FOX SPORTS NETWORKS LLC, 10KT405, 1999-11-08

FOX SPORTS NETWORKS LLC
10KT405, 1999-11-08
CABLE & OTHER PAY TELEVISION SERVICES

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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

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Form 10-K

[_]Annual Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the fiscal year ended .

[X]Transition report pursuant to Section 13 of 15(d) of the Securities
Exchange Act of 1934 for transition period from January 1, 1999 to June 30,
1999.

Commission File No. 333-38689

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FOX SPORTS NETWORKS, LLC
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
Delaware 95-4577574
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>

1440 South Sepulveda Boulevard, Los Angeles, CA 90025
(Address of principal executive offices)

Registrant's telephone number, including area code: (310) 444-8123

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark whether the Registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) been subject to such
filing requirements for the past 90 days.

Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Aggregate market value of Registrant's voting stock held by non-affiliates:
Not applicable

Number of shares of common stock outstanding as of the close of the period
covered by this report: None

Documents incorporated by reference: None

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This document contains statements that constitute "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended, and Section 27A of the Securities Act of 1933, as
amended. The words "expect," "estimate," "anticipate," "predict," "believe"
and similar expressions and variations thereof are intended to identify
forward-looking statements. These statements appear in a number of places in
this document and include statements regarding the intent, belief or current
expectations of the Company, its members or its officers with respect to,
among other things, trends affecting the Company's financial condition or
results of operations. The readers of this document are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, including those risks and uncertainties
discussed in this document under the headings "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
Company does not ordinarily make projections of its future operating results
and undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Readers should carefully review the risk factors discussed herein
and in the other documents filed by the Company with the Securities and
Exchange Commission. This report should be read in conjunction with the
audited consolidated financial statements of the Company and related notes set
forth elsewhere herein.

PART I

Item 1. Business

Background

Fox Sports Networks, LLC (formerly Fox/Liberty Networks, LLC), a limited
liability company organized under the laws of the State of Delaware in April
1996, (together with its subsidiaries, the "Company") is the largest regional
sports network ("RSN") programmer in the United States, focusing on live
professional and major collegiate home team sports events. Fox Sports
Networks, LLC is a holding company which provides cable programming through
(i) its sports programming operations, consisting of interests in RSNs and Fox
Sports Net ("FSN"), a national sports programming service that provides its
affiliated RSNs with 24 hour per day national sports programming featuring
live and replay sporting events and original programming, a national sports
news program, Fox Sports News, and other national sports programming services
and through (ii) FX Network ("FX"), a general entertainment network.

The Company is a wholly-owned subsidiary of Fox Entertainment Group, Inc.
("Fox"), a majority-owned subsidiary of The News Corporation Limited ("News
Corporation"). The Company was formed in April 1996 as a 50%/50% joint venture
between Fox and Liberty Media Corporation ("Liberty"), a wholly-owned
subsidiary of Tele-Communications, Inc. ("TCI"). In July 1999, News
Corporation acquired from Liberty substantially all of Liberty's 50% interest
in the Company and its businesses. News Corporation transferred the acquired
interests to Fox in exchange for common stock of Fox.

In December 1997, the Company consummated a transaction (the "Rainbow
Transaction") with Rainbow Media Sports Holdings, Inc. ("Rainbow"), an
indirect subsidiary of Cablevision Systems Corporation ("Cablevision"),
pursuant to which (i) the Company acquired a 40% interest in Regional
Programming Partners ("RPP") which was formed to hold interests in Rainbow's
then existing RSNs and Madison Square Garden, L.P. (which, in addition to
owning two RSNs, owns the Madison Square Garden entertainment complex, Radio
City Productions LLC, the New York Rangers, a professional hockey team, and
the New York Knicks, a professional basketball team), (ii) the Company and
Rainbow formed National Sports Partners (the "National Sports Partnership") as
a 50%/50% partnership to operate FSN and (iii) the Company and Rainbow formed
National Advertising Partners (the "National Advertising Partnership") as a
50%/50% partnership to act as a national advertising sales representative for
the RSNs which are affiliated with FSN. RPP is managed by Rainbow, while the
National Sports Partnership and the National Advertising Partnership are
managed by the Company.

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The Company's interests in the sports programming business are derived
through its 99% ownership interests in Fox Sports Net, LLC and Fox Sports RPP
Holdings, LLC and its interest in FX is derived through its 99% ownership
interest in FX Networks, LLC. The remainder of the interests in these entities
are held by affiliates of Fox.

Overview

The Company owns and operates 12 RSNs (the "O&O RSNs") and has direct or
indirect equity interests ranging from 12% to 70% in an additional nine RSNs
(together with the O&O RSNs, the "Company's RSNs"). The Company's RSNs are
complemented by FSN, which provides national programming for distribution by
RSNs. The O&O RSNs have rights to telecast live games of 37 professional
sports teams in the National Basketball Association (the "NBA"), the National
Hockey League (the "NHL"), Major League Baseball ("MLB") and numerous
collegiate sports teams. Because of their home team programming, RSNs have
strong local appeal in their respective markets, generating high prime time
ratings and attractive subscriber fees from cable operators. The Company's
strategy is to utilize its RSNs to build a national cable sports network under
the "FOX" brand name based on a "broadcast network affiliate" model.

The Company owns interests in, or is affiliated with, 25 RSNs. These RSNs
have rights to telecast live games of 73 professional sports teams in the NBA,
NHL and MLB (out of a total of 77 such teams in the United States) and
numerous collegiate sports teams to approximately 62 million households out of
a total of approximately 75 million households receiving basic cable or direct
to home ("DTH") satellite service.

The Company also owns and operates FX, a general entertainment network
currently reaching approximately 43 million cable and DTH households. The
Company also owns interests in various other entertainment and programming
related businesses which it believes are complementary to its principal
businesses.

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Regional Sports Networks

The following table lists the O&O RSNs, the Company's ownership interests in
such RSNs, such RSNs' primary DMAs, the approximate number of cable subscribers
for each of the O&O RSNs (as of June 30, 1999), and the professional sports
teams with which each O&O RSN has sports programming rights agreements.

<TABLE>
<CAPTION>
Ownership Subscribers
RSN Interest(1) DMA (in millions) Team (League)
--- ---------- --- ------------- -------------
<C> <C> <C> <C> <S>
Fox Sports Net 100% Dallas/ 5.2 Dallas Mavericks (NBA)
Southwest Ft. Worth; Dallas Stars (NHL)
Houston; Houston Astros (MLB)
San Antonio Houston Rockets (NBA)
San Antonio Spurs (NBA)
Texas Rangers (MLB)
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Fox Sports Net 100% Los Angeles; 4.1 Los Angeles Lakers (NBA)
West San Diego; Anaheim Angels (MLB)
Las Vegas Los Angeles Kings (NHL)
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Fox Sports Net 100% Los Angeles; 2.5 Los Angeles Clippers (NBA)
West 2 San Diego Mighty Ducks of Anaheim (NHL)
Los Angeles Dodgers (MLB)
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Fox Sports Net 100% Pittsburgh 2.0 Pittsburgh Pirates (MLB)
Pittsburgh Pittsburgh Penguins (NHL)
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Fox Sports Net 100% Denver; 2.1 Denver Nuggets (NBA)
Rocky Mountain Kansas City Colorado Avalanche (NHL)
Colorado Rockies (MLB)
Kansas City Royals (MLB)
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Fox Sports Net 100% Seattle/Tacoma; 2.2 Seattle Mariners (MLB)
Northwest Portland Seattle SuperSonics (NBA)
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Fox Sports Net Utah 100% Salt Lake City 0.6 Utah Jazz (NBA)
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Fox Sports Net 100% St. Louis; 1.6 St. Louis Cardinals (MLB)
Midwest Indianapolis St. Louis Blues (NHL)
Indiana Pacers (NBA)
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Fox Sports Net 100% Phoenix/Tucson 1.1 Arizona Diamondbacks (MLB)
Arizona Phoenix Coyotes (NHL)
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Fox Sports Net 100% Detroit 2.3 Detroit Red Wings (NHL)
Detroit Detroit Pistons (NBA)
Detroit Tigers (MLB)
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Fox Sports Net 88% Atlanta; Charlotte 6.5 Atlanta Braves (MLB)
South Atlanta Hawks (NBA)
Charlotte Hornets (NBA)
Carolina Hurricanes (NHL)
Nashville Predators (NHL)
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Sunshine 56.4% Tampa/ 3.9 Tampa Bay Lightning (NHL)
Network St. Petersburg/ Miami Heat (NBA)
Sarasota; Miami/ Orlando Magic (NBA)
Ft. Lauderdale;
Orlando
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</TABLE>
(1) All ownership interests are indirect. The Company consists of numerous
limited liability companies, general and limited partnerships and
corporations. For a variety of tax and corporate reasons, the equity
ownership of individual entities in the chain of entities holding interests
in RSNs and FX include interests held directly by affiliates of Fox and, in
certain instances, Liberty. See "Business--Certain Arrangements Regarding
Ownership Interests."

In addition, a contract with MLB allows the Company to nationally telecast 26
MLB games per year on each of FX and FSN.

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The following table lists the non-managed RSNs in which the Company owns
equity interests, the Company's ownership interests in such RSNs, the primary
DMAs in which such RSNs operate, the approximate number of subscribers of such
RSNs (as of June 30, 1999), and the professional sports teams with which each
RSN has sports programming rights agreements.

<TABLE>
<CAPTION>
Ownership Subscribers
RSN Interest(1) DMA (in millions) Team (League)
--- ----------- --- ------------- -------------
<S> <C> <C> <C> <C>
Fox Sports Net 70% Chicago 3.2 Chicago Bulls (NBA)
Chicago Chicago Blackhawks (NHL)
Chicago White Sox (MLB)
Chicago Cubs (MLB)
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Home Team Sports 34.3% Washington, DC; 4.2 Washington Capitals (NHL)
Baltimore Washington Wizards (NBA)
Baltimore Orioles (MLB)
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Fox Sports Net 70% San Francisco/ 2.9 San Francisco Giants (MLB)
Bay Area Oakland/San Jose; Oakland A's (MLB)
Sacramento/ Golden State Warriors (NBA)
Stockton/Modesto San Jose Sharks (NHL)
Sacramento Kings(NBA)
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Fox Sports Net 20% Boston; 3.0 Boston Celtics (NBA)
New England Providence;
Hartford
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SportsChannel 12% Tampa/ 3.1 Florida Marlins (MLB)
Florida St. Petersburg/Sarasota; Florida Panthers (NHL)
Miami/ Tampa Bay Devil Rays (MLB)
Ft. Lauderdale;
Orlando/Daytona/
Melbourne
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Fox Sports Net 40% Cleveland; 2.1 Cleveland Indians (MLB)
Ohio Columbus Cleveland Cavaliers (NBA)
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Fox Sports Net 40% Cincinnati 2.5 Cincinnati Reds (MLB)
Cincinnati
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Fox Sports Net 40% New York City 4.5 New York Mets (MLB)
New York New Jersey Nets (NBA)
New York Islanders (NHL)
New Jersey Devils (NHL)
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MSG Network 40% New York City 7.4 New York Yankees (MLB)
New York Knicks (NBA)
New York Rangers (NHL)
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</TABLE>
(1) All ownership interests are indirect. The Company consists of numerous
limited liability companies, general and limited partnerships and
corporations. For a variety of tax and corporate reasons, the equity
ownership of individual entities in the chain of entities holding
interests in RSNs include interests held by affilitates of Fox and, in
certain instances, Liberty. See "Business--Certain Arrangements Regarding
Ownership Interests."

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The following table lists third-party-owned RSNs currently affiliated with
FSN, the primary DMAs in which such RSNs operate and the professional sports
teams currently associated with such RSNs.

<TABLE>
<CAPTION>
RSN DMA Team (League)
--- --- ------------
<S> <C> <C>
Comcast Philadelphia Philadelphia Phillies (MLB)
SportsNet Philadelphia 76ers (NBA)
Philadelphia Flyers (NHL)
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Midwest Sports Minneapolis/ Minnesota Twins (MLB)
Channel St. Paul; Milwaukee Brewers (MLB)
Milwaukee Minnesota Timberwolves (NBA)
Milwaukee Bucks (NBA)
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Empire Buffalo Buffalo Sabres (NHL)
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New England Boston Boston Red Sox (MLB)
Sports Network(1) Boston Bruins (NHL)
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</TABLE>
(1) FSN will enter into a primary affiliation agreement with Fox Sports Net
New England upon the expiration of its existing affiliation agreement with
New England Sports Network on December 31, 1999.

Owned and Operated RSNs

Southwest. Launched in 1983, the Southwest RSN's coverage area includes
Texas, Oklahoma, Arkansas, Louisiana and parts of New Mexico. As of June
30, 1999, there were approximately 5.2 million subscribers, representing
93% penetration of total basic cable subscribers in the region. The
Southwest RSN currently has professional rights agreements with the Dallas
Mavericks (NBA), the Houston Astros (MLB), the Dallas Stars (NHL), the San
Antonio Spurs (NBA), the Houston Rockets (NBA) and the Texas Rangers (MLB)
and collegiate contracts covering the Big 12.

West/West2. Launched in 1985, the West RSN's coverage area includes
southern California, Nevada and Hawaii. As of June 30, 1999, there were
approximately 4.1 million subscribers, representing 99% penetration of
total basic subscribers in the region. The West RSN currently has
professional rights agreements with the Los Angeles Lakers (NBA), the Los
Angeles Kings (NHL) and the Anaheim Angels (MLB) as well as collegiate
contracts covering the University of Southern California, the University of
California, Los Angeles and other PAC-10 teams.

The West2 RSN, a second channel in the southern California region, was
launched by the Company on January 31, 1997. As of June 30, 1999, there
were approximately 2.5 million subscribers, representing 99% penetration of
total basic subscribers in the region. The West2 RSN currently has
professional rights agreements with the Los Angeles Dodgers (MLB), the
Anaheim Mighty Ducks (NHL) and the Los Angeles Clippers (NBA).

Pittsburgh. Launched in 1986, the Pittsburgh RSN's coverage area includes
Pennsylvania, eastern Ohio, West Virginia and parts of New York and
Maryland. As of June 30, 1999, there were approximately 2.0 million
subscribers, representing 86% penetration of total basic subscribers in the
region. The Pittsburgh RSN currently has professional rights agreements
with the Pittsburgh Pirates (MLB) and the Pittsburgh Penguins (NHL) and
collegiate sublicenses for games of the University of Pittsburgh and The
Pennsylvania State University.

Rocky Mountain. Launched in 1988, the Rocky Mountain RSN's coverage area
includes Colorado, Kansas, Missouri, Nebraska, New Mexico, South Dakota and
Wyoming. As of June 30, 1999, there were approximately 2.1 million
subscribers, representing 94% penetration of total basic subscribers in the
region. The Rocky Mountain RSN currently has professional rights agreements
with the Denver Nuggets (NBA), the Colorado Avalanche (NHL), the Colorado
Rockies (MLB) and the Kansas City Royals (MLB) and collegiate contracts
covering the Big 12 and Western Athletic Conferences.

