K. Rupert Murdoch, Chairman and Chief Operating Officer News Corporation Peter Chernin, President and Chief Operating Officer, News Corporation David DeVoe, Senior Executive Vice President, Chief Financial Officer Gary Ginsberg, Executive Vice President, Investor Relations & Corporate Communications

: Spencer Wang, JP Morgan. Douglas Shapiro, Bank of America Securities. Doug Mitchelson, Deutsche Bank Securities. Michael Nathanson, Sanford Bernstein. Aryeh Bourkoff, UBS. Jessica Reif Cohen, Merrill Lynch. Richard Greenfield, Polly Research. Vijay Javant, Lehman Brothers. Anthony Noto, Goldman Sachs. David Roberts, Goldman Sachs. Alan Gould, Natexis Bleichroeder. George Coleman, Citigroup. Jason Helfstein, CIBC World Markets. Jolanta Masojada, Credit Suisse First Boston. Alex Pollak ,Macquarie Bank.

: Aileen Landoon, Financial Times Seth Sutel, the Associated Press Julia Unguine, The Wall Street Journal Sean Ahlmer , the Australian Financial George Thelay, the Hollywood Reporter

Gary Ginsberg, please go ahead Sir.

Thank you Brad. Good afternoon everyone, thanks for joining us today. As usual within the call today are Rupert Murdoch, Chairman and CEO of News Corp., Peter Chernin, President and Chief Operating Officer and Dave DeVoe, our Chief Financial Officer. As usual we begin with the financial review of the quarter from Dave and then Rupert will follow and offer some further perspective on some of our key issues. We’ll then take your questions. And as usual I’ll take questions first from analysts and then from the press as Brad indicated. Given how late it is in the day for those of your on the East Coast, I strongly urge you to limit your questions to just one. First of all let me give you some quick legalese today’s call is of course governed by the safe harbor position on this call we’ll make statements within the meaning of the inaudible securities format of 1995. These forward looking statements involve known and unknown risks on inaudible factors including those described in our public filings with the SEC that could cause actual results that are totally different from those in the forward looking statement. And with all that, Dave, I’ll now turn the call over to you.

