Ladies and gentlemen thank you for standing by. Welcome to the NWS Second Quarter 2007 Earnings Release. For the conference, all the participant lines are in a listen-only mode. However, there will be an opportunity for your questions, and instructions will be given at that time. (Operator Instructions). As a reminder, today's call is being recorded. I would now like to turn the conference over to the Executive Vice President, Investor Relations and Corporate Communications, Mr. Gary Ginsberg. Please go ahead.

Thank you, John. Good morning everyone and thanks for joining us today to discuss our second quarter operating results. With me today are Rupert Murdoch, Chairman and Chief Executive Officer of News Corporations; Peter Chernin, President and Chief Operating Officer; and Dave DeVoe, our Chief Financial Officer. We will begin today's call as usual with Dave providing some financial analysis for the quarter that may not be obvious from the reading of our results. Rupert will then talk about some of the strategic gains we've made in the quarter that will have immediate and lasting benefits to the company. And Peter will follow Rupert with some deeper commentary on the performance of our television segment, and why we are so bullish on that segment through the remainder of this fiscal year. We will then go right into your questions, and as John just said, we'll take them first from the investment community and then we will take them from the press. Today's call is, of course, governed by the Safe Harbor provisions. On this call, we will make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, including those described in News' public filings with the SEC that could cause actual results to materially differ from those in the forward-looking statements. And with that, I will turn the call over to Dave. What if there was a way to promote your company to a perfectly targeted group of potential customers, partners, acquirers and investors? What if you could tailor your pitch to them at the moment of maximum interest? And what if you could do this for a no-brainer price?:

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Gary, thank you and good morning everybody. As you have seen from today's earnings release, we reported net income of $822 million for the second quarter of fiscal 2007. This is an 18% increase over the income from continuing operations reported in the second quarter a year ago. This improvement was largely driven by 24% increase in operating income and higher earnings from DIRECTV, partially offset by higher taxes due to the benefit we received a year ago. Earnings per share for this quarter were $0.26, which is a 24% increase over the $0.21 reported a year ago. The strong operating income growth in the quarter reflects record film contributions and greatly improved results of SKY Italia. These year-over-year improvements were partially offset by lower television and book contributions. Also keep in mind that a year ago, in the year ago quarter rather, it included $99 million provision recorded in connection with the U.K. newspaper print projects. Since you now should have a copy of our earnings release, I won't go through all the segments in detail. However, I would like to provide context for a few items as you look at the numbers. First, our Film Business had a record quarter, delivering operating profits of $470 million. As anticipated, home entertainment drove the revenue and profit growth led by the results from Ice Age 2, and X-Men: The Last Stand. Equally important, with several new theatrical releases in the quarter that performed very well at the box office, most notably Borat and Night at the Museum. These films will be significant profit contributors in the back half of the year from both their continued worldwide theatrical and home entertainment results. Our TV production business, Twentieth Century Fox TV also had an improved operating income performance, reflecting increased home entertainment…

Thank you, Dave. Good morning everyone. Once again, I think we had another very solid quarter, 18% revenue growth, 24% operating income, and 24% earnings per share growth. While much of this growth was driven by our Filmed and SKY Italia businesses, a number of other operating segments, television and cable programming remained just two should enjoy positive growth in the second half of our fiscal year, driven by strong ratings turnaround at FOX Broadcasting and renegotiated affiliated fees at Fox News Channel. And consistent with this operational momentum, Dave, just reaffirmed financial guidance. In short time, the company is certainly on track for the remainder of this year. In addition to our financial success, we made significant strategic progress in reaching agreement with Liberty Media is swapped by DIRECTV's other assets for the News Corp. share Liberty hold. This is a great transaction for our company and for our shareholders, really from every perspective. Most importantly, it amounts to a 16% buyback of our shares done four at once and without paying a premium. It would take at least 18 months to accomplish a buyback of this size in the open market given our typical trading volumes. Moreover, the transaction is immediately and significantly accretive to earnings per share. This improvement reflects the significant reduction in our shares outstanding in conjunction with only a small reduction in our earnings. Following this exchange, News Corp. will continue to be in an exceedingly strong financial position with significant cash balances. It's [maintained] our financial flexibility to continue to make strategic investments as well as additional opportunistic buybacks. In fact, we'll have approximately $3.4 billion buyback capacity under the existing authorization. Depending upon market conditions, we expect to complete that within the original timeframe of May 2008. I do not see any…

