships that Gemstar (with Yuen) sued and has formed licensing deals

· First large deal was with Comcast – Comcast “completes our transition from enemy of the cable world to friend of the cable world” – CEO Jeff Shell

· Upside for Gemstar - Its licensing deals

· TV Guide circulation topped out at $19M in the late 1980’s

· TV Games Network – Offers Internet wagering on Horse Races

· Plans to launch service that allows betting through a remote control

· New partnerships with Matsushita (Panasonic) and Sony for Interactive program guides

· Working with Comcast with development of interactive guides for set-top boxes – 2004

· New Concept of 2005 – Launched July 2005

· Transformed TV Guide into a larger full size format and focusing more on entertainment, lifestyle and celebrity

· TV Guide has had a much older audience and they want to focus on younger readers with this format change

· Currently has a circulation guarantee of 9M in 2005 but with new format will reduce that by one-third

· Will now guarantee circulation rates of 3.2M with the new format

· Will no longer supply TV Guide to hotels

· At its peak, TV guide had a circulation of 19.7M in 1975

· Scaling back it listings to 25% of the magazine with features representing 75% of the magazine

· Previously had 140 different version of TV Guide will now just have an eastern and pacific time zone version

· Expecting to have roughly 4.5M subscribers

· Sold its SkyMall unit, which they bought in 2001, for $52M – In-flight catalogs

Hicks, Muse, Tate, & Furst CEO Thomas Hicks (One of Texas biggest tycoons in Texas)

· Leveraged Buyout Firm

· National network of Radio, TV outlets, and possible billboards

· Dallas Stars, Texas Rangers, Bumble Bee Tuna

· Simon & Schuster reference business

· Acquired (Radio) Chancellor Media (AMFM) in 94’ for $5.7B - Biggest pure-play radio

· Viacom International for $885M, Evergreen Media for $2.4B SFX Broadcasting for $2.0

· Acquired Lin TV for $1.9B

· Capstar Broadcasting in 96’ for $3.2B

· Later sold to Clear Channel

· New venture fund guaranteeing a 20% annual return

Hughes Electronic Corporation (NWS) (GMH) El Segundo, CA CEO Chase Carey http://www.hughes.com

· Now Called DirecTV (Acquired by News Corp)– see DirecTV above

· Digital TV entertainment, broadband service, satellite-based private business networks, and global video and data broadcasting

Hughes Electronic four main units:

• DirecTV, Inc.

• US’s leading provider of digital quality direct-to-home television programming
• End of 2001 – 12M subscribers worldwide

• DirecTV Latin America
• PanAmSat Corporation

• NASDAQ: (SPOT)
• Hughes owns 84% of PanAmSat
• See PanAmSat below under own heading

• Hughes Network System

• Satellite-bases private business networks
• Has a 50% market share
• Leading producer of set-top receivers for DirecTV
• DIRECWAY satellite-based Internet access service

Hughes Electronics Acquisitions and Divestitures:

· Bought Telocity for $180M – broadband internet service provider

· Sold their set-top box manufacturing to Thomson for $250M – May 2004

· Selling PanAmSat to Kohlberg Kravis Roberts & Co. for $3.55B – April 2004

· Selling Hughes Network Systems (HNS) – Expected to fetch $1.5B

· Direct TV sold its 4% stake in TiVo – June 2004

Hughes Electronic General Info:

· GM owned 70% Hughes - The earnings of Hughes Electronics were used to calculate the earnings attributable to the General Motors Class H common stock (NYSE GMH)

· In 1996 AT&T tried to market DirecTV to its 90 million customers, only drew about 50,000 takers – sold its 2.6% stake back in Dec. 1997

· DirecTV – Long term marketing deal with w/ Bell Atlantic and SBC Communications

· Has 65% of North American satellite broadcasting market

· Rival EchoStar

· 12M subscribers at the end of 2001

· 4Q2002 – 11.2M

· End of 2003 – 12M

· Marketing DirecTV in Circuit City

· Hughes as a Target of Acquisition:

· News Corp and EchoStar both trying to take control of Hughes

· EchoStar tried to acquire for $18B – original price was $25.8B

· Would have been the nation’s most dominant satellite TV Broadcaster

· Transaction would have been a reverse merger

· Major scrutiny from US Antitrust regulatory officials – may block the merger

· FCC and Justice Department rejected the take-over on grounds of antitrust

· Deal completely scrubbed

· GM is willing to sell Hughes only if it is a tax-free transaction – tax-free transactions usually take a much longer time to complete

· April 2003 – Enter News Corp.