Gary, thank you. Good afternoon. As you have seen by the results in today’s earnings release, we’re pleased with the financial performance of the company for the quarter. We reported operating income in the second quarter of $920 million and this is a 4% decline from last year’s results. However, you should note that during the quarter we recorded a $99 million charge related to expected redundancy costs in connecting with our UK printing plant project. Excluding this charge, operating profit would have been up 7%. This result was lead by the reduced operating offer as SKY Italia and continued growth at our cable and TV segments. Partially offset by reduced profits from our film group. Additionally, this quarter’s operating income was also reduced by $55 million from the combination of both stock based compensation expense and this is required under the new accounting standard and amortization expense related to the purchase of the outstanding shares of FOX last year and last quarter’s internet acquisitions. At our associated entities income of $160 million in the quarter increased $112 million above last year’s level. This is primarily the result from our share of higher DIRECTV and BSkyB earnings. Both BSkyB and DIRECTV have reported their earnings so we refer you to the earnings release for information. Other income in the second quarter was $62 million versus the net charge of $114 million in the prior year. The current year’s quarter primarily reflects the unrealized gain on the change in fair value of our exchangeable debt securities. While a comparable period a year ago reflected an $86 million unrealized loss on the same security as well as a loss on our sale of the Multi-Country platform to DIRECTV. In the quarter, our tax provision reflects the $100 million benefit from the application of the American Jobs Creation Act, which permits repatriation of certain foreign earnings at lower rates. Additionally, our minority interest charge declined by $74 million principally from last year’s purchase of the outstanding shares of the Fox Entertainment Group. As a result of these items, the corporation’s net income for the quarter of continuing operations was $694 million as compared to $386 million last year. Our related earnings per share for the quarter was 21¢ in increase from the 13¢ that was reported last year. You’ll also note that below continuing operations we recorded a $381 million gain in the quarter resulting from the sale of the Times Educational Supplement business in the United Kingdom. As required under GAAP, this gain has been reflected as a gain on disposition of discontinued operations. I would just like to turn to the statements for a little more information. The Film Entertainment segment reported second quarter operating profits of $299 million, which is $108 million below last year’s results. This reduction in earnings was in line with our expectation and principally results from particularly strong home entertainment sales last year from a group of very successful films, most notably, “Day After Tomorrow,” “Garfield,”, “I Robot,” “Dodgeball,” and the Star Wars trilogy. During this quarter, driving rather this quarter’s earnings were home entertainment sales lead by “Fantastic Four,”, “Kingdom of Heaven,” “Star Wars Episode III,” and “Mr. & Mrs. Smith,” and continued catalog and pay TV contributions. Our result for this year’s quarter were impacted by the theatrical releasing costs of films released in the quarter including “Walk the Line,” “The Family Stone,” and “Cheaper by the Dozen 2.” Each of these films will provide positive contributions in subsequent periods for us. Our televison production business, 20th Century Fox Television had earnings for quarter above year ago levels reflecting continued strong contributions from home entertainment sales, principally “24” and “Family Guy.” Overall, our television segment reported operating profit of $183 million, a $30 million improvement versus the prior year’s quarter. This is driven principally by the timing of new program launches at the Fox Network and improvement at STAR. At our television stations we report operating profits slightly below year ago level. In the second quarter of the overall ad market decline versus last year as a result of lower political spending. However, the revenues at the stations were approximately equal with last year at the Fox TV station gain market share in the court. Additionally, the second quarter results reflects higher programming expenses from the addition of 46 hours of local news expansion versus the second quarter a year ago. At the network, operating results improved primarily due to the timing of the premiere of the Fox Fall Lineup. This year the season’s primary launch cost reflected in the first quarter while a year ago they were incurred in the second. As Rupert and Peter can comment on, the Fall lineup was well received and rating improvements translated into revenue gains in the quarter. The second quarter result also reflects increase programming costs particularly from movie broadcasts. At Star, revenues increased in excess of by nearly 30% in the quarter lead by India. Operating income improved from last year’s quarter reflecting the continued success of our Indian lineup and contributions from our Star 1 channel which was launched in November of 2004. Turning to our cable network programming segment, this segment once again reported strong results with second quarter operating profits of $262 million a 15% increase over last year’s second quarter results. Growth in the quarter came from advertising, subscription revenue gains across the channels and a consolidation of Florida and Ohio RSN’s after their acquisition in April. These two increases were partially offset by increased programming costs at FX and costs from the resumption of the hockey season. The Fox News Channel continued its growth. Despite increased cost for the various breaking news stories, ad sales increased 7% for the quarter and then were supported by continuous rating gains and with subscriber levels at 88 million. The regional sports networks also continued their revenue and operating income growth, primarily from increases in DBS subscribers. At FX revenues were up approximately 23% for the quarter as compared to a year ago. Driven by advertiser revenue gains and higher affiliate revenues for both the addition of more than 1 million subscribers from a year ago level, and increased affiliate rates. Ad revenue gains in the second quarter were driven by improved prices supported by the channels original programming throughout the quarter and new syndicated programming. Turning to SKY Italia our pay television business in Italy, SKY reported an operating loss of $53 million, which like in the first quarter, is approximately half the loss reported a year ago. Revenues in local currencies increased by 14% inaudible 520 million EUROS, reflecting the growth in the subscriber base. Programming costs increased in the quarter as a result of the increased subscribers. The quarter’s results also includes a $12 million charge resulting from an arbitration settlement from certain programming rights. In the quarter gross additions were approximately 270,000, net additions were 200,000. At the end of the quarter subscribers totaled approximately 3.6 million, 16% more than year ago levels. Sacks was approximately 275 EUROS per subscriber, this is an increase from the 245 EUROS a year ago and this is due to an increase in the take up of our free installation offer. The monthly RPU approximately 45 EUROS to the quarter which was comparable to the same quarter a year ago. SKY Italia has not renewed 96% of the 2.5 million annual contract that expired in this fiscal year. This represents approximately three-quarters of the beginning subscriber base. And with our very high renewal rate continuing through January, SKY Italia is on course for an annual turn rate of less than 10%. Our magazines and inserts reported operating income of $76 million in the quarter, a 4% improvement from last year. The quarter results were lead by higher revenue from our in-store division due to the continued growth and our product offerings. In the newspaper segment operating income in US dollars was $69 million, $115 less than the year ago period. However, as noted earlier, this quarter’s newspaper segment results were unfavorably affected by a $99 million charge related to the redundancies we have now committed to in the United Kingdom in connection with our move over the next few years to a new more efficient printing plant. When the project is completed, we expect our UK newspaper production headcount will be reduced by almost 700 employees, 65% from current levels, yielding approximately $65 million of annual savings in personnel costs. Looking a the impact for the entirety of fiscal 2006, the net effect of the United Kingdom print project on year-to -year operating profit growth will be essentially zero. The cost of the redundancy and the increased depreciation expense will be offset by a gain on the sale of a London land parcel which we expect to close the second half of this year. On an operating basis, circulation revenues increased from cover price increases while advertising revenues particularly in the United Kingdom were lower. In support of the cover price increase, marketing costs increased during the quarter. Also in this quarter, certain of our Australian newspapers were adversely impacted by the 2 Sunday holidays. In addition, this quarter newspapers result as compared to last year were favorably impacted by the inclusion of the operating profit from QPL following its acquisition in mid November of last year. Harper Collins delivered another very strong result with operating profit of $77 million for the quarter, $15 million or 24% increase from results reported a year ago. This year’s results were significantly influenced by the strength in the children’s division title particularly the Narnia series and from the strong backlist reorder sale in the trade group. Before I turn to inaudible the guidance, just a couple of other matters, as required under GAAP I mentioned this briefly earlier, News Corporation began expensing stock options this fiscal year, we recognized approximately $30 million of expense with operating profit in the second quarter related to power option grants. Also during the quarter we continued our share buyback program with the purchase of more than $850 million, 55 million shares. Since we announced the buyback, we’ve repurchased nearly 102 million shares for a total of $1.64 billion. Now we turn to our guides for the rest of the year. In connection with our earnings released announced in November, we indicated an expectation that fiscal 2006 operating income growth at News Corporation would be approximately 12%. Based on the assumptions inherent in our projections we are still comfortable with a 2% growth rate, excuse me with a 12% growth estimate in the current fiscal year. And with that, I would like to turn the call over to Rupert who will provide some other comments.

