Reed Nolte - Senior Vice President of Investor Relations John P. Nallen - Chief Financial Officer, Principal Accounting Officer and Senior Executive Vice President Chase Carey - President, Chief Operating Officer, Director, President of the Media & Entertainment Arm and Chief Operating Officer of the Media & Entertainment Arm James Rupert Murdoch - Deputy Chief Operating Officer, Director, Chairman of News International and Chief Executive Officer of News International

Michael Nathanson - MoffettNathanson LLC John Janedis - UBS Investment Bank, Research Division Anthony J. DiClemente - Nomura Securities Co. Ltd., Research Division Benjamin Swinburne - Morgan Stanley, Research Division Douglas D. Mitchelson - Deutsche Bank AG, Research Division Jessica Reif Cohen - BofA Merrill Lynch, Research Division Richard Greenfield - BTIG, LLC, Research Division David Bank - RBC Capital Markets, LLC, Research Division Alexia S. Quadrani - JP Morgan Chase & Co, Research Division Michael C. Morris - Guggenheim Securities, LLC, Research Division

Ladies and gentlemen, thank you for standing by, and welcome to the Twenty-First Century Fox 2Q '14 Earnings Release Teleconference Call. [Operator Instructions] And as a reminder, today's call will be recorded. I would now like to turn the conference over to your host, Mr. Reed Nolte, Senior Vice President, Investor Relations. Sir, the floor is yours. Please go ahead.

Thank you very much, Steve. Hello, everyone, and welcome to our Second Quarter Fiscal 2014 Earnings Conference Call. On the call today are Chase Carey, President and Chief Operating Officer; James Murdoch, Deputy Chief Operating Officer; and John Nallen, our Chief Financial Officer. First, we will give some prepared remarks on the most recent quarter, then we'll be happy to take questions from the investment community. This call may include certain forward-looking information with respect to Twenty-First Century Fox's business and strategies. Actual results could differ materially from what is said. The company's Form 10-Q for the 3 months ended December 31, 2013, identifies risks and uncertainties that could cause actual results to differ and these statements are qualified by the cautionary statements contained in such filings. Additionally, this call will include certain non-GAAP financial measurements. The definition of and the reconciliation of such measures can be found in our earnings release and our 10-Q filing. Finally, please note that certain financial measures used in this call, such as segment operating income before depreciation and amortization, often referred to as EBITDA, and adjusted earnings per share, are expressed on a non-GAAP basis. The GAAP to non-GAAP reconciliation of these non-GAAP measures is included in our earnings release. Also note that the historical results for periods prior to June 28, 2013, described in the press release and on this call have been adjusted to reflect the separation that was completed at the end of fiscal 2013. And with that, I'm pleased to turn it over to John. John P. Nallen: Thanks, Reed, and good morning, everyone. As you will have seen in today's earnings release, our financial results continue to reflect strong top line revenue growth. We reported second quarter fiscal 2014 revenues for the total company of $8.2 billion, which is up 15% compared to the second quarter a year ago. Approximately 40% of this growth is organic with the balance reflecting the inclusion of revenues from our newly consolidated businesses, namely, Sky Deutschland and our acquired cable sports channels. Total segment EBITDA for the second quarter was $1.54 billion, a 4% reduction compared to the $1.61 billion reported a year ago. This year's results reflect solid underlying cable channel growth, continued strength in retransmission consent revenues and a strong TV production performance. These increases were more than offset by lower contributions from our Film business and weaker ratings for the X Factor, as well as the impact of the investments in our new cable channels and the consolidation of Sky Deutschland's EBITDA losses. In aggregate, the impact of acquisitions and new channel launches reduced our reported EBITDA growth by approximately 6%. Additionally, unfavorable foreign exchange movements reduced the growth by a further 1%. From a bottom line perspective, we reported income from continuing operations attributable to stockholders of $982 million as compared to the $1.06 billion reported in the second quarter a year ago. Excluding the net income effects in both years of amounts reflected in Other, net and our gains from participating in BSkyB's share repurchase program, second quarter adjusted EPS was $0.33 this year versus $0.35 in the prior year. Now let me provide some additional context on the performance of a few of our businesses, and let's start with the Cable Networks. Overall, total segment revenues in the second quarter increased 14% from last year, highlighted by a 17% increase in affiliate revenues and 7% advertising growth. The 17% affiliate revenue growth was led by higher rates across our channels. Domestic affiliate fees increased 15%, primarily from higher average rates led by the RSNs, FX and Fox News, as well as our new channels, FS1 and FXX. Increased revenues related to the impact of last year's NHL lockout and the inclusion of SportsTime Ohio also contributed to the growth. Our reported international affiliate fees were up 22%. Within this overall increase, affiliate fees at the nonsports channels at FIC and STAR grew 16% in local currency terms. The balance of the affiliate fee increase was from the international sports channel, which was partially offset by unfavorable currency movements. Second quarter advertising revenue growth reflects domestic advertising increases of 7%, led by double-digit gains at the FX channels and the RSNs, which were partially offset by political-related advertising declines at Fox News. At the international channels, advertising revenue increased 9%. Within this overall increase, local currency advertising at the FIC and STAR nonsports channels grew at the same 9% rate. The increase generated by our sports channels was offset by the overall negative impact of foreign currency. So total Cable segment EBITDA in the quarter was $1.04 billion, a 2% increase above prior year levels. Similar to our first quarter results, this quarter's strong underlying EBITDA growth, generated by the RSNs, FX and Fox International Channels, was largely absorbed by the impact of the planned investments in our new channel launches and the impact of unfavorable foreign currency comparisons. Combined, the new channels and currency negatively impacted the year-on-year Cable segment growth by 10% with the new channel launches, alone, representing a 7% impact to our growth. Turning to our Television segment. EBITDA in the quarter of $218 million declined $27 million from last year. We had strong growth in retransmission consent revenues and improved network sports results, led by the revenue increases from solid ratings for the NFL regular season and the MLB postseason. These improvements were more than offset by substantially reduced political revenues at the stations, weaker X Factor ratings and higher programming and marketing costs at the FOX Network in support of our initiative to invest in the network. At the Film segment, second quarter EBITDA was $337 million, down 21% from a year ago. This decline primarily reflects lower theatrical revenues and higher releasing costs for this year's films, including The Secret Life of Walter Mitty, Walking with Dinosaurs and The Counselor, as well as difficult comparisons to last year's results, which included the theatrical release of Taken 2 and a home entertainment release of Ice Age: Continental Drift. Revenues and EBITDA contributions at our television production units were up year-over-year, primarily due to this year's domestic syndication of Modern Family and higher SVOD revenues. Our DBS segment reported EBITDA of $30 million in the quarter as compared to $55 million in the prior year. These decrease reflects the consolidation of Sky Deutschland's negative EBITDA results, which more than offset a $25 million improvement in SKY Italia contributions, primarily from marketing and operating cost reductions. Total revenues at the DBS segment increased by $605 million, principally from the inclusion of $565 million in Sky Deutschland revenue. Sky D this morning reported ARPU gains of 5.5% and a year-over-year direct subscriber increase of 304,000, yielding 3.67 million subs at quarter end. At SKY Italia, local currency revenues in the quarter were similar to a year ago as the slight ARPU increase was offset by lower average subs for the period. Quarter-end subscribers of 4.76 million were unchanged from the end of September. Now before I turn to guidance, let me give you a quick update on our buyback activity and the delisting process. Since the date of the separation, we've been consistently repurchasing FOXA shares, resulting in approximately $2.3 billion of repurchases from July 1 through yesterday. So we're on track to complete the $4 billion buyback within the 12-month time frame we've previously announced. Additionally, in the beginning of January, we announced our plans to delist from the Australian Stock Exchange. Yesterday, we filed a definitive proxy statement with the SEC that includes detailed information about the delisting process and key dates. If approved, the effective date of this suspension in trading on the ASX will occur at the close of trading on May 1. Finally, let me address our guidance for fiscal 2014 total segment EBITDA growth. Since our last earnings call 3 months ago, we have updated our operational assumptions to reflect our first half performance and our outlook for the remainder of our fiscal year. And while we have the usual pluses and minuses across most of our divisions that essentially offset, we are lowering our outlook in 2 areas: first, our Film division's results for the first 6 months have been below our plans, including the impact of our 3 theatrical film releases in the December quarter and this will impact our full year outlook; second, prime time ratings, and therefore advertising revenues, will be lower than anticipated at the Fox Broadcast network, largely due to the mixed performance of our shows, led by the lower-than-planned ratings on the X Factor and the early results of American Idol. Therefore, these network advertising revenue factors will also impact our full year outlook. So primarily as a result of these film and network factors and based on all of the assumptions inherent in our projections, we now expect that our total segment EBITDA percentage growth rate for fiscal 2014 will be in the mid- to high-single digit range, above the $6.26 billion total segment EBITDA base level of fiscal 2013. This outlook does not reflect the impact of consolidating the YES Network results, although this factor would not materially impact the 2014 growth rate. If that transaction closes when expected, we will consolidate the YES Network results beginning in our fiscal fourth quarter, including approximately $1.7 billion of their debt. As we look out to our expected performance for the second half of the year, we anticipate that a majority of our overall annual growth will be realized in the fourth fiscal quarter as we expect very favorable film comparisons, led by this year's comparatively stronger releases, including Rio 2 and X-Men: Days of Future Past. Additionally, results of the Cable segment are expected to be strong, driven by continued top line growth and a more moderate increase in costs, principally from sports rights. So with that, let me turn the call over to Chase.