· News Corp. acquiring a 31.4% stake in Hughes Electronics for $6.6B

· Approved by both boards April 9, 2003

· Acquiring the 20% owned by GM and 14.1% owned by the public

· Now will be the No.2 pay-TV service provider to US households behind Comcast

· Direct TV had 11.2M subscribers ending 4Q2002

· News Corp. wants to design and launch a new generation of satellite as early as 2006 and no later than 2008

· Will be called DirecTV group

· Shut down its broadband initiative

· CEO succession:

· Michael Smith replaced by Chase Carey

· New CEO Chase Carey want to has 15M subscribers by 2006

· DirecTV Latin America – Announced that they might file Chapter 11 - December 2002

· Spaceway Project - $1.5B internet via satellite venture – also will help distribute DirecTV broadcasts

· Currently two satellites are projected to be in use – First satellite will begin limited service in 2004

· Launched a new satellite in May of 2004 with the aim to increase local TV coverage for subscribers

· Subscriber goals:

· Looking for a 25% increase in satellite subscribers from 2004 to 2007

· Direct TV wants $15M subscribers by the end of 2006

· Upgrading their digital video recording ability for its subscribers with new set top boxes

Brokerage	Recommendation	Sentiment
Prudential
JP Morgan
Deutsche Securities

Liberty Media (L) (LMCb) Englewood, CO CEO Robert Bennet http://www.libertymedia.com

· Chairman John Malone – Controls 44% of Liberty

· Was once a wholly owned subsidiary of AT&T (from the TCI acquisition)

o Was a tracking stock of AT&T’s

o August 2001 - AT&T spun off Liberty making it an independent entity

· Three Segment: International, Interactive (Includes QVC), and Networks

o Completely spun off International division June 2004

Liberty Media Stakes:

· Has stakes in AOL (4%) Corus Entertainment (17%), Court TV (50%), Crown Media (13%), Discovery Communications (50%), DMX Music (56%), E! Entertainment (10%), Flextech Limited UK (25%), Game Show Network (50%), International Channel (90%), Jupiter Programming – Japan (50%), MacNeil/Lehrer Productions (67%), News Corp. (18), On Command Hotel Movie Service (100%), Pramer Argentina (100%), Premium Movie Partnership Australia (20%), QVC (42%), Starz/Encore (100%) Torneos y Competencias S.A. (54%) USA Interactive (20%), Viacom <1%, Vivendi (4%), Priceline.com (1%), Motorola (4%), Sprint PCS (21%), IDT Corp (17%), Cendant (3%), United GlobalCom (74%) TeleWest Communications (25%)

· Europe:

· Has cable assets in Germany, UK, Japan, and South America

· Biggest shareholder of United Global Communications – Major cable TV (largest) and Telephone Co. in Europe – has a 70% stake

· 25% stake in TeleWest Communications (Britain’s #2 cable company)

· Wants it to merge with NTL - #1 in Britain

· Owns 25% of Telemundo station group and 50% of the network

· Telemundo is restructuring and after its done, Liberty will own 34.5%

· Has a 20% stake in USA Networks, 4% stake in AOL TWX (Has limited voting rights and a cap on how much they can own)

· International Stakes Include: Liberty Cablevision of Puerto Rico (100%), Jupiter Programming (50%) and Jupiter Telecom (45%), Pramer SCA Argentina

· Interactive Group includes: Ascent Media (100%), TruePosition (89%), On Command (66%), QVC (42%), OpenTV(35%), InterActive Corp (20%)

· Stake in United Pan-European Communications (UPC) – 70% stake (around $1.5B)

· Owns 50% of Jupiter Telecommunications – Japan’s largest cable operator

· 50% stake in Princes Holdings, 1% of 360 Networks

· Liberty Satellite and Technology

· Liberty Media owns 12.5% but has a 85% voting stake

· Buying the rest of Liberty Satellite

· Buying Dutch cable operator Casema for $733M - Has 1.3M subscribers

· Deal fell through

· Discover other shareholders are Cox Communication and Advance/Newhouse (the Newhouse family)

· Acquiring a majority stake in QVC from Comcast for around $8B – August 2003

· Has a 20% stake in Barry Diller’s IAC/Interactive Corp.