Thank you Dave and good afternoon everyone. We had another good quarter and on balance I was quite pleased with the rates of growth we continue to achieve across the great majority of our assets. I’m particularly pleased with the progress we’re making in our satellite platforms. In Italy it’s SKY Italia, in England, BSkyB and, of course, at DIRECTV 2. All three are operating in highly competitive regulated environments. Yet all three, this quarter and indeed throughout this fiscal year have beaten back whatever obstacles were thrown in their path to post very impressive numbers. Certainly using any operating metric these platforms are robust, clear market leaders and poised to continue long term growth as their subscriber bases continue to expand. SKY Italia had half a million net new subscribers over the last year. This subscriber growth is particularly impressive considering how uneven the competitive playing field has been for SKY Italia the past couple of years as it has contended with the government subsidized roll out of digital terrestrial television. Despite the money, publicity and marketing thrown behind its alternative multi-channel platform, SKY Italia has thrived as evidenced this quarter in the sharply reduced losses to platform achieved versus last year. As Dave mentioned earlier, in the December quarter, we had a 200,000 net new subscribers, the second largest quarter of new additions in the platform’s short history. I think it’s interesting to note that when the government’s subsidies the DTT roll out exhausted in October, our subscriber additions sharply accelerated and continued to rise through the quarter. Also inaudible 45 plus EUROS while driving down churn below 10%. We are firmly on plan to achieve a full year profitability this fiscal year and to reach between 3.8 and 3.9 million subscribers by the end of June. Long term it’s worth noting that we recently extended Soccer DDH rights through the 2009 season with the three most important Italian teams, Junventus, Inter and AC Milan. Importantly, these contracts were extended at lower rates than the current contract. With more than two thirds of SKY Italia’s costs essentially fixed, the leverage on future profits from continued sub-growth is tremendous. It’s realty e driving force behind why we are so excited about the long term outlook for this business. While its specifics are different, the major story lines of BSkyB are largely the same. Increasing subscriber growth despite stepped up competition continued low churn and high RPU. Two and a half years ago we previewed its infancy and before there was a merge cable offering, BSkyB set an ambitious subscriber target of 8 million sales by the end of calendar year 2005. December the 19th we surpassed that goal. This last quarter, BSkyB added 215,000 net new subscribers, the highest net quarterly addition in the last three years. And their cash flow and earnings have following in suit. Last quarter’s earnings per share marked a 16th consecutive quarter of year-on-year growth. With the upcoming national launch of High Definition Television a roll out of residential broadband services later this year, I’m fully confident SKY will achieve their 10 million subscriber target in 2010 and continue to add substantial equity earnings as the news. DIRECTV reports a net quarter result this morning so I’m not gong into detail other than to say, that we’re pleased with the continued subscriber and abu growth that that platform is achieving. inaudible taking the reduced churn this year and last year are just beginning to bear fruit. And the steps they’re taking to aggressively roll up local high definition, broadband and more above DOD service position, I’m sorry service position the platform well for the next few years. Dave alluded earlier to the investments we’re making at our UK press plants and the resulting $99 million redundancy charge we took this past quarter. Let me repeat just one crucial point, we are making these investments in order to retain our market domination in the highly competitive marketplace. Standing in place with out data technology and limited color capacity is simply not an option. By getting now instead of the old color printing presses a new automated reproduction plans we have secured our future as inaudible the leading national newspaper publisher. Now instead of 1,000 mechanical staff manning our presses, we will be able to make due with 350. Now instead of limited capacity for color in our newspapers, we can provide color on every page. A critical feature to both advertisers and readers. Over time the investment will result in significant cost savings, a better use of product for our readers and most importantly, for you and so we continue to maintain our market leadership and consistent strong profit generation for years to come. Before Peter, Dave and I get to your questions, let me just quickly highlight two other developments not fully reflected in our quarter’s earnings. First, the accelerated rating momentum on Fox network. Peter can provide more color on this. I just want to accentuate that after a solid third half for the broadcast season, we’ve enjoyed even faster growth since January with the addition of American Idol and 24 to our schedule. As of last night, House took a record opening. The return of Idol has been nothing short of spectacular. With season to date 18-49 ratings up 15%. And the result of 24 and the return of 24 has exceed even this growth with rating up 17%. We are also very encouraged with the success of new shows, Bones and Prison Break it continues the strength of shows continued over the Fall including Family Guy, American Dad, House and the Simpsons, now in their 17th season. House in particular continues to amaze. Last night, House posted a 20 share among adults 18-49, its highest rating ever. Season to date, excluding baseball, Fox is up 13% over last year. This ratings trend will generate stronger ad sales at both the network and at our stations. And the series we produce, including 24, Prison Break, Bones, Family Guy and American Dad these higher ratings will include longer term revenues in TV, DVD’s and other ancillary windows. Finally at the risk of sounding repetitive, I want to quickly address the considerable progress we’re making with our internet properties. Development not yet apparent from our reported financials. The largest acquisitions of MySpace, IGN and Scout. News Corp, inaudible in aggregate and are the fourth most trafficked set of sites in terms of page views and sixth in terms of unique viewers. That’s in the United States in the internet. At MySpace alone, we have 46 million registered users in quarter end a 45% increase in just three months before. Now a month later we are over 50 million. Every single day we register more than 200,000 new people a trend that shows no sign of slowing. inaudible about 50% of total US ad impressions on the internet, closing in on 20 billion impressions a month. That puts us behind only Yahoo. A mandate now is clear. To monetize this vast audience we target advertising made possible by the wealth of information we have from our own engaged patchnet users. The revenue and profit potential of monetizing this audience even a fraction of it, is significant. This calendar year we expect to generate $350 million in revenue from our internet properties and I’d be disappointed if our internet segment isn’t among our biggest growth contingents over the next few years. We’re also very actively looking at new ways to leverage our vast content through renewed digital distribution outlets whether through the internet, video on demand, portable digital devices or cell phones. Digital technology is rapidly giving us new distribution capabilities enabling content companies to reach people in far greater numbers anywhere at any time. This is in fact a great time for media companies such as ours. With our vast libraries and ability to create new appealing content we’re positioned to capitalize on these new revenue streams. We’re in discussion with all major players in this arena, we’ll announce deals when we’re convinced they will create real value. Last year we successfully tested these waters with Moby Surge, 24 and American Idol downloaded to cell phones. More recently, we announced a video on demand deal with some of our Fox and FX shows from DIRECTV. And we expect to have some additional announcements shortly. An exciting time and we look forward to the challenges of capturing these new opportunities. So, thank you very much and with that, I’d like to turn it over for your questions.

Indeed, and thank you very much Mr. Murdoch, Mr. Chernin and our panel for your time and that presentation today. And ladies and gentlemen as you just heard at this point we turn towards your questions and comments. We invite you to queue up by simply pressing star then 1 on your phone keypad. You do hear a tone indicating you’ve been placed in queue and if your question or concern is addressed before you’re called on you may remove yourself from the que by pressing the pound key. As I mentioned in the opening of today’s earnings release, we’ll take questions first from members of the financial and analysis community and immediately move into members of the press, so we ask that you would queue up at this time as well by pressing star 1. And first in queue representing Merrill Lynch we go to the line of Jessica Reif Cohen, please go ahead. Jessica Reif Cohen.: Thanks. This question is for Peter. About UPN in the Fall, can you talk about what the stations will program and maybe talk a little bit about what’s going on in terms of advertising both local for this station and national for the network? If I could sneak one more in, Gary, Peter could you just talk a little bit about inaudible the calendar for 06. Disney seems a little more optimistic about home video trends, I’m just wondering if you’re seeing that as well?

Yes, I would say starting with UPN, Jessica, we’re actually, believe this is a positive for the entire market including our stations. You know we think that there will be ratings freed up among younger demos, which we expect to be the main beneficiary on the Fox network. We think there will be advertiser’s dollars freed up which we hope to exploit. We think it will be better for the syndication market, better for the town market and I think it’s important to point out that UPN Prime Time represented about $50 million net of our station revenues and so we’re working on a number of things right now. We looking at some unwire network things, we’re talking with all of the other stations out there and seeing plans that we come up to supply other stations with programming. We will hopefully be ready to announce something in the next several weeks. We think net, net that this is a real positive for us. On the advertising trend front, you know we’re actually seeing a pretty good quarter right now, you know we’ll have a down month because of the Olympics in February but we expect the first quarter to be up and we’re seeing you know a strengthening across all segments of the business probably the softest piece is domestic autos, but we’re seeing increases in financial services, telcos, movies, fast food, retail, etc., so I would say across all of our platforms, advertising is actually heating up a little bit. And I think we remain reasonably confident about the movie business. You know I think that this quarter was a bit of an anomaly because of comparisons with you know what was a sort of extremely large DVD market a year ago, you know with “Day After Tomorrow,” “Garfield,” “I Robot,” and “Dodgeball” all in the same quarter a year ago. And DVD releases for this quarter while they were strong, “Fantastic Four,” “Kingdom of Heaven,” two of the big ones, “Star Wars III,” “Mr. & Mrs. Smith,” were only distribution deals for us, so they didn’t match the same kind of revenues that we had got from movies last year which we owned 100% of. So we continue to feel pretty good about the movie business over all, we feel very good about our theatrical success over the Christmas period. You know, with (inaudible), “Family Stone,” “Cheaper by the Dozen,” now “Big Mommas House,” and we’ll begin to see that success translated into home video profits later in the year.

Thank you.

And thank you very much and next we go to the line of William Drewry, Credit Suisse, please go ahead.

Thank you a TV network question I guess for Peter. Just wondering what the success of the ratings momentum what we might be able to expect in terms of full year profitability or less losses and then also just what that’s going to mean for programming development and potential bottom line leverage looking into next season as well? Thanks.

Well I think that, I certainly don’t want to predict but we think we will close the gap on loses because of our ratings success. I think it’s important to note it’s clearly not just American Idol, it’s 24, it’s House, Bones is picking up, we’ll bring back Prison Break in March so we have tremendous ratings momentum going on throughout the rest of this broadcast year. We expect to see that reflected on the network and hopefully also on the station level. You know our development for next year appears to be reasonably ordinary. What I mean by that is not from a creative point of view but you know we’re not doing any excessive spending. I think the big leverage on next year’s performance from a network perspective is you know we have some very high priced series, Malcolm in the Middle, and That 70’s Show, which are going into – this is their last season, and they will be replaced by much, much less expensive series. So I think that clearly it’s incumbent upon us to replace them with successful series but if we can replace them with series of equal success we have a big positive benefit because they will be much less costly.

Thank you.

Next we go to the line of Aryeh Bourkoff representing UBS, please go ahead.

Thanks so very much. Just two quick ones. If you add back the $99 million of the newspapers expense and the $12 million for the program write down, is it right to say that you know $1.03 billion EBIT number or up 8% or so is the right sort of adjusted number to use just to clarify. And then secondly I was wondering if you could talk about any potential interest in Univision as reported today and what your plans are for that segment? Thanks.

The answer to your first question is yes. It would be the appropriate number.

And the answer to your second question is we only read about it today like everybody else, Univision and we will be looking at it.

We have a question from Michael Nathanson now representing Sanford Bernstein, please go ahead.

Thanks, I’ll keep it to one. Rupert, turn to SKY Italia and the lower sports cost that you referenced, can you help quantify the type of reductions you’ve seen in sports deals in the past couple of months? And do you have any more contracts to come and what’s the percentage of programming to revenues in Italy now … where you think it can go over time?

The proportion is certainly coming down, the revenue but I can’t give you the exact figure, I’m sorry. We’re not talking huge figures but I think over a couple of years it will be at least

About 10%

About 10%.

Are there any other sports contracts that you inherited from the merger that could come down over time?

Yeah, we’ve been getting down to individual sports clubs, there are others we’re adding. We just bought exclusive rights to most of the World Cup coming up in a few months which we expect to be a really big lift.

Thanks.

A big lift to subscribers. I just heard of the inaudible platforms, what we like about them particularly is these are subscription revenues, which go a long way to balance our dependence on advertising revenues.

That 10% results in a very big number because we’re spending over 500 million EUROS on sports.

Thank you.

And next in queue we go to the line of Doug Mitchelson representing Deutche Bank Securities, go ahead.

Thanks. Also just kind of following up on SKY Italia, Rupert, I mean Dave said that RPU was flat year to year and Sack costs had risen year to year and commented on the free install plan so that kind of implies that competition is still pretty robust in Italy and returns on subscriber acquisitions had been dropping and I just wanted to make sure you’re bullishness in SKY Italia, can you kind of discuss that. Is subscriber acquisitions still good?

Yes, the fact that DTT is not being subsidized and their bosses, I think is a help. And also, people that are operating in that area have been losing money and seem to be fairly clumsy about it. Now maybe they’ll improve but at the moment, they’re less of a factor then they were a few months ago and certainly much less to be feared.

I guess, did DTT kind of pulling back and not being subsidized is that impacted your marketing plans? Does that impact the December quarter or is that more a calendar ’06 event?

It will be calendar ’06 if anything. No, we are pushing ahead as far as we as fast as we think it prudent. But we do not want to push ahead to the point where we’re going to push the churn right up to an uneconomic level. I think we’re advancing very well, but we are doing so conservatively.

Okay, thank you.

And next we go to the line of Douglas Shapiro, representing Bank of America Securities, please go ahead.

Thank you. Can you just remind us of the aggregate printing press investment and the timing of the spending, meaning over what how many years you expect that to occur? And then in light of that if you could also comment on the timing of the charge this quarter.

It’s roughly $1 billion of investment in the plant

Which includes this $99 million

That’s right. And about a third of that will have been paid for in the current year, the balance will be paid for over the next two to three years. The $99 million charge, under GAAP we’re required to make this charge, these employees are not redundant until we obviously commission the plant. So the $99 million will be paid probably two to three years from now as these employees . . .

Progressively as we bring the plants on, we’ll bring in the smaller one in Scotland on first and it will be followed by the one in the North, Northern England and finally the big one outside London. But the point is we have taken the inaudible right now but the cash doesn’t go out until you know as I said over the next three years.

I guess the follow up then is the full $65 million in benefits you should realize starting in the third year?

The full amount, yes.

Good, thank you.

And Spencer Wang with JP Morgan has our next question. Please go ahead.

Thanks. Dave could you just quantify the revenue and EBIT impact from consolidating Queensland Press, the RSN and NSP and then just follow up on Rupert’s comment on Univision. Could you help us understand how it could fit just given your existing TV station footprint? Thanks.

It’s roughly $60 in revenue and $25 million in profits. I don’t have the other, it’s pretty small. I think it’s about $10 million of operating profit.

$10 million this quarter. The rationalization of all those RSN’s over a full year were to be a lot more than $10.

Thanks.

And thank you Mr. Wang. Our next participant in queue is Richard Greenfield, Mr. Greenfield representing Polly Research, go ahead Sir.

Hi, in light of everything that’s been going on at Time Warner, as well as the discussion of what’s happened at Viacom, Mr. Murdoch, could you just give us or discuss why vertical integration makes sense for News Corp. and whether you feel the need to own significantly more of the distribution assets than you own currently like DIRECTV and BSkyB, to achieve the benefits of vertical integration? Thanks.

We don’t think we need to own more of those platforms. We certainly haven’t considered at this stage. But should be add other platforms I think we would if the occasion arose and there were at a reasonable price. For instance we looked over the years closely at Sergicouple in Spain and never took the leap because of the price. No I think what we have now gives us a tremendous help in distributing channels and encouraging us to distribute channels. Our proxy in the national channels group which is a small operation and based actually in Italy but selling channels all over the world has become a past grade profit sector. At this stage, not significantly big, but all the indications we’ll be making some hundreds of millions within the next four to five years. As for the principle of keeping all this all these media properties together as a portfolio, I’m a very strong believer in all the integration and the synergies that can be achieved between them to improve sharable value overall. One of the things there that doesn’t show the same rate of growth such as techni America marketing, you know throw up a lot of cash which enables us to do things like buy my space and take benefit of opportunities. We think it’s a good structure and I don’t see any benefit to shareholders in breaking it up. And if you take Viacom, even today’s after today’s lift in prices, it still equivalent of $34 which it wasn’t very far from for two years. So I don’t see the benefit from a marketing point of view and I see real destruction in a company such as ours.