Thank you, John, and good morning, everybody. This may sound like an unexpected opening line after John just took our guidance down a notch, but we've never been more excited about the future at Twenty-First Century Fox. I'd like to be clear that I'm not minimizing our disappointment in the adjusted guidance. However, that disappointment does not distract from the momentum that exists across our company and the confidence in our ability to achieve the overall 3-year goals we outlined last August. Structurally and strategically, we've never been stronger and better positioned. We continue to build the foundation that will enable us to deliver sustained long-term growth. At our cable channels, that foundation begins with long-term affiliation agreements that drive stable top line growth and provide the base to build new channels like Fox Sports 1, FXX and our new sports international channels. We continue to conclude agreements around the world that meet or exceed our targets for both existing and new channels, which reflect our global strength. In the last few months, we concluded such agreements with 2 of the top 10 U.S. distributors, as well as leading distributors in Latin America and Asia. We also continue to take advantage of opportunities to add new dimensions to our Cable business. Last month, we agreed to increase our ownership in YES to 80%. And we've recently rebranded multiple channels in Latin America and Europe, building a global lifestyle brand called FOX Life, which creates an additional international tentpole brand to go with FOX, FOX Sports and National Geographic. Another foundation to drive our long-term growth is our unique brands, content and long-term rights that distinguish our business. Our U.S. channels continue to maximize these strengths and build on our market leadership positions. At FX, American Horror Story had a great run with its best ratings ever, while Sons of Anarchy finished its season as the highest rated series in FX history. We also look forward to FX's launch of season 2 of The Americans later this month and the premiere of new series like Tyrant from the creators of Homeland and The Strain, both of which will premier this summer. Our RSNs continue to deliver on-target results and we're well positioned to rights discussions. Fox News is as dominant a ratings force as ever, although headwinds in the ad markets during this off-political cycle have been tougher than expected, leading to results that are up year-on-year but behind our target. Fortunately, we're headed back into another political cycle and recent programming moves are delivering even stronger ratings. At Fox Business, we're excited to welcome Maria Bartiromo and look forward to ongoing growth and profits with new and improved distribution agreements on top of ongoing improvements at the channel. We're still investing at building Fox Sports 1 and FXX while going through some of the growing pains at building a programming lineup, but those channels are on course and will be a source of new profits for years to come. An issue that has been a topic of recent debate is the impact of consolidation in the U.S. distribution industry. We honestly don't see any material consequences to our business. In fact, there may be some positive ones. First, unique content at scale in an expanding digital world has never held a stronger hand. Second, the new digital platforms and over-the-top players may grow even more quickly with a consolidated distribution industry. Furthermore, the real issue is how many choices an individual home has, not how big is the distributor. We already deal successfully with large distributors. Cable consolidation will not change the number of choices. Consumer choices actually are likely to increase, not decrease, as over-the-top digital platforms emerge. Finally, consolidation may spur innovation and improve customer experience and new technologies like targeted ads as well as other enhancements that enlarge the pie for everyone. Turning back to our channels business. Another foundation for our long-term growth is our international leadership position. Although we expect that the continued weakening of emerging market currencies will adversely impact this year's Cable results by an additional $50 million to $75 million from what we assume at the start of the fiscal year, our operational progress internationally, including at both Fox International Channels and STAR, continues to be a story of across-the-board strength while adding new dimensions to the business. STAR recently launched the STAR Sports brand across its 6 sports channels, including STAR Sports 3, India's first 24/7 Hindi sports channel and the digital site, starsports.com, substantially increasing the reach of sports and establishing a new foundation for growth in India. While the related investments are spending are short-term profits, this initiative should prove to be one of our largest drivers of growth 5 to 10 years from now. On the broadcast side of our channels business, we've had mixed results. Sports have been a positive, particularly the NFL capped by Sunday's Super Bowl, delivering TV's largest audience ever. Retransmission is also an ongoing source of growth and we continue to conclude agreements at or above our targets. The one area that is delivering results significantly below expectations is the entertainment network. While we had success with new series, Sleepy Hollow, and Golden Globe winner, BROOKLYN NINE-NINE, the combination of disappointing ratings from X Factor, larger programming write-ups than planned and a bit of extra programming and marketing costs leave us well behind our goal. We also expect American Idol, which is a much better show than it was a year ago, to deliver results below our targets. While these results are disappointing, we are quite bullish about the direction of the network as we break away from decades-old antiquated rules of broadcasting where 100 scripts in the fall become 20 pilots in the spring, leading to dozens of series being launched that September with each planned to deliver 22 episodes before the cycle begins again. During the coming months, our new strategy for the network will start to evolve with events like 24 and COSMOS, as well as new series like Gracepoint and Hieroglyph, all launched at different times of the year, different series lengths and new programs ordered without pilots that go straight to the series. We will still rely on some of the historical industry practices where it makes sense. However, we can't be bound by rules established in a free network world. We need to execute with an opportunistic agility to maximize its value. Our broadcast network is the strongest distribution platform in the business and this new direction will enable us to build it to its full potential. Our content business is also one with mixed results. Our television studio continues to be a powerhouse with 43 scripted shows on broadcast and cable this season and 17 new pilots for next season. We're more excited than ever about the increasingly robust digital market for our product. We just concluded a new agreement with Amazon granting exclusive SVOD rights to FX's hit shows The Americans, as well as SVOD distribution rights to other new and library series. More details will come from Amazon later today on that. On the flip side, our film company has had a difficult first half of the year. I don't want try and put a silver lining on the results. We're disappointed. However, this business will always have its ups and downs and we are energized about a number of key releases over the next 6 months, including Rio 2, X-Men: Days of Future Past and Dawn of the Planet of the Apes. These results won't have a big impact on fiscal 2014 due to timing, but we're optimistic that they will provide a great start to next fiscal year. Finally our satellite platforms in the U.K., Germany, Italy and India continue to operate well and building their leadership positions. We're pleased with the recent subscriber additions of BSkyB and Sky Deutschland and have stabilized subscriber levels and profits in Italy. So in aggregate, while we have some businesses that aren't delivering planned and short-term results, we feel good about the strategy and direction of all our operations. Overall, we have solid momentum, which gives us confidence in achieving our long-term targets. With that, I'll turn it back to Reed.