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Northwest. Launched in 1988, the Northwest RSN's coverage area includes
Washington, Oregon, Idaho, Alaska and western Montana. As of June 30, 1999,
there were approximately 2.2 million subscribers, representing 94%
penetration of total basic subscribers in the region. The Northwest RSN
currently has professional rights agreements with the Seattle Mariners
(MLB) and the Seattle SuperSonics (NBA) and collegiate contracts covering
University of Washington, Washington State University, the University of
Oregon, Oregon State University and the Big Sky Conference.

Utah. Launched in 1989, the Utah RSN's coverage area includes Utah,
southern Idaho, Montana, Nevada and western Wyoming. As of June 30, 1999,
there were approximately 0.6 million subscribers, representing 93%
penetration of total basic subscribers in the region. The Utah RSN
currently has a professional rights agreement with the only professional
sports team in the region, the Utah Jazz (NBA), and collegiate contracts
covering the Western Athletic and Big Sky Conferences.

Midwest. Launched in 1989, the Midwest RSN's coverage area includes
Missouri, Indiana, Kentucky, Ohio, eastern Wisconsin and southern Illinois.
As of June 30, 1999, there were approximately 1.6 million subscribers,
representing 96% penetration of total basic subscribers in the region. The
Midwest RSN currently has professional rights agreements with the St. Louis
Cardinals (MLB), the Indiana Pacers (NBA) and the St. Louis Blues (NHL) and
collegiate contracts covering the Big 12 Conference.

Arizona. Launched in 1996, the Arizona RSN's coverage area includes
Arizona and parts of Nevada. As of June 30, 1999, there were approximately
1.1 million subscribers, representing 99% penetration of total basic
subscribers in the region. The Arizona RSN has professional rights
agreements with the Phoenix Coyotes (NHL) and the Arizona Diamondbacks
(MLB) and collegiate contracts covering the University of Arizona, Arizona
State University and other PAC-10 teams.

Detroit. Launched in September 1997, the Detroit RSN, as of June 30,
1999, had approximately 2.3 million subscribers, representing 97%
penetration of total basic subscribers in the region. The Detroit RSN's
coverage area includes Michigan and northern Ohio. The Detroit RSN has
professional rights agreements with the Detroit Red Wings (NHL), the
Detroit Pistons (NBA) and the Detroit Tigers (MLB) and collegiate contracts
covering teams from the Big 10 Conference.

South. The Company owns 88% of the South RSN and the remaining 12% of the
South RSN is owned by E.W. Scripps Company. Launched in 1990, the South
RSN's coverage area includes Georgia, Alabama, Kentucky, Mississippi, North
Carolina, South Carolina and Tennessee. As of June 30, 1999, there were
approximately 6.5 million total subscribers, representing 98% penetration
of total basic subscribers in the region. The South RSN currently has
professional rights agreements with the Atlanta Braves (MLB), the Atlanta
Hawks (NBA), the Charlotte Hornets (NBA), the Nashville Predators (NHL) and
the Carolina Hurricanes (NHL) and collegiate contracts covering the South
East and Atlantic Coast Conferences. See "Business--Certain Arrangements
Regarding Ownership Interests."

Sunshine. The Company currently owns 56.4% of the Sunshine RSN and the
remaining 43.6% of the Sunshine RSN is owned by various Multiple System
Operators ("MSOs") operating in the region, including Comcast Corporation
and Media One. Launched in 1988, the Sunshine RSN coverage area includes
most of Florida. As of June 30, 1999, there were approximately 3.9 million
subscribers, representing 98% penetration of total basic subscribers in the
region. The Sunshine RSN currently has professional rights agreements with
the Orlando Magic (NBA), the Miami Heat (NBA) and the Tampa Bay Lightning
(NHL) and collegiate contracts covering the University of Florida, Florida
State University and the University of Miami. See "Business--Certain
Arrangements Regarding Ownership Interests."

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Non-Managed RSNs

The Company owns equity interests in, but does not manage, the following
RSNs:

Chicago. The Company directly owns 50% of the Chicago RSN and owns an
additional 20% of the Chicago RSN indirectly through RPP. A subsidiary of
RPP currently owns 50% of the Chicago RSN and is the managing partner.
Launched in 1986 and affiliated with FSN since January 1998, the Chicago
RSN's coverage area includes Illinois, Iowa, Indiana and Wisconsin. As of
June 30, 1999, there were approximately 3.2 million subscribers,
representing 94% penetration of total basic subscribers in the region.
Featured teams in this region include the Chicago Bulls (NBA), the Chicago
Blackhawks (NHL), the Chicago White Sox (MLB), and the Chicago Cubs (MLB).
Collegiate contracts cover DePaul University as well as the Big 10
Conference.

D.C./Baltimore. The Company owns 34.3% of the D.C./Baltimore RSN, which
operates under the name Home Team Sports ("HTS"), and the remaining 65.7%
of the D.C./Baltimore RSN is owned by CBS. Launched in 1984 and affiliated
with FSN since 1996, the D.C./Baltimore RSN's coverage area includes
Maryland, parts of Washington, D.C., Delaware and Virginia. As of June 30,
1999, there were approximately 4.8 million subscribers, representing 98%
penetration of total basic subscribers in the region. Featured teams
include the Baltimore Orioles (MLB), the Washington Capitals (NHL) and the
Washington Wizards (NBA), and college contracts covering teams in the Big
East Conferences, Atlantic Coast Conference and Colonial Athletic
Association.

Bay Area. The Company directly owns 50% of the Bay Area RSN and owns an
additional 20% of the Bay Area RSN through RPP. A subsidiary of RPP
currently owns 50% of the Bay Area RSN and is the managing partner.
Launched in 1990 and affiliated with FSN since January 1998, the Bay Area
RSN's coverage area includes northern California, southern Oregon, Hawaii
and northern Nevada. The Bay RSN area carries all FSN programming, with the
exception of PAC-10 football and basketball. The PAC-10 programming will
continue to be broadcast by Bay TV, a third-party-owned broadcast station
in the region formerly affiliated with FSN, through December 31, 1999. As
of June 30, 1999, there were approximately 2.9 million subscribers,
representing 91% penetration of total basic subscribers in the region.
Featured professional teams include the San Francisco Giants (MLB), the
Oakland A's (MLB), the Golden State Warriors (NBA), the Sacramento Kings
(NBA) and the San Jose Sharks (NHL), while collegiate contracts cover
Stanford University and the University of California, Berkeley.

Through its 40% ownership interest in RPP, the Company holds indirect
ownership interests, in the following RSNs:

New England. RPP manages and owns 50% of the New England RSN. Launched
in 1984, the New England RSN's coverage area includes Massachusetts, Rhode
Island, Vermont, New Hampshire, Maine and parts of Connecticut. Upon the
expiration of FSN's existing affiliation agreement with New England Sports
Network on December 31, 1999, the New England RSN will become an affiliate
of FSN. As of June 30, 1999, there were approximately 3.0 million
subscribers, representing 80% penetration of total basic subscribers in the
region. The featured professional team is the Boston Celtics (NBA).

Florida. RPP owns 30% of the Florida RSN and the remaining 70% of the
Florida RSN is owned by Front Row Communications, Inc. ("Front Row"). Front
Row is the managing partner of the Florida RSN. Launched in 1993, the
Florida RSN's coverage area includes northern and southern Florida. As of
June 30, 1999, there were approximately 3.1 million subscribers,
representing 94% penetration of total basic subscribers in the region.
Featured professional teams include the Florida Marlins (MLB), the Florida
Panthers (NHL) and the Tampa Bay Devil Rays (MLB). The Tampa Bay Devil
Rays, Inc. has an option to acquire 10% of the Florida RSN.

Ohio. RPP manages and owns 100% of the Ohio RSN. Launched in 1989 and
affiliated with FSN since January 1998, the Ohio RSN's coverage area
includes Ohio, western Pennsylvania, northwest New

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York, West Virginia and Kentucky. As of June 30, 1999, there were
approximately 2.1 million subscribers, representing 90% penetration of
total basic subscribers in the region. Featured professional teams include
the Cleveland Indians (MLB) and the Cleveland Cavaliers (NBA).

Cincinnati. RPP manages and owns 100% of the Cincinnati RSN. Launched in
1989 and affiliated with FSN since January 1998, the Cincinnati RSN's
coverage area includes Ohio, Kentucky and Indiana. As of June 30, 1999,
there were approximately 2.5 million subscribers, representing 95%
penetration of total basic subscribers in the region. The featured
professional team is the Cincinnati Reds (MLB).

New York. RPP owns and operates two RSNs in the New York region: The
Madison Square Garden Network ("MSG") and Fox Sports Net New York, formerly
SportsChannel New York. RPP manages and owns 100% of each of MSG and Fox
Sports Net New York. In April 1999 RPP increased its ownership to 100% by
purchasing ITT Corporation's remaining 3.7% ownership interest. A
subsidiary of RPP is the managing partner of the New York RSNs. See
"Certain Relationships and Related Transactions."

Acquired in 1994 as Madison Square Garden Network, MSG's coverage area
includes New York and parts of New Jersey and Connecticut. As of June 30,
1999, there were approximately 7.4 million subscribers in the region.
Featured professional teams include the New York Knicks (NBA), the New York
Rangers (NHL) and the New York Yankees (MLB).

Launched in 1982 and an affiliate of FSN since January 1998, Fox Sports
New York's coverage area includes New York and parts of New Jersey and
Connecticut. As of June 30, 1999, there were approximately 4.5 million
subscribers in the region. Featured professional teams include the New
Jersey Nets (NBA), the New York Islanders (NHL), the New Jersey Devils
(NHL) and the New York Mets (MLB).

Through its ownership of MSG, L.P., RPP has a 100% ownership interest in
the New York Knicks (NBA), the New York Rangers (NHL), the Madison Square
Garden facilities and Radio City Productions LLC ("RCP"). RPP also has a
100% ownership interest in Metro Channel LLC, a company established by
Rainbow to own and operate the Metro Channel. The Metro Channel is intended
to provide programming of particular interest to a region, such as local
news, business, entertainment and sports.

Rights Agreements

The right to telecast professional sports events is obtained through rights
agreements entered into between an RSN and an individual professional sports
team. Rights agreements are generally for a specified number of games per
season for a specified number of years and for a specified market area as
determined by the respective leagues. The acquisition of programming rights
pursuant to a rights agreement allows an RSN to telecast those games which are
subject to the agreement on an exclusive basis. The average term of rights
agreements (from commencement to scheduled termination) entered into by the
O&O RSNs in 1998, and to date in 1999, is 7.3 years. Certain of the rights
agreements contain provisions for early termination or renegotiation of the
terms therein prior to their scheduled termination. In addition, the O&O RSNs'
rights agreements generally contain certain rights with respect to a
subsequent term such as rights of first refusal, rights of first negotiation
or rights to match offers made by third parties. The Company's objective is to
renew O&O RSN rights contracts on favorable terms. However, the renewal costs
could substantially exceed the original contract cost, the O&O RSNs could be
outbid for such rights contracts or rights holders could elect to retain the
rights for their own use. The loss of rights could impact the extent of the
Company's regional sports coverage, which could adversely affect the Company's
ability to sell local and national advertising time and, in some cases, to
maintain affiliate fees. See "Business--Competition," "Business--Advertising"
and "Business--Affiliated Cable Systems and Subscribers."

The O&O RSNs' collection of rights agreements is diversified, with a total
of 37 professional rights contracts. These contracts include rights to 12 MLB
teams, 14 NBA teams and 11 NHL teams. The O&O RSNs, through affiliation with
FSN, also have rights to three of the country's top collegiate football
conferences, the PAC-10, Big 12 and Conference USA.

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Fox Sports Direct

Fox Sports Direct packages and distributes via satellite the programming of
various RSNs. In addition to providing sports programming produced by the O&O
RSNs, Fox Sports Direct also distributes sports programming produced by
certain third-party-owned RSNs pursuant to arrangements with such RSNs. The
Company is currently the nation's largest provider of sports programming for
the DTH market, reaching approximately 5.8 million DTH households. Fox Sports
Direct packages the programming of various RSNs for distribution to the Ku-
Band marketplace by DirecTV, Inc. and EchoStar Communications Corporation's
Dish network. In addition, Fox Sports Direct distributes certain programming
to the residential C-band marketplace.

Fox Sports Net

FSN has been structured based on the "broadcast network affiliate" model, in
which each RSN airs a slate of local programming, which is supplemented by a
schedule of network-provided national programming, consistent across all
regions. Unlike the typical "broadcast network affiliate" model, the Company's
programming is anchored by highly rated local programming during prime time,
with national FSN programming during the balance of the schedule. Hence, the
primary function of FSN is to complement regional sports programs with a
synchronized schedule of quality national programming, the cornerstone of
which is Fox Sports News. Fox Sports News provides comprehensive coverage of
all sports news nationwide, presenting a consistent brand image with high
quality on-air graphics. Fox Sports News consists of a half hour pre-game news
show aired at 6:30 p.m. and a two hour wrap-up news program aired at 10:00
p.m., each of which is shown locally in each time zone. FSN also provides
other sports programming events, including nationally televised MLB games,
NCAA college football and basketball, boxing, PGA golf, Formula One racing,
and other sporting events, as well as original sports-related programming such
as The Last Word and Goin' Deep. In addition to providing national
programming, FSN also supplies corporate and marketing support, as well as
technical operations to the Company's RSNs, helping to create one cohesive
network.

FSN has entered into affiliation agreements with RSNs across the country
including the Company's O&O RSNs, certain RSNs that RPP owns and operates and,
in certain regions where the Company does not hold interests in RSNs, with
third-party-owned RSNs. These agreements allow the RSNs to carry certain
programming of FSN in exchange for a per subscriber fee. The affiliation
agreements also permit FSN to market and sell advertising time during the
national portions of the RSN's programming schedule. Pursuant to separate
advertising representation agreements, the National Advertising Partnership is
permitted to sell advertising time for the RSN during a portion of the RSN's
regional sports programming.

Affiliated Cable Systems and Subscribers

During the six months ended June 30, 1999, the O&O RSNs generated
approximately 62% of their revenues, excluding DTH revenues, from subscriber
fees paid by affiliated cable systems. As of June 30, 1999, the Company's O&O
RSNs transmitted programming to approximately 5,500 local affiliated cable
systems in 35 states.

Each of the Company's RSNs enters into affiliation agreements with MSOs
and/or individual cable system operators. In certain instances, the Company
has entered into agreements with MSOs that encompass more than one RSN. Such
agreements typically run for five to seven years and generally provide for
annual rate increases. Under affiliation agreements, cable system operators
must distribute the RSN service to a certain number of subscribers and/or
maintain a certain subscriber base penetration level. The same criteria are
generally used as the basis for calculating the monthly fees paid by the cable
operator to the Company for its programming. The Company's RSNs command
license fees in excess of average fees charged by basic cable networks
overall, but generally consistent with fees charged by other cable network
providers of live regional sports programming. The Company's affiliation
agreements have staggered expiration dates, with an average maturity of
approximately six years (from commencement to scheduled termination).

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The Company's RSNs' programming meets many subscribers' demands for
increased local and national sports programming. Current industry trends
suggest that many new channels to be offered by cable system operators will be
offered on a pay-per-view, a la carte or digital tier basis as the operators
seek to compete against the extensive choices offered by DTH distribution
systems. As advertiser supported networks, RSNs depend on achieving and
maintaining carriage within the basic cable programming package, as the
subscriber penetration rate for pay-per-view or a la carte programming
packages is substantially less than the penetration rate achieved by basic
programming packages. To date, the strong demand for the Company's RSNs' local
and national sports programming has allowed the Company's RSNs to either
maintain or establish a presence on the basic programming package while
expanding within the DTH market.

Advertising

FSN and the Company's RSNs derive significant revenues from selling a fixed
supply of advertising inventory, comprised of advertising time slots ("units")
shown during the Company's national and regional programming. The inventory is
divided among national network, national spot and local advertising. Regional
professional sports events such as basketball, hockey and baseball, as well as
other local sports programming, currently carry both national spot and local
advertising. Network programming such as Fox Sports News, nationally televised
MLB games and PGA golf includes national network, national spot and local
advertising. The Company's approach offers national advertisers the unique
ability to purchase national network, national spot and local advertising from
one source in each of the top DMAs.

Local advertising is sold at the RSN level, and national network and
national spot units are sold at the national level by the National Advertising
Partnership. The National Advertising Partnership's centralized inventory
management for the national network, national spot and local advertising
categories of inventory enables the Company to respond to supply and demand,
and to allocate inventory across advertising categories, such that units are
sold to the advertiser willing to pay the highest rate, regardless of market.
Accordingly, the split of advertising time between national network, national
spot and local advertising varies across markets and is dictated by pricing
conditions in each specific market at any point in time. The Company believes
that this ability to buy units across advertising categories and across
regions from one source also provides advertisers with a more efficient
purchasing mechanism.

Total advertising revenues are a function of the audience viewing level, the
average cost of each incremental viewer and the number of advertising units
sold. The audience viewing level, or audience delivery, is determined by the
number of subscribers to whom the programming is available and the portion of
those subscribers who are tuned into the programming, as measured by ratings
achieved by FSN and the RSNs. FSN uses A.C. Nielsen, Inc. ("Nielsen") to
provide metered estimates of audience viewing levels which are widely accepted
by advertisers as a basis for measuring audience delivery. The cost of each
incremental viewer is quantified by the cost per thousand homes ("CPM") or the
cost per point ("CPP"). The CPM or CPP is negotiated by the advertiser and the
telecaster, and will vary depending on the type and schedule of the program
that will carry the advertisement and the overall reach or ubiquity of the
network (i.e. cable networks with more subscribers are generally able to
command higher CPMs). CPMs are used in selling national network while CPPs are
used in the national spot and local advertising markets.

The Company's advertising revenues are derived primarily from sales of
advertising units, and to a lesser extent, from 30 to 60 minute program
advertising. Advertisers on FSN include nationally known companies in the
entertainment, beverage, packaged goods, fast food, automotive, retail,
insurance and travel industries.

Production and Distribution

Distribution of live sporting events is accomplished by a combination of
satellite and fiber transmissions. A production crew in a mobile remote
facility is stationed at the venue to produce and direct the event. The
various camera shots, pre-produced tape elements and graphics packages are
integrated by the mobile remote facility and then formatted to be delivered to
a technical operations center ("Master Control"). The telecast is delivered

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to the Master Control via remote satellite uplink, direct fiber transmission,
or a microwave network depending upon the location of the event.

After receiving the remote feed, the Master Control "traffics" the event,
inserting commercial inventory and on-air promotion spots in formatted
positions. The signal is then uplinked from the Master Control to the RSN's
transponder, where the local cable system operator, or MSO, can downlink the
signal. After accessing the feed from the transponder, the cable system
operator delivers the signal to the cable subscriber via hard-wired coaxial
cable.

FSN provides 24 hours of national programming each day, which is made
available for all affiliated RSNs. Each RSN has the opportunity to receive and
deliver the national programming when no regional professional sports event or
locally-produced programming is available. This national service is treated
like a separate RSN with its own Master Control and technical operations.

Fox Sports News, the cornerstone of FSN's programming, is produced live
daily from 3:00 p.m. until 12:00 a.m. Pacific time. The show is delivered to
the Company's uplink facility located in Houston via a direct fiber optic
connection. A separate news integration control studio, which uses technology
similar to a Master Control, brings each affiliated RSN into and out of the
live news telecast. Once a professional sports event or other regularly
scheduled program ends, the RSN joins the news telecast. The integration
studio makes sure that each RSN joins Fox Sports News during a commercial
break only, and never during the program in progress. Commercial inserts and
on-air promotional materials are handled through each RSN's Master Control.

FX was launched in June 1994. FX currently reaches approximately 43 million
cable and DTH households and has become a popular choice among viewers. FX's
strength has been derived from its ability to bring award-winning television
series to cable, its access to the Twentieth Century Fox film library and its
development of original programming. In addition, FX carries sports
programming with live coverage of national MLB games airing one night per
week.

FX's line-up for the Fall 1999 season includes "M*A*S*H," "Beverly Hills
90210," "The X-Files," "NYPD Blue," "Married With Children" and "Millenium."
Recently, as FX continues to increase its presence as a leading general
entertainment cable network, the cable rights to "Ally McBeal," "Buffy the
Vampire Slayer" and "The Practice" have been acquired as well as a slate of
feature films including "The Blair Witch Project," "The Full Monty," and "The
X-Files." FX also has developed a slate of original programming including "The
X-Show," a 5 night a week, one hour talk show, and "The Toughman World
Championship" series.

FX is distributed from a Master Control located in Los Angeles. FX has two
transponders to provide alternate programming feeds for the east and west
coast time zones. Each feed has its own dedicated transponder which cable
system operators access via their system head-ends and distribute to
subscribers via co-axial cable. Overall, FX's distribution functions just like
an RSN, with the exception of the dual feeds for the two different time zones.

Competition

General

The business of distributing sports programming for cable and satellite
television is highly competitive. A number of basic and pay television
programming services (such as ESPN) as well as free over-the-air broadcast
networks provide programming that targets the Company's RSNs' audience. The
business of distributing general entertainment programming for cable and
satellite television is also highly competitive. A number of basic and pay
television programming services (such as USA Network and Turner Network
Television) as well as free over-the-air broadcast networks provide
programming that targets the same viewing audience as FX.

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The Company's RSNs and FX directly compete with other programming services
for distribution and, when distribution is obtained, the Company's RSNs and FX
compete, in varying degrees, for viewers and advertisers with other cable
programming services and over-the-air broadcast television, radio, print
media, motion picture theaters, video cassettes and other sources of
information and entertainment. Important competitive factors are the prices
charged for programming, the quantity, quality and variety of the programming
offered and the effectiveness of marketing efforts.

Increased competition for viewers in the cable industry may result from
technological advances, such as digital compression technology, which allows
cable systems to expand channel capacity; the further deployment of fiber
optic cable, which has the capacity to carry a much greater number of channels
than co-axial cable; and "multiplexing," in which programming services offer
more than one feed of their programming. The increased number of choices
available to the Company's viewing audience as a result of such technological
advances may lead to a reduction in the Company's market share. The Company
competes or expects to compete in the future for advertising revenue with the
television programming services described above, as well as with other
national television programming services, superstations, broadcast television
networks, local over-the-air television stations, radio and print media.

RSNs

The Company distributes a full range of sports programming on both a
national and regional level, with the Company's major focus being on regional
sports programming. On a national level, the Company's primary competitor is
ESPN, and to a lesser extent, ESPN2. In addition, ESPNews and CNN/SI, each
offer a 24 hour sports news format which competes directly with Fox Sports
News. In regional markets, the Company's RSNs' compete with other regional
sports networks, including those operated by team owners and other sports
programming providers and distributors.

In addition to competition for cable distribution, viewers and advertisers,
the Company's RSNs also compete, to varying degrees, for programming. With
respect to the acquisition of sports programming rights, FSN competes for
national rights principally with the national broadcast television networks, a
number of national cable services that specialize in or carry sports
programming, and television "superstations," which distribute sports and other
programming to cable television systems by satellite, and with independent
syndicators that acquire and resell such rights nationally, regionally and
locally. The Company's RSNs also compete for local and regional rights with
those independent syndicators, with local broadcast television stations and
with other local and regional sports networks. The owners of distribution
outlets such as cable television systems may also contract directly with the
sports teams in their service area for the right to distribute a number of
such teams' games on their systems. The owners of teams may also launch their
own regional sports networks and contract with cable television systems for
carriage.

FX faces competition in the acquisition of distribution rights to
programming produced by other diversified media companies, due to industry
consolidation and the elimination of the financial interest and syndication
rules. Many of FX's competitors are larger and have financial and other
resources substantially greater than those of the Company. Certain of these
organizations are "vertically integrated" (i.e., producing, distributing and
exhibiting their own programming). Industry integration may impact FX's
ability to acquire programming distribution rights, as it is likely that
vertically integrated media companies will sell programming distribution
rights to their cable network subsidiaries. The effect of such distribution
patterns would be to reduce the availability of such programming and to
increase the cost of programming that is available for acquisition by FX. With
the repeal of certain governmental regulations which formerly prohibited the
broadcast networks from acquiring financial interests in, and syndication
rights to, television programming, this trend towards vertical integration
and, accordingly, competition in the industry, is expected to increase. See
"Business--Regulation and Legislation."

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Satellite Distribution

All programming for the Company is transmitted from the Company's facilities
located in Houston and Los Angeles. Local teleports near each facility provide
uplink services to deliver the Company's programming to transponders on
various geosynchronous satellites which, in turn, are received by cable system
operators, DTH services and other customers.

Presently, each regional sports network has a dedicated feed which is
transmitted to a transponder as either a digital or an analog signal. In
addition, a network feed is transmitted to a transponder as a means of
distributing certain programming (including Fox Sports News) to the Company's
RSNs. Each cable system head-end has equipment which is controlled remotely
from the Company's Houston location. This provides the Company with
substantial flexibility to "switch" the programming for an individual region
or sub-region to alternative programming in order to accommodate regional
variations in broadcast rights for certain teams and events.

Programming for FX is distributed using two separate feeds on two separate
satellite transponders, one for the Eastern, Central and certain portions of
the Mountain time zone and one for all other portions of the Mountain time
zone and the Pacific time zone.

The Company's business depends upon the launch and operation of satellites
by third parties. As of June 30, 1999, the Company leased 15 full-time
transponders. Eleven of these 15 transponders, with leases expiring between
December 1999 and 2006, are used by its domestic sports networks. Of these
eleven transponders, five are on Satcom C-1, with three leases direct from GE
Americom ("GE") and two leases from GE via a WTCI sublease. With respect to
the remaining six full-time domestic sports transponders, three are also
leased from GE (one on GE-1, one on Satcom C-3 and one on GE-3), and three are
leased from PanAmSat Corporation on the Hughes Galaxy VII satellite. The
remaining four of the 15 continuing transponders are used by entities other
than the Company's domestic sports networks. Of these four transponders, one
is leased from Broadcast Development, Inc. on the Hughes Galaxy VII satellite,
one is leased from GE via a WTCI sublease on Satcom C-1, one is leased from GE
on Satcom C-3, and one is leased from Unlimited Satellite Services on GE-3. FX
uses one of these transponders and shares a transponder on the Hughes Galaxy
VII Satellite with two domestic sports networks. The others are subleased to
Fox News Channel and FXM (both affiliates of Fox) and NDTC (an affiliate of
Liberty). See "Certain Relationships and Related Transactions."

The Company has successfully completed the digital compression of its
transmissions to three of the four transponders on Galaxy VII. Through
compression, the Company is able to combine up to eight services on one
transponder, using bit rates ranging from 4 to 7 megabits per second. This has
improved signal quality, programming and "switching" capability, growth
opportunities, and has also resulted in significant cost savings due to the
reduced transponder requirements. See "Certain Relationships and Related
Transactions."

Satellites are subject to significant risks that may prevent or impair
proper commercial operations, including satellite defects, launch failure,
destruction and damage and incorrect orbital placement. Because the Company's
primary satellites (Galaxy VII and Satcom C-1) are already in orbit, the
Company does not expect to face any significant launch risks over the next
several years. In 2006, which is the projected end of useful life for Galaxy
VII, the Company might again face satellite launch risk, depending on the
selected transponder migration plans at that time. Failure or disruption of
satellites that are already operational, such as Satcom C-1 and Galaxy VII,
could have a material adverse effect on the Company. The Satcom C-1
transponder leases have minimal back-up in the event of transponder or
satellite failure, and the Company would have to rely on spare transponder
capacity (available internally as well as via third parties) and alternative
program scheduling methods in the event of loss of one or more Satcom C-1
transponders. The Galaxy VII and Satcom C-3 transponder leases are
"protected," in that these leases provide for transmission on a back-up
satellite should a serious transmission or reception fault occur. As a result
of full implementation of the Company's digital compression plan in 1999, all
of the Company's services are either on Galaxy VII or Satcom C-3, and, thus
are "protected," or the capacity exists to allow all of the services to be on
these protected transponders.

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Regulation and Legislation

Certain aspects of the Company's programming operations are subject,
directly or indirectly, to federal, state, and local regulation. At the
federal level, the operations of cable television systems, satellite
distribution systems, other multichannel distribution systems, broadcast
television stations, and, in some respects, vertically integrated cable
programmers are subject to the Communications Act of 1934, as amended, by the
Cable Communications Policy Act of 1984 (the "1984 Act"), the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Act"), which
amended the 1984 Act, and the Telecommunications Act of 1996 (the "1996 Act")
and regulations promulgated thereunder by the Federal Communications
Commission (the "FCC"). Cable television systems are also subject to
regulation at the state and local level.

The following does not purport to be a summary of all present and proposed
federal, state, and local regulations and legislation relating to the cable
television industry and other industries involved in the video marketplace.
Other existing legislation and regulations, copyright licensing, and, in many
jurisdictions, state and local franchise requirements are currently the
subject of a variety of judicial proceedings, legislative hearings, and
administrative and legislative proposals which could change, in varying
degrees, the manner in which the cable television industry and other
industries involved in the video marketplace operate.

Federal Regulation and Legislation

The 1992 Act subjected all cable television operators not subject to
"effective competition" to rate regulation. Rate regulation under the 1992 Act
resulted in a reduction of rates to some subscribers in some markets. The 1996
Act eliminated cable rate regulation as of March 31, 1999, except with respect
to the "basic" tier (which must include all local broadcast stations and
public, educational and governmental access channels, and must be provided to
all subscribers). In response to the 1992 Act and the FCC's implementing
regulations, many cable systems retiered channels to create an attractively
priced "basic" tier, while offering satellite-delivered programming services
such as the Company's on a different service tier. To the extent such
retiering or repricing of the Company's networks induces customers to
discontinue their subscriptions, the Company's financial performance might
have been adversely affected. Deregulation of rates pursuant to the 1996 Act
may reverse such tiering and pricing decisions by cable system operators and,
correspondingly, reverse or ameliorate any adverse effects of the 1992 Act. On
the other hand, to the extent that rate deregulation causes a material
increase in cable rates, the individual subscriber base of the Company could
be decreased, potentially affecting the Company's subscriber revenues.

FCC regulations adopted pursuant to the 1992 Act prevent a cable operator
that has an attributable interest (including voting or non-voting stock
ownership of 5% or more or limited partnership equity interests of 5% or more)
in a programming vendor from exercising undue or improper influence over the
vendor in its dealings with competitors to cable. The regulations also
prohibit a cable programmer in which a cable operator has an attributable
interest from entering into exclusive contracts with any cable operator or
from discriminating among competing multichannel program distributors in the
price, terms and conditions of sale or delivery of programming. With respect
to cable systems having channel capacity of less than 76 channels, the FCC's
regulations limit to 40% the number of programming channels that may be
occupied by video programming services in which the cable operator has an
attributable interest. As a result of Liberty Media's ownership interest in
The News Corporation Limited, the Company's programming services are subject
to these requirements. Similarly, Cablevision is deemed to have an
attributable interest in Regional Programming Partners ("RPP"). The FCC's
program access and non-discrimination regulations therefore restrict the
ability of these cable programming services to enter into exclusive contracts.
The rules also permit multichannel video programming distributors (such as
multichannel multipoint distribution services ("MMDS"), satellite master
antenna televisions ("SMATV"), DBS and DTH operators) to bring complaints
against the Company to the FCC charging they are unable to obtain the affected
programming networks on nondiscriminatory terms. While cable systems are
expanding their capacity, there may be instances in which AT&T Cable Services
or a Cablevision system with 75 channels or less will not be able to carry one
or more of the Company's services (or in the case of Cablevision, an RPP
service) or will have to remove another affiliated channel.

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The FCC's regulations concerning political advertising also apply to certain
cable television programming services carried by cable system operators. The
Company must provide program ratings information and increased closed
captioning of its cable programming services to comply with FCC regulations,
which could increase its operating expenses.

FCC regulations implementing the 1992 Act require each television
broadcaster to elect, at three year intervals, either to (i) require carriage
of its signal by cable systems in the station's market ("must carry") or (ii)
negotiate the terms on which such broadcast station would permit transmission
of its signal by the cable systems within its market ("retransmission
consent"). The FCC recently has initiated a rulemaking proceeding to determine
carriage requirements for digital broadcast television signals on cable
systems, including carriage during the period of transition from analog to
digital signals.

State and Local Regulation

Cable television systems are generally constructed and operated under non-
exclusive franchises granted by a municipality or other state or local
governmental entity. Franchises are granted for fixed terms and are subject to
periodic renewal. The 1984 Act places certain limitations on a local
franchising authorities ("LFAs") ability to control the operations of a cable
operator, and the courts from time to time have reviewed the constitutionality
of several franchise requirements, often with inconsistent results. The 1992
Act prohibits exclusive franchises, and allows LFAs to exercise greater
control over the operation of franchised cable television systems, especially
in the areas of customer service and rate regulation. The 1992 Act also allows
LFAs to operate their own multichannel video distribution systems without
having to obtain franchises. Moreover, LFAs are immunized from monetary damage
awards arising from their regulation of cable television systems or their
decisions on franchise grants, renewals, transfers, and amendments.

The terms and conditions of franchises vary materially from jurisdiction to
jurisdiction. The specific terms and conditions of a franchise and the laws
and regulations under which it is granted directly affect the profitability of
the cable television system, and thus the cable television system's financial
ability to carry programming. Local governmental authorities are responsible
for regulating the rates charged for the basic tier of service. Local rate
regulation for a particular system could result in resistance on the part of
the cable operator pay to the amount of subscriber fees charged by the Company
for its programming.

Various proposals have been introduced at the state and local level with
regard to the regulation of cable television systems, and a number of states
have enacted legislation subjecting cable television systems to the
jurisdiction of centralized state governmental agencies.

Patents, Trademarks and Licenses

In connection with the formation of the Company and the Rainbow Transaction,
Twentieth Century Fox Film Corporation and Fox Broadcasting Company agreed to
grant the Company a non-exclusive, royalty free license, with the right to
sublicense to RSNs, to use the "FOX" brand name and certain related artwork.
See "Certain Relationships and Related Transactions."

In their telecast rights agreements with the professional sports teams in
their markets, RSNs are granted certain rights to use the name, logos,
symbols, seals, emblem, and insignia and other trademarks of the team and its
opponents. Generally, such agreements restrict such usage to the actual game
telecasts, and for other purposes incident thereto (news and highlight shows
and on-air promotional spots), and for other purposes (e.g., print
advertisements) so long as the use is limited to the marketing and promotion
of the teams and the RSNs. Generally, such promotional usages may be
"sponsored" (e.g., a particular company sponsoring a particular RSN's telecast
of a professional sports team with the visual use of team and sponsor logos),
but such promotional uses cannot imply endorsements by the team. Typically the
RSNs also have the contractual right to use the pictorial representations and
the names and likenesses of the players, managers, coaches and officials of
the team, its opponents, and the applicable league in the telecasts and for
promotional purposes incident thereto. As a

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protection of their proprietary property, the teams generally reserve certain
approval rights of trademark usages and other rights reservations. Because the
telecast rights agreements are limited to the "home territories" of the teams,
and the RSNs only operate within such territories, the rights to use a teams
logo are generally limited to such territories.

The Company has an agreement with MLB to telecast certain of its games on a
national basis on FSN and FX, and has the same general rights under the
agreement for use of the MLB logo and those of its teams as are in the team
contracts, but such usages are permitted on a national basis.

Employees

As of June 30, 1999, the Company, together with its O&O RSNs and other
subsidiaries, had 1,223 full-time employees. The Company also regularly
engages freelance creative staff and other part-time employees. None of the
Company's employees are covered by collective bargaining agreements. The
Company believes its relations with its employees are good.

Certain Arrangements Regarding Ownership Interests

South. The South RSN is operated through SportSouth Network, Ltd. ("South
Ltd."). LMC Southeast Sports, Inc. ("LMC Southeast") holds a 1% limited
partnership capital interest and a 43% general partnership capital interest in
South Ltd. SportSouth Holdings, LLC (jointly owned by LMC Southeast and LMC
Southeast's direct parent) holds a 1% general partnership profits interest and
a 43% limited partnership profits interest and Liberty SportSouth Inc. (a
wholly-owned subsidiary of LMC Southeast) holds a 1% general partnership
capital and profits interest and a 43% limited partnership capital and profits
interest in South Ltd. The remaining 12% general partnership interest in South
Ltd. is held by E.W. Scripps Company. Liberty/Fox Southeast LLC holds 100% of
the equity interest and 49% of the voting interest of LMC Southeast and
Liberty Sports, Inc., an affiliate of Liberty, holds 51% of the voting
interest. Fox Sports Net, LLC holds a 99% membership interest in Liberty/Fox
Southeast LLC, FRSM Southeast, Inc., an affiliate of Fox, holds a .5%
membership interest and FRSM holds a .5% membership interest.

The partners of South Ltd. are subject to a buy/sell procedure which may be
initiated at any time by any general partner of South Ltd. The partner
initiating the buy/sell procedure (the "Initiating Partner") must notify the
other general partner (the "Responding Partner") of South Ltd. of its
intention to initiate the buy/sell procedure, such notification to include a
statement by the Initiating Partner of the value of South Ltd. Within 90 days
after receipt of such notice, the Responding Partner shall notify the
Initiating Partner of its election to either purchase the Initiating Partner's
interest in South Ltd. or sell its interest in South Ltd. to the Initiating
Partner. If the Responding Partner does not respond within 90 days, it shall
be deemed to be an election of the Responding Partner to sell its interest in
South Ltd. to the Initiating Partner.

Sunshine. The Sunshine RSN is operated through Sunshine Network ("Sunshine
Network"), a joint venture with ARC Ltd. holding a 49% interest and Sunshine
Network of Florida, Ltd. ("SNFL") holding a 51% interest. LMC Sunshine, Inc.
holds a 14.362% limited partnership interest in SNFL and Sunshine Network,
Inc. ("SNI"), an entity in which LMC Sunshine, Inc. holds a 14.507% interest,
holds a 1% general partnership interest. The remaining interests in SNFL, Ltd.
are held by various regional cable MSOs. Liberty/Fox Sunshine LLC holds 100%
of the equity interest and 49% of the voting interest of LMC Sunshine, Inc.
and Liberty Sports, Inc., an affiliate of Liberty, holds 51% of the voting
interest. Fox Sports Net, LLC holds a 99% membership interest in Liberty/Fox
Sunshine LLC, FRSM Sunshine, Inc., an affiliate of Fox, holds a .5% membership
interest and FRSM holds a .5% membership interest. In October 1998, the
Company, together with certain other partners in SNFL and shareholders of SNI,
acquired Time Warner Entertainment's 29.647% limited partnership interest in
SNFL and 29.946% interest in SNI, respectively.

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The joint venturers of Sunshine Network are subject to a buy/sell procedure
which may be initiated at any time by either joint venturer. The venturer
initiating the buy/sell procedure (the "Initiating Venturer") must notify the
other venturer (the "Responding Venturer") of Sunshine Network of its
intention to initiate the buy/sell procedure, such notification to include a
statement by the Initiating Venturer of the value of Sunshine Network. Either
within 60 days after receipt of such notice if Sunshine Network of Florida,
Ltd. is the Initiating Venturer, or, if ARC Ltd. is the Initiating Venturer,
within 120 days of the date that Sunshine Network of Florida, Ltd. receives an
appraisal of Sunshine Network (provided that such appraisal is requested by
Sunshine Network of Florida, Ltd. within 10 days of the receipt of the
buy/sell notice and such appraisal is completed no later than 21 days after
such request), the Responding Venturer shall notify the Initiating Venturer of
its election to either purchase the Initiating Venturer's interest in Sunshine
Network or sell its interest in Sunshine Network to the Initiating Venturer.
If the Responding Venturer fails to timely notify the Initiating Venturer of
its election, the Initiating Venturer shall have the right, at its option, to
either purchase the Responding Venturer's interest in Sunshine Network or
require the Responding Venturer to purchase its interest in Sunshine Network.

Chicago. The Chicago RSN is operated through SportsChannel Chicago
Associates ("Chicago Associates"). RPP holds a 50% interest in Chicago
Associates and Fox Sports Net Chicago Holdings, LLC holds a 50% interest.

Rainbow holds a 60% general partnership interest in RPP and Fox Sports RPP
Holdings, LLC holds a 40% general partnership interest. The Company holds a
.5% membership interest in Fox Sports RPP Holdings, LLC, FRSM II holds a 99%
membership interest and FRSM holds a .5% membership interest.

D.C./Baltimore. The D.C. Baltimore RSN is operated through Home Team Sports
Limited Partnership ("D.C./Baltimore LP"). Affiliated Regional Communications,
Ltd. ("ARC Ltd.') holds a 34.3% limited partnership interest in D.C./Baltimore
LP and the remaining interest is held by Group W. ARC Ltd. holds a 99% limited
partnership interest in ARC Holding and Sports Holding Inc., a wholly-owned
subsidiary of ARC Ltd., holds a 1% general partnership interest. Liberty/Fox
ARC L.P. ("ARC L.P.") holds a 100% equity interest and 62.6799% capital
limited partnership interest in ARC Ltd. and Liberty ARC, Inc., wholly owned
by LMC Regional Sports, Inc., an affiliate of Liberty, holds a 37.3201%
capital general partnership interest. Fox Sports Net, LLC holds a 98% limited
partnership interest in ARC L.P., New LMC ARC, Inc., a subsidiary of Liberty,
holds a 1% general partnership interest and FRSM holds a 1% limited
partnership interest.

Bay Area. The Bay Area RSN is operated through SportsChannel Pacific
Associates ("San Francisco Associates"). RPP holds a 50% interest in San
Francisco Associates and Fox Sports Net Bay Area Holdings, LLC holds a 50%
interest.

New England. The New England RSN is operated through SportsChannel New
England, a wholly owned subsidiary of RPP. RPP holds a 50% ownership interest
in the New England RSN and Media One, Inc. holds a 50% interest.

Florida. The Florida RSN is operated through SportsChannel Florida
Associates ("Florida Associates"). RPP holds a 30% interest in Florida
Associates and the remaining 70% of Florida Associates is held by Front Row.
The Tampa Bay Devil Rays, Inc. has an option to purchase 10% of the Florida
RSN.

Ohio. The Ohio RSN is operated through SportsChannel Ohio Associates ("Ohio
Associates"), a wholly-owned subsidiary of RPP.

Cincinnati. The Cincinnati RSN is operated through SportsChannel Cincinnati
Associates ("Cincinnati Associates"), a wholly-owned subsidiary of RPP.

New York. RPP currently owns and operates two RSNs in the New York region:
The Madison Square Garden Network, operated through Madison Square Garden,
L.P. ("MSG, L.P."), and Fox Sports New York, operated through SportsChannel
Associates ("SportsChannel New York Associates"), a wholly-owned subsidiary of
MSG, L.P. MSG, L.P. is a wholly-owned subsidiary of RPP.

18
<PAGE>

Item 2. Properties

The Company's corporate facilities are located in Los Angeles, California
where it leases approximately 64,000 square feet of office space from New
World Communications Group Incorporated, an indirect, wholly-owned subsidiary
of Fox. See "Certain Relationships and Related Transactions."

In addition to the corporate facilities, the Company also leases office
facilities located in the market of each of the Company's RSNs, technical and
uplink facilities located in Houston, Texas and Los Angeles, California and
various sales offices located throughout the United States. The Company has
national ad sales offices in New York, Boston, Atlanta, Detroit, Chicago,
Dallas, Los Angeles and San Francisco. The Company's RSNs have sales offices
in Houston, Hollywood (Florida), Kansas City, Indianapolis, Charlotte,
Tallahassee, Tampa and Salt Lake City. The O&O RSNs lease office space within
the market that they serve and are summarized as follows:

<TABLE>
<CAPTION>
RSN Location
--- --------
<S> <C>
Southwest........................................... Irving, Texas
West/West2.......................................... Los Angeles, California
Pittsburgh.......................................... Pittsburgh, Pennsylvania
Rocky Mountain...................................... Denver, Colorado
Northwest........................................... Bellevue, Washington
Utah................................................ Salt Lake City, Utah
Midwest............................................. St. Louis, Missouri
Arizona............................................. Phoenix, Arizona
Detroit............................................. Detroit, Michigan
South............................................... Atlanta, Georgia
Sunshine............................................ Orlando, Florida
</TABLE>

Fox Sports Direct leases its corporate office space in Irving, Texas. FX
also leases sales offices in Los Angeles, Chicago and New York.

The Company does not own any real property. The Company believes that its
current office and production space, together with space readily available in
the markets in which it operates, are adequate to meet its needs for the
foreseeable future.

Item 3. Legal Proceedings

As of June 30, 1999 there are no material pending legal proceedings against
the Company, other than routine litigation incidental to the Company's
business, except as described below.

U.S. v. ASCAP--Virtually every cable network is involved in this "rate
court" proceeding in the Southern District of New York to set a formula for
assessing music performance license fees on cable programming. The Company's
cable services pay ASCAP license fees under the current interim rate
structure, which is calculated as a percentage of each network's gross
revenues, and ASCAP is seeking an increase in those fees. The interim rate is
subject to upward or downward adjustment in future rate court proceedings. The
other major copyrighted music performance society, BMI, is assessing a
negotiated interim license fee, and the final rate will be determined either
by negotiation after the conclusion of the ASCAP rate court proceeding or in
another rate court proceeding. The Company cannot predict the final outcome of
these disputes, but does not believe that it will suffer any material
liability as a result therof.

Echostar--On October 27, 1997, Echostar Communications Corporation
("Echostar") filed a complaint with the FCC against the Company alleging that
the Company had violated Section 548 of the Communications Act of 1934, as
amended (the "1934 Act") and Sections 76.1000 et seq. of the FCC's Rules (the
"FCC Rules") by discriminating against Echostar in the prices and other terms
and conditions for distribution of regional sports programming to Echostar's
subscribers by direct broadcast satellite. Echostar's claim is based on
allegations that the Company licenses cable operators to distribute regional
sports programming at lower prices and on more

19
<PAGE>

favorable terms than those contained in Echostar's contract with the Company.
Echostar's complaint requests the FCC to order the Company to offer Echostar
regional sports programming at rates and on terms that are no worse than those
offered to other cable operators, to award damages in an unspecified amount,
and to impose future reporting requirements to ensure non-discrimination. On
December 10, 1997, the Company filed a response to the Echostar complaint
denying any violation of the 1934 Act or the FCC Rules. On October 28, 1998,
the Cable Bureau of the FCC dismissed Echostar's complaint with prejudice on
the grounds that the statute of limitations had expired. On June 30, 1999, the
Cable Bureau denied Echostar's November 27, 1998 petition for reconsideration
of its decision in this matter. On July 30, 1999, Echostar sought review of
the Bureau's decisions by the full FCC. The Company filed its opposition to
this petition for review on August 16, 1999.

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable.

20
<PAGE>

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Not Applicable.

Item 6. Selected Financial Data

The selected financial data of the Company as of June 30, 1999, December 31,
1998 and 1997 and for the six months ended June 30, 1999, the years ended
December 31, 1998 and 1997 and the eight months ended December 31, 1996 are
derived from the Company's consolidated financial statements audited by Arthur
Andersen LLP, independent public accountants, included elsewhere in this
report. The selected financial data of the Company for the six months ended
June 30, 1998 is unaudited.

The selected financial data of Liberty Sports, Inc. and subsidiaries--
Domestic Operations set forth below for the period from January 1, 1996 to
April 29, 1996 is derived from the combined financial statements of Liberty
Sports, Inc. and subsidiaries--Domestic Operations ("LSI Domestic") audited by
KPMG LLP, independent auditors, included elsewhere in this report.

The selected financial data of FX Networks, LLC set forth below for the ten
month period ended April 29, 1996 is derived from FX Networks, LLC's financial
statements audited by Arthur Andersen LLP, independent public accountants,
included elsewhere in this report.

The selected financial data presented below and under "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
should be read in conjunction with the financial statements, including the
notes thereto, appearing elsewhere in this report.
THE COMPANY
(Dollars in thousands)

<TABLE>
<CAPTION>
Six months Six months
ended ended Year ended Year ended April 30 to
June 30, June 30, December 31, December 31, December 31,
1999 1998 1998 1997 1996
---------- ----------- ------------ ------------ ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Statement of Operations:
Revenues................ $ 364,253 $326,023 $ 655,194 $ 471,792 $ 144,792
---------- -------- ---------- ---------- ---------
Expenses:
Operating............. 296,059 250,300 485,276 420,888 197,445
General and
administrative....... 39,264 41,343 90,662 65,558 31,609
Depreciation and
amortization......... 12,239 11,094 21,662 18,968 8,507
---------- -------- ---------- ---------- ---------
347,562 302,737 597,600 505,414 237,561
---------- -------- ---------- ---------- ---------
Operating income
(loss)................. 16,691 23,286 57,594 (33,622) (92,769)
---------- -------- ---------- ---------- ---------
Other (income) expenses:
Interest, net......... 54,781 54,521 110,425 34,142 3,819
Subsidiaries' income
tax expense
(benefit), net....... 233 900 1,456 (1,590) 3,437
Loss on sale of
assets............... 2,767 -- 121 -- 4,913
Equity (income) loss
of affiliates, net... 11,160 (6,400) 5,913 9,018 12,024
Other, net............ 471 197 (1,478) 401 --
Minority interest..... 1,736 1,366 3,225 2,864 187
---------- -------- ---------- ---------- ---------
Net loss................ $ (54,457) $(27,298) $ (62,068) $ (78,457) $(117,149)
========== ======== ========== ========== =========
Deficiency of earnings
available to cover
fixed charges charges.. $ (54,457) $(27,298) $ (62,068) $ (78,457) $(117,149)
Balance Sheet Data (end
of period):
Total assets............ $1,932,498 $1,891,935 $1,817,758
Long-term debt.......... 1,488,178 1,401,891 1,246,291
Stockholders' equity.... 35,746 90,203 152,271
</TABLE>

21
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS (PREDECESSOR)

<TABLE>
<CAPTION>
January 1
to
April 29,
1996
----------
(Dollars
in
thousands)
<S> <C>
Statement of Operations:
Revenues............................................................. $99,753
-------
Expenses:
Operating.......................................................... 60,664
General and administrative......................................... 27,993
Depreciation and amortization...................................... 10,788
-------
99,445
-------
Operating income..................................................... 308
-------
Other income (expenses):
Interest expense................................................... (1,963)
Interest income.................................................... 91
Equity in earnings of affiliates................................... 219
Minority interest in earnings of subsidiaries...................... (1,076)
Other, net......................................................... 1,467
-------
(1,262)
-------
Loss before income taxes........................................... (954)
Income tax benefit................................................... 217
-------
Net loss........................................................... $ (737)
=======
Deficiency of earnings available to cover fixed charges.............. $ (954)
</TABLE>

FX NETWORKS, LLC (PREDECESSOR)

<TABLE>
<CAPTION>
Ten months
ended
April 29,
1996
----------
(Dollars
in
thousands)
<S> <C>
Statement of Operations:
Revenue............................................................. $ 75,401
--------
Expenses:
Operating......................................................... 63,369
General and administrative........................................ 19,936
Depreciation and amortization..................................... 480
--------
83,785
--------
Operating loss...................................................... (8,384)
--------
Interest expense.................................................... (7,898)
--------
Net loss.......................................................... $(16,282)
========
Deficiency of earnings available to cover fixed charges............. $(16,282)
</TABLE>

22
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Introduction

In April 1996, Fox and Liberty entered into a 50%/50% joint venture,
pursuant to which the Company was formed to provide cable programming through
its sports programming operations, consisting of interests in RSNs and a
national sports programming service, and through FX, a general entertainment
network. In July 1999, News Corporation acquired substantially all of
Liberty's 50% ownership interest in the Company and transferred that interest
to Fox in exchange for common stock. The Company's interests in the sports
programming business are derived through its 99% ownership interests in Fox
Sports Net, LLC and Fox Sports RPP Holdings, LLC while its interests in FX are
derived through its 99% ownership interest in FX Networks LLC.

In December 1997, the Company consummated the Rainbow Transaction, pursuant
to which (i) RPP was formed to hold interests in Rainbow's then existing RSNs
and certain other businesses, (ii) the National Sports Partnership was formed
to operate FSN and other national sports programming services, and (iii) the
National Advertising Partnership was formed to act as a national advertising
sales representative for the RSNs which are affiliated with FSN. RPP is
managed by Rainbow, while the National Sports Partnership and the National
Advertising Partnership are managed by the Company. In connection with the
consummation of the Rainbow Transaction, (i) the Company contributed $850.0
million to RPP in exchange for a 40% partnership interest held by Fox Sports
RPP and Rainbow contributed its interests in certain RSNs, the Madison Square
Garden entertainment complex, Radio City Productions LLC, the New York Rangers
and the New York Knicks to RPP in exchange for a 60% partnership interest,
(ii) the parties each contributed certain business interests and other assets
related to national sports programming to the National Sports Partnership in
exchange for 50% partnership interests, and (iii) the parties each contributed
certain assets related to advertising sales to the National Advertising
Partnership in exchange for 50% partnership interests.

In August 1997, the Company issued $500.0 million aggregate principal amount
of its 8 7/8% Senior Notes due 2007 and $405.0 million aggregate principal
amount at maturity ($252.3 million gross proceeds) of its 9 3/4% Senior
Discount Notes due 2007 (together, the "Offering"). The net proceeds from
these notes were used, along with proceeds from the Bank Facility (as defined
below), to finance the Rainbow Transaction. In January 1998, pursuant to an
Exchange Offer, the Company exchanged all of these notes for new notes, the
terms of which were are substantially identical to the original notes, which
were registered by the Company under the Securities and Exchange Act of 1933,
as amended. The Company received no proceeds from the issuance of the Notes in
the Exchange Offer.

In connection with the consummation of the Rainbow Transaction, the Company
and a group of banks led by Chase Manhattan Bank, amended and restated an
existing credit agreement to permit borrowings by Fox Sports Net, LLC, Fox
Sports RPP Holdings, LLC and FX Networks, LLC, each a subsidiary of the
Company (together, the "Co-Borrowers"), in the amount of $800.0 million (the
"Bank Facility"). The Bank Facility was comprised of a $400.0 million
revolving credit facility and a $400.0 million term loan facility. The
proceeds of the loans under the Bank Facility were used to finance, in part,
the Rainbow Transaction.

In July 1999, 19th Holdings Corporation, a wholly-owned subsidiary of Fox,
acquired the debt outstanding under the Bank Facility from the group of banks,
and in so doing, assumed the rights and obligations of the group of banks
under the Bank Facility. The Company and 19th Holdings Corporation
subsequently amended and restated the Bank Facility to provide, among other
things, a fixed rate of interest, determined by 19th Holdings Corporation on
an annual basis, and eliminated substantially all of the affirmative and
negative covenants other than with respect to the payment of principal and
interest (the "19th Facility"). The Company currently expects that remaining
availability under the 19th Facility will primarily be used for investments in
certain subsidiaries of the Company and for working capital purposes.

Included in this Report are: (i) the consolidated financial statements of
the Company for the eight months ended December 31, 1996, the years ended
December 31, 1997 and 1998 and the six months ended June 30, 1999 (ii) the
combined financial statements of Liberty Sports, Inc.--Domestic Operations for
the period from

23
<PAGE>

January 1, 1996 to April 29, 1996, and (iii) the financial statements of FX
Networks, LLC for the ten months ended April 29, 1996.

General Programming Operations

Basic cable networks generally recognize revenue from two principal sources:
the payment of affiliate fees from pay television distributors and the sale of
advertising time.

Basic cable networks typically enter into long-term contracts with pay
television distributors such as cable system operators, DTH operators,
multisystem multipoint distribution systems ("MMDS") operators and other
hybrid pay television platforms. These operators provide for the delivery of
the network's programming to subscribers. Contracts between networks and
distributors generally vary in length and provide for a monthly programming
fee ("affiliate license fee") to be paid by the distributor, on a per
subscriber basis, to the cable network for the right to distribute programming
on a non-exclusive basis. Affiliate license fees are generally based on the
popularity of the cable network and the cost of its programming, and
distribution contracts will generally set forth the manner in which fees will
change throughout the life of the contract. The affiliate license fee schedule
during the contract term typically varies based on the number of subscribers
to whom the distributor delivers the network (volume) and/or penetration of
the network among a distributor's total subscriber base. Affiliate license
fees paid by a distributor will typically increase in aggregate as the number
of subscribers served by the distributor increases, and will increase, on a
per subscriber basis, by an escalator, such as the consumer price index
("CPI") for a fixed number of years until the contract expiration date. Upon
the contract's expiration, the parties can renegotiate the license fee to the
extent that market forces will allow. In exchange for distribution and
affiliate license fees, distribution contracts often require the cable network
to provide its distributor with various forms of consideration, including
advertising time that the operator may sell locally, marketing programs and
materials, and in recent years, substantial per subscriber launch funds.

Basic cable networks also receive revenues from the sale of advertising time
on the network. Advertising is sold in time increments and is priced primarily
on the basis of a program's popularity among the specific audience that the
advertiser desires to reach. Advertising rates are affected by the number of
advertisers competing for available time, the total audience reached, as
measured by the number of subscribers to the network, and to the extent that
the network is targeted to a particular audience, the size and demographic
makeup of the subscriber base targeted by the network. Generally, most
advertising contracts are short-term in nature. Cable networks generally pay a
commission both to advertising agencies for placement of local or national
advertising and to their in-house sales force (or the national sales
representative for national advertising).

Cable networks expenses primarily include five general types of expenses:
programming expenses, production and technical expenses, marketing expenses,
advertising expenses and general and administrative expenses.

Programming expenses are generally the largest component of a cable
programmer's expenses and include expenses related to originally produced
programming, acquired programming and rights to programming obtained by
contract. Production and technical expenses typically include expenses related
to operating the technical facilities of the network, the equipment required
to uplink the signal to the satellite and, in the case of RSNs, the production
crews who film and announce the games. Marketing expenses include all
promotional expenses related to improving the market visibility and awareness
of the network. Advertising expenses include sales commissions paid to the in-
house sales force involved in the sale of advertising and commissions paid to
outside representatives. General and administrative expenses include salaries,
employee benefits, rent and other routine overhead expenses as well as legal,
accounting and consulting fees.

The Company's Programming Operations

Each of the Company's RSNs receive revenues from both affiliate license fees
and from the sale of air time to local and national advertisers. The Company's
RSN's have rights agreements with professional sports teams

24
<PAGE>

and colleges, within its region of operation. For professional teams, these
rights agreements generally grant the RSN the exclusive right to air a
specified number of games of the professional team per season, plus playoff
games, for a specified fixed fee. The average term of these contracts (from
commencement to scheduled termination) has historically been approximately six
years for the Company's O&O RSNs and such contracts have specified mechanisms
for the increase of the rights fee per game over the term of the contract.

FSN, the Company's national programming service, also receives revenue from
both affiliate license fees and from the sale of advertising time to national
network advertisers. FSN's affiliate license fees are received from affiliated
RSNs or broadcast stations for the right to distribute FSN's national
programming within their region of operations. Similar to the RSNs, FSN has
various rights agreements for its national sports programming, most notably
national rights from MLB and various college conferences for football and
basketball. FSN also produces its own daily sports news program, Fox Sports
News. Upon consummation of the Rainbow Transaction, FSN became a service of
the National Sports Partnership.

Fox Sports Direct, the Company's satellite services operation, provides
sports programming from the RSNs to direct broadcast service providers, such
as DirecTV, Inc. and EchoStar's Dish network, for Ku-band satellite owners.
Fox Sports Direct's revenues are received from a monthly per subscriber fee
from the direct broadcast service providers. Fox Sports Direct acquires its
sports programming through a license agreement with the RSNs whereby Fox
Sports Direct splits a percentage of its revenues received from its
subscribers with the "home territory" RSN in which the specific satellite
subscriber resides.

Prior to the consummation of the Rainbow Transaction, Fox Sports Ad Sales,
LLC, the Company's advertising sales subsidiary received commissions from the
sale of air time on behalf of RSNs, both the Company's and third party RSNs,
as well as on behalf of FSN. Expenses consist of sales personnel and other
sales-related costs. Upon consummation of the Rainbow Transaction, sales of
national advertising became a function of the National Advertising
Partnership.

FX receives revenue from both affiliate license fee contracts and the sale
of advertising time and acquires programming from various sources. FX has
entered into contracts with various Hollywood studios, including Twentieth
Century Fox, a subsidiary of Fox, for the exclusive cable rights to telecast
specific programming, including both feature films and off network television
programming, within a specified term. These contracts are generally long-term
in nature. Under generally accepted accounting principles, FX capitalizes its
film rights and amortizes the asset over the life of the contract. As a
result, the amount of cash payments made for a film contract in a particular
reporting period may differ from the amount amortized.

Significant Accounting Practices

Basis of Presentation

The Company's ownership interests in the RSNs are held either directly or
indirectly and have different voting rights attached thereto. The Company
consolidates all subsidiaries in which it has a majority interest and voting
control. The percentage of ownership, together with the degree to which the
Company controls the management and operation of an RSN, determines the
appropriate accounting treatment for the Company's interest in that particular
RSN. If the Company owns a majority interest in a particular RSN, but does not
have voting control, the ownership interest is accounted for using the equity
method of accounting. Under the equity method of accounting, the financial
condition and results of operations of entities are not reflected on a
consolidated basis and, accordingly, the consolidated revenues and expenses of
the Company, as reported on its consolidated statements of operations, do not
include revenues and expenses related to the entities accounted for under the
equity method.

As of December 31, 1996, the following RSNs, together with Fox Sports
Direct, are accounted for using the equity method of accounting: Southwest
RSN, Pittsburgh RSN, Rocky Mountain RSN, Midwest RSN, Sunshine RSN, Chicago
RSN, Bay Area RSN and D.C./Baltimore RSN, as well as certain operations within
Fox

25
<PAGE>

Sports Net. Prior to the formation of the Company, the Southwest RSN,
Pittsburgh RSN, Rocky Mountain RSN and Midwest RSN, as well as Fox Sports
Direct, were consolidated in Liberty Sports, Inc.'s financial statements,
while the others have historically always been accounted for under the equity
method.

Entities that are consolidated in the financial statements of the Company,
at December 31, 1996, include subsidiary entities which own FX Networks, LLC,
West RSN, West 2 RSN, Northwest RSN, Utah RSN, Arizona RSN, South RSN and Fox
Sports Ad Sales, as well as certain operations within Fox Sports Net.

On March 13, 1997, upon the acquisition of the remaining interests in ARC
Ltd. by ARC LP, the Company assumed management control of the consolidated
subsidiaries of Liberty/Fox ARC LP, and from that date the consolidated
subsidiaries of ARC Ltd. and their operations were consolidated.

In connection with the Rainbow Transaction, the Company contributed certain
business interests and other assets related to national sports programming to
the National Sports Partnership and certain assets related to advertising
sales to the National Advertising Partnership. The Company holds 50%
partnership interests in each partnership. Whereas the assets and liabilities,
and the results of operations of FSN, the national sports programming business
and the national advertising sales representation business were consolidated,
the National Sports Partnership and the National Advertising Partnership are
each accounted for under the equity method. Fox Sports RPP's 40% interest in
RPP is also accounted for under the equity method.

The following RSNs, together with Fox Sports Direct and FX Networks, LLC,
are consolidated in the financial statements of the Company, at December 31,
1997 and 1998 and at June 30, 1999: West RSN, West 2 RSN, Northwest RSN, Utah
RSN, Arizona RSN, South RSN, Southwest RSN, Rocky Mountain RSN, Midwest RSN
and Detroit RSN.

As of December 31, 1997 and 1998 and as of June 30, 1999, the following are
accounted for using the equity method of accounting: Pittsburgh RSN, Sunshine
RSN, Chicago RSN, Bay Area RSN, D.C./Baltimore RSN, RPP, National Sports
Partnership and National Advertising Partnership.

Because the Company reports the results of a significant number of its
subsidiary entities on the equity method, its financial results do not
represent the total combined revenues and expenses of the entire Company. As a
result of the various acquisitions and sales in recent years, which in turn
impact the accounting treatment of many of the Company's subsidiary entities,
comparability of the Company's historical financial results is not possible.

Program Rights

The Company has multi-year contracts for telecast rights of syndicated
entertainment programs and sporting events. Program rights for entertainment
programs are amortized over the term of the contract using the straight-line
method. Program rights for sporting events which are for a specified number of
games are amortized on an event-by-event basis, and those which are for a
specified season are amortized over the term of the season on a straight-line
basis.

At the inception of these contracts and periodically thereafter, the Company
evaluates the recoverability of the costs associated therewith against the
revenues associated with the program material and related expenses. Where an
evaluation indicates that a multi-year contract will result in an ultimate
loss, additional amortization is provided to currently recognize that loss.

Excess Cost

26
<PAGE>

The Company periodically reviews the propriety of the carrying amount of its
excess cost as well as the related amortization period to determine whether
current events or circumstances warrant adjustments to the carrying value
and/or the estimates of useful lives. This evaluation consists of the
Company's projection of undiscounted operating income before interest over the
remaining lives of the excess cost.

Results of Operations
FOX SPORTS NETWORKS, LLC

Six Months ended June 30, 1999

Total revenues for the six months ended June 30, 1999 were $364.3 million,
an increase of $38.2 million, or 12%, over the six months ended June 30, 1998.

Programming revenue was the largest source of revenue, representing 47% of
total revenue, or $171.1 million, for the six months ended June 30, 1999.
Advertising revenue represented 26% of total revenue, or $95.6 million, for
the six months ended June 30, 1999. For the six months ended June 30, 1998,
programming revenue was $148.2 million and advertising revenue was $82.1
million and represented 45% and 25% of total revenues, respectively.

Programming and advertising revenue increased by $22.9 million and $13.5
million, respectively in the six months ended June 30, 1999 as compared to the
six months ended June 30, 1998. These represent a 15% increase and 16%
increase in programming and advertising revenue, respectively, between the
periods. The increase in programming revenue of 15% is comprised primarily of
an increase in average subscribers at the consolidated O&O RSNs and FX of 7%
and 15%, respectively, between the periods. Rate increases comprised the
balance of the increase between periods. The increase in advertising revenue
of 16% is comprised of a 46% increase in advertising revenue for FX and a 5%
increase for the RSNs. Increased total day ratings on FX, together with the
increased subscribers, resulted in a 24% increase in total day average
audience during the six months ended June 30, 1999 over the same period in the
previous year. The increase is due primarily to the strengthening of the
program schedule throughout all dayparts. The increased ratings together with
increased subscribers resulted in the significant increase in advertising
revenue. The RSNs growth in advertising revenue is due to increased
advertising rates and the number of professional events, primarily NHL.
Advertising rates per game increased for MLB and NHL events in the six months
ended June 30, 1999 as compared to the same period in the previous year, while
rates for NBA events were negatively impacted due to the NBA lockout. The
limited amount of time between the settlement of the lockout and the
commencement of the NBA season impaired the Company's ability to sell
advertising, as did the reduced number of games in the season.

Operating expenses totaled $296.1 million for the six months ended June 30,
1999, which represented 81% of total revenues. These expenses consist
primarily of rights fees, programming and production costs. Operating expenses
for the six months ended June 30, 1998 totaled $250.3 million, or 77% of total
revenues. The increase in operating expenses is primarily attributable to
increased programming rights fees of RSNs due to renegotiated and newly
entered into sports rights agreements and increased programming expenses of FX
relating to newly launched programs during or subsequent to the period ended
June 30, 1998.

General and administrative expenses totaled $39.3 million for the six months
ended June 30, 1999, which represented 11% of total revenues. General and
administrative expenses for the six months ended June 30, 1998 totaled $41.3
million, or 13% of total revenues. A non-cash charge to earnings was taken in
the six months ended June 30, 1999 and 1998 with respect to an equity
appreciation rights plan. Excluding this non-cash charge, general and
administrative expenses would have been $34.1 million and $32.4 million, or
each 10% of total revenues for the six months ended June 30, 1999 and 1998,
respectively.

Depreciation and amortization expenses totaled $12.2 million and $11.1
million for the six months ended June 30, 1999 and 1998, respectively. Of
these amounts, $7.0 million and $7.2 million were related to amortization of
excess cost from acquisitions of programming entities consolidated with the
Company.

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Interest expense for the six months ended June 30, 1999 totaled $56.1
million in relation to $1.5 billion of debt outstanding as of June 30, 1999.
The amount of debt is primarily attributable to (i) the Offering, pursuant to
which $800.8 million of debt is outstanding at June 30, 1999, (ii) the Bank
Facility and indebtedness thereunder in the amount of $677.0 million; and
(iii) the acquisition of certain assets in connection with the commencement of
operations of Fox Sports Net Detroit.

Equity loss of affiliates for the six months ended June 30, 1999 was $11.2
million, while the Company recognized equity income of affiliates of $6.4
million for the six months ended June 30, 1998. For the six months ended June
30, 1998, equity income of affiliates included a $7.1 million gain on the sale
of 50% of RPP's investment in Fox Sports Net New England. In the six months
ended June 30, 1999, RPP was negatively impacted by the NBA lockout,
Pittsburgh RSN was adversly affected by the Pittsburgh Penquins bankruptcy and
the Company recognized start-up losses from its Canadian joint venture.

Three Months ended June 30, 1999

Total revenues for the three months ended June 30, 1999 were $192.3 million,
an increase of $22.9 million, or 14%, over the three months ended June 30,
1998.

Programming revenue was the largest source of revenue, representing 45% of
total revenue, or $86.3 million, for the three months ended June 30, 1999.
Advertising revenue represented 28% of total revenue, or $54.7 million, for
the three months ended June 30, 1999. For the three months ended June 30,
1998, programming revenue was $74.2 million and advertising revenue was $44.9
million and represented 44% and 26% of total revenues, respectively.

Programming and advertising revenue increased by $12.1 million and $9.8
million, respectively in the three months ended June 30, 1999 as compared to
the three months ended June 30, 1998. These represent a 16% increase and 22%
increase in programming and advertising revenue, respectively, between the
periods. The increase in programming revenue of 16% is comprised primarily of
an increase in average subscribers at the consolidated O&O RSNs and FX of 6%
and 14%, respectively, between the periods. Rate increases comprised the
balance of the increase between periods. The increase in advertising revenue
of 22% is comprised of a 48% increase in advertising revenue for FX and a 13%
increase for the RSNs. Increased total day ratings on FX, together with the
increased subscribers, resulted in a 27% increase in total day average
audience during the three months ended June 30, 1999 over the same period in
the previous year. The increase is due primarily to the strengthening of the
program schedule throughout all dayparts. The increased ratings together with
increased subscribers resulted in the significant increase in advertising
revenue. The RSNs growth in advertising revenue is due to increased
advertising rates and the number of professional events, primarily NBA.
Advertising rates per game increased for MLB and NHL events in the three
months ended June 30, 1999 as compared to the same period in the previous
year, while rates for NBA events were negatively impacted due to the NBA
lockout. The limited amount of time between the settlement of the lockout and
the commencement of the NBA season impaired the Company's ability to sell
advertising as did the reduced number of games in the season. The total number
of local professional events increased by 11% between the periods.

Operating expenses totaled $175.6 million for the three months ended June
30, 1999, which represented 91% of total revenues. These expenses consist
primarily of rights fees, programming and production costs. Operating expenses
for the three months ended June 30, 1998 totaled $137.1 million, or 81% of
total revenues. The increase in operating expenses is attributable to an
increase in the number of professional events, primarily NBA games, as well as
increased programming rights fees of RSNs due to renegotiated and newly
entered into sports rights agreements. Additionally, programming expenses of
FX increased relating to newly launched programs during or subsequent to the
period ended June 30, 1998.

General and administrative expenses totaled $20.9 million for the three
months ended June 30, 1999, which represented 11% of total revenues. General
and administrative expenses for the three months ended June 30, 1998 totaled
$20.4 million, or 12% of total revenues. A non-cash charge to earnings was
taken in the three

28
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months ended June 30, 1999 and 1998 with respect to an equity appreciation
rights plan. Excluding this non-cash charge, general and administrative
expenses would have been $18.0 million and $18.1 million, or 11% and 9% of
total revenues for the three months ended June 30, 1999 and 1998,
respectively.

Depreciation and amortization expenses totaled $6.3 million and $5.9 million
for the three months ended June 30, 1999 and 1998, respectively. Of these
amounts, $3.4 million and $3.7 million were related to amortization of excess
cost from acquisitions of programming entities consolidated with the Company.

Interest expense for the three months ended June 30, 1999 totaled $28.7
million in relation to $1.5 billion of debt outstanding as of June 30, 1999.
The amount of debt is primarily attributable to (i) the Offering, pursuant to
which $800.8 million of debt is outstanding at June 30, 1999, (ii) the Bank
Facility and indebtedness thereunder in the amount of $677.0 million; and
(iii) the acquisition of certain assets in connection with the commencement of
operations of Fox Sports Net Detroit.

Equity loss of affiliates for the three months ended June 30, 1999 was $1.4
million while the Company recognized equity income of affiliates was $0.5
million for the three months ended June 30, 1998. In the three months ended
June 30, 1999, RPP and Chicago RSN were negatively imapcted by the NBA
lockout, Pittsburgh RSN was adversly affected by the Pittsburgh Penquins
bankruptcy and the Company recognized start-up losses from its Canadian joint
venture.

Year ended December 31, 1998

The Company has certain subsidiaries that are consolidated and others, which
are accounted for under the equity method of accounting. The comparability of
the year ended December 31, 1998 to the year ended December 31, 1997 is
affected significantly by three events: (i) on March 13, 1997, upon the
acquisition of the remaining interests in ARC by ARC LP, the Company assumed
management control of the consolidated subsidiaries of Liberty/Fox ARC LP and
from that date the consolidated subsidiaries of ARC and their operations were
consolidated, (ii) Fox Sports Detroit was launched in September 1997 and (iii)
the operations of FSN were contributed to the National Sports Partnership in
December 1997 and subsequent to the date of such contribution were accounted
for under the equity method.

Total revenues for the year ended December 31, 1998 were $655.2 million, an
increase of $183.4 million, or 39%, over the year ended December 31, 1997. The
increase in total revenue between the years ended 1998 and 1997 would have
been $128.3 million, or 27%, had ARC been consolidated for the entire period,
and excluding Fox Sports Detroit and the impact of FSN.

Programming revenue was the largest source of revenue, representing 46% of
total revenue, or $301.7 million, for the year ended December 31, 1998.
Advertising revenue represents 24% of total revenue, or $160.5 million, for
the year ended December 31, 1998. For the year ended December 31, 1997,
programming revenue was $226.5 million and advertising revenue was $117.9
million. Had ARC been consolidated for the entire period ended December 31,
1997 and excluding the impact of FSN, programming and advertising revenue
would have been $223.6 million and $115.2 million in the year ended December
31, 1997. On this basis, as a percentage of total revenue for the year ended
December 31, 1997, programming and advertising revenue represented 46% and
24%, respectively. Excluding Fox Sports Detroit and the impact of FSN,
programming and advertising revenue for the year ended December 31, 1998
represented 44% and 25%, respectively, of total revenue.

Had ARC been consolidated for the entire year ended December 31, 1997, and
excluding Fox Sports Detroit and the impact of FSN, programming and
advertising revenue would have increased by $48.0 million and $39.5 million,
respectively in the year ended December 31, 1998 as compared to the year ended
December 31, 1997. These represent a 21% increase and 34% increase in
programming and advertising revenue, respectively, between the periods. The
increase in programming revenue of 21% is comprised primarily of an increase
in subscribers at Fox Sports West 2 which launched on January 31, 1997,
subscriber growth in other RSNs and the

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<PAGE>

continued subscriber growth of FX. Rate increases comprised the balance of the
increase between periods. The increase in advertising revenue of 34% is
comprised of a 48% increase in advertising revenue for FX and a 31% increase
for RSNs, other than Fox Sports Detroit. Increased ratings on FX, together
with the increased subscribers, resulted in a 17% increase in average audience
during primetime, in the year ended December 31, 1998 over the same period in
the previous year. The increase is due primarily to the addition of The X-
Files and NYPD Blue to the primetime schedule in the fall of 1997. The
increased ratings together with increased subscribers resulted in the
significant increase in advertising revenue. The RSNs growth in advertising
revenue is due to increased advertising rates and an increase in the number of
professional events, primarily MLB. Advertising rates per game increased for
MLB, NBA and NHL events in the year ended December 31, 1998 as compared to the
same period in the previous year. The number of local professional events
increased by 27% over these same periods.

Operating expenses totaled $485.3 million for the year ended December 31,
1998, which represented 74% of total revenues. These expenses consist
primarily of rights fees, programming and production costs. Operating expenses
for the year ended December 31, 1997 totaled $420.9 million, or 89% of total
revenues. Had ARC been consolidated for the entire year ended December 31,
1997, and excluding Fox Sports Detroit and the impact of FSN, operating
expenses for the year ended December 31, 1998 and 1997 would have been $441.9
million and $372.6 million, respectively. On this basis, operating expenses
represent 72% and 77% of total revenues for the year ended December 31, 1998
and 1997, respectively. The increase in operating expenses is attributable to
an increase in the number of professional events, primarily MLB games, as well
as increased programming rights fees of RSNs due to renegotiated and newly
entered into sports rights agreements. Additionally, programming expenses of
FX increased relating to newly launched programs during or subsequent to the
year period ended December 31, 1997.

General and administrative expenses totaled $90.7 million for the year ended
December 31, 1998, which represented 14% of total revenues. General and
administrative expenses for the year ended December 31, 1997 totaled $65.6
million, or 14% of total revenues. A non-cash charge to earnings was taken in
the year ended December 31, 1998 with respect to an equity appreciation rights
plan in the amount of $13.5 million. Excluding this non-cash charge, general
and administrative expenses would have been $77.2 million, or 12% of total
revenues.

Depreciation and amortization expenses totaled $21.7 million and $19.0
million for the years ended December 31, 1998 and 1997, respectively. Of these
amounts, $14.3 million and $11.8 million were related to amortization of
excess cost from acquisitions of programming entities consolidated with the
Company. The increase is primarily due to the consolidation of ARC and the
acquisition of an RSN in Detroit.

Interest expense for the year ended December 31, 1998 totaled $113.0 million
as a result of $1.4 billion of debt outstanding as of December 31, 1998. The
amount of debt is primarily attributable to (i) the Offering, pursuant to
which $786.9 million of debt is outstanding at December 31, 1998, (ii) the
Bank Facility and indebtedness thereunder in the amount of $605.0 million; and
(iii) the acquisition of certain assets in connection with the commencement of
operations of Fox Sports Detroit, pursuant to which the Company incurred
$25.7 million of debt.

Equity loss of affiliates for the year ended December 31, 1998 was $5.9
million, a decrease of $3.1 million, from an equity loss of $9.0 million for
the year ended December 31, 1997. For the year ended December 31, 1998, equity
income of affiliates includes the Company's equity interests in the operations
of the National Sports Partnership and the National Advertising Partnership,
whose operations were consolidated prior to the Rainbow Transaction, RPP and
certain RSNs. For the year ended December 31, 1997, equity income of
affiliates included the Company's equity interests in ARC and its related
subsidiaries through March 13, 1997, certain RSNs and equity losses of the
National Sports Partnership and the National Advertising Partnership for the
period from December 18, 1997 through December 31, 1997. For the year ended
December 31, 1998, equity income of affiliates includes the effect of $7.9
million in amortization of excess cost relating to the Company's investment in
several of its affiliates and a $7.1 million gain on the sale of 50% of RPP's
investment in Fox Sports New England.

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<PAGE>

Year ended December 31, 1997

The Company has certain subsidiaries that are consolidated and others which
are accounted for on the equity method of accounting. On March 13, 1997, upon
the acquisition of the remaining interests in ARC by Liberty/Fox ARC LP, the
Company assumed management control of the consolidated subsidiaries of
Liberty/Fox ARC LP, and from that date the consolidated subsidiaries of ARC
and their operations were consolidated. Had the additional 12.78% interest
been acquired at the beginning of the period (January 1, 1997), the Company's
consolidated revenue and income would have increased by $29.9 million and $0.3
million, respectively.

Total revenue for the year ended December 31, 1997 was $471.8 million.
Programming revenue is the largest source of revenue, representing 48% of
total revenues, or $226.5 million. Advertising revenue represents 25% of total
revenues, or $117.9 million. For the eight months ended December 31, 1996,
programming revenue was $85.3 million and advertising revenue was $37.7
million, or 59% and 26% of total revenues, respectively. The primary reason
for this change in the mix of revenues as compared to total revenue is due to
the consolidation of ARC in which direct broadcast revenue represents 52% of
ARC's total revenues. For the year ended December 31, 1997, direct broadcast
revenue represented 19% of total revenues, or $91.7 million. For the eight
months ended December 31, 1996, direct broadcast revenue was $5.7 million, or
4% of total revenues reflecting the impact of ARC being accounted for on the
equity method during this period.

Operating expenses totaled $420.9 million for the year ended December 31,
1997, which represented 89% of total revenues. These expenses consist
primarily of programming and production costs. Operating expenses for the
eight months ended December 31, 1996 totaled $117.4 million, or 81% of total
revenues. The increase can be attributed to acquisition and renewals of
programming rights during the first half of 1997 and direct telecast rights to
third party RSNs that were not previously consolidated. The Company also
incurred significant expenses throughout the year related to the launch of
West2 in January 1997. As West2 has not yet achieved full distribution,
operating expenses substantially exceeded revenues during the year. The
Company also made a significant investment in programming in conjunction with
the continued development of FSN, which launched in November 1996.

General and administrative expenses totaled $65.6 million for the year ended
December 31, 1997, which represented 14% of total revenues. General and
administrative expenses for the eight months ended December 31, 1996 totaled
$31.6 million, or 22% of total revenues. In 1996, the Company incurred
significant costs relative to severance and relocation expenses in connection
with the Company's decision to relocate its corporate offices from Dallas,
Texas to Los Angeles, California. The Company offered a severance package
based upon years of service to those employees who elected not to transfer,
and a relocation package to those employees who elected to relocate to Los
Angeles. Similar costs were not incurred in 1997.

Depreciation and amortization expenses totaled $19.0 million and $8.5
million for the year ended December 31, 1997 and for the eight months ended
December 31, 1996, respectively. Of these amounts, $11.8 million and $5.2
million were related to amortization of excess cost from acquisitions of
programming entities. The increases are primarily due to the consolidation of
ARC in 1997, as discussed above.

Interest expense for the year ended December 31, 1997 totaled $49.2 million
as a result of $1.3 billion of debt outstanding as of December 31, 1997.
Interest expense for the eight months ended December 31, 1996 totaled $4.2
million which related to $171.7 million of outstanding indebtedness as of
December 31, 1997. The increase in the amount of debt is attributable to (i)
the Offering, pursuant to which the Company incurred $752.3 million of debt;
(ii) the consolidation of ARC's consolidated subsidiaries, pursuant to which
the Company incurred $9.0 million of debt; (iii) the purchase of the remaining
interest in ARC pursuant to which the Company incurred $40.0 million of debt;
(iv) the arrangement of an advertising sales and carriage agreement pursuant
to which the Company incurred $30.0 million of debt; (v) the Bank Facility and
indebtedness thereunder in the amount of $460.0 million; (vi) the acquisition
of certain assets in connection with the commencement of operations of the
Detroit RSN, pursuant to which the Company incurred $25.7 million of debt; and
(vii) additional borrowings of approximately $39.5 million to fund operations
for the year ended December 31, 1997, net of the extinguishment of debt of
$201.7 million during the period.

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Eight months ended December 31, 1996

The Company was formed pursuant to a 50%/50% joint venture in April 1996
from the contribution of assets from Liberty and Fox. The consolidated
statement of operations of the Company reflects the RSNs and other sports
businesses, formerly owned by Liberty and Fox.

The Company has certain subsidiaries that are consolidated and others which
are accounted for under the equity method of accounting. The key criteria used
to determine the accounting treatment are ownership and voting control. For
comparative purposes to a pro forma combined Liberty Sports and Fox/Liberty FX
statement of operations prior to the formation of the Company, it is important
to realize that certain subsidiary entities were accounted for under the
equity method after formation of the Company in April 1996 which were
previously consolidated in Liberty Sports, Inc. financial statements. These
significant subsidiary entities are Liberty/Fox KBL LP (Pittsburgh RSN),
Liberty/Fox ARC LP (Southwest, Midwest and Rocky Mountain RSNs, and Fox Sports
Direct), and Liberty/Fox Distribution LP (primarily national rights for
college football).

If these operating subsidiaries had been consolidated for the eight months
ended December 31, 1996, as they were under Liberty Sports, Inc. prior to the
formation of the Company, the effect on total consolidated revenues and
expenses would have been significant. For the eight months ended December 31,
1996, total revenues for these operating subsidiaries were $138.6 million,
consisting of the following: programming--$40.7 million, advertising--$19.3
million, direct broadcast--$55.1 million and other--$23.5 million. Total
expenses for the same period were $163.3 million, consisting of the following:
operating--$150.0 million, general and administrative--$10.4 million, and
depreciation and amortization--$2.9 million. The operating loss for these non-
consolidated subsidiaries was $24.7 million, which is included on the
Company's financial statements as equity income of affiliates, net and equity
in loss of affiliates related to additional amortization of program rights.

For comparability purposes, the following discussion will make reference to
comparisons between calendar 1996 and 1995 for the O&O RSNs. To achieve
comparability, these calculations were made by summing the specific revenues
and expenses for all owned and operated regional sports networks, whether
consolidated or accounted for under the equity method for financial statement
purposes, for 1996 and 1995.

Total revenues for the eight months ended December 31, 1996 were $144.8
million. Programming revenue is the largest revenue source, representing 59%
of total revenue or $85.3 million. Programming revenues for RSNs increased 30%
in calendar 1996 compared to calendar 1995 due to rate increases and
increasing subscribers. Advertising revenue totaled $37.7 million or 26% of
total revenues. For RSNs, advertising revenues increased 15% in calendar 1996
due to new sports contracts and higher advertising rates and sell-out
percentages in certain events. Direct satellite broadcast revenue represented
only 4% of total revenues or $5.7 million due to the Company's direct
satellite broadcast division, Fox Sports Direct, not being consolidated. The
remaining revenue sources account for 11% of total revenues and consist of
infomercials, merchandising, and other.

Operating expenses totaled $117.4 million for the eight months ended
December 31, 1996, which represented 81% of total revenues. These expenses
consisted primarily of programming and production costs. For RSNs, programming
and production costs increased 17% in calendar 1996 from calendar 1995 due
primarily to escalating and/or renegotiated costs in certain existing sports
contracts, and, to a lesser extent, new sports contracts.

In 1996 the Company finalized a long-term agreement with MLB for national
cable rights. In accordance with the Company's accounting policies as
described above, an evaluation of the recoverability of the costs associated
with this agreement was performed. Additional amortization of program rights
totaling $80.0 million was recorded associated with this contract, as a result
of the evaluation of projected future advertising revenues in comparison to
future program rights. Depreciation and amortization expenses totaled $8.5
million for the period. Of this amount, $5.2 million was related to
amortization of excess cost from acquisitions of programming entities. An
additional amortization of program rights totaling $29.0 million was also
recorded with respect to a projected loss to an affiliate on college football
contracts.

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General and administrative expenses totaled $31.6 million, or 22% of total
revenues, for the eight months ended December 31, 1996. Included in this total
for the period was $1.3 million for deferred compensation to certain employees
and $1.2 million in severance costs associated with the announced relocation
in August 1996 of the Company's corporate offices from Dallas to Los Angeles.
The actual relocation was completed in March 1997.

Interest expense was $4.2 million for the period with substantially all of
the Company's debt bearing interest at floating rates.

Subsidiaries income tax expense totaled $3.4 million for the period which
related to estimated federal and state tax liabilities.

In September 1996, the Company sold its merchandising division for $3.8
million to a company owned by former executives of Liberty. A loss on sale of
$4.9 million was realized in conjunction with this transaction.

The Company has numerous significant investments accounted for under the
equity method. For the eight months ended December 31, 1996, net equity income
of affiliates was $17.0 million.

LIBERTY SPORTS, INC.--DOMESTIC OPERATIONS

Period from January 1, 1996 to April 29, 1996

Revenues for the four months ended April 29, 1996 totaled $99.8 million.
Programming, advertising, and direct broadcast revenues were 38%, 28%, and
24%, respectively, of total revenues for the four month period compared to
38%, 30%, and 23%, respectively, of total revenues for the calendar year ended
December 31, 1995 ("Liberty Calendar 1995"). The slight percentage decrease in
advertising revenues was offset by an increase in the percentage of other
revenues as other revenues were 10% of total revenues for the four month
period compared to 9% for Liberty Calendar 1995.

Operating expenses for the four months ended April 29, 1996 were $60.7
million, or 61% of total revenues for the period. Operating expenses for
Liberty Calendar 1995, as a percentage of total revenues, were comparable at
60%.

General and administrative expenses for the four months ended April 29, 1996
were $28.0 million, or 28% of total revenues for the period. General and
administrative expenses for Liberty Calendar 1995, as a percentage of total
revenues, were 33%. The decreased percentage cost is attributable to the sale
of certain unprofitable business divisions in January 1996 and overall
efficiencies in Liberty Sports, Inc.--Domestic Operations' existing
operations.

Ten Months ended April 29, 1996

Revenues for the ten months ended April 29, 1996 totaled $75.4 million, of
which approximately 74% represented revenues attributable to programming
revenue, as compared to 77% of FX's total revenue for the fiscal year ended
June 30, 1995 ("FX Fiscal 1995"). Increased advertising revenues due to the
maturing of the programming service and increased awareness among viewers and
advertisers since the June 1994 launch resulted in a decrease in the
percentage. Advertising revenue (net of commissions) contributed approximately
23% of revenues for the ten month period, and infomercial revenue contributed
3%.

Operating expenses for the ten months ended April 29, 1996 were $63.4
million, or 84% of total revenues for the period. Operating expenses for FX
Fiscal 1995, as percentage of total revenues, was 122%. This improvement in
operating expenses as a percentage of revenues is attributable to a decrease
in original programming production.

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<PAGE>

General and administrative expenses for the ten months ended April 29, 1996
were $19.9 million, or approximately 26% of revenues for the period. General
and administrative expenses for FX Fiscal 1995 were approximately 35% of
revenues. This decrease in general and administrative expenses as a percentage
of revenues is attributable to an overall increase in programming and
advertising revenues as compared to FX Fiscal 1995.

Liquidity and Capital Resources

The Company's liquidity requirements arise from (i) the funding of operating
losses and other general working capital needs, (ii) its strategic plan to
secure national distribution for its network sports and general entertainment
programming, including through the acquisition of existing third party owned
RSNs or through the launch of new RSNs, (iii) the acquisition of programming
rights, and (iv) its capital expenditure requirements.

Net cash (used in) provided by operating activities of the Company for the
six months ended June 30, 1999, the years ended December 31, 1998 and 1997 and
the eight months ended December 31, 1996 was ($32.1) million, ($32.0) million,
($76.7) million and $14.3 million, respectively.

Net cash used in investing activities of the Company for the six months
ended June 30, 1999, the years ended December 31, 1998 and 1997 and the eight
months ended December 31, 1996 was $20.6 million, $36.0 million, $932.4
million and $38.8 million, respectively.

Net cash provided by financing activities of the Company for the six months
ended June 30, 1999, the years ended December 31, 1998 and 1997 and the eight
months ended December 31, 1996 was $68.9 million, $61.4 million, $1,050.8
million and $25.2 million, respectively.

In June 1997, the Company entered into an agreement with Rainbow to acquire
a 40% interest in Rainbow's sports properties, including economic interests in
eight RSNs, Madison Square Garden entertainment complex, Radio City
Productions LLC, the New York Knicks, and the New York Rangers in exchange for
$850.0 million. In December 1997 the Rainbow Transaction was consummated and
the net proceeds from the Offering, along with available proceeds under the
Bank Facility, were used to fund the Company's cash contribution of
$850.0 million to RPP.

In August 1997, the Company consummated the Offering. The net proceeds from
the Offering were used in part, to finance the Rainbow Transaction. The
indentures, as amended, pursuant to which the Notes were issued in connection
with the Offering contain certain restrictive covenants that, among other
things, restrict the Company's ability to incur additional indebtedness, pay
dividends, transfer assets and engage in transactions with affiliates. As of
June 30, 1999 the Company was in compliance with these restrictive covenants.

In September 1997, the Company entered into a credit agreement which
permitted borrowings of up to $450.0 million. The proceeds of such credit
agreement were used to retire amounts borrowed under previously existing
credit facilities and for working capital purposes. Upon consummation of the
Rainbow Transaction, the Company amended and restated this $450.0 million
credit agreement to permit borrowings of up to $800.0 million under the Bank
Facility. The Bank Facility was used to finance, in part, the Rainbow
Transaction. At June 30, 1999, the total amount borrowed under the Bank
Facility was $677.0 million. South Ltd. also has a credit facility (the "South
Credit Facility") with permitted borrowings of $4.7 million. At June 30, 1999,
the total amounts borrowed under these credit facilities were $681.7 million.
The total commitments pursuant to these credit facilities were $804.7 million
as of June 30, 1999. In July 1999, 19th Holdings Corporation, a wholly-owned
subsidiary of Fox, acquired the debt outstanding under the Bank Facility, and
assumed the rights and obligations of the banks under the facility. The South
Credit Facility restricts the payment of dividends, and contains certain
restrictive covenants regarding, among other things, the maintenance of
certain financial ratios and restrictions on the distribution of assets.

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<PAGE>

Future capital requirements are substantial. At June 30, 1999, the Company
has future minimum payments on operating leases, including transponders
totaling $77.1 million, and commitments under long-term program rights
contracts totaling $1,474.8 million. The Company has also made a substantial
investment in the National Sports Partnership. The National Sports
Partnership, which was formed in December 1997, required a significant
investment to fund operating losses, primarily related to the agreement with
MLB and the development of Fox Sports News. Investment in the National Sports
Partnership will continue as the network continues to develop. In addition,
the cost of acquiring sports programming rights continues to escalate. See
"Business--Rights Agreements." Furthermore, the Company intends to continue to
explore opportunities to expand its distribution.

The Company is a holding company and its assets consist solely of
investments in its subsidiaries and affiliates. As a holding company, the
Company's ability to meet its financial obligations, including its obligations
under the Notes and the 19th Facility and its funding and other commitments to
its subsidiaries and affiliates, is dependent on the earnings of such
subsidiaries and affiliates and the distribution or other payment of such
earnings to the Company in the form of dividend distributions, loans or other
advances, payment or reimbursement for management fees and expenses, and
repayment of loans and advances from the Company. Accordingly, the Company's
ability to pay interest on the Notes and to otherwise meet its liquidity
requirements may be limited as a result of its dependence upon the
distribution of earnings and advances of funds by its subsidiaries and
affiliates. The payment of dividends or the making of loans or advances to the
Company by its subsidiaries and its affiliates, which may be subject to
statutory, regulatory or contractual restrictions, are contingent upon the
earnings of those subsidiaries and affiliates, and are subject to various
business considerations. Although the agreements between the Company and its
partners contemplate the payment of distributions, the Company may not be able
to cause its subsidiaries or affiliates to make distributions when it may have
a need for distributions, and the Company may not be able to dispose of its
investments in any of its RSNs if required for financial or other reasons.

Sources of funding for the Company's future financing requirements, if any,
may include public or private offerings of equity and/or debt securities,
commercial bank loans, and partner capital contributions. The extent of the
additional financing required, if any, will depend on the success of the
Company's business. There can be no assurance that additional financing, if
needed, will be available to the Company or, if available, that such financing
can be obtained on terms acceptable to the Company and within the limitations
contained in the terms of any future financing arrangements. Failure to obtain
any such financing could delay or prevent the Company's development and growth
plans, impair the Company's ability to meet its debt service requirements, and
have a material adverse effect on the Company's business.

The Company believes that its existing funds and the proceeds from
borrowings under the 19th Facility, will be sufficient to meet its plan to
secure national distribution, maintain and/or acquire programming, make
anticipated capital expenditures, and meet its projected working capital
requirements, although no assurances can be given in this regard.

Year 2000

The following disclosure is a Year 2000 readiness disclosure statement
pursuant to the Year 2000 Readiness and Disclosure Act.

The Company is devoting significant resources throughout its business
operations to resolve the potential impact of the Year 2000 ("Y2K") on the
processing of date-sensitive information by its computerized information
technology ("IT") systems. The Y2K problem is the result of computer programs
being written using two digits (rather than four) to define the applicable
year. Certain programs may recognize a date using "00" as the year 1900 rather
than the year 2000, which could result in miscalculations or system failures.
The problem also extends to non-IT systems including: operating and control
systems that rely on embedded chip systems.

35
<PAGE>

The Company's standard for compliance requires that for a computer system or
a business process to be Year 2000 compliant, it must be designed to be used
prior to, on and after January 1, 2000. Such systems or processes must be able
to operate without error in dates and date-related data, including without
limitation, calculating, comparing, indexing and sequencing prior to, on and
after January 1, 2000.

The Company has established a dedicated Y2K Steering Committee to oversee
the Company's Y2K internal IT application and infrastructure readiness
activities. The Y2K Steering Committee is charged with raising awareness
throughout the Company, developing tools and methodologies for addressing the
Y2K issue, monitoring the development and implementation of business and
infrastructure plans to bring non-compliant applications into compliance on a
timely basis and identifying and assisting in resolving high risk issues. The
Y2K Steering Committee is focused on the following major areas:

Internal IT Systems. The Company is approaching its Y2K internal readiness
program in the following five phases: (1) assessment, (2) strategy, (3)
planning, (4) implementation and (5) testing and management. The assessment
phase involves taking an inventory of the Company's internal IT applications.
The strategy phase involves prioritizing risk, identifying failure dates,
defining a solution strategy, estimating repair costs and communicating across
the Company the magnitude of the problem and the need to address Y2K issues.
The planning phase consists of identifying the tasks necessary to ensure
readiness, scheduling remediation plans for applications and infrastructure,
and determining resource requirements and allocations. The fourth phase,
implementation, involves readying the development and testing environments,
and piloting the remediation process. Testing and management, the last phase,
consists of executing the Company's plan to fix, test and implement critical
applications and associated infrastructure, and putting in place contingency
plans for processes that have a high impact on the Company's business. The
Company's critical IT application systems are either Y2K compliant or have had
contingency plans put into place.

Internal Non-IT Systems. The Company has also focused on internal non-IT
systems. Non-IT systems include those systems that are not commonly thought of
as IT systems, such as broadcast equipment, satellite transmission equipment
telephone/PBX systems, fax machines, facilities systems regulating alarms,
building access and other miscellaneous systems that depend on date-related
processing. The Company's Y2K Steering Committee is providing standardized
tools and is monitoring the progress of these readiness efforts to ensure
business continuity.

Material Third Party Relationships. The Company has developed a Y2K process
for dealing with its key suppliers, contract producers, distributors, vendors
and partners. The process generally involves the following steps: (i) initial
supplier survey, (ii) risk assessment and contingency planning, (iii) follow-
up supplier reviews and escalation, if necessary, and where relevant, (iv)
testing. To date, the Company has received responses from many of its critical
suppliers, most of whom responded that they expect to address all their
significant Y2K issues on a timely basis. The Company is following up with
those significant vendors and service providers that either did not respond
initially or whose responses were unsatisfactory. The company is working to
identify and analyze the most reasonably likely worst case scenarios for third
party relationships affected by Y2K.

The Company has focused efforts on identifying and remedying Y2K exposures
throughout its enterprise. In addition, the Company is developing and will
have tested, where practical, contingency and business continuity plans. These
plans include, but are not limited to identification of alternative suppliers,
vendors and service providers. Contingency plans have been or will be
developed for areas that include broadcast technical operations, live event
telecasts, programming, application systems, business processes, and potential
issues relative to facilities.

Based on the Company's current assessment, the costs of addressing potential
problems are not currently expected to have a material adverse impact on the
Company's financial position, results of operations or cash flows in future
periods. However, if the Company, its customers or vendors identify Y2K issues
in the future and are unable to resolve such issues in a timely manner, it
could result in a material financial risk. Accordingly, the Company plans to
devote the necessary resources to resolve all significant Y2K issues in a
timely manner. The estimated costs of the project are currently expected to be
approximately $2.5 million in the aggregate.

36
<PAGE>

The costs of the project and the date on which the Company believes it will
complete the Y2K modifications are based on management's best estimates, which
were derived utilizing numerous assumptions of future events, including the
continued availability of certain resources, third-party modification plans
and other factors. However, there can be no guarantee that these estimates
will be achieved, or that there will not be a delay in, or increased costs
associated with, the implementation of the Company's Y2K compliance project.
Specific factors that might cause such material differences include, but are
not limited to, the availability and cost of personnel trained in this area,
the ability to locate and correct all relevant computer codes, timely
responses to and correction by third parties and suppliers, the ability to
implement interfaces between the new systems and the systems not being
replaced, and similar uncertainties. Due to the general uncertainty inherent
in the Y2K readiness of third parties and the interconnection of national
businesses, the Company cannot ensure that its ability to timely and cost
effectively resolve problems associated with the Y2K issue will not affect its
operations and business, or expose it to third party liability.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 8. Financial Statements and Supplementary Data

The Reports of Independent Public Accountants, Financial Statements and
Notes to the Financial Statements appear in a separate section of this Form
10-K (beginning on page F-1) following Part IV. The index to Financial
Statements is included in Item 14.

Item 9. Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 10. Directors and Executive Officers of the Registrant

Executive Officers

The current executive officers of the Company and/or certain of its
subsidiaries are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
David Hill.............. 53 Chairman
Jeff Shell.............. 33 President
Tracy Dolgin............ 39 Chief Operating Officer
James A. Martin......... 44 Executive Vice President, Head of Business Operations
Louis LaTorre........... 45 Senior Vice President
Robert L. Thompson...... 41 Executive Vice President and Chief Operating Officer of
Fox Sports Net, LLC
</TABLE>

David Hill has served as Chairman of the Company since April 1996. From
April 1996 through October 1997, Mr. Hill also served as the Company's Chief
Executive Officer. In addition, since June 1999, he has served as Chairman and
Chief Executive Officer of Fox Sports Television Group and prior thereto, from
October 1997 to June 1999, he served as Chairman and Chief Executive Officer
of Fox Broadcasting Company. Prior thereto, from July 1996 until October 1997,
Mr. Hill served as Chief Operating Officer of Fox Television and from December
1993 until October 1997 as President of Fox Sports, a division of Fox
Television. From April 1988 until October 1993, Mr. Hill was employed at Sky
Television and its successor company, British Sky Broadcasting Group plc
("BSkyB"), in various capacities, including Head of Sky Sports, a subsidiary
of BSkyB.

Jeff Shell has served as President of the Company since June 1999. Prior
thereto, Mr. Shell served as Executive Vice President and Chief Financial
Officer of the Company from February 1998 to June 1999. Prior

37
<PAGE>

thereto, Mr. Shell served as Senior Vice President, Finance and Development of
the Company from June 1996 until February 1998. From October 1994 until
November 1996, he served as Vice President of Business Development for Fox,
Inc. Prior thereto, from September 1991 until October 1994, Mr. Shell served
in various capacities in the Strategic Planning and Corporate Development
Group at The Walt Disney Company.

Tracy Dolgin has served as Chief Operating Officer of the Company since
September 1998. Prior thereto, Mr. Dolgin served as Joint Chief Operating
Officer of Fox Sports Net, LLC from July 1997 to September 1998. In addition,
he served as Executive Vice President, Marketing for Fox Sports, a division of
Fox Broadcasting Company, from December 1993 until September 1998. Prior
thereto, from December 1992 until December 1993, Mr. Dolgin served as
Executive Vice President, Marketing of Fox Broadcasting Company, and from May
1989 until December 1992, Mr. Dolgin served as Senior Vice President,
Marketing of Home Box Office, a subsidiary of Time Warner, Inc.

James A. Martin has served as Executive Vice President, Head of Business
Operations of each of the Company, Fox Sports Net, LLC and FX Networks, LLC
since June 1997. From September 1996 until June 1997, he served as Executive
Vice President and Chief Operating Officer of Fox Sports Net, LLC. From
January 1995 until September 1996, Mr. Martin served as Executive Vice
President and President of Regional Network Operations of Liberty Sports, Inc.
Prior thereto, from September 1991 until December 1994, Mr. Martