Edgar Filing: FOX ENTERTAINMENT GROUP INC

SCHEDULE 14A
(RULE 14A-101)

Information Required in Proxy Statement

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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[ ] Preliminary Proxy Statement

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(e)(2))

[x] Definitive Proxy Statement [ ] Definitive Additional Materials

[ ] Soliciting Material Under Rule 14a-12

Fox Entertainment Group, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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[LOGO OF FOX ENTERTAINMENT GROUP, INC.]

FOX ENTERTAINMENT GROUP, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Fox Entertainment Group, Inc.:

The Annual Meeting of Stockholders of Fox Entertainment Group, Inc. (the
"Company") will be held at the Citibank Auditorium, 399 Park Avenue, 12th
Floor, New York, New York, at 10:00 a.m., local time, on November 13, 2001, for
the following purposes:

1. To elect the Board of Directors for the ensuing year.

2. To ratify the appointment of Arthur Andersen LLP as independent
public accountants for the Company for the fiscal year ending June
30, 2002.

3. To transact such other business as may properly come before the
meeting.

All stockholders are invited to attend the meeting. Stockholders of
record at the close of business on October 11, 2001, the record date fixed by
the Board of Directors, are entitled to notice of, and to vote at, the meeting.
A complete list of stockholders entitled to notice of, and to vote at, the
meeting will be open to examination by the stockholders beginning ten days
prior to the meeting for any purpose germane to the meeting during normal
business hours at the office of the Secretary of the Company at 1211 Avenue of
the Americas, New York, New York 10036.

Whether or not you intend to be present at the meeting, please sign and
date the enclosed proxy and return it in the enclosed envelope. Returning a
proxy will not deprive you of your right to attend the annual meeting and vote
your shares in person.

By Order of the Board of Directors

/s/ Lawrence A. Jacobs
LAWRENCE A. JACOBS
Secretary

New York, New York
October 12, 2001

FOX ENTERTAINMENT GROUP, INC.
1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036

(212) 852-7111

---------------------

PROXY STATEMENT

---------------------

The accompanying proxy is solicited by the Board of Directors of Fox
Entertainment Group, Inc. (the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 10:00 a.m., local time, on
November 13, 2001, at the Citibank Auditorium, 399 Park Avenue, 12th Floor, New
York, New York, and any adjournment thereof.

This proxy statement and accompanying proxy card are being mailed commencing
on or about October 12, 2001 to stockholders of record at the close of business
October 11, 2001.

VOTING SECURITIES; PROXIES

The Company has two classes of common stock, Class A common stock ("Class A
Common Stock") and Class B common stock ("Class B Common Stock", and together
with the Class A Common Stock, the "Common Stock"). Holders of Class A Common
Stock are entitled to one vote per share, and holders of Class B Common Stock
are entitled to ten votes per share, on all matters to be voted on by
stockholders. A majority of all of the shares of stock entitled to vote at the
meeting, present in person or represented by proxy, shall constitute a quorum
at the Annual Meeting. A plurality of the votes cast, present in person or
represented by proxy at the Annual Meeting, is required for election of the
nominees as directors. Holders of shares of Class A Common Stock and Class B
Common Stock are not entitled to cumulate their votes in the election of
directors. In all matters other than the election of directors, a majority of
the votes cast by holders of shares of Class A Common Stock and Class B Common
Stock present in person or represented by proxy at the Annual Meeting, and
entitled to vote, is required. An inspector of election appointed for the
meeting shall determine whether a quorum is present and determine the number of
votes cast by holders of Common Stock for all matters.

The form of proxy solicited by the Board of Directors affords stockholders
the choice among approval of, disapproval of, or abstention with respect to
each matter to be acted upon at the Annual Meeting. Shares of Class A Common
Stock and Class B Common Stock, represented by the proxy, will be voted, except
as to matters with respect to which authority to vote is specifically withheld.
Where the solicited stockholder indicates a choice on the form of proxy with
respect to any matter to be acted upon, the shares will be voted as specified.
Abstentions and broker non-votes will not effect the outcome of the election of
directors or the ratification of the appointment of the independent public
accountants. With respect to all other matters to be voted on by stockholders
at the Annual Meeting, abstentions will have the same effect as "no" votes, and
broker non-votes will have no effect on the outcome of the vote.

All shares of Class A Common Stock and Class B Common Stock, represented by
properly executed proxies which are returned and not revoked, will be voted in
accordance with the instructions, if any, given therein. If no instructions are
provided in a proxy, the shares of Class A Common Stock and Class B Common
Stock represented by such proxy will be voted FOR the Board's nominees for
director, and FOR the ratification of the appointment of Arthur Andersen LLP
and in accordance with the proxy-holder's best judgment as to any other matters
raised at the Annual Meeting.

A stockholder who has given a proxy may revoke it at any time prior to its
exercise by giving written notice of such revocation to the Secretary of the
Company, executing and delivering to the Company a later dated proxy reflecting
contrary instructions or appearing at the Annual Meeting and taking appropriate
steps to vote in person.

At the close of business on October 11, 2001, 298,804,106 shares of Class A
Common Stock and 547,500,000 shares of Class B Common Stock were outstanding
and eligible for voting at the meeting. Only stockholders of record at the
close of business on October 11, 2001 are entitled to notice of, and to vote
at, the meeting.

As of October 11, 2001, FEG Holdings, Inc., an indirect wholly-owned
subsidiary of The News Corporation Limited ("News Corporation"), owned
174,004,106 shares of Class A Common Stock and 547,500,000 shares of Class B
Common Stock of the Company, representing in the aggregate 85.25% of the equity
and 97.84% of the voting power of the Company.

FEG Holdings, Inc. has advised the Company that it intends to vote all of
its shares of Class A Common Stock and Class B Common Stock in favor of the
election of the nominated directors and the ratification of the appointment of
the independent public accountants. Such action by FEG Holdings, Inc. will be
sufficient to elect such directors and ratify the appointment of the
independent public accountants without any action on the part of any other
holder of Common Stock.

The Company will bear the cost of solicitation of proxies. In addition to
the solicitation of proxies by mail, certain officers and employees of the
Company, without additional remuneration, may also solicit proxies personally,
by facsimile and by telephone. In addition to mailing copies of this material
to stockholders, the Company may request persons, and reimburse them for their
expenses in connection therewith, who hold stock in their names or custody or
in the names of nominees for others, to forward such material to those persons
for whom they hold stock of the Company and to request their authority for
execution of the proxies.

PROPOSAL 1

ELECTION OF DIRECTORS

The bylaws of the Company provide that each director serves from the date of
election until the next annual meeting of stockholders and until his successor
is elected and qualified. The specific number of directors is set by a
resolution adopted by a majority of the entire Board of Directors. The number
of directors is currently fixed at eight. Proxies cannot be voted for a greater
number of persons than the number of nominees named.

The persons named in the accompanying proxy intend to vote for the election
of the nominees listed herein as directors. Each nominee has consented to serve
if elected. The Board of Directors has no reason to believe that any nominee
will not serve if elected, but if any of them should become unavailable to
serve as a director, and if the Board of Directors designates a substitute
nominee or nominees, the persons named as proxies will vote for the substitute
nominee or nominees designated by the Board of Directors.

The following table sets forth certain information with respect to the
individuals nominated and recommended to be elected by the Board of Directors
of the Company and is based on the records of the Company and information
furnished to it by such persons. Reference is made to "Security Ownership of
Certain Beneficial Owners and Management" for information pertaining to stock
ownership by the nominees.

NAME OF NOMINEE AGE POSITION
--------------- --- --------

K. Rupert Murdoch....... 70 Chairman and Chief Executive Officer
Peter Chernin........... 50 President, Chief Operating Officer
David F. DeVoe.......... 54 Senior Executive Vice President, Chief Financial Officer
Arthur M. Siskind....... 63 Senior Executive Vice President, General Counsel
Chase Carey............. 47 Director
Christos M. Cotsakos.... 53 Director
Laura D'Andrea Tyson.... 55 Director
Thomas W. Jones......... 52 Director

BIOGRAPHICAL INFORMATION

K. RUPERT MURDOCH has been a Director of the Company since 1985, Chairman
since 1992 and Chief Executive Officer of the Company since 1995. Mr. Murdoch
has been Chairman of the Board of Directors of News Corporation since 1991, and
Director and Chief Executive of News Corporation since its formation in 1979.
Mr. Murdoch has served as a Director of News Limited, News Corporation's
principal subsidiary in Australia, since 1953, a Director of News International
plc, News Corporation's principal subsidiary in the United Kingdom, since 1969,
and a Director of News America Incorporated, News Corporation's principal
subsidiary in the United States ("NAI"), since 1973. Mr. Murdoch has served as
a Director of STAR since 1993 and Chairman from 1993 to 1998, as a Director of
British Sky Broadcasting Group plc ("BSkyB") since 1990 and Chairman since June
1999 and as a Director of Fox Family Worldwide ("FFW") since 1996. Mr. Murdoch
is also a member of the board of directors of Philip Morris Companies, Inc. and
China Netcom Corporation (Hong Kong) Limited.

PETER CHERNIN has been a Director and President and Chief Operating Officer
of the Company since 1998. Mr. Chernin has been a Director, President and Chief
Operating Officer of News Corporation and a Director, Chairman and Chief
Executive Officer of NAI, since 1996. Mr. Chernin was Chairman and Chief
Executive Officer of Fox Filmed Entertainment ("FFE") from 1994 until 1996,
Chairman of Twentieth Century Fox Film Corporation from 1992 until 1994 and
President of Fox Broadcasting Company ("FOX") from 1989 until 1992. Mr. Chernin
served as a Director of TV Guide, Inc. from 1999 until July 2000 and has been a
Director of Sky Global Networks, Inc. ("SGN") since June 2001. Mr. Chernin has
served on the Advisory Board of PUMA AG since 1999 and as a Director of E*TRADE
Group, Inc. since 1999.

DAVID F. DEVOE has been a Director of the Company since 1991 and Senior
Executive Vice President and Chief Financial Officer of the Company since 1998.
Mr. DeVoe has been a Director, Chief Financial Officer and Finance Director of
News Corporation since 1990 and Senior Executive Vice President of News
Corporation since 1996. Mr. DeVoe was an Executive Vice President of News
Corporation from 1990 until 1996. Mr. DeVoe has been a Director of NAI since
1991 and a Senior Executive Vice President since January 1998. Mr. DeVoe served
as Executive Vice President of NAI from 1991 to 1998. Mr. DeVoe has been a
Director of SGN since June 2001, NDS Group plc since 1996, STAR since 1993 and
BSkyB since 1994.

ARTHUR M. SISKIND has been a Director and Senior Executive Vice President
and General Counsel of the Company since 1998. Mr. Siskind has been a Director
and Group General Counsel of News Corporation since 1991 and a Senior Executive
Vice President of News Corporation since 1996. Mr. Siskind served as Executive
Vice President of News Corporation from 1991 until 1996. Mr. Siskind has been a
Director of NAI since 1991 and a Senior Executive Vice President since 1998.
Mr. Siskind served as an Executive Vice President of NAI from 1991 to 1998. Mr.
Siskind has been a Director of SGN since June 2001, NDS Group plc since 1996,
STAR since 1993 and BSkyB since 1992. Mr. Siskind has been a member of the Bar
of the State of New York since 1962.

CHASE CAREY has been a Director of the Company since 1992. Mr. Carey was
Co-Chief Operating Officer of the Company from 1998 until 2000. Mr. Carey
served as the Chairman and Chief Executive Officer of Fox Television from 1994
until 2000. Mr. Carey has been a Director of News Corporation since 1996 and
was Co-Chief Operating Officer from 1996 until 2000. Mr. Carey has been a
Director of NAI since 1996, President and Chief Operating Officer of NAI since
1998 and Executive Vice President of NAI from 1996 to 1998. Mr. Carey has been
a Director, President and Chief Executive Officer of SGN since June 2001. Mr.
Carey was President of the Company from 1995 to 1998, Executive Vice President
and Chief Operating Officer from 1991 to 1995 and Senior Vice President from
1988 to 1991. Mr. Carey served as a Director of TV Guide, Inc. from 1999 to
July 2000 and has served as a Director of Gemstar-TV Guide International, Inc.
since July 2000. Mr. Carey has been a Director of STAR since 1993, a Director
of NDS Group plc since 1998 and a Director of FFW since 1996. Mr. Carey also
serves on the board of directors of Gateway Inc. and Colgate University.

CHRISTOS M. COTSAKOS has been a Director of the Company since 1999. Mr.
Cotsakos has been President, Chief Executive Officer and a Director of E*TRADE
Group, Inc. since 1996 and Chairman of its board of directors since 1998. Prior
to joining E*TRADE Group, Inc., he served as President, Co-Chief Executive
Officer, Chief Operating Officer and a director of A.C. Nielsen, Inc. from 1995
to 1996, as President and Chief Executive Officer of Nielsen International from
1993 to 1995, and as President and Chief Operating Officer of Nielsen Europe,
Middle East and Africa from 1992 to 1993. Mr. Cotsakos also serves as a
director of Official Payments Corporation.

LAURA D'ANDREA TYSON has served as a Director of the Company since 1999. Dr.
Tyson has been the Dean of the Haas School of Business Administration at the
University of California at Berkeley since 1998. She holds the Class of 1939
Chair in Economics and Business Administration at the Haas School of Business.
Dr. Tyson served as National Economic Adviser to the President of the United
States from 1995 to 1996 and as Chair of the White House Council of Economic
Advisers from 1993 to 1995. She also served as a member of the President's
National Security Council and Domestic Policy Council. Dr. Tyson is also a
director of Eastman Kodak Company, Human Genome Sciences, Inc., Morgan Stanley,
Dean Witter & Co., SBC Communications Inc. and VIASense, Inc.

THOMAS W. JONES has served as a Director of the Company since May 2001. Mr.
Jones has been the Chairman and Chief Executive Officer of Citigroup's Global
Investment Management and Private Banking Group since 1999. He is also Chairman
and Chief Executive Officer of Citigroup Asset Management. Mr. Jones served as
Executive Vice President of Finance and Planning, and Chief Financial Officer
for TIAA-CREF between 1989-1993, President and Chief Operating Officer from
1993 to 1997 and Vice Chairman and Director from 1995 to 1997, when he joined
Travelers Group as Vice Chairman and Director. He is also a Director of Federal
Home Loan Mortgage Corporation, a Trustee of Cornell University, the
Educational Broadcasting Corporation, and the Investment Company Institute.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE ELECTION OF
EACH OF THE NOMINEES NAMED ABOVE FOR ELECTION TO THE BOARD OF DIRECTORS.

COMMITTEES OF THE BOARD--BOARD MEETINGS

The Company's Board of Directors held four meetings during the fiscal year
ended June 30, 2001. Directors who are employees of the Company or News
Corporation do not receive any compensation for their services as Directors or
members of committees of the Board of Directors. Directors who are not
employees of the Company or News Corporation are compensated for their services
as Directors by an annual retainer of $30,000 and $1,000 for attendance at each
Board meeting and each meeting of the committee of the Board on which they
serve. All Directors are reimbursed for their reasonable expenses incurred in
attending meetings of the Board of Directors.

The Board of Directors has established an audit and a remuneration committee
to assist it in the discharge of its responsibilities. The principal
responsibilities of each committee and the members of each committee are
described in the succeeding paragraphs. Actions taken by any committee of the
Board are reported to the Board of Directors, usually at its next meeting or by
written report.

The Audit Committee of the Board of Directors currently consists of Christos
M. Cotsakos, Laura D'Andrea Tyson and Thomas W. Jones. The Audit Committee held
five meetings during the fiscal year ended June 30, 2001. Mr. Cotsakos and Dr.
Tyson participated in all five meetings. Mr. Jones was appointed to the Audit
Committee in May 2001, and attended the one meeting in Fiscal 2001 held after
that date. Under applicable rules of the NYSE, Mr. Jones, through his position
at Citigroup, the parent of Citibank N.A. ("Citibank"), may be deemed not to be
an independent director for purposes of serving as a member of the Audit
Committee. The Company and News Corporation have engaged Citibank for various
banking services. Management believes that any banking fees negotiated and paid
to Citibank are in line with terms and fees made and paid by both the Company
and other corporations to other banking institutions for similar services. The
Board has determined that

it is in the best interest of the Company for Mr. Jones to serve on the Audit
Committee. The Board has further determined that the remaining members of the
Audit Committee are "independent" as defined by the rules of the NYSE.

The function of the Audit Committee is to assist the Board in fulfilling its
oversight responsibilities. The primary duties and responsibilities of the
Audit Committee, as set forth in more detail in its Charter, are: to review the
financial reports and other financial information provided by the Company to
any governmental body or the public; to review the Company's systems of
internal controls regarding finance and accounting that management and the
Board have established; to review the Company's auditing, accounting and
financial reporting processes generally; to serve as an independent and
objective party to monitor the Company's financial reporting process and
internal control system; to review and appraise the audit efforts of the
Company's independent accountants and corporate audit departments; to provide
an open avenue of communication among the independent accountants, financial
and senior management, the corporate audit department, and the Board of
Directors; and to advise the Board of Directors on any other requested issues
and such other duties as the Board of Directors may designate from time to
time. The Audit Committee Charter is reviewed annually. See "Report of the
Audit Committee."

REPORT OF THE AUDIT COMMITTEE

In accordance with its written charter, a copy of which is attached as Annex
A, approved by the Board of Directors, the Audit Committee of the Board assists
the Board in fulfilling its responsibility for oversight of the quality and
integrity of the accounting, auditing and financial reporting practices of the
Company. As part of the Audit Committee's meetings, the Audit Committee
discussed the interim financial information contained in each quarterly
earnings announcement with the Company's Chief Financial Officer and
independent accountants prior to the filing of the respective Quarterly Report
on Form 10-Q.

In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent accountants (i) a formal written
statement describing all relationships between the accountants and the Company
that might bear on the accountants' independence consistent with Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," (ii) discussed with the accountants any relationships that may
impact their objectivity and independence, and (iii) considered whether the
non-audit fees billed to the Company by Arthur Andersen LLP are compatible with
maintaining the accountants' independence. The Audit Committee also discussed
with management, the corporate auditors and the independent accountants the
quality and adequacy of the Company's internal controls and the corporate audit
function's organization, responsibilities, budget and staffing. The Audit
Committee reviewed with both the independent and the corporate auditors their
audit plans, audit scope, and identification of audit risks.

The Audit Committee discussed and reviewed with the independent accountants
all communications required by generally accepted accounting standards,
including those described in Statement on Auditing Standards No. 61, as
amended, "Communication with Audit Committees" and, with and without management
present, discussed and reviewed the results of the independent accountants'
audit of the financial statements. The Audit Committee also discussed the
results of the corporate audit activities.

The Audit Committee reviewed the audited financial statements of the Company
as of and for the fiscal year ended June 30, 2001, with management and the
independent accountants. Management has the responsibility for the preparation
of the Company's financial statements and the independent accountants have the
responsibility for the audit of those statements.

Based on the above-mentioned review and discussions with management and the
independent accountants, the Audit Committee recommended to the Board that the
Company's audited financial statements be included in its Annual Report on Form
10-K for the fiscal year ended June 30, 2001, for filing with the Securities

and Exchange Commission. The Audit Committee also recommended the
reappointment, subject to shareholder approval, of the independent accountants,
and the Board concurred in such recommendation.

The Audit Committee:

Christos M. Cotsakos (Chairman)
Dr. Laura D'Andrea Tyson
Thomas W. Jones

The Remuneration Committee of the Board of Directors currently consists of
K. Rupert Murdoch, Peter Chernin and Chase Carey. The Remuneration Committee
did not hold any meetings during the fiscal year ended June 30, 2001. The
Committee is to review and make recommendations to the Board of Directors on
the remuneration of the Chief Executive Officer, to review and make
recommendations to the Chief Executive Officer on the remuneration of the other
senior executive officers and such other duties as the Board of Directors may
designate from time to time.

The Board of Directors does not have a nominating committee. This function
is performed by the Board of Directors as a whole.

There are no family relationships among any of the directors or executive
officers of the Company. The Company's executive officers serve in such
capacity at the pleasure of the Board of Directors.

EXECUTIVE OFFICERS OF THE COMPANY

The names and ages of the executive officers of the Company as of October
10, 2001 and their positions with the Company are as follows:

EXECUTIVE OFFICERS AGE POSITION
------------------ --- --------

K. Rupert Murdoch................. 70 Chairman and Chief Executive Officer
Peter Chernin..................... 50 President, Chief Operating Officer
David F. DeVoe.................... 54 Senior Executive Vice President, Chief
Financial Officer
Arthur M. Siskind................. 63 Senior Executive Vice President, General
Counsel

All of the Executive Officers of the Company are also executive officers of
News Corporation. As executive officers of News Corporation, the Executive
Officers of the Company continue to render services to News Corporation.

The biographical description of each Executive Officer is set forth under
"Election of Directors" above.

For the fiscal year ended June 30, 2001, no amount of compensation was paid
or accrued by the Company for the account of the Executive Officers of the
Company, and no amount of compensation was paid or accrued to News Corporation
with respect to the services of the Executive Officers. Information regarding
the compensation received by the Executive Officers for their services to News
Corporation and its subsidiaries will be included in the Annual Report of News
Corporation on Form 20-F for the fiscal year ended June 30, 2001.

The Senior Executives of the Company (in addition to persons identified as
Executive Officers above) are as follows:

SENIOR EXECUTIVES AGE POSITION
----------------- --- --------

James N. Gianopulos... 49 Chairman of Fox Filmed Entertainment
David Hill............ 55 Chairman and Chief Executive Officer of Fox Sports Television Group
Thomas E. Rothman..... 46 Chairman of Fox Filmed Entertainment
Mitchell Stern........ 47 Chairman and Chief Executive Officer of Fox Television Stations

Set forth below is a brief biographical description of the Senior Executives
who are not Executive Officers of the Company:

JAMES N. GIANOPULOS has been Chairman of FFE since July 2000. He shares the
position with Thomas E. Rothman. Mr. Gianopulos was President of Twentieth
Century Fox International from 1994 until July 2000 overseeing both the
Theatrical and the Home Entertainment units. Mr. Gianopulos was President of
International and Pay Television for Twentieth Century Fox from 1992 to 1994.
Mr. Gianopulos serves on the Boards of the USC Entertainment Technology
Committee and KCRW for National Public Radio.

DAVID HILL has served as Chairman and Chief Executive Officer of Fox Sports
Television Group since 1999. Mr. Hill served as Chairman and Chief Executive
Officer of FOX from 1997 until 1999 and served as President of Fox Sports, a
division of Fox Television, from 1993 to 1999. From 1996 until 1997, Mr. Hill
served as Chief Operating Officer of Fox Television. In addition, Mr. Hill has
served as Chairman of Fox Sports Networks since 1996. From 1996 through 1997,
Mr. Hill also served as Fox Sports Networks' Chief Executive Officer.

THOMAS E. ROTHMAN has been Chairman of FFE since July 2000. He shares the
position with James N. Gianopulos. Mr. Rothman previously served as President
of Twentieth Century Fox Film Group from January to August 2000, and was
President of Twentieth Century Fox Production from 1995 to 2000. In 1994, he
was the founder and first President of Fox Searchlight Pictures. Mr. Rothman
also serves as a member of the board of directors of the Sundance Institute.

MITCHELL STERN has been Chairman and Chief Executive Officer of Fox
Television Stations since 1998. Mr. Stern was President and Chief Operating
Officer of Fox Television Stations, Inc. from 1993 to 1998.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Set forth below is stock ownership information as of October 11, 2001 as to
each person who owns, or is known by the Company to own beneficially (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), more than
five percent of the Common Stock of the Company, and the number of shares of
Common Stock owned by its Directors and by all Executive Officers and Directors
as a group. Other than News Corporation, the persons named below own only Class
A Common Stock.

NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------

News Corporation (1)....................................... 721,504,106(2) 85.25%
K. Rupert Murdoch.......................................... 5,000 *
Peter Chernin.............................................. 4,444 *
Chase Carey................................................ 5,000 *
David F. DeVoe............................................. 4,000 *
Arthur M. Siskind.......................................... 4,000 *
Christos M. Cotsakos....................................... 40,000 *
Laura D'Andrea Tyson....................................... -- --
Thomas W. Jones............................................ 5,000 *
All Directors and Executive Officers as a group (7 persons) 67,444 *

--------
(1) Such shares are held by FEG Holdings, Inc., an indirect wholly-owned
subsidiary of News Corporation.
(2)Consists of 174,004,106 shares of Class A Common Stock and 547,500,000
shares of Class B Common Stock. The shares of Class B Common Stock are
convertible on a 1:1 basis at the option of the holder into shares of Class
A Common Stock.
* Less than one percent.

Set forth below is the information as of October 11, 2001 as to the
beneficial ownership of the outstanding Ordinary Shares of News Corporation
(the only class of shares of News Corporation generally entitled to voting
rights) by each person who at such time owned more than five percent thereof,
by the Company's Directors and Executive Officers and by all of the Directors
and Executive Officers of the Company as a group. The following table does not
include beneficial ownership of Preferred Limited Voting Ordinary Shares of
News Corporation ("Preferred Ordinary Shares").

NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------

Cruden Investments Pty. Limited............................... 607,322,053(1) 30%
K. Rupert Murdoch............................................. 607,322,053(1)(2) 30%
Peter Chernin................................................. -- (3) --
Chase Carey................................................... -- (4)
David F. DeVoe................................................ -- (5) *
Arthur M. Siskind............................................. 27,821(6) *
Christos M. Cotsakos.......................................... -- --
Laura D'Andrea Tyson.......................................... -- --
Thomas W. Jones............................................... -- --
All Directors and Executive Officers of the Company as a group
(7 persons)................................................. 607,349,874 30%

--------
(1) Includes Ordinary Shares owned by (i) Mr. Murdoch, (ii) Cruden Investments
Pty. Limited, a private Australian investment company owned by Mr. Murdoch,
members of his family and various corporations and trusts, the
beneficiaries of which include Mr. Murdoch, members of his family and
certain charities and

(iii) corporations, including a subsidiary of Cruden, which are controlled
by trustees of settlements and trusts set up for the benefit of the Murdoch
family, certain charities and other persons. By virtue of shares of News
Corporation owned by such persons and entities and Mr. Murdoch's positions
as Chairman and Chief Executive of News Corporation and Chairman and Chief
Executive Officer of the Company, Mr. Murdoch may be deemed to control the
operations of News Corporation and the Company. In addition, Mr. Murdoch,
Cruden Investments Pty. Limited and such other entities beneficially own
230,348,706 Preferred Ordinary Shares. The address of Cruden Investments
Pty. Limited is Level 2, 306 Little Collins Street, Melbourne, Victoria,
Australia.
(2) Mr. Murdoch has been granted options to purchase 24,000,000 Preferred
Ordinary Shares, of which 12,000,000 are currently exercisable or become
exercisable within 60 days.
(3) Mr. Chernin has been granted options to purchase 17,275,000 Preferred
Ordinary Shares, of which 7,525,000 are currently exercisable or become
exercisable within 60 days.
(4) Mr. Carey has been granted options to purchase 5,300,000 Preferred Ordinary
Shares, of which 3,310,000 are currently exercisable or become exercisable
within 60 days.
(5) Mr. DeVoe has been granted options to purchase 3,190,000 Preferred Ordinary
Shares, of which 1,250,000 are currently exercisable or become exercisable
within 60 days.
(6) In addition, Mr. Siskind beneficially owns 50,143 Preferred Ordinary Shares
and has been granted options to purchase 3,660,000 Preferred Ordinary
Shares, of which 1,720,000 are currently exercisable or become exercisable
within 60 days.
* Less than one percent.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATIONSHIPS BETWEEN THE COMPANY AND NEWS CORPORATION

BUSINESS RELATIONSHIPS

News Corporation and its subsidiaries have, in the past, engaged in a broad
range of relationships with the Company and its subsidiaries. These
relationships have included the purchase by programming platforms owned, in
whole or in part, by News Corporation of programming created or owned by the
Company; the purchase by the Company of television and movie rights related to
books published by HarperCollins Publishers Inc. or other News Corporation
publications; the purchase of advertising in free-standing inserts or other
publications of News Corporation; and the purchase of certain television
broadcasting equipment services from News Corporation. The Company believes
that the terms and conditions of all such arrangements are fair and reasonable.

MASTER INTERCOMPANY AND OTHER AGREEMENTS

For purposes of governing certain on-going relationships between the Company
and News Corporation, the Company and News Corporation have entered into
various agreements and relationships, including those described below. The
agreements described below were negotiated in the context of a
parent-subsidiary relationship and therefore are not the result of arm's-length
negotiations between independent parties. There can be no assurance, therefore,
that each of such agreements, or the transactions provided for therein, or any
amendments thereof will be effected on terms at least as favorable to the
Company as could have been obtained from unaffiliated third parties.

The following descriptions summarize all material terms of such agreements.

MASTER INTERCOMPANY AGREEMENT

The Company and News Corporation have entered into a Master Intercompany
Agreement which provides, among other things, for certain agreements governing
the relationship between the Company and News

Corporation. The consideration for each of the services and other arrangements
set forth in the Master Intercompany Agreement have been mutually agreed upon
between News Corporation and the Company based upon allocated costs, provided
that all such consideration and any material arrangements are subject to the
approval of the respective Audit Committees of the Company's and News
Corporation's Boards of Directors. For the fiscal year ended June 30, 2001, no
amount was paid or accrued by the Company to or for the account of News
Corporation for services under the Master Intercompany Agreement other than the
amounts set forth under "Cash Management and Financing."

Cash Management and Financing
-----------------------------

Pursuant to the Master Intercompany Agreement, the Company may utilize the
worldwide treasury and cash management function, including the use of bank
overdraft facilities, of News Corporation and its subsidiaries, subject to
certain limitations. In addition, the Company's cash balances are available to
News Corporation and its subsidiaries. From November 11, 1998, interest on
outstanding intercompany balances (see "Intercompany Debt") has been charged at
commercial market rates not exceeding News Corporation's average cost of
borrowings as set forth in the Master Intercompany Agreement. At June 30, 2001,
the intercompany interest rate approximated 8%.

Executive Officer Services
--------------------------

The Master Intercompany Agreement provides that News Corporation or its
subsidiaries will make available to the Company the services of Messrs. K.
Rupert Murdoch, the Company's Chairman and Chief Executive Officer; Peter
Chernin, the Company's President and Chief Operating Officer; David F. DeVoe,
the Company's Senior Executive Vice President and Chief Financial Officer; and
Arthur M. Siskind, the Company's Senior Executive Vice President and General
Counsel, and such other employees of News Corporation as the Company and News
Corporation may from time to time designate.

Although it is contemplated that such executives will spend a considerable
portion of their business time in connection with the business of the Company,
they will also be engaged in activities for News Corporation not related
directly to the business of the Company. In addition, pursuant to the Master
Intercompany Agreement, News Corporation may terminate the availability of the
services of such executives upon notice to the Company.

Services of Company Employees
-----------------------------

The Master Intercompany Agreement provides that News Corporation and its
subsidiaries may from time to time request certain employees of the Company to
devote time to the business activities of News Corporation, its subsidiaries
and affiliated and associated companies.

Facility Arrangements
---------------------

Certain of the Company's facilities are or may in the future be located on
premises owned or leased by News Corporation, or entities in which News
Corporation has an interest. Furthermore, certain facilities of News
Corporation, or entities in which News Corporation has an interest, are or may
in the future be located on premises owned or leased by the Company. The Master
Intercompany Agreement provides that News Corporation and its subsidiaries, on
the one hand, and the Company, on the other hand, will permit each other to use
all or a portion of their respective premises.

Employee Matters
----------------

The Master Intercompany Agreement provides that certain employees of the
Company may from time to time continue to be eligible to participate in stock
option and other employee benefit plans maintained by News Corporation and its
subsidiaries. The Company will assume and be solely responsible for all
liabilities and

obligations whatsoever with respect to current officers and employees of the
businesses owned and operated by the Company and former officers and employees
of such businesses who, immediately prior to the termination of their
employment, were employed in such businesses.

Insurance
---------

The Master Intercompany Agreement provides that News Corporation or its
subsidiaries will provide insurance coverage on behalf of the Company against
certain risks and in amounts of coverage consistent with current coverages or
as otherwise may be agreed between them. The Master Intercompany Agreement
further provides that News Corporation will not be obligated to maintain any
type or amount of coverage.

Services
--------

The Master Intercompany Agreement provides that News Corporation and its
subsidiaries will continue to provide various services to each other, including
material procurement, transportation and financial and administrative services.

Trademarks
----------

The Master Intercompany Agreement provides that News Corporation and its
subsidiaries and the Company will be granted a royalty-free license to use
certain trademarks and service marks of the Company and that the Company will
be granted a royalty-free license to use certain trademarks and service marks
of News Corporation and its subsidiaries. The Master Intercompany Agreement
also provides that the license granted by News Corporation to the Company may
be terminated at any time by News Corporation.

Indemnities by the Company
--------------------------

News Corporation or its subsidiaries have, in the past, given certain
guarantees or made commitments relating to the businesses that are conducted by
the Company. These include commitments made in connection with film rights
agreements and funding and other obligations made to Liberty IFE, Inc., the
holder of Series A Preferred Stock of Fox Family Worldwide having a liquidation
preference of $345 million. The Master Intercompany Agreement provides that the
Company will assume all such obligations and commitments, and will indemnify
and hold News Corporation and its subsidiaries harmless from and against all
liabilities arising from any default thereunder.

Indemnities by News Corporation
-------------------------------

The Master Intercompany Agreement provides that News Corporation will
indemnify and hold the Company and its subsidiaries harmless from and against
any and all liabilities arising from any default under the debt instruments or
obligations of News Corporation or its subsidiaries (other than the Company)
which have been guaranteed by the Company or its subsidiaries or will be
guaranteed by the Company in the future.

Tax Sharing Agreement
---------------------

The Company and certain of its subsidiaries are included in the consolidated
group of News Publishing Australia Limited, the principal U.S. subsidiary of
News Corporation, for U.S. federal income tax purposes (the "Consolidated
Group") as well as in certain consolidated, combined or unitary groups which
include News Publishing Australia Limited and/or certain of its subsidiaries (a
"Combined Group") for state and local income tax purposes. The Company and News
Publishing Australia Limited have entered into a tax sharing agreement (the
"Tax Sharing Agreement"). Pursuant to the Tax Sharing Agreement, the Company
and News Publishing Australia Limited generally make payments between them in
order to allocate the tax liabilities and tax attributes

of the Consolidated Group or any Combined Group. Losses and other future tax
benefits of the Company and its subsidiaries actually availed of to reduce the
tax liabilities of the Consolidated Group or Combined Group and any taxes
actually paid by the Company and its subsidiaries included in such Groups will
be taken into account for this purpose. The Company and News Publishing
Australia Limited will cooperate in preparing any tax return filed with respect
to the Consolidated Group or any Combined Group.

News Publishing Australia Limited is primarily responsible for preparing and
filing any tax return with respect to the Consolidated Group or any Combined
Group, as well as for controlling and contesting any audit or other tax
proceeding with respect to the Consolidated Group or any Combined Group. The
Company is responsible for preparing and filing any tax returns that include
only the Company and its subsidiaries and for any taxes with respect to such
tax returns.

In general, the Company and its included subsidiaries will be included in
the Consolidated Group for so long as News Publishing Australia Limited
beneficially owns at least 80% of the total voting power and value of the
outstanding stock of the Company. Each member of a consolidated group for
federal income tax purposes is jointly and severally liable for the federal
income tax liability of each other member of the consolidated group.
Accordingly, although the Tax Sharing Agreement allocates tax liabilities
between the Company and News Publishing Australia Limited, during the period in
which the Company is included in the Consolidated Group, the Company could be
liable in the event that any federal tax liability is incurred, but not
discharged, by any other member of the Consolidated Group.

INTERCOMPANY DEBT

Prior to the consummation of the initial public offering which closed on
November 16, 1998, News Corporation and its subsidiaries eliminated certain of
the Intercompany borrowings owed by the Company, and the Company issued
Intercompany Notes to a subsidiary of News Corporation in an aggregate amount
of $4.5 billion, representing the remaining Intercompany borrowings and payment
of dividends by the Company to a subsidiary of News Corporation (and
approximately $3.8 billion was the largest aggregate amount of such
indebtedness in the fiscal year ended June 30, 2001). The Intercompany Notes
constitute unsecured, general obligations of the Company and mature on June 30,
2003. The Intercompany Notes bear interest at a rate equal to the average cost
of long-term debt of News Corporation (currently 8% per annum), adjusted
annually. The Company used the entire net proceeds from the initial public
offering to repay a portion of the amounts due under the Intercompany Notes.
The aggregate amount outstanding under the Intercompany Notes at June 30, 2001
was approximately $2.9 billion.

CREDIT ARRANGEMENTS

News Corporation and certain of its subsidiaries, including the Company, are
guarantors of the obligations of NAI under various guaranteed debt instruments
(the "Guaranteed Debt Instruments"). Such guarantees, including those of the
Company, represent contingent and not current obligations of the Company. The
principal amount of indebtedness outstanding under such Guaranteed Debt
Instruments at June 30, 2001 was approximately $9.3 billion. The Guaranteed
Debt Instruments mature at various times between 2002 and 2096, with a weighted
average maturity of over 20 years, and are generally not redeemable prior to
maturity. The indentures governing the Guaranteed Debt Instruments limit the
ability of News Corporation and its subsidiaries (including the Company) to
subject their properties to liens. Certain Guaranteed Debt Instruments issued
prior to March 1993 also may impose limitations on the ability of News
Corporation and its subsidiaries, including the Company, to incur indebtedness
in certain circumstances. The Guaranteed Debt Instruments also contain
customary representations, warranties, covenants and events of default. Under
the terms of the Guaranteed Debt Instruments, the holders thereof have the
right to require NAI to make an offer to repurchase the outstanding debt
instruments in the event of a "Change of Control Triggering Event.'' A Change
of Control Triggering Event occurs when the Guaranteed Debt Instrument is
downgraded below investment grade following a "Change of Control" of News
Corporation or an announcement of an intended Change of Control (or in the
event the

Guaranteed Debt Instrument is not investment grade at such time, a reduction in
the rating by one or more gradations). A Change of Control occurs when a person
other than News Corporation, subsidiaries and certain affiliates of News
Corporation and the Murdoch Family (as defined in the Guaranteed Debt
Instruments) owns (i) 30% or more of the voting power of News Corporation's
common shares or (ii) if the Murdoch Family is the beneficial owner of more
than 30% of such voting power of News Corporation, a percentage greater than
that owned by the Murdoch Family. Certain Guaranteed Debt Instruments require
any subsidiary of News Corporation which issues any guarantee for money
borrowed in excess of $50 million to guarantee all outstanding and future
senior indebtedness issued by News Corporation or its affiliates pursuant to
the indentures governing the Guaranteed Debt Instruments.

The Company has also guaranteed the obligations of News Corporation and
certain of its subsidiaries under the Revolving Credit Agreement. The Revolving
Credit Agreement provides for borrowings of up to approximately $2.0 billion
and expires on June 30, 2004. As of October 10, 2001, there were no borrowings
outstanding under the Revolving Credit Agreement. The Revolving Credit
Agreement contains certain covenants which, among other things, limit the
ability of News Corporation and the Company to subject their properties to
liens, to incur indebtedness, to make certain investments and to prepay certain
indebtedness. News Corporation is also required to maintain certain financial
covenants, calculated on a consolidated basis, including a leverage ratio,
interest coverage ratio and fixed charge covenant ratio. The Revolving Credit
Agreement also contains representations, warranties, covenants and events of
default customary to senior unsecured credit facilities of similar size and
nature.

In addition to the foregoing, the Company and its subsidiaries may from time
to time in the future guarantee additional obligations of News Corporation and
its subsidiaries.

Pursuant to the Master Intercompany Agreement, News Corporation has agreed
to indemnify and hold the Company and its subsidiaries harmless from and
against all liabilities arising from any default under the debt instruments or
obligations of News Corporation or its subsidiaries (other than the Company)
which have been guaranteed by the Company or its subsidiaries.

ACQUISITION OF CHRIS-CRAFT INDUSTRIES, INC. AND RELATED TRANSACTIONS

On July 31, 2001, News Corporation acquired Chris-Craft Industries, Inc.,
BHC Communications, Inc. and United Television, Inc. Total consideration paid
by News Corporation amounted to $2.03 billion in cash and the issuance of
68,854,209 million News Corporation American Depositary Receipts ("ADRs")
(representing 275,416,836 million Preferred Ordinary Shares of News
Corporation). News Corporation subsequently transferred the acquired business
(excluding approximately $1.7 billion in cash) to the Company, for an exchange
in which the Company issued to News Corporation approximately 122,244,272
million shares of Class A Common Stock of the Company, increasing News
Corporation's equity interest from 82.76% to approximately 85.25%. Following
the exchange, News Corporation's voting interest remains at 97.8%. The Company
then assigned the licenses issued by the Federal Communications Commission for
the acquired stations to its indirect subsidiary, Fox Television Stations,
Inc., which became the licensee and controls the operations of the acquired
stations. In July 2001, News Corporation entered into a binding agreement to
swap KTVX-TV in Salt Lake City and KMOL-TV in San Antonio, to Clear Channel
Communications, Inc. in exchange for WFTC-TV in Minneapolis (the "Clear Channel
swap"). The Clear Channel swap closed on October 1, 2001. In addition, in
August 2001, News Corporation entered into an Asset Exchange Agreement to swap
KBHK-TV in San Francisco, recently acquired in the Chris-Craft transaction, to
Viacom, Inc. ("Viacom") in exchange for WDCA-TV in Washington, DC and KTXH-TV
in Houston (the "Viacom swap"). The Viacom swap is subject to FCC approval and
other customary conditions.

PROPOSED ACQUISITION OF INTERNATIONAL SPORTS PROGRAMMING, LLC

The Company and Liberty/TINTA LLC ("Liberty/TINTA"), a subsidiary of Liberty
Media Corporation ("Liberty"), each own 50% of International Sports
Programming, LLC ("Fox Sports International"). On July 15, 2001, under a
preexisting option, Liberty exercised its right to cause Liberty/TINTA to sell
its 50% interest in Fox Sports International held by Liberty/TINTA to News
Corporation in exchange for 3,633,866 million ADRs of News Corporation
representing 14,535,464 preferred shares subject to adjustment for dividends
paid since July 1999. Under the terms of the transaction, News Corporation will
transfer the acquired interest in Fox Sports International to the Company for
approximately 3,632,000 million shares of Class A Common Stock of the Company.
The transaction is expected to close in the second quarter of fiscal 2002.

PROPOSAL 2

INDEPENDENT PUBLIC ACCOUNTANTS

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has selected the firm of Arthur Andersen LLP to audit
the books and accounts of the Company for the fiscal year ending June 30, 2002.
The firm of Arthur Andersen LLP, independent public accountants, has audited
the books and records of the Company for the previous fiscal year.

Representatives of Arthur Andersen LLP are expected to be available at the
meeting to respond to appropriate questions and will be given the opportunity
to make a statement if they desire to do so.

DISCLOSURE OF AUDITOR FEES

The following is a description of the fees billed to the Company by Arthur
Andersen LLP during the year ended June 30, 2001:

Audit Fees...................................................... $2,660,000
Financial Information Systems Design and Implementation......... --
All Other Fees.................................................. 1,174,400
----------
Total Fees................................................... $3,834,400
==========

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's Directors and Executive Officers, and
persons who beneficially own more than ten percent of a registered class of the
Company's equity securities, to file with the Securities and Exchange
Commission (the "Commission") initial reports of ownership and reports of
changes in ownership of Common Stock and the other equity securities of the
Company. Officers, Directors, and persons who beneficially own more than ten
percent of a registered class of the Company's equities are required by the
regulations of the Commission to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, based solely on review of
copies of reports furnished to the Company and upon representations made, the
Company believes that during the fiscal year ended June 30, 2001, except for an
untimely filing on behalf of Thomas W. Jones of an Initial Statement of
Beneficial Ownership, all Section 16(a) filing requirements applicable to its
Officers, Directors, and greater than ten percent beneficial owners were
complied with.

ANNUAL REPORT

The Annual Report of the Company for the fiscal year ended June 30, 2001 is
being mailed to stockholders with this proxy statement.

STOCKHOLDER PROPOSALS

Stockholder proposals intended to be considered for inclusion in the proxy
statement for presentation at the Company's 2002 Annual Meeting of Stockholders
must be received by the office of the Secretary of the Company at 1211 Avenue
of the Americas, New York, New York 10036 no later than June 14, 2002, for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting. All proposals must comply with applicable Commission rules and
regulations. In addition, in order for nominations or other business to be
properly brought before the Company's 2002 Annual Meeting of Stockholders,
stockholders must give timely notice thereof in writing to the Secretary of the
Company at the Company's offices not less than 45 or more than 75 days prior to
the anniversary date on which the Company first mailed its proxy materials for
the preceding year's Annual Meeting; provided, however, that if the date of the
Annual Meeting is advanced by more than 30 days prior to or delayed by more
than 30 days after the anniversary of the preceding year's Annual Meeting,
notice by the stockholder to be timely must be delivered not later than the
close of business on the later of (i) the 90th day prior to the Annual Meeting
or (ii) the 10th day following the day on which public announcement of the date
of such meeting is first made. The bylaws of the Company define "public
announcement" for these purposes, as disclosure in a press release reported by
the Dow Jones News Service, Associated Press or a comparable national news
service or in a document publicly filed by the Company with the Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director all information relating to
such person as would be required to be disclosed in solicitations of proxies
for the election of such nominees as directors pursuant to Regulation 14A under
the Exchange Act, and such person's written consent to serve as a director if
elected; (b) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of such business, the reasons for
conducting such business at the meeting and any material interest in such
business of such stockholder and the beneficial owner, if any, on whose behalf
the proposal is made; (c) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such stockholder, as they appear on the Company's
books, and of such beneficial owner, (ii) the class and number of shares of the
Company that are owned beneficially and of record by such stockholder and such
beneficial owner; and (iii) whether either such stockholder or beneficial owner
intends to deliver a proxy statement and form of proxy to holders of, in the
case of a proposal, at least the percentage of the Company's voting shares
required under applicable law to carry the proposal or, in the case of a
nomination or nominations, a sufficient number of holders of the Company's
voting shares to elect such nominee or nominees.

OTHER MATTERS

The Board of Directors is not aware of any other matter other than those set
forth in this proxy statement that will be presented for action at the meeting.
If other matters properly come before the meeting, the persons named as proxies
intend to vote the shares they represent in accordance with their best judgment
in the interest of the Company.

THE COMPANY UNDERTAKES TO PROVIDE ITS STOCKHOLDERS WITHOUT CHARGE A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS
AND SCHEDULES FILED THEREWITH. WRITTEN REQUESTS FOR SUCH REPORT SHOULD BE
ADDRESSED TO THE OFFICE OF THE SECRETARY, FOX ENTERTAINMENT GROUP, INC., 1211
AVENUE OF THE AMERICAS, NEW YORK, NY 10036.

ANNEX A

AUDIT COMMITTEE CHARTER

FOX ENTERTAINMENT GROUP, INC. (THE "COMPANY")
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

CHARTER

I. PURPOSE AND AUTHORITY

The Board of Directors has established an Audit Committee with authority,
responsibility and specific duties as described below.

The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Company to
any governmental body or the public; the Company's systems of internal controls
regarding finance and accounting that management and the Board have
established; and the Company's auditing, accounting and financial reporting
processes generally. Consistent with this function, the Audit Committee should
encourage continuous improvement of, and should foster adherence to, the
Company's policies, procedures and practices at all levels. The Audit
Committee's primary duties and responsibilities are to:

. Serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system.

. Review and appraise the audit efforts of the Company's independent
accountants and corporate audit department.

. Provide an open avenue of communication among the independent
accountants, financial and senior management, the corporate audit
department, and the Board of Directors.

The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter. The Audit
Committee has the authority to investigate any activity of the Company. All
employees are directed to cooperate as requested by Members of the Audit
Committee. The Audit Committee is empowered to retain persons having special
competence as necessary to assist the Audit Committee in fulfilling its
responsibility.

II. COMPOSITION

The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.

A non-independent Board Member may serve on the Audit Committee provided
that the Board determines such service is in the best interests of the Company
and its shareholders. No more than one non-independent Board Member may serve
on the Audit Committee at the same time.

All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee
shall have accounting or related financial management expertise.

The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.

III. MEETINGS

The Committee shall meet at least two times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, the director of the
corporate audit department and the independent accountants in separate
executive sessions to discuss any matters that the Committee or each of these
groups believe should be discussed privately. In addition, the Committee, or at
least its Chair, should hold discussions with the independent accountants and
management quarterly regarding the Company's financial statements (consistent
with IV.4. below).

Minutes of each meeting are to be prepared, and, following approval by the
Audit Committee sent to the Members of the Audit.

IV. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties, the Audit Committee shall:

DOCUMENTS AND REPORTS
---------------------

1. Review and update this Charter periodically, at least annually, as
conditions dictate.

2. Review the Company's annual and quarterly financial statements and any
directly related reports submitted to any government body or the public
which includes a report rendered by the independent accountants. The
Audit Committee shall have discussions with management and the
independent accountants with respect to financial statements to be
included in the Company's Annual Report on Form 10-K. Based on the
review of these financial statements and discussions with management and
the independent accountants, the Audit Committee shall make a
recommendation to the Board of Directors with respect to inclusion of
such financial statements in the Form 10-K.

3. Review a summary of findings from completed internal audits and a
progress report on the current year's internal audit plan. When and as
deemed necessary, review the individual internal audit reports to
management prepared by the corporate audit department and management's
response.

4. Hold discussions with financial management and the independent
accountants regarding the Quarterly Report on Form 10-Q prior to its
filing with the Securities and Exchange Commission or prior to the
release of earnings. The Chair of the Committee may represent the entire
Committee for purposes of these discussions.

5. Review the disclosures regarding the Committee's composition and
responsibilities and how they were discharged as included in the
Company's annual Proxy Statement prior to its filing with the Securities
and Exchange Commission.

INDEPENDENT ACCOUNTANTS
-----------------------

6. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness. Review the
performance of the independent accountants and approve any proposed
discharge of the independent accountants when circumstances warrant. The
independent accountants are ultimately accountable to the Board of
Directors and the Audit Committee. On an annual basis, the Committee
should review and discuss with the accountants all significant
relationships the accountants have with the Company to determine the
accountants' independence. The Audit Committee shall receive a formal
written statement from the independent accountants of all such
significant relationships. The Audit Committee shall also review the
fees and other compensation to be paid to the independent accountants.

7. Meet with, discuss and review, prior to the annual audit, the scope of
the audit to be performed by the independent public accountants.

FINANCIAL REPORTING PROCESSES
-----------------------------

8. In consultation with management, the independent accountants, and the
director of the corporate audit department, review the integrity of the
Company's financial reporting processes, both internal and external.

9. Consider the independent accountants' judgments about both the quality
and the acceptability of the Company's accounting policies as applied in
its financial reporting. The independent accountants shall discuss with
the Audit Committee both the quality and the acceptability of the
Company's accounting policies.

10. Consider and approve, if appropriate, major changes to the Company's
auditing and accounting principles and practices as suggested by the
independent accountants, management, or the corporate audit department.

11. Review and monitor the plans and activities of the corporate audit
department, including:

. Approving the charter of the corporate audit function;
. Reviewing annual internal audit plans and results of activities;
. Reviewing the organizational structure, internal audit budget,
staffing levels and related qualifications of the internal audit
department; and,
. Ascertaining how effectively the corporate audit department
discharges its responsibilities.

PROCESS IMPROVEMENT
-------------------

12. Following completion of the annual audit, review separately with each of
management, the independent accountants and the corporate audit
department any significant difficulties encountered during the course of
the audit, including any restrictions on the scope of work or access to
required information.

13. Review any significant disagreement among management and the independent
accountants or the corporate audit department in connection with the
preparation of the financial statements.

14. Review with the independent accountants, the corporate audit department
and management the extent to which changes or improvements in financial
or accounting practices, as approved by the Audit Committee, have been
implemented.

OTHER
-----

15. Review, with the Company's counsel, any legal matter that could have a
significant impact on the Company's financial statements.

16. Perform any other activities consistent with this Charter, the Company's
By-laws and governing law, as the Committee or the Board deems necessary
or appropriate.

................................................................................

FOX ENTERTAINMENT GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS -- NOVEMBER 13, 2001
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned stockholder in Fox Entertainment Group, Inc.
("Corporation") hereby constitutes and appoints K. Rupert Murdock, David F.
DeVoe and Arthur M. Siskind, and each of them, his true and lawful attorneys and
proxies, with full power of substitution in and for each of them, to vote all
shares of the Corporation which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held on November 13, 2001 at Citibank,
N.A., 399 Park Avenue, 12th Floor, New York, New York, at 10:00 a.m., local
time, or at any postponement or adjournment thereof, on any and all of the
proposals contained in the Notice of the Annual Meeting of Stockholders, with
all the powers the undersigned would possess if present personally at said
meeting, or at any postponement or adjournment thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEES LISTED ON THE REVERSE SIDE.

(Continued and to be signed and dated on the other side)

FOX ENTERTAINMENT GROUP, INC.
P.O. BOX 11131
NEW YORK, N.Y. 10203-0131

................................................................................

Detach Proxy Card Here

\/ \/
................................................................................

[_]

THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 1

1. Election of Directors

FOR all nominees listed below [_]

WITHHOLD AUTHORITY to vote for all nominees listed below [_]

*EXCEPTIONS [_]

Nominees: K. Rupert Murdoch, Peter Chernin, Chase Carey, David F. DeVoe, Arthur
M. Siskind, Christos M. Cotsakos, Laura D'Andrea Tyson and Thomas W. Jones.
*(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and strike a line through that nominee's name.)

THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 2

2. Proposal to ratify Arthur Andersen LLP as independent accountants.

FOR [_] AGAINST [_] ABSTAIN [_]

Change of Address and
or Comments Mark Here [_]

The above named proxies are granted
the authority, in their discretion,
to act upon such other matters as may
properly come before the meeting or any
postponement or adjournment thereof.

Dated:__________________________, 2001

______________________________________
Signature(s)

______________________________________
Signatures

Votes must be indicated
(x) in Black or Blue ink. [X]

Please sign exactly as your name appears and return this proxy immediately in
the enclosed stamped self-addressed envelope.

................................................................................

[TEXT TO RIGHT OF PROXY CARD]

Please Detach Here
You Must Detach This Portion of the Proxy Card
\/ Before Returning it in the Enclosed Envelope \/