Thank you, Chase. Steve, now we'd like to move on to the Q&A.

[Operator Instructions] Our first question will come from the line of Mike Nathanson of MoffettNathanson. Michael Nathanson - MoffettNathanson LLC: I have one for John and then one for Chase and James. John, can you just spend some time on Cable Networks? Expenses are up 22% in the first half. I'm wondering, when you look at this fiscal year, what expense growth will be for Cable Nets for the year. Maybe you could separate the growth rates for the year between domestic, international and expenses. John P. Nallen: I'm not sure that I look at it that way, Michael, but I think the growth rate will be consistent as we go through it. On the sports side, internationally, probably consistent growth rate in expense as we go through. On the U.S. side, the growth rate will moderate a bit in the fourth quarter, as I indicated, because the sports rights costs, particularly at FS1, are not as significant as they were or will be in the first 3 quarters. So there'll be a slight moderation in the fourth quarter. But I think the increase will be fairly consistent for the first 3 quarters of the year. Michael Nathanson - MoffettNathanson LLC: Okay. And then for Chase and James. You talked a bit, Chase, about changes in the broadcast model and one of the things we hear a lot about is VOD. And because you guys own on a network and a studio, there's going to be tension about VOD rights in terms of getting people of MVPD stacking rights for a whole season. So how do you feel about possibly changing the model to give full season stacking rights versus what it does to the back end value of syndications? Or how are you guys feeling about that change to the model?