Thanks.

And thank you very much Mr. Greenfield. Next we go to the line of Vijay Javant, representing Lehman Brothers, please go ahead.

The question for Mr. Murdoch, inaudible of the World Cup Soccer, is there anything Skytel is going to do uniquely, like an HD rollout or DVR rollout or anything, that could potentially impact subscriber acquisition costs?

I don’t think we’re planning to integrate those moves. They’re on the ball and we will be bringing in I think if we haven’t already, immanently a DVR program. I don’t believe you know DVR’s will be greatly used for sports events in any rate. We haven’t yet moved to doing anything about high definition in Italy, we have in Britain, we are introducing a lot of channels there and we will certainly be the first to do it in Italy. But we haven’t announced plans or even developed detail ones yet.

Thank you.

In this country after we get our next, all our satellites that have been built, we have to have every channel available both in standard and high definition.

Thank you. And next we will go to the line of Anthony Noto representing Goldman Sachs, please go ahead.

Thank you very much. Mr. Murdoch my question really revolves around the whole internet segment. My sense is that you’re losing money currently on operating income line as it relates to your internet activities and I was wondering how much is that depressing your growth rate this quarter and what’s the absolute loss and when do you see that breaking even and what are the gating factors to get there? Is it, do you have a direct sales force that’s currently selling against the audience that you’ve touched on? And what are the other factors for us to consider? Thank you..

It doesn’t have a material impact on our growth rate in the quarter at all.

And I guess I would say what we’re focused on right now is growing our revenues as rapidly as possible. We’re adding sales people, But you know this think has grown so rapidly in such a short period of time that I think that’s one of our big issues is I think we need to reorganize the sales force, add sales people, and really begin to monetize what’s you know pretty extraordinary amount of traffic and paid views and quick throughs, etc. So I think what we’re focused on it’s a pretty immaterial loss right now, we don’t expect it to get any bigger and we’re really focused on driving up revenues which given it’s not going to add that much expense in the long term should we inaudible to significant profitability.

Peter, do you have a sense at this point of what the reaction is

Comes to my retention bonuses to my executives of the companies that we’ve booked.

Sure. I was just going to ask Peter, do you have a sense of the reaction of traditional advertisers of doing a buy across for different platforms, is the selling message to them clear and articulate or are you still in the process of formulating that as well?

See I would say we are just formulating that now. We also need, we have some software upgrades which we had to do, you know we’re really working hard to integrate with the technology of these different businesses which were all on different systems. And so we’re trying to build a common ad serving platform and a common ad selling platform. We’re beginning to go out there and deliver a message to advertisers, but we haven’t yet had a lot of sales. That will happen pretty quickly once we have this sort of common platform. And I would say the people we have talked to, particularly, the advertisers aiming at young demos, movie companies, fast food companies, video companies, video game companies are incredibly receptive to the message because you know there’s not greater aggregation of young audience members I think anywhere in the media business than there is currently on FINN.

Right. Thank you.

He’s also from Goldman Sachs, we have a question from the line of David Roberts, please go ahead Sir.

This one’s for Dave DeVoe, you mentioned earlier that there’ll be a land sale later this year that will offset some of the charges you’re taking on the standard as part of this relocation there’ll be quite a lot of land for sale, could you give us an indication of the magnitude of that and the timing? And also on the free cash flow for the first half you had your seasonal issues again, are you still comfortable with around $2 billion for the full year?

We’re still comfortable with the cash flow for the year. Obviously the magnitude is in excess of $100 million, with respect to the sale of the land. We have a contract, we’re just in the process of going through the approval process. Foreign land it takes quite a bit of time, but we expect to be closed before the end of June.

Is there additional land to sell as well at Whapping?

There will be. We’re still weighing up how much we sell of the land or do we co-develop it and how much the buildings we intend to stay in rather than rent elsewhere for editorial and back office.

I thank you.

And here now with Natexis Bleichroeder we go to the line of Alan Gould, please go ahead.

Yes for Peter, could you update us on the pacings at the cable networks and also the affiliate agreement for Fox News which I guess start rolling over in October?

I would say our pacings are up, I think cable was up you know probably close to 20% over all of our things in the past quarter and pacings continue strong in the cable business. Now Fox News is going strong and FX is going very strong and RSN is going very strong, so I think the cable pacings are very strong. In terms of Fox News affiliations you know our first deals come up for negotiations in I believe the Fall. I think DIRECTV in September and Cablevision in October and then generally roll out pretty sequentially you know through the next three years you know we have some in ’07, some in ’08, some in ’09. So and again we have very aggressive expectations from (inaudible) a significant margin that remains the number one rated news channel, so I think one of the real must have cable channels.

Before we take the next question, I’d like to elaborate on what I said about Univision. I simply said we’d look. We look at things all the time. We don’t have any specific intentions for it at all. And some of the prices that I’ve heard being thrown around we have no intentions.

And thank you for that Mr. Murdoch. And our next participant in queue we go to the line of George Coleman representing Citigroup, please go ahead.

Thank you. Just coming back to the issue, the underlying gross rates for the quarter, the $36 million other operating charge taken in the second quarter last year, was that the write back in cable on the Adelphia recovery?

George, that was the, those were costs associated with the inaudible corporation to the United States.

I think you alluded to a 7% underlying growth rate in your opening remarks, that’s net of that charge as well.

The 7% growth rate is simply adding back the $99 million charge to operating income.

If we inaudible to the 76% from a year ago it would be a lot more.

Thank you.

And next we’ll go to the line of Jason Helfstein representing CIBC World Markets, please go ahead.

Thanks. Just one question. Could you talk about what impact, what got sold into syndication this quarter and then compared to last year. And then what does syndication look like in the third quarter and the comparison versus a year ago? Thanks.

Off the top of my head I’m not sure I think the syndication sales, there’s some ongoing sales but I don’t think there was anything sold into syndication in the quarter. I know we had an X-File sale in the first fiscal quarter.

That’s right Peter your absolutely correct.

But I don’t think there’s anything specific in the second quarter. You know I think coming up, you know what we’re looking at the things that we’re looking at for fiscal ’07 are Family Guy which we have not yet made a decision whether or not to syndicate but which we have very high hopes on and then Reba and Still Standing should both be available for fiscal ’07.

Thank you.

And it’s also important to point out that you know at this point our DVD sales of television products are really in some ways turning into our largest single revenue source, particularly on shows like Family Guy where the number is pretty astonishing, 24 for instance you know those are sort of going on in every quarter. But the syndication tends to be in the first fiscal quarter, second fiscal quarter.

Okay and thank you Mr. Helfstein. We next go to the line of Jolanta Masojada, representing Credit Suisse First Boston, please go ahead.

Thanks very much. I just wondered if you could talk about you recent asset sales strategy, you recently announced the sale of STAR Radio, a part of the sale of the Times Education business, with your under leveraged balance sheet, can you talk about the logic behind the strategy and are the other asset sales come through?

STAR Radio was out there on its own. And there was increasing competition although we were doing very well, but we got a good price for it and we were not prepared to sort of make Europe-wide really push ahead with Europe-wide, European-wide radio investments. We’re not in radio elsewhere and we couldn’t see the point. As to the educational supplements, there are a number of reasons, but the one I’ll tell you is that frankly you know that a whole lot depended on all the revenue with classified advertising and we see what’s happened to classified advertising elsewhere in the world. In Britain, 90% of that was coming from government schools and it was just a matter of time before the government department of education opened their own website with all that stuff. So we just thought it was safer to be out of it than in it. We’re not in the business throwing off 20 million odd pounds a year and I hope that I’m wrong and the people that get it do well. We though it was time to move on. We would be wise to amortize.

Before we get to the press questions, why don’t we take one more investor question and then right to the press.

Indeed sir, I’d be happy to. Ladies and gentlemen thank you for your interest in the call today. Our next analyst question and final analyst question then goes to Alex Pollak with Macquarie Bank, please go ahead.

Thanks very much for that. I had a quick question and it’s in the light of the Apple/Disney deal and I had a question about whether Mr. Murdoch you thought it would be a good thing going forward and what plans you had to offer a similar kind of service and whether you thought that Disney made the right decision to so to speak cut some of the value of the syndication platform by putting the programming available on an on-demand basis over the net?

I think Peter should answer that. Just the one thing. I think the dewrapping that we don’t give on our televisions and a DVR for free. But you go ahead, sorry.

I think we are looking to monetize our content in any way we can. We’ve already announced a deal with DIRECTV to begin to offer video on demand. Downloads of network product and I think even more interestingly pre airing downloads of some of our FX products. We are in discussion with Apple, we think it’s an interesting thing, I don’t think it changes the world, but I think it’s interesting. But I think overall what it highlights is you know the significant value in all our content assets and what how technology is going to allow all both us and our other media companies to monetize our content in new and additive ways. The one thing I don’t agree with is part of your question, the idea that this is going to affect syndication. It think there’s a huge difference between you know sort of audience impulse to buy something on demand and the sort of the way people watch syndication. I think certainly we haven’t seen any real indication of you know, cause we’ve monetized our content far more significantly in the DVD business and we see no indication that that impacts syndication. So I think that they are very different sort of impulses and consumers and I think what all this technology is doing is adding additional ways for us to reap value from our content.

Thank you very much

Thank you Mr. Pollak. Well ladies and gentlemen, members of the press we now immediately go into your Q and A session. We invite you to queue up once again.

Give it one minute

Very good sir

Actually, we’re fine

Okay. And while we’re waiting ladies and gentlemen, you may take this opportunity to queue up just by pressing star 1. One moment please for our first question. We have a number of participants that have queued up. If you’re ready Mr. Murdoch? Representing the Financial Times we go to the line of Aileen Landoon, please go ahead

Thank you. I wondered in light of the strong performance of the satellite businesses how important it is that they become able to provide a bundle of video, phone and broadband offering? How important is that in terms of how quickly they offer this to their customers? And secondly, can you just give us an update on Fox Business Channel and what the plans are for that please? Thank you.

On giving the package with the broadband and video, I think it’s desirable, cable has it. We think it will be a very powerful help to SKY and it’s competition with the re energized and re capitalized cable company. So, we have great hopes for it. Aileen Landoon Is it as important in the UK and the US and Italy?

Well we haven’t got around to thinking about it too much in Italy. And it tis, we’ve spoken to Telecom Italia of course and other players there and it there’ll be no problem in making inaudible offers, but not perhaps competitive ones. So we just have to see about Italy. We are working very hard on coming up with a plan for the United States and I think Mr. Carey will be ready with an announcement in the next couple of months.