Thank you, Rupert, and good morning everyone. Obviously, we are very pleased with the overall performance of the company and we are enjoying now at nearly all of our operating businesses. And I hope some of the reasons for our optimism about the next two quarters will come out in the Q&A part of the call. But, first, I want to spend a couple of minutes on the unsatisfactory performance of our Television segment in the last quarter. We faced some unique challenges in the quarter from the Network, STAR, and MyNetworkTV in particular, challenges that we are addressing and I believe overcoming, so that you will see renewed growth in this segment in the second half of the year and into next year. So, let's start with the biggest current challenge we face and that is turning around MyNetworkTV. It's a challenge we are aggressively tackling and one that we expect to see significant improvement later in the year. Clearly, MyNetworkTV is not going as originally planned. But we are taking aggressive action to rectify our problems. We know from our experience starting the FOX Network that there will always be fits and starts when you undertake the launch of any network and clearly that's certainly been the case with MyNetworkTV. But if we didn't get it right the first time, we've learned from our experience and hopefully now have a better game plan for making it a success. First and foremost, we decided that we needed a dedicated management team to run the Network. So, we hired Greg Meidel, a seasoned television executive, who actually was with us in the early days of FOX. I think Greg will bring significant expertise to the marketing, ad sales, affiliate relation, and programming parts of the Network. He and his team…

(Operator Instructions). First go to the line of Jessica Reif Cohen with Merrill Lynch, please go ahead.

Thank you. Peter, just a couple of things to follow-up on STAR TV. As you mentioned, you recently changed management. What would you like to see over the next three to five years in terms of growth and business extensions? And on film, you had a great first half but looks like you'll have an amazing second half. What do you think, as you look out to fiscal year '08 and beyond, can you drive it further? What will the growth drivers be? And then finally Dave, I just wanted to clarify, you said that cable for the full -- you said growth will be similar to the first quarter, meaning the first quarter had 26% operating income growth in that range?

Yes, that is the easy one to answer, yes.

Thank you.

Okay, Jessica, quickly on STAR. I think we have aggressive expectations for STAR. Beginning on India, we'd like to see continued growth in our channels. We expect the growth of Tata Sky. I think the most significant impact it will have on the Company is growth of revenues inside STAR as we see additional subscribers and an ability to get higher declarations of subs from the cable operators. New channel launches there, and also particularly new ancillary businesses in the Internet and production, et cetera. So we're optimistic about STAR going forward in India. We'd also --

I'd just say that the STAR is going a lot faster than we had budgeted for, putting on like 5000 customers a day.

Yes, on Tata Sky.

Tata Sky, which is (inaudible). And then additionally, we're also ambitious in other countries, particularly Indonesia, where we've recently launched -- we recently acquired a television network, which we're optimistic. A very big country. We're hoping that could be the next India and also just continuing growth in other territories, Taiwan, Hong Kong, China, et cetera. Turning to the film company, again, it is -- you certainly don't want to bank on outstanding box office performance every year, but I guess I would say two things. One is, we believe obviously -- people have asked us this question for three years, can you continue the growth? And we believe that we have a management team in place that certainly can guarantee success. It is relentlessly and obsessively focused on profitability. And so, we have high confidence in their ability to continue to pick good pictures. And certainly, we had a couple of things that are positive. We have got -- if you look at our current profitability, it has been heavily driven by Ice Age 2. We have three great animated pictures in the pipeline, Simpsons this summer, ICE Age 3 and Dr. Seuss Book starring Jim Carry. So, I think that gives us optimism. The other thing gives us optimism in terms of our ability to grow that segment is we are just getting started with Fox Atomic and that's an area where we hopefully -- where we have launched a new label. I think you have seen our ability to successfully launch new film labels and we would hope that would be a significant growth driver in the years ahead.

Thank you.

The next question is from the line of Aryeh Bourkoff with UBS. Please go ahead.

Yes. Good morning. Thank you. My questions revolve around the Fox Interactive Media segment. I think you mentioned $125 million of revenue in the quarter from FIM primarily in MySpace, could you talk about how that compares to the prior quarter? Also, previously you mentioned 2007 revenue expectations around $500 million for that segment, can you talk about or reaffirm that number?

Yeah.

And talk about the trends for that business? And then lastly, the Google deal, there has been a lot of talk about whether the Google deals is a firm deal. Can you just take this opportunity to clarify that and discuss what the parameters around that deal are? Thank you.

20% to 25% growth in MySpace.

Yeah. I think we had -- just to try and hit those numbers, I think we had about 25% growth quarter-over-quarter in MySpace. I think we had about 70% growth year-over-year in revenues. We have announced that we actually -- I think we will over deliver on what we said we expected to be $500 million in revenue for the fiscal year and that continues to go well. If anything, I think you have seen -- we have seen our monetization growth momentum increase over this year over the last year, as we are starting to see some of the improvements we have made in advertising technology and advertising sales force begin to take effect. The Google deal, which there's an article in today's Wall Street Journal, we do have a binding letter of intent. We are over delivering on our impression guarantees. So, we are absolutely comfortable. We are in a process of negotiating with a very complicated long form, and there are places in that long form, where we are looking to mutually benefit each other, where we are hoping to do some things that can over deliver for Google, and hoping to do some things where we can also look for some growth opportunities on our side. But we do have a binding letter of intent and we are significantly over delivering on our guarantees.

Can you talk about how that $500 million of revenues in '07 can pace in the outer years potentially and how that Google deal takes effect in '08?