· Stake in News Corp.:

· Has the second largest voting stake in News Corp

· Had an 17% non voting stake – technically the biggest shareholder

· 9.1% voting position – Sold some voting stock – once had 18% stake in their non-voting stock – January 2004

· (The Murdock family has a 30% stake in News Corps voting stock

· Increased its right to be able to raise their voting stake in News Corp. to 17% - November 2004

· Liberty will buy 8% of the 17% from Merrill Lynch in April 2005

· Now increased stake to 18% of the voting stake – January 2005

· Converting its non-voting stock to voting shares – Hypothetically they can raise to voting stake to 50% but that would set off a poison pill and will dilute their interest

· Sold its E! Entrainment and the International Channel stake to Comcast while Comcast transfers its 10% stake Liberty stock back to Liberty in a tax-free exchange for $1B– July 2004

· Bought Provide Commerce (Proflowers.com) for $477M – December 2005

· Buyseasons – Online costumes

· 40% stake in DirecTV Group.

· Has a controlling stake in Backcountry.com

· Bobybuilder.com – bought Bodybuilder.com for roughly $100M

Liberty Media In Europe:

· Acquiring six German cable TV operators from Deutsch Telecom for $4.7B

· Will give them 10M subscribers

· Cable subscribers:

· Looking to get 18M subscribers in Europe – 1/3 of the market

· Has 13M subscribers in Europe with almost 1/3^rd of the market – June 2002

· Will make them the biggest cable company in Europe

· Will become the “Toll Gate” to Europe

· In order to go through, Liberty must provide high-speed Internet and telephone cable service

· 20% of western Europe homes subscribe to satellite TV

· Germany is its 2^nd largest cable market behind the US

· TeleWest Communication – UK cable – Launched a tender offer for its Bonds

· Indirectly controls United Pan Europe through its 70% stake in UPC parent

· Liberty Global – New name of their converged International units – United Global Com and Liberty Media International – Announced June 2005

Liberty General Info:

· Owns Starz and Encore movie channel

· Starz has 13.2M subscribers/homes – Encore 21M subscribers/homes

· Malone expects Liberty to become the largest shareholder in Comcast

• Each February 15^th, Liberty has the right to ask Comcast to by its QVC stake

· Claims skyrocketing programming costs and combined legal battles with Comcast are lowering their operating income for the Liberty pay-cable unit which includes Starz and Encore

• If movies do well in at the box office that Starz/Encore contracted to purchase before their release, their final price will be higher which has been the case of late – September 2003

· Dividing into three operating areas – International Cable, US Programming, Interactive Operations

· Malone – felt he was “screwed royally” the last time he sold an asset – he sold TCI to AT&T in 1999

· Buying Suez’s Noos Unit (Through UGC) - Noos Unit is No.1 cable operator in France with 1.1M customers

· Spun off its International operations – Liberty Media International: (LBTYA) (LBTYB) – June 2004

• Will not break up its cable networks and interactive business
• “Liberty ain’t for sale” John Malone
• International operation are about 10% to 15% of Liberty’s value
• Breaking up the structure to make the company simpler and easier to grow
• “There is an opportunity to be a consolidator overseas”
• John Malone will be CEO of Liberty Media International

· “There are certain assets within Liberty that might fit Rupert (News Corp) better than us” – John Malone

· Liberty claims to be open to merge Starz Encore with another party

· Court TV – Time Warner has right to buy Liberty’s half stake in 2005/2006

· January 2005 – Restructuring plan:

• Consolidating International Cable (Merging Liberty Media International and United Globalcom) and will be called Liberty Global Inc.