Okay. Thanks.

As to the Fox Business Channel, we continue to negotiate with a major group of companies and think we’re extremely confident that we’ll have enough subscribers to start it this year.

Any more specific time than this year?

No.

Okay. Thank you.

And thank you very much. And next representing the Associated Press we go to the line of Seth Sutel, please go ahead.

Hello everyone, thanks. Just two questions here. Rupert, are you still on track to roll out an announcement for a broadband wireless strategy within the next month or so as per your comments last month? And also,

Are we ready to?

Pardon me?

Are we ready to announce a roll out?

Are you still on the schedule of announcing a roll out in the next month or so?

Yes. Let’s just say a couple of months. Yes.

Is there more color you could give us on what you’re considering and what it would look like?

No, I’m afraid not.

Okay. One other thing, what’s your position on Ala cart offering of cable network channels? Is this something you might consider for your own cable networks, or on DIRECTV?

No, I think it kills the whole business model. You see a lot of the you certainly see a great number of the smaller cable channels appearing all together. And huge increases in price for the popular things such as ESPN and for that matter CNN and Fox News, you want to buy those things one at a time and allow the cable companies their normal profit margin, I imagine you know the prices would go up by hundreds of percents.

I think it’s important to point out I also think this would be a real negative to consumers. I think consumers would end up with significantly less choice and as Rupert said, generally higher prices. So it would be higher prices for fewer options.

It would destroy choice and much higher prices for the channels that survive.

I’m sorry, just last one. If the Arbocks end up doing an ala cart model would you feel that you might have to respond in some way?

I don’t see any indication that they’re going to do it. I think it’s a typical business model for them to support suddenly the kinds of deals they’ve done with us, the kinds of deals they’re talking about, to be able to carry our channels does not suggest they’d be able to economically do it and we see no indication that it would be a positive for consumers. So we don’t think it’s something they’ll do nor do we think it’s something we have to match.

Thanks.

And next representing The Wall Street Journal, we go to the line of Julia Unguine, go ahead.

Hi there. I want to ask about MySpace. Recently there’s been some women who have been talked or met people off line they met on MySpace and inaudible and he was investigating MySpace. What are you guys doing to make it a safer place?

We’re doing a great deal. There are more safeguards in place now than anybody else and we doing everything we can to strengthen them and to warn the people on MySpace not to give information which identifies them. Also, to police and we’ve got a lot of ways of for our rhythm and find out if there’s anyone on there below the age of 14 we throw them straight off. And we’ll be writing to all the schools in the county, but we are well aware of the issue. It’s an issue which had to be faced by the other big players years ago and we are going to, we are on the front foot in combating it.

Julia, I don’t’ think there’s as much evidence as your suggesting there is. I think we are aware that there’s the potential for use on the platform just as there is potential for abuse on any other internet platform and we intend to take as Rupert said, a leadership position in providing service to parents, to schools, to PTA’s to principals in terms of giving them guidance in terms of how to help you kid behave safely on all internet platforms, not only MySpace. Additionally, we’ve been in touch with the Connecticut Attorney General’s office. They have not filed any charges. We are closely cooperating with them in terms of looking for ways of making the internet and our platform a safer place for everybody.

We have three left in queue. Let’s go to Sean Ahlmer now representing the Australian Financial, please go ahead.

Incorporating into the US, you’ve done pretty well, your earnings have been strong, your share price hasn’t reflected that though and even it’s not longer an old media story as much as Time Warner and Disney have out performed news quite easily i

Time Warner and Disney in the last couple of days perhaps. They made a major move with Pixar, but go on.

The thing, can you do something to spark the News Corp. share price?

I think we’re doing fine. We do believe that we are undervalued and that’s why we’re energetically pursuing by back, but you know it’s there for people to see and we know what happened. We were hit by SMP tech out in Australia when we ad previously been advised that would not happen. That caused a flood of shares to hit the market and it hasn’t fully recovered from that. But it will. All we have to do is keep improving earnings per share and the market will come to us.

Thank you very much Mr. Ahlmer and next we go to the line of George Thelay with the Hollywood Reporter. Please go ahead.

Hi Peter, thanks so much. I just wanted to follow up on the question of the UPN situation. Did I understand correctly that you guys

Our main goal is to maximize rating and to maximize revenues so we’re open to the best ideas from anybody. And we have lots of what we think are pretty strong ideas ourselves.

Thank you.

And our final question today we go to the line of John Lehman, representing the Australian, please go ahead sir.

Good morning everyone. Question about the Foxtail operation in Australia. It’s turning a profit now for the first time in its history. Just a question for Mr. Murdoch on what he sees as the outlook for Foxtail in the year ahead and the second question about Foxtail, do you think that a deal will be reached with Gary Stokes’ 7 network for the coverage of the AFL from 2007?

I think that Foxtail is on plan and doing fine. It’s going very well with turning over to digital and as you say it’s now in profit. As for the litigation, I can’t comment on it. Nor if I knew anything would I be able to say anything with confidence.

Thank you.

You’re dealing with a lot of unpredictable.

Thank you very much everybody. This marks the end of the call.

Very good and thank you Mr. Murdoch a pleasure as always, and ladies and gentlemen, as you just heard, that does conclude the call for today. We’d like to thank you very much for your participation as well as for using AT&T Executive Teleconferencing Service. With that, you may now disconnect.