Look, we would expect to -- I don't think we want to give a number for next year. But we would certainly continue -- that $500 million this year is with minimal search revenue from Google. The Google deal increases into several hundred million dollars next year and we would also continue to see our pacing growth in display and other advertising, as some of our advertising technologies take effect and some of our ad sales improvements take effect. So, I think next year you are going to see a pretty -- a very sizable revenue growth led by not only the continued momentum on our display and other advertising, but the Google deal really begins to kick in, in fiscal '08 and beyond.

And lastly, the profitability of FIM. You said you could have turned the corner to this quarter based on those one-time costs. When do you expect it to really start to ramp on the bottom-line?

Well, we had our first overall profitable month in the month of December. We expect to be marginally profitable, breakeven marginally profitable for fiscal '07, and we would expect to see profitability increase dramatically in fiscal '08. I think our hopes are that we can get this thing up to a margin in the low 20% range in fiscal '08.

Yeah, you get operating -- you get huge operating leverage. That's your cost on [the growth].

I think that's pretty pessimistic. I think we can do better than 20%.

Okay. Thank you very much.

The next question is from line of Richard Greenfield with Pali. Please go ahead.

Hi. A question first for Rupert. We believe News Corp. is underlevered right now. You've got DIRECTV almost behind you. Could you talk to your interest in using your significant financial capacity now for buying partially owned assets such as BSkyB or Gemstar, where there has been a lot of speculation and compare that to using your financial capacity to simply buyback stock? And then Dave, could you just update us on your view of target leverage for News Corp. and how quickly you think you can move the company to that target leverage? Thanks.

I think, I've heard there are rumors around this. But as far as UK Sky, we would love to, but it's just too expensive. There is -- I think it will cost us many, many, many billions of dollars. What I said earlier that if we see nothing better than buying our own shares at the moment, we will continue to do that. As for Gemstar, I can tell you, absolutely, that we will not be buying 100% of Gemstar or another share. I think that answers the question.

Yeah, I think for target leverage, I think we are pretty comfortable with taking the company to 2.5 to 3 times and we'll get there partly over the next year, as Rupert mentioned to the completion of the buyback, and we'll just see as we go. But it will be probably a slower pace than you might like to move ultimately. You will see the leverage go to about two times.

Our next question is from Michael Nathanson with Bernstein. Please go ahead.

Thanks. I have one for Dave and one for Rupert. Dave, on cable TV, you are talking about the acceleration of profits for the rest of the year. I wondered if in terms of what you're saying, do you think it's going to be acceleration of revenue growth that drives that acceleration profits or a slowdown on the cost side? And then, the cost inflation has been very volatile lately, I wonder what do you think the long-term cost inflation would be for cable as going forward? And then, I’ve one for Rupert.

It's really not an acceleration of growth. It's really a timing. It’s pretty much -- this quarter is pretty much as we expected. So, it's really cost in the quarter and the timing of that cost that reduced our growth rate in the quarter. And I think we've done a pretty good job at maintaining cost. Obviously, the toughest area of cost inflation in the cable networks certainly are RSNs and something that we fight every single day to try to maintain the cost as low as possible. But there we do have the capacity, we have the capacity to pass that cost on to higher affiliate fees.

Yeah, let me just, if I can Dave?

Sure.

We look very -- the most volatile area of costs are our sports team cost. We look very closely at those deals. There will continue to be some timing aberrations because what happens is that when you renew a team deal, you generally have a big increase in cost that year and you make up for it in the latter part of that contract, as you pass on those costs to the cable operators. So, we are absolutely certain about our ability to continue to aggressively grow our RSNs. But there will continue to be timing aberrations as there were in this quarter.

Okay. And then Rupert. I wondered if you have any thoughts getting a close to Italian soccer riots last weekend, and what do you think over the near-term implications for SKY Italia?

I think we're okay on the soccer. They're certainly for the next -- this year and next year and you will find the EU probably buying it at this issue, and that will be very good for us. As for the trouble last week when they cancelled the whole round for one week that will be added on the end. It will not affect us at all through financially.

I know, it's short-term, but any change, any spike up in boxes since people may not be going to the games as much?

Well, it's too early to say. It's only been known for two days, but I think our sales of new subscribers there is running well ahead of last year. I am talking about the last six weeks.

Okay. Thanks.

Our next question is from Doug Shapiro with Banc of America Securities. Please go ahead.

Yeah, thank you. I had two as well. The first one was, I was wondering if you feel comfortable of quantifying the MyNetworkTV losses in the first half and where you would like to see those go or you think they realistically those can go on the second half? And then second thing is in your FCC filing regarding the DIRECTV sale, you mentioned the challenge that are faced in finding a competitive broadband solution, just wondering if you could talk about your broadband strategy in Italy in light of those comments?

I am sorry, was the question about My -- we didn't hear it. Was it MySpace losses in the first half?

No, no. MyNetworkTV losses?