· Liberty is buying all of UGC its doesn’t own for $3.5B

· Will be run by Michael Fries – Was CEO of UGC

· John Malone on his sale of TCI to AT&T – “Absolutely” a mistake - March 2005

· Spinning off 50% of Discovery Communications – Announced March 2005

• The remaining 50% is owned by Cox and Advance/Newhouse Communications with Liberty expecting to contribute their share for the planned spin-off
• Spin-off will occur in 2Q2005 (July 21 2005) and will be called Discover Holdings

· New CEO Gregory Maffel

• Former CEO of 360 Networks and Co-president of Oracle and former MSFT finance Chief
• Robert Bennett resigned August 2005

· In a legal dispute with IAC/InteractiveCorp.. Lawsuits were filed January 2008.

• Mr. Malone is claiming that Barry Dillar’s planed reorganization of Interactive is a “corporate coup”
• John Malone has been intertwined with Barry Dillar for years and Mr. Malone’s Liberty Media controls 61.7% of IAC’s “supervoting” stock though they own roughly 30% of IAC’s voting stock.
• With the spin-off of many IAC’s properties, Liberty Media’s and Mr. Malone’s voting shares would be drastically diluted.
• All the new spin-offs of IAC will have a single-tier voting structure which is unfavorable to Mr. Malone.
• IAC counter-sued Liberty Media for the right to spin-off its properties on its own terms.

Brokerage	Recommendation	Sentiment
Goldman Sachs
CSFB
Smith Barney

News Corp (NWS) Sydney, AUS Rupert Murdoch http://www.newscorp.com/

· Filmed Entertainment: 20th Century Fox, Fox Searchlight Pictures, Fox Studios. Fox Television Studios

· Television: BSkyB, FOX Broadcasting, Fox Sports Australia, Fox Television Stations, FOXTEL, SKY PerfecTV, STAR, Stream

· Owns 35 US TV stations

· Cable – Fox News, Fox Sports, FX, Fox Movie Channel, National Geographic Channel, SPEED Channel, Los Angeles Dodgers

· Magazines & Inserts: InsideOut, donna hay, News America Marketing, SmartSource, The Weekly Standard, Gemstar – TV Guide International, Maximum Golf

· Books – Harper Collins, Regan Books, Zondervan

· Newspapers – New York Post, The Times, The Sun, The Sunday Times, Post-courier, Herald Sun, News of the World, , The Australian, The Daily Telegraph 175 total

· Other – WebMD, National Rugby League, Broadsystem, Festival Records, fox Interactive, Mushroom Records, NDS, News Interactive, News Outdoor, Nursery World

News Corp Acquisitions and Stakes and Divestitures:

· Owns 85.3% of Fox Entertainment

· Fox Entertainment with Cablevision owns up to $3.29B in cable broadcasting

· Owns Fox Sports Net New England, Florida, Bay Area, Ohio, Chicago, New York Knicks, Rangers and Liberty, MSG Network, Madison Square Garden’s, National Sports Partners, Radio City Entertainment

· March 2005 – Buying the rest of Fox that it doesn’t own at a $6.2B offer

· Has a 49.5% stake in Fox Family Worldwide with Saban having the other 49.5%

· Sold TV Guide to Gemstar International – later reacquired with the acquisition of Gemstar.

· The deal was later viewed as a poor and expensive acquisition for News Corp.

· Gemstar:

· Talking about a stock swap with Liberty Media’s Chairman John Malone stake in Gemstar-TV Guide – Murdoch would give the shares to Sky Global Networks

· News Corp owned 42.6% of Gemstar

· News Corp has written off $6B in Gemstar – April 2004

· Received stake from selling TV guide in 1998 to an affiliate of TCI (Tele-Communications) for $2B – TCI later merged with Gemstar

· Sky Global Networks - Satellite holdings – UK (BSkyB – 35.4% stake) – Asia (Star TV 100% stake – 27 channels ) – Sky Latin America – all satellites act like broadband connections

· ESPN Star Sports – 50% stake

· Phoenix Satellite TV – 37.6% stake – In Hong Kong and targets mainland China and accounts for half of China’s 90M cable viewers

· Sky Italia – Italian Satellite TV

· In China:

· 8.5% stake in Netease.com (Chinese portal), 12% stake in Renren.com (Chinese community web site), 12% stake in SinoBit.com (Portal to link entrepreneurs and investors online), 50% stake in Chinabyte.com (with People’s Daily Newspaper – focus on high-tech)

· Has controlling stake in NDS – Plc – makes smart cards for running set-top boxes

· Bought 10 TV stations from Chris Craft Industries for $5.35B

· Sold the Dodgers baseball team to Frank McCourt for around $375M including the stadium – News Corp bought the Dodgers for $311M – October 2003

· Acquired Italian Telepiv – Pay TV

· DirecTV - Acquired a 31.4% stake in Hughes Electronics (DirecTV, PanAmSat) for $6.6B - 2003

· Approved by both boards April 9, 2003

· Acquired the 20% owned by GM and 14.1% owned by the public

· Now will be the No.2 pay-TV service provider to US households behind Comcast

· DirecTV had 11.2M subscribers ending 4Q2002

· DirecTV had a churn rate of 20% in 2002 and 2003

· Expecting DirecTV subscriber growth to grow from 12M in 2003 to 20M by the end of 2009

· Will give News Corp. a total of 22M subscribers

· DirecTV will continue to finance and build its own satellite fleet and doesn’t want to lease capacity

· Looking to sell PanAmSat – April 2004

· News Corp cannot buyout the rest of DirecTV that it doesn’t own due to a tax related agreement with GM

· Growth of DirecTV has gradually faded after the acquisition.

· Sold its DirecTV stake to Liberty Media.

· Intermix media (Myspace.com) for $580M – July 2005

· Acquired Intermix media for $580M when announced – July 2005

· Final acquisition price was $650 million.

· Intermix has 30 plus websites but its primer site is MySpace.com

· MySpace.com is a social networking site tailored to the 20 and under crowd

· Intermix owns 53% of MySpace.com but buying the 47% it doesn’t own

· Google guaranteed to give MySpace and other News Corp. web sites a minimum of $900M in ad revenue till 2009

· Dow Jones & Co.:

· Acquired Dow Jones for $5 billion, a 67% premium – August 2007

· Rupert Murdoch pursued a deal with Dow Jones for over five years and finally won over the Bancroft family who controlled Dow Jones

· Dow Jones Wall Street Journal is the second largest paper in the U.S

· Dow Jones owns Marketwatch (which they bought in January 2005 for $528 million from Larry Kramer), Barron’s and Factiva.

News Corp General Info:

· Fox:

· Fox News:

· In 2002 surpassed CNN as the No.1 news channel in the US

· The 23 FOX TV stations account for 40% of News Corp’s total earnings

· TV operations were its largest generator of revenue with 28% in 2002

· Fox Financial News – Fox launching a financial news network to rival CNBC in the first half of 2006

· BSkyB – 7.2M subscribers – average revenue per user 369 pounds – wants 400 pounds by 2005

· BskyB allows sports wagering in the UK on Horse Racing, Golf, etc.

· In 2003 – 15.1M people placed bets worth $214M

· Sky Global – Investments in UK, Far East and Latin America but none in the US

· Newspaper and Coupons:

· Highest returns on its newspaper and supermarket coupon business

· News Corp. Notables:

· Hired tobacco lobbyist Thomas Griscom for spokesman

· Consolidated all of its global satellite operations and investments

· US accounted for 78% of News Corps revenue in 2004

· Took a $293M charge in restructuring its relationship with WebMD and write downs for Juno Online and Six Degrees.com

· Fox Interactive Media – New house of their web sites and content in the US

· TV and Film represent News Corp.’s largest revenue generating segments followed by Cable-network programming and newspapers.

· Asia and News Corp:

· Star Group LTD. – Star TV – Asian Satellite TV broadcaster

· Makes US inspired TV shows for satellite TV in China – like “Millionaire”

· India generates 2/3^rd’s of its revenue and almost all of its profit

· Has 40 of the 50 top rated shows in India - 2003

· No.2 broadcaster in after Hong-Kong based Phoenix Satellite TV

· Star has a 38% stake in Phoenix Satellite