Look, there's no question, increasingly, the value of these rights extends beyond the linear network and into the VOD world. And I think each of these businesses, which is what we're doing, needs to pursue a strategy that makes sense for them. So I think for our networks, that's capturing and controlling a wider set of rights so that they're able to deliver an experience to their consumers that enables people to watch what they want when they want and where they want. I think in order to do that, the networks have to be aggressive about controlling and negotiating the rights they need. Negotiating those rights with our studios is really not that different than negotiating rights with third parties. I think, equally, on the studio, on the content side, we recognize those rights have value and we expect the content side to extract value for its rights in the marketplace. So yes, I think owning both sides enable us to have a strategic understanding of sort of the business as a whole. But I think the execution of that really comes down to each individual business pursuing what makes sense for it strategically, which, on the network side, is controlling a wider set of rights in the digital world; on the studio site, it's extracting appropriate value for its rights from distributors. I think we have -- I think the benefit of visibility to both sides is that we hopefully make smart decisions about how much we'll invest in the networks to control those rights on the one hand and ensuring on the content side we're extracting fair and full value for those rights. So I think it has the benefit of strategic understanding of those but the actual execution really comes down to both businesses making smart decisions.

[Operator Instructions] Our next question will come from the line of John Janedis of UBS. John Janedis - UBS Investment Bank, Research Division: John, there's been a lot focus, as you know, on X Factor and Idol. Now given the comments you made on the network and ad weakness from ratings, does this change your view on the size of investments on scripted programming relative to prior expectations? John P. Nallen: I think Chase should probably address that.

Yes -- no, I don't think. I mean, I think you're looking at great shows, and clearly, the scripted entertainment area for us, both the studio and the network, as I said. This year, we have 2 new shows we feel real great about, BROOKLYN NINE-NINE and Sleepy Hollow, so certainly that's a great area for us. But equally, we've had great success over the years with nonscripted entertainment and actually we have some -- we have a new executive in place to energize that area and actually he's got some great things coming later in the year. Look, I think it's important for us to continue to be opportunistic and open-minded and in some ways continue to try to find new programming in whatever format that excites people and energizes people. And we think there are opportunities across-the-board and I don't -- I think you've just got to continue to really try and find build that next franchise, whether it's scripted or nonscripted. But we certainly expect to be aggressive in both sides of it.

Our next question will come from the line of Anthony DiClemente of Nomura. Anthony J. DiClemente - Nomura Securities Co. Ltd., Research Division: Just wondering if the change in guidance has any bearing on your longer-term guidance targets, if you could just talk about that $9 billion EBITDA number? And then Chase, just love an update on your thoughts on Aereo as we go into Supreme Court ruling in June, July?

Sure. No, I really don't, that's what I said upfront. I think, structurally, we feel good about where we're at. And again, I don't -- I want to be clear that I'm not trying to just gloss over the challenges we've got really in a couple of businesses. In the Film business, it is a business that has ups and downs. We feel good about the films we've got coming as we look forward. But it's not a structural. It's a film business, you still -- look, we've got a great management team that has proven its capability to be a market leader for years. It is a business that, again, has some ups and downs. And the network, as well, I think, they're doing some really exciting things. And then as I look out from the shows I touched on coming, we feel great about where it's going. So I don't -- for us, there are challenges we've got this year, we take them seriously. But when I look at the structural underpinning of what gets us to that $9 billion target, those structural underpinnings are there and we continue to execute on them. We continue to conclude distribution agreements and that enables us to get there. We continue to build the array of business platforms, channels, really are putting the fundamentals in place that are important to reach those goals. Our new channels, while we're investing in them, investments in FXX and FS1 are pretty much on target with what we expected to invest. So there's an investment going into it but we're still very excited about the future of those businesses. So as we look out, the fundamentals are really still in place. We need to execute better in a couple of businesses, but that's really the core of what we're dealing with here. On Aereo, it is headed to the Supreme Court in the next 6 months. I think we're cautiously optimistic that that will hopefully bring up an end to the delivered illegal theft of our content. And I do want to be clear because you hear a lot about this. This case is about respecting copyrights. It's not about cloud computing. You hear a lot of scare mongering that this case threatens cloud computing. Nothing could be further from the truth. Our content gets sold by Amazon, iTunes, others today that use cloud technology and we're a big fan and supporter of cloud technology. It simply needs to be done in a way that respects our copyrights, and we will pursue our rights. Right now, we're pursuing them legally. We're pursuing through the paths we've described before. But at the end of the day, we need to -- our business needs to have a dual-revenue model and needs to be in a place that we could be competitive in the marketplace. And hopefully, we can get those rights reaffirmed through this process.

Our next question will come from the line of Ben Swinburne of Morgan Stanley. Benjamin Swinburne - Morgan Stanley, Research Division: Chase, do you think there's anything going on with cable news beyond just the normal news cycle? I just asked because it's really across all cable news networks we've seen weak ratings and I think disappointing advertising. And then, James, could you talk about Sky Deutschland and the outlook of there? They had a really bullish print today and outlook, but Netflix is coming to Germany. The market seems to be a bit spooked about what that could mean. How do you think that business is positioned in the face of a historically price-sensitive German consumer and an over-the-top new entrant?

For us in Fox News, realistically, no. I mean, last year, they had -- at the end of last year, they had to deal with the off-political cycle and there's no question that the year-on-year comparisons were tough for a nonpolitical year against the political spending from the year before. But actually, news networks are doing great. I mean, I think its ratings in January were up year-on-year. And I think I said in the last call, we've made a series of changes that are actually -- the morning show with new talent, reorganized the prime time lineup. I think Roger introduced a little while ago The Five at 5:00, which has been a great addition to the lineup. I think it put new energy in it. I think the audience is actually -- versus what it was recently, yes, for January, it's younger and bigger. So for us, we feel pretty good about where we're at. And again, we have to fight through the cyclicality of political spending, which gets bigger and bigger to -- and many people chagrined in other arenas, but it becomes a bigger factor that creates cyclicality here. But for us, Fox News is realistically just a locomotive that keeps going. And with that, I do think that Fox Business is really beginning to hit its stride. I think it's got some great moves. I think Maria Bartiromo is going to add a great dimension to it. We continue to strengthen the distribution agreements for Fox Business and I think that channel really has an increasingly exciting future as it really begins to carve out a space with a distribution platform finally fully in place and I think a lot of the rules Roger has made in the lineup is starting to get some traction.

And Ben, just on Germany. I think -- I mean, obviously Brian and the team reported the results earlier today, or I guess, last -- I guess, very early this morning our time and so I don't want to add too much to that. But I'd say it's a very competitive marketplace. It's a marketplace that traditionally we've been competing with free satellite channels, as well as in cable and the IPTV services. But I think Sky Deutschland's positioned really, really well. I think the brand is increasingly established in a marketplace just after -- only after a few short years. The quality of the product is very high. And really, Sky Deutschland's positioning where it's available over any infrastructure, be it cable, IPTV or satellite, as well as the very, very successful Sky Go TV Everywhere product and now the new stand-alone over-the-top product now. I think the company's positioned well. But Germany's a very big market. I think we've shown over the last few years that you can increase your revenue per customer there and you can attract new customers, which a lot of people didn't think was possible. And the company has really a momentum to it and is on a trajectory that we think is very encouraging. So I think it's not a zero-sum game. I there's a lot of choice in the marketplace already. We already have Watchever there and other things like that. And it's going to continue to be dynamic and competitive. But as long as we can keep innovating and keep a good quality of products onscreen for our customers, I think the company's going to continue to do well.

Our next question will be from the line of Mr. Doug Mitchelson of Deutsche Bank. Douglas D. Mitchelson - Deutsche Bank AG, Research Division: Chase, I'm curious if there's an opportunity over time for BSkyB, Sky Deutschland and SKY Italia to work more closely together? Is there potential upside from that? And separately, either John or Chase, I think you implied, Chase, the company's still on track for $9 billion of EBITDA in fiscal '16. Any help that you can give us for the cadence in fiscal '15 growth versus fiscal '16 growth given the lower fiscal '14 base would be helpful.

Yes, on -- in terms of the Skys, I think we do think there are -- the are truly -- there are clearly benefits of the Skys working together this year, technologies to share. But in the -- certainly, many of the operational fundamentals of the businesses they share across them. We went down the path to acquire BSkyB and part of that was a view that there were values on having those businesses more closely aligned. We're obviously not on that path today, so I think we're trying to do more and more of that and find ways we can capture the value by having those companies share things they've learned, share expertise, benefit from each other and win, win, win. And hopefully, we'll continue to try and exploit that. But I think it's an opportunity, like we're aware there are opportunities to have those businesses learn and benefit from each other. And I think we'll continue to try and find ways to tackle that and given where we're at today structurally. I think in terms of guiding and looking at the years -- looking through the years, I mean, again, you take one of the 2, I mean, the issues in sort of '14, if you take the 2, one is film, which is sort of, I don't want to completely call it a one-off, but in many ways it was a result of films released during the last 6 months, they don't have much of an impact, and realistically, the issues that caused the shortfall the film business in '14 aren't going to really affect '15 at all. I mean, '15 will be affected by how our films will perform in the next 6 months. We feel good about them, but the film -- the flow-through of the films we've released to date is a fairly marginal issue in'15. I think for the network, in many ways, it is again sort of that transition. I mean, we've gone through the network, in many ways it was a network that had this unique franchise, American Idol, it sort of transcended everything else in television. And it's gotten to a place today where actually it's a great show. It's a top hit show, we'd love the ratings from that on any other show, but it's not a show that sort of drives the whole network like it did in years past. And so we've been planning that adjustment knowing that the show is 13 years old. We hope it has 14, 15, 16, 17 years but they won't be years that look like years 5, 6 and 7. So this transition of the network from having this sort of locomotive that sat there in the middle of it that generated unique profits we've known is coming to the end. It's sort of winding down to a place where it becomes just a great successful show. Again, hopefully, this year, we think it's a much better show. Hopefully, there's traction -- gets better traction as it goes through this season. We think it has the potential. We think they've done a really good job and it's a very entertaining show. But it's going to be a good show and what's happened is the ratings for that, as well as X Factor, fell faster than we hoped. But directionally, it's not different. We didn't expect those. We haven't been planning on those to sort of all of a sudden have a rebirth. What we had hoped to do is manage them through this process. So it probably moves those to a slightly lower base, but it really isn't directionally different than what we would have been planning, which is those shows to be part of a lineup, but really part of a broader diversified lineups where increasingly what we're looking to develop is new hits to take them on. So again, I don't think it puts the network, yes, maybe a little bit, but not really materially in a different place. So I don't think those 2 items, film, really I wouldn't think it changed our view on '15 much at all. I think the network probably marginally. And the rest of it, there are some issues that are tougher than we planned. The foreign exchange, we started off the year thinking we had $100 million hit from foreign exchange and now it's looking sort of well north of $150 million. So there's some of those issues and those we put in a jump, put in the ordinary course up and down. The upside in sports could absorb that, the hit on foreign exchange and other pros and cons. So I think those give and takes we'd assumed we can sort of manage through those gives and takes. So I don't think it would change our outlook on '15 that much. Again, '15, we do expect it to be a big bounce-up in '16 and I think that's still true. I mean, we're still very much in a build process. I think we talked about the investment in the new channels and actually said the build is actually -- the investment in the new channels is actually a little higher in '15 than '14 and that's been planned. I mean, that's sort of due to the way the sports rights roll in. But again, it's a long-winded answer. If I look at it holistically, I don't think as you look at '15 and '16, we're really in that different a place. By the end of the year, we'll see. We'll have 6 more months and we'll know more than we do today. But I wouldn't say I feel that different about '15 and really don't feel different about '16 about where we'll be.

Our next question will come from the line of Jessica Reif-Cohen of Bank of America. Jessica Reif Cohen - BofA Merrill Lynch, Research Division: One to James and one to Chase. James, now you that you control all of STAR Sports for roughly a year, can you just talk about what you've done differently and maybe you can provide some color about investments still needed and the ultimate growth trajectory for that business? And then Chase, on FXX, with The Simpsons coming in August, it just seems like such an amazing branding opportunity. Can you talk about how that show can drive the channel and how quickly you can monetize it?

Thanks, Jessica. On STAR Sports, I think it's been a really exciting period for us since being able to take over ESPN's share and what we view as ESPN Star Sports and it's really been across Asia. Really, the creation of a FOX Sports brand in Southeast Asia, at East Asia and the STAR Sports suite of channels in India and just on STAR Sports, it's been very exciting. As Chase mentioned, 6 STAR Sports channels were launched towards the end of last year. And some of the things that's exciting about it, for example, doing a 24-hour Hindi language coverage of Indian cricket would seem reasonably obvious and surprising that it hasn't been down before and that's proving very, very successful. From an investment perspective, it's a little bit lumpy. As you know, we had some additional cricket rights for an additional sports in the last quarter in India and some of those things will continue to be a little [indiscernible] years and things like that, particularly impacting the STAR Sports business over the next few years. But we think it adds really a fundamental new dimension to the Indian business. We're a leader there in the general entertainment category in many, many of the regions and languages of India and have really built a #1 network across the country. Adding sports to that portfolio, we think, is very, very exciting. It gives us a whole new dimension from the standpoint of affiliate revenue growth and we can really cement our leadership. So we think it's a real component of getting that business. As we've said in the past, to be the overall STAR business in the India should be $0.5 billion profit business within a reasonable horizon. But this investment in this year and next year and a bit of the next, given some of the rights costs that come through, is a big investment, but it's really a testament to our belief in what we can do in that region. And we think India is a marketplace that's going to be increasingly important for us and more we can really put even more distance between us and our nearest competitors.

Yes, and on FXX, I mean, there's no question. Simpsons is a tremendously exciting and important event and sort of opportunity for us. And we do -- it is more than a show and I've said it before. In many ways, we look to use that -- when I turn it to Simpsons channel, but in many ways it'll be the face of the channel. It'll clearly be much more than just a series taking up a large block of hours. It will be a series that helps brand the channel, helps drive the channel. And we are doing -- working really hard on it. And we're also really excited that it has really gone up. In many ways, the breadth of rights we have there will enable us to do some really unique things in a digital sense. So it's not just branding the channel from a linear perspective, but really starting to really create some precedents in terms of creating a digital experience aligned with that channel that adds a whole new dimension to it. In terms of monetizing it, it's always -- in the cable -- in this world, it's always a little complicated because you can monetize through 2 things: you monetize through affiliations and you monetize through advertising. So the affiliation side is largely tied to -- have some affiliation grievance come up. I don't have it offhand. I think, fortunately, we're in a place, and part of it was the timing where a pretty big block of our affiliation agreements in the sort of 1 year-plus post. I think probably half of the universe comes up for renewal within 1 year, 1 year and change. I don't -- again, I didn't look at it so I don't have the exact dates off the top of my head from when The Simpsons roll in. So it'd be great if we can get momentum. Clearly, monetizing it through the affiliation side is obviously a big part of it. I think from an advertising perspective, it's going to be dependent on our execution. I think FX has proved to be pretty good at sort of distinguishing themselves from everybody else out there. I think they're -- I mean, realistically, I think they're second to none. If you stack up FX up against the channels they compete with today, I think they have proven an ability to distinguish themselves from the pack and I think we feel really good about their ability to drive a level of interest into that that we could monetize through advertising that we feel really good about it. But I want to say that. At the end of the day, we're building an asset. I mean, the question, I'm much more sort of focused on "Where can you get this in 2 or 3 years and where can you get this to in 2 quarters?" So it is -- this is an opportunity to build a franchise that can be a real tentpole for new growth in our business. And so I think it is, yes, we care about the short-term and want to do what we can to drive short term. But when you're building an asset like that and investing it, to us, I think, the real key issue is where can you get that business to in 2 or 3 years, not 2 to 3 months.

Our next question will come from the line of Mr. Richard Greenfield of BTIG. Richard Greenfield - BTIG, LLC, Research Division: I wanted to follow up on Michael Nathanson's question. When you look at a show like The Simpsons, you've actually acquired all of the prior season rights to use for your applications. And so instead of selling that to a Netflix or Amazon, you're keeping all of that for yourself to drive traffic to your apps. Wondering when you look at shows like The Americans and any of your shows or content you're creating, why is it not the right decision for FOX to keep those rights in-house, to build your own direct-to-consumer applications versus selling them to third parties. I realize there's a near-term cash infusion from selling them. But why is The Simpsons decision not the right decision for all of your content as you look forward? And then just a separate question on Formula One rights. There's been a lot of noise about Malone and Discovery possibly buying them. Is that something -- it seems like something that would fit very well with FOX globally. Why haven't -- or is that something of interest to you?

Just on The Simpsons question, the rights question of why not keep all our rights in-house, I think it's important -- I think if you go back to Michael's question, and again, I think there's a real benefit to us being we believe that the vertical integration of our businesses is a real strength. I think the strength comes from having a strategic understanding of both sides of that, that are insights and ability to make, that's where they make sense. But I think when you get to a one-size-fits-all, I think that -- I don't think that's the right way to go. And I think at a more granular level, you have to sort of look at decisions on one level holistically and on another level for each individual business. And those businesses have to make bets. And there are times when our distribution businesses have a unique ability to take advantage of a set of rights for us to make -- The Simpsons is the perfect example. We have a new channel that FX -- that Simpsons could help take to a whole new level, so it made sense for us to probably invest more than anybody else in The Simpsons because we can monetize it in terms of building a unique asset. There are the other times when somebody else, for a piece of content we own, has a unique need that will end up meaning they're going to pay more than it's worth to our asset. And they just -- they know we're going to keep it, nonetheless, even if somebody else thinks it's because they have a need, worth a lot more than it is to us, I don't think that makes sense. And I think it's important that -- what we're not going to do is sort of undersell the content. We have participants, we have people in it, it's important that our content gets full and fair value. And therefore, if somebody in the market sees more value in that content than we do, but it's because of a need or just because of a belief, then there are places where it make sense to take advantage of that. Conversely, I think we hopefully have a breadth of assets that will increasingly let us take advantage of assets, I mean, an example, FIC. I mean, Fox International Channels, there are a number of places where we've taken series and bought out the international rights to shows we had. A unique need, we had a unique franchise in Fox International Channels to take a show like The Americans or -- I can't remember, they've done a couple. They bought the global right, global distribution rights to that and used it as a dimension. But it was really based on the Fox International Channels having unique strategic need and building -- and their ability to build the value that enabled them to make a bet. But again, there'll be places where third parties will see a value that exceeds what it's worth to us. And again that's the right way to maximize the business. Again, we have the benefit of the visibility to make intelligent decisions, so we think it's worth making a bet. We obviously have the ability to see the picture holistically and make those bets intelligently. But I do think that you have to look at it from a holistically, as well as from each individual business' perspective.

Formula One.

And then Formula One. Yes, Formula One's great rights. I mean, at the end of the day, they're buying I guess -- I don't know what's going on in Formula One. I read the same paper you do. Like rights, they're taking about buying sports. I mean, I guess to what degree you can buy sports to get to rights, I mean, I think if you're buying it, you have to buy because you like the sports -- you believe the sport's a good investment, not -- there are a lot of things that go into the sport. And that Formula One is certainly, TV rights are a big part of it, but there are other big elements on the revenue side. And obviously, it's a big business that requires [indiscernible] management. But I think, very good business. But I think you'd go into it -- if it's for TV rights, I don't think you buy the assets to buy -- to get access to the TV rights. I think you buy it because you think it's good business. And I think TV rights we license in the marketplace. And we obviously have a good relationship with Formula One and hopefully continue to build it. But I think to the degree there's investment at Formula One, anybody making that, whether it's us or anybody else, you'd have to make it on the merits of what you think about Formula One and how good an investment it is and what's the future of that.

And Rich, this is James here. I'd just remind everyone we are -- we're a broadcaster of Formula One in almost every region of the world. We are a very large part of Formula One's audience. And in many places, we have very long-term rights agreement to Formula One and it delivers very well for our customers. Irrespective of whatever speculation is out there in the market, we think that's been a relationship that's great for both sides and is going to continue.

Our next question will come from the line of David Bank of RBC Capital Markets. David Bank - RBC Capital Markets, LLC, Research Division: Chase, I was wondering if you could give us a trajectory that kind of benchmark over the next 12 to 36 months for viewership and ratings levels you expect to achieve at FS1. I also wonder if you could also talk about how you see the business mix with respect to affiliate fees and advertising revenues shaking out when you get closer to maturity 3 or 4 years out when your new programming has sort of been on for a while, like MLB, when you have no more speed legacy deals in place. Basically at maturity, how do you see the revenue split between advertising and affiliate?

Yes, I mean, first, I don't think we probably would get to that level of granularity year-by-year sort of rate increase that's probably at the level of detail beyond what we sort of put out there -- put out there publicly. I think if you look out over time, I think the mix of affiliate and ad revenues, I think, particularly on the sports side probably tilts to the affiliate side of it. I think that's the nature of sports today. The importance of that product is, again, I think everybody recognizes, it is the most important product. It is the most powerful product. The product that, again, not everybody, but certainly for a large segment of consumers, it is a must-have product for a large segment of consumers. And therefore, I think that's what leads for it to get reflected, its value to get reflected in the affiliation side of it. The advertising is certainly important. The live nature of the sports, we said before, makes it uniquely valuable to advertisers. I mean, you look at the NFL this year, I think it's certainly probably a good and recent testament as you could find anywhere of how valuable sports is to advertisers. So I don't mean to -- certainly not trying to minimize the importance of the advertising side of it, but I think in general, in the sports arena, the affiliate side will be the larger piece of the pie vis-a-vis advertising. David Bank - RBC Capital Markets, LLC, Research Division: Is that kind of a 50-50 mix or like a 70-30 mix or -- I'm sorry, just taking one more pass at it.

We're not going to get into that type of granularity. It's, again, the affiliate side is the bigger piece of it.

Our next question will come from Alexia Quadrani from JPMorgan. Alexia S. Quadrani - JP Morgan Chase & Co, Research Division: Just sort of staying on that sports theme. We keep seeing more evidence of the rising competition for these sports rights and obviously the rising costs of these franchises. Due to the revenues generated, it sounds like from the affiliate fees more than the advertising, the growing CPMs and audiences, I guess, do they make up for the higher programming costs? You got such great perspective from your expansive franchise and obviously the Super Bowl. I'm curious about the cost equation, how that delta may be changing going forward? Is it maybe for the better or for the worse? Any color there would be great.

I'm not sure -- I mean, I'm not sure how to answer that. I guess, look, I guess what I'd say is our sports businesses we feel great about. And obviously, we are dealing with these costs. When we do affiliate deals, they're multi-year deals. So it's actually, you get a pretty good road map for a fair bit of it if the affiliate's the larger piece and you get deals that go out years, those rights agreement layer against that. You have to make some assumptions of rating and ad dollars, but that's the smaller part of the top line. So I think we feel like it's pretty good visibility given, again, the nature of long-term distribution agreements aligned with long-term rights agreements and the ability to keep those 2 things get balanced to have a really healthy business for us. And certainly, to date, we've done it. And yes, there's pressure on rights that, I guess, again, as I said before, it's a double-edged nature of sports. It's the most important programming out there, probably gets more important as -- everything else fragments. It sort of continues to, in many ways, stand taller. And so that's the positive, the realities is it comes at a cost. I think we proved -- I think we've got a pretty good track there, proven the ability to build it, digest those costs and build real value. I think we are helped by the fact, I think, buyers that have scale in that arena are probably best positioned because I think breadth and depth, I mean, it's one thing to sort of have a one-off. But I think to the degree you've got a broad array of sports for us, regional, national, global, domestic, you sort of got something for everybody and I think that really helps and I think gives it a bit of a 1 plus 1 is 3. So I do think scale is going to become an increasingly important dynamic in the ability to get full value, to maximize value for the rights you've got.

Due to time constraints, our last question will come from the line of Michael Morris of Guggenheim Securities. Michael C. Morris - Guggenheim Securities, LLC, Research Division: Two questions. One, again for sports rights. When you look at this latest sports rights that you have right now for FS1, do you feel like you have enough in terms of what you're trying to accomplish over the next 3 or 4 years on the affiliate growth side? Or the next big contract to come up would be the NBA. How do you look at potentially bidding for and making an investment in the NBA relative to what your revenue objectives are? Is it important -- is it as important to kind of, from a competitive perspective, can you break away from other networks as it is to bolster your own network? And then also on the affiliate side, the 5% acceleration that you saw domestically, how much of that came from having NHL back on the air this fall? And can you give us any insight to what you think that pace is going to look like in the new calendar year? John P. Nallen: I'll cover the second one for you. Of the 15% domestic growth we had in the quarter, about 5% of it is the impact of the NHL and SportsTime Ohio. So the underlying growth is about 10%. And we've said that we expect the double-digit gains in affiliate fees in the year and we're comfortable with that.

In terms of the rights we have, I mean, simple answer is yes. We actually have the rights in place we need to execute the plan we've got. That doesn't mean we won't engage on new rights and I think we always want to be opportunistic. And if there's a dimension of rights, we're not going to buy everything. So I think that we are going to be selective. But it doesn't mean that there won't be -- there aren't opportunities to add something that we think we can, in turn, down the road, create incremental value. But the rights we have today, and then we've got a broad set of rights related to baseball, NASCAR, college football and basketball, UFC, soccer, Champions League, World Cup, golf, we've got a broad mix of rights, broad mix of rights spread across the year. We feel great about where we're at. So certainly, we have the rights in place to execute the plans we've got. So I think we certainly will look at incremental rights and make a determination. Are they rights we could take on and create incremental value on them, I mean. And if not, we feel very good about where we're at. I'm sorry, in terms of key -- I wouldn't take rights to keep them away from others. I mean, I think you build -- you focus on building your own the business, not spending money to -- if we can't make -- I think our sports channel will be strong enough. We're comfortable that we can -- and we've got enough breadth across the company that we can execute on delivering the value through our sports channel. I wouldn't invest -- we wouldn't invest in further rights unless they make sense for us. We wouldn't invest for the purpose of being -- to block others.

At this point, we'd like to conclude today's call. Thank you everybody for joining. If you have any further questions, please call me or Joe Dorrego here in New York.

Thanks a lot. John P. Nallen: Thanks, everyone.

Ladies and gentlemen, that does conclude our conference call for today. On behalf of today's panel, I'd like to thank you once again for your participation, and thank you for using AT&T. Have a wonderful day. You may now disconnect.