Look, as I said earlier, the MyNetworkTV losses were higher than we expected and will honestly be higher than we expected in this quarter. We are making big programming changes, I think its March 12, March 13, somewhere around there and we expect to significantly reduce, as I said, reduce our programming costs by 50% on two-thirds of the nights. And honestly, we expect to have programming that is more advertising attractive and also that we expect to do a better job of selling. So, while the losses have been higher than we expected, I think in the context of the company, we can easily absorb them. And we certainly would expect to have significant impact on these costs. If not in this fiscal year, in fiscal '08, we expect to get this thing turned around and fixed. As per the DIRECTV question, I forgot -- broadband strategy in Italy, do you want to --

The broadband picture is totally different in Europe to here. We bought our own fiber footprint across Britain and we're expanding it fully. But the point that under European law, which is -- it looks like it's going to be permanent there, throughout Europe, the last mile into the home has to be carried by the incumbent telephone company at a controlled and fairly cheap wholesale rate. So, that's leading broadband to become somewhat of a commodity in fact across Europe. And we're not worried about it in -- we're ready with two big companies in Italy with a triple play. We are still having difficult negotiations with Telecom Italia, but we have no doubt they'll be carrying our programs.

All right. Thank you.

In fact, they'll be carrying older movies. Our own independent channel is something they negotiated.

Okay, thanks a lot.

Our next question is from the line of Anthony Noto with Goldman Sachs. Please go ahead.

Thank you very much. Dave and Peter if my math is correct, your MySpace revenue for the quarter would have been about $75 million given the numbers that you gave, a $50 million increase versus a year ago and that represented three times last year. And I was just wondering of that $75 million if it's correct, what percent of that is search revenue versus display revenue? And on the display side, is there an opportunity to accelerate your monetization through in ad sense for content deal with Google? And then second, I know that you've been blocked out from being able to buyback stock and Rupert, you made some comments about buying back stock. Can you start to buyback stock shortly after this call prior to the shareholder vote, as it relates to the Liberty transaction? Thank you.

I will do the MySpace first -- piece first quickly Anthony. Your revenue numbers are reasonably accurate. I would say the search contribution in those revenue numbers in Q2 are de-minimus because the Google deal hasn’t kicked in yet. So we expect those -- we would expect to see continued momentum on the display side and then have search kick in. We do believe we can see continued momentum on the display side. Most of that will come from our own sales force and from our own sales effort and from our own technology moves. The one area where Google can contribute to us on the display side is they have the right to sell remnant advertising and remnant advertising is the great sort of unsold opportunity in MySpace, given that we are the leader as of the last comScore ratings. We are the leader in page views on the internet, so we have a lot of remnant advertising that is going at ridiculously low CPMs. And one of the parts of the Google deal that we hope to see improvements on is Google has the right to monetize that remnant advertising for us and we think that will show improvement in display advertising beyond what they contribute on the display -- on the search side.

And again, the question on the buyback, the company is free now. Once the call is complete, we have announced to raise the buyback stock prior to the vote of our proxy. So we have the ability to be in the market at any time.

Great. Thanks Dave. Peter just one follow-up on that. Is that an exclusive right for Google on their remnant inventory or could you utilize ad networks other than Google such -- and then also marketplaces like Right Media.

Yes it is not an exclusive deal. What it is, is we've set a floor with Google and they have the right to sell above that floor. We do utilize other ad networks and in somewhat -- in many of those cases we are the largest customers in those other ad networks. And the big issue for us where we think Google can improve things for us is to the degree we can improve our eCPM and raise it across the board for all of these networks. There is significant opportunity for money to flow to the bottom-line to us.

Great, thank you.

Our next question is from the line of William Drewry, Credit Suisse. Please go ahead.

Thanks. Just wondering, Peter, if you can give us a little bit more color on what the ad market is doing and scatter between the cable networks and the TV network. And then I was just wondering on the expectations for the network next year, you said that they need to do a better job. Just wondering is that increased program spending into the upfront, into the development season or better promotion strategy, may be a little more color there too. Thank you.

Better programs?

Yes, exactly. It's not increased spending, it's just better spending. I guess is really the answer as Rupert said. In terms of the ad market, the ad market is actually surprisingly strong right now. We are seeing pretty decent scatter on the network front and certainly we've got some unbelievably attractive inventory in Idol and 24 and House, etcetera, and its matched with a pretty strong market. Same thing on the cable front. The cable market is actually pretty strong. The one thing going on both sides is that, particularly on the cable side, sales are late. In the sense that they take very close to air date and that has compressed over the years. But overall the market is pretty strong and I think it bodes well for the upfront. As for next year, as I said, we expect -- demand better performance of our programs in the fall. But that being said, I would be extremely disappointed if we weren’t the number one network during the '07-'08 broadcast season given the continued strength of our shows, given a shorter baseball without the divisionals, which are the low-rated part, given what we see as big momentum in the BCS and given that we have the Super Bowl next year. So if we are not the number one network next year, hopefully for the fourth year in a row, we will be somewhere between angry and disappointed.

It's the great achievement to get that. I mean we've been -- we've been tenth of a point from winning the last two years. This year we have to possibly do a little better than that, and next year should do quite a bit better.

Great, thank you.

Our next question is from the line of Vijay Jayant with Lehman Brothers. Please go ahead.

Thanks. Most of my questions are answered. One for Peter though on the broadcast profitability side, can you just share conceptually the new Major League Baseball deal which is not as elaborate. Can you sort of talk about what the swing it can provide in terms of profitability next year?

I think as a new Major League Baseball deal we expect to be profitable over the course of the deal. They will be small in numbers in the sense we have less programming, but in general with most of these sports deals your profitability -- your numbers improve as they go on and as you get CPM increases. And the one positive across the board is we have seen sports CPMs go very strongly. We had a very good year in terms of above what our deal projections were for the NFL. We had -- we are having very good sports CPMs increases in NASCAR pricing right now and early baseball sales because we are just beginning to sell next year’s baseball. We are actually also seeing some improvements in CPMs.

Thank you.

The next question is from the line of Spencer Wang with Bear Stearns. Please go ahead. Spencer Wang your line is open do you have any questions?

Yeah, sorry about that. Good morning. First question for Peter. The DVD market has been basically flat for the last few years, can you just share with us your expectations for the overall market in '07 and how you see HD playing out for DVD. And then just lastly can you share with us how your stations are pacing in the current quarter? Thanks.

Yeah, the DVD market, my sense is there is a little bit of growth and it's hard for us because I think our DVD sales were up more than 25% for the quarter. So we are going great guns. I think we also outperformed the market given our close relationship. Actually one piece of good news -- [haven’t had a chance to tell] Rupert yet is we were just named Vendor of the Year by Wal-Mart for the third year in a row, which is really unprecedented. So, we are the category manager in the three largest retailers in the world, the Wal-Mart and Target -- three largest video retailers, Wal-Mart, Target and Carrefour. So I think we expect to consistently outperform the video market and I expect to see very modest growth in the market overall, but better growth than that for us. HD is a very early thing. I think the most positive number I saw was -- I saw some research at [PVS] that says that 80% of the people who are buying PlayStation 3s are also buying -- are also using it to watch high-def Blu-ray movies on. If that's the case and if that continues to be the case, I think it's an incredibly positive thing for Blu-ray and hopefully a positive sign that will end up unified around one format. So, we are -- we have not baked in huge growth based on Blu-ray, but we expect that the high-def will show improvements in our margins overall and show some category replacement.

And TV station pacings, please?

We don't break out TV station pacings, but I'd say that the local market is characterized by very strong performance on the FOX stations and obviously the weakness as we've talked about on the MyNetwork stations.

Thank you.

Our next question is from line of Tuna Amobi with Standard & Poor's. Please go ahead. Tuna Amobi - Standard & Poor's: Thank you very much. I had a couple of questions as well. The first one is for Rupert. I guess is it fair to say that the company as a whole has not been particularly successful in China. And given that premise, can you talk a little bit more about what MySpace is doing in that market, and how -- what makes you confident that MySpace would be able to break into China, given the intense level of competition in that market? And related to that on this idea of a [peer] commerce, how do you pursue that strategy on MySpace, perhaps without compromising on advertising revenues? And the next question would be on video syndication. Beyond the Google deal, how do you -- what strategy do you see to kind of monetize your video? Is MySpace going to be the hub of all the video syndication deals that you are going to be pursuing beyond the Google deal, or are you going to be talking to third-party providers like [Brico and ALO video] such parties, can you clarify that? Thank you very much.

Let's take the China. We don't do very well in China. We have an interest. We just sold half of it in Phoenix Televisions in World Today. We have got five times our money back of our total investment and we are still there. We brought on a new partner, China Mobile and this has been very good base and we think it will do nicely. And we have our own little channel, Xing Kong, which is produced in Shanghai and distributed through the Southeast. That’s pretty much a breakeven operation. We are very modest. All I would say there is that nobody and I challenge anyone to argue this. Nobody, none of the American media companies or British media companies have made any impact there yet. It's possible that -- I mean there are lot of look-alike MySpace's there that something they would not be done as a subsidiary. There may be a MySpace China which has been licensed, but we are just feeling our way there. Tuna Amobi - Standard & Poor's: Any timeframe on when we might breakthrough?

It is a vast market, but it is certainly a very, very sensitive one and as we have seen what happened to Google there and what happened to eBay there, it is very difficult, even to -- to Yahoo, it is a very difficult market for outsiders. And the Chinese companies that you talk about being very competitive, some are pretty good, like (inaudible) and so on and have huge market shares, but really and huge market cash, but a relatively small profits. So that's it. Now as for the future of what we are going to be doing in the Internet space. Obviously MySpace is the big star at the moment. And we have to grow -- I see tremendous growth in that and is being a very big profit driver for the overall company in the coming years. If we get it right. And keep it right. The -- of course, all our newspapers, all of our television stations are very busy developing and expanding their sites and their revenues are growing very well. Some are profitable. Nothing of significant amounts, some like $5 million, some like $10 million, those profits are credited to those operations. But we have put in a lot of effort right across all our activities to extend ourselves across the Internet. For instance, the London Times has now reached 10 million uniques a month. The New York Post, I think is reaching to its 4 million. I couldn't tell you what they all are, but it adds up to a very significant figure, and we think that we could do a lot at that level. Now, we will keep our eyes open for other opportunities, but we don't see -- we see a lot of small things, which can help us technologically, maybe stand alone, but no major investments at this stage. Pete, you might like to add too?

The only other thing I would like to add, you asked the question about video and how we are going to monetize our video across the Internet. I guess it breaks down into two areas. First in terms of MySpace is already really good job, particularly on user-generated video. We are not at YouTube levels, but I believe we're clear number two in user-generated video and growing strongly and I think the team there has done an excellent job over the last two or three months of improving our video experience and we are seeing more videos posted and more traffic and more streams of user-generated video. On the rich media side or the copyrighted content side of video, while clearly we will provide our content to MySpace, we will also distribute sort of the FOX video as widely as possible on the Internet on ad-supported basis. And you have seen us make deals -- we have a big TV deal with obviously iTunes. We have deals with virtually every video distributor on the web. And we will continue to try and distribute our content as widely as possible and monetize it as widely as possible. Tuna Amobi - Standard & Poor's: Okay, that’s helpful, any comments on the peer e-commerce idea?

The only comment there is, look we think there is a great opportunity at Myspace to do some e-commerce business. And we are looking closely at and the team there is building, what we think as some exciting applications. So, it is an area of growth for us. The other -- just as -- one of the things that we haven’t talked about at all is, we are seeing tremendous growth from Cingular in our wireless MySpace application. I think Cingular actually announced in the last day or two their fastest growing application ever and Cingular -- exclusive for Cingular for just a few months, and then we will begin to roll that out across the other U.S. carriers and across the other International carriers. So I think --

We are pretty advanced with the major European carriers to launch within weeks.

So I think, look, in almost every area of MySpace, what we've got is great traffic, great audience and clearly we have been focused this year of monetizing it on our own ad sales, but we are very focused on where the growth is beyond that. Internationally, we're seeing great growth. E-commerce is a potential. Probably wireless is a great potential growth area for us. And so that is one of the areas that the MySpace team has been spending a lot of time focused. Great, thank you very much. Tuna Amobi - Standard & Poor's: Great, thank you very much.

And John, since a lot of people have to get over to a certain theme park in the next half hour, why don't we take one more question.

And we will go to Doug Mitchelson with Deutsche Bank, please go ahead.

Thank you very much. Two questions if you don't mind. Curious of your current views on PBR and the move in the last upfront live only ratings, which are costing the network arguably about 6% of the primetime revenue this season. Do you believe live only ratings is the appropriate measure of quality of products and will that be the measure in this year's upfront again. And then secondly, just curious on Rupert's view on the balance sheet. I know you talked about moving up to two times leverage, but I guess a consensus among the investors that 2.5 to 3 times leverage is still a conservative level for the conglomerates. I am just curious, Rupert, on your thoughts on that. Thanks.

Well, I will do the DVR one quickly. I do not think that live is the appropriate thing. I think we are seeing -- as Nielsen improves their methodology, we are seeing a lot of additional ratings. Obviously, the college one is going on right now which is a great thing for FOX and our young programming, but we are talking to Nielsen and we are talking to the advertisers and I would hope -- and I have some expectations that we will see next year's upfront sold on the basis of live plus three, maybe live plus two. But frankly, we think it should be live plus seven, but I think we will see an improvement from live-live to live plus two or three, which I think is a much more accurate reflection of current viewing.

On the leverage, I just have thought but Dave said. I think that 2 times -- 2.5 times are we comfortable with. But we want to keep ourselves flexible and have the freedom to move if and when we see strong opportunities. So we don’t want to get over leveraged because who knows how long all of this supply money is going to be around.

I think that’s right and I think 2.5 time is just as appropriate. You are going to see us start to re-lever. It's probably going to take slightly longer than we told you. We want to get the Liberty transaction behind us. We obviously, as Rupert said, we've got -- I think one of the analysts said we have got a lot of cash flow. We have a buyback in place to be and they can see us being pretty aggressive with it. As Rupert mentioned better, there no better use for our cash than buying back our stock right now. But to get the three times leverage from here is a lot of borrowing capacity. So it is not going to happen overnight, but it will happen over time.

Great, thank you.

Okay, thank you very much, John, why don't we go right into the press call?

Certainly, and just give a quick reminder. (Operator Instructions). One moment please for our first question. And we will go to the line of Aline van Duyn with the Financial Times. Please go ahead.

Good morning. I wanted to ask a bit more about monetizing the copyrighted content on the Internet, and I wondered if you can talk a little bit about your discussions with YouTube in terms of licensing your content to them and potential sort of sharing of ad revenues from that? And related to that, how your discussions are going with other media companies to potentially set up an alternative distribution platform for video content on the Internet?

First of all, obviously, I am not going to talk about discussions or negotiations we have with third parties. Other than, I do believe that one of the big growth areas in the Internet this coming year, and I think you can see this from virtually every analyst and from every advertiser will be licensed content. I think there's a tremendous desire for video advertising on the Internet at extremely high CPM, sort of broadcast level CPMs. And they are desperate for licensed copyright content that's safe to be on and I think that's going to be a great opportunity for all of the big media companies. We have had conversations with YouTube. We have had conversations with all of the broad video portals from Yahoo to AOL. There is a tremendous desire on the part of everybody to do more business with us. And we also certainly would talk to -- everybody is talking to everybody right now. And we are going to take it slowly and we are going to do what we think is best long-term to monetize our content and we think we are in a very good position because there is so much advertiser demand that for legitimate content on the Internet right now.

Thanks.

Our next question is from the line of Cecile Dorat with Bloomberg News. Please go ahead.

Good morning. I first wanted just to clarify your comments on the revenue at MySpace, the plus 70% year-over-year and also the breakeven this year. Were you talking about MySpace or were you talking about the Fox Interactive Media unit?

Look, MySpace is such a dominant part of FIM. Basically, they are one and the same. The increases in revenues are driven by MySpace, but those percentages and the breakeven things actually apply to both because MySpace is such a dominant part of FIM's monetization and FIM's financials right now.

So, just so David -- what David mentioned earlier in his presentation, it was the number of users that tripled year-over-year not the revenue?

No, it's the revenue that -- the revenue tripled.

The revenue tripled.

Revenue tripled, yes.

And what increased by 70% then year-over-year?

That was all FIM. That was all FIM. But MySpace revenues have tripled year-over-year.

Okay. All right.

We think they will triple again.

And that tripled again this year?

No, we hope that (inaudible). But it sounds like [that] was doubled.

I am sorry, I can't hear you well.

He said, there is not much doubt, they will double.

Can you give an update on the Fox Business Channel? When do you expect to launch it?

The Fox Business Channel?

Yes.

Yeah. I think we have not yet announced…

We will be making an announcement in the next week on that I think. But already problems for the moment now are getting the physical studios right. It's certainly -- it looks like, early in the fall.

Early in the fall?

We will be more specific about that with a month or…

We would assume in the later part of this calendar year, and we'll make a formal announcement hopefully soon.

Yeah. We have to recruit some money on these.

Thank you.

I forget that.

Next question?

And that's from the line of Ken Lee with Reuters. Please go ahead.

Hi, good morning. Viacom recently asked you to pull down all of its videos. Does -- I mean is News Corp. considering going a similar route to defend its copyrights on YouTube? And I’ve got a follow-up about MySpace.

Yeah, look, we are certainly -- we are not contemplating anything nor we talk about it directly. But that being said, we have both sides of this question. On one hand, we are enormous believers in copyright protection and we believe from the FOX side that our copyrights need to be respected by all users. And at the same time on the MySpace side, we are taking aggressive actions to protect all copyright owners in the area of finger printing, in the area of audio tracking, in the area takedowns, in the area of trying to automate takedowns. So, from both sides of the company, we are a great respecter and believer in copyrights.

Does that in any way sort of prevent the company from taking a more aggressive stance towards protecting copyrights, and specific with YouTube?

I don't think anything prevents anything. But -- no, I guess I would say that. I don't think anything prevents anything. But we respect copyrights and we expect others to respect our copyrights.

Can you give us any more color on, is it within weeks or longer or would it take more months for MySpace to enter China?

We are not prepared to make any comments about what we're doing with MySpace in China at this moment. Sorry.

I would just asked the reporters who are still in the queue that we would like to limit it to one question, so that we can get through as many question as possible.

And next is from the line of Seth Sutel with the Associated Press, please go ahead.

Good morning. Look, I was just wondering if I could follow-up on Ken's thing briefly on YouTube. Have you asked YouTube to take any takedowns and if -- is there any other color you could give on the MyNetwork programming changes that you have in mind? Thank you.

We have at various points asked YouTube takedown programming and I think it was well reported last week that there were some episodes of 24 that it showed up and we asked them to take them down and they complied. We also worked with them to try an subpoena user data so that we could go after the individual who violated our copyrights and posted those shows -- frankly posted on both YouTube and some other sites. So, we have asked to take down things and they have complied. On the MyNetwork side what we are doing is we are going from 6 nights of telenovelas, which crew had struggled to 2 nights of -- 6 nights and 2 different hours to 2 nights of 2 hours each. One telenovela for 2 hours and 1 night, 1 telenovela for 2 hours in the next night, which we believe we will play much more like movies. We've then have added 2 nights of IFL which -- there is some real excitement on [sports segment] on part of advertisers. We do that a big event on Monday night and then a recap on Saturday night. And we've added 2 nights of what we believe are very advertiser friendly movies on Thursday and Friday nights. Thursday night is a great night. We think its great kind of programming to run movies. We are running lot of first run movies. And then we are running essentially classics on Friday night, which we think particularly given it’s a pretty lackluster network night for everybody. The opportunity to see classic movies, there is a better strategy than one we've portrayed. And most importantly, as I said earlier on those four nights of changes there is no telenovelas, our programming cost would be reduced by more than 50%.

Our next question is from Julia Angwin with The Wall Street Journal. Please go ahead.

Hi there. I was wondering if you could quantify or speak to some of the people who quantified the MyNetworkTV losses? On Wall Street, I've seen estimates of $25 million of losses so far. I've also heard losing -- it was losing $2 million a week with the telenovela strategy. Are those numbers in the right ballpark?

Again we are not breaking out the weekly numbers. People can see what our numbers were for the quarter and we expect those losses to improve.

Your next question is from Staci Kramer with paidContent.org. Please go ahead.

Hi, Peter, could you elaborate a little bit on the syndication efforts that you are making with FOX content across various download services and streaming services. You seem to be very -- FOX has been very experimental of late and I would like to hear a little bit more about the strategy there?

Well, I think that's actually a good characterization of our strategy. We believe that this is a good time to experiment widely with the dissemination of our content. Anybody who respects our copyrights were largely willing to try things that. And I think what you see is a marketplace influx. I think you see a marketplace that clearly users are anxious for more legitimate content. And we are willing to do a lot of experimenting and I think that what we hope to see is we hope to see various services and various models to dominate and then we'd be more active in those. But I think right now what we are trying to do and certainly what I've instructed the people at FOX Digital Media to do is get our content out there, get it available to users. Let's try and monetize it on a download basis or paid download basis. Try it on advertising supported stream basis. Let's try and get it aggressively on MySpace, let's try and get it aggressively on our station website. And so we are trying to do a lot of different things right now, and we will hopefully be smart enough to move aggressively in the areas of those who are successful and move away from the ones that aren’t successful.

The next question is from Joseph Menn with the Los Angeles Times. Please go ahead

Hi I guess, this is for Peter. Is there some sense of awkwardness that Universal is doing over MySpace content? And is there any -- what do you think are the chances of some sort of global solution where the content providers can agree with the more upstart distribution including your own?

I am not sure. What was the part of the question about Universal? Sorry could you just clarify?

Is it awkward that they are unhappy with their content being on MySpace given that you are trying to -- you have got similar questions about your content sometimes appearing on YouTube?

Well, I would say -- this is Universal Music I guess you are talking about. And is it awkward? Yeah we believe that they -- we've worked hard to be in the leadership position about aggressively complying with all aspects of the Digital Millennium Copyright Act. So, in terms of awkwardness no there’s no awkwardness. We believe that we comply with the DMCA, and we expect anybody else that uses our content to comply with the DMCA and that mostly has do with protecting copyrights and following take down orders and trying to put in finger printing technology etcetera, all of which we think we have been in a leadership position on MySpace. So, no I don't think there is any awkwardness at all and I think there is great consistency in the company's position, which we think we are a -- we honor copyrights on MySpace and we expect others to honor our copyrights.

Our next question is from the line of George [Sealy] with The Hollywood Reporter. Please go ahead.

Good morning gentlemen. I was just wondering if you guys are ever considering spinning off any parts of the business. People sometimes talk about the FOX interactive media business being so attractive, any thoughts about spinning off any parts of the asset you own?

No. We are very happy with our mix of assets.

And next we go to the line of Chris Tryhorn with MediaGuardian. Please go ahead.

Mr. Murdoch, hello. I just wanted to ask you about the recent sentencing of Clive Goodman, the News World Journalist for hacking into phone messages. Some people suggested that that's the tip of the iceberg in terms of a general newspaper culture, including newspapers that’s used internationally. What would you say to that given [or exceeded] in place to stop that kind of thing happening again?

You are talking about an illegal taping by a private investigator. That is not part of our culture anywhere in the world, least of all in Britain.

And do you think there is adequate protection to stop that from happening again?

Yeah absolutely. I think every newspaper is making very close examinations of how they are operating.

Our next question is from Jill Goldsmith with Variety. Please go ahead.

Hi, Rupert. I was wondering how committed you are to working with the Chandler family and their attempt to buy out Tribune Company?

We are interested quite openly and frankly, if we could do something, not too expensive but which would lead to a joint operating agreement between the New York Post and Newsday. We think that will be a very, very powerful combination for advertisers to take a [banner loss] on the Post and -- into a shared profit situation. So, that we are interested in. And then it’s pretty much the limit of --.

And that investment would be small. I think the net investment would be small.

That would be no investment, but maybe then to get that small net investment under the Chandlers who would be heading that with 51% of the business.

And we have no further questions in queue.

Thanks. Thank you very much.

Thank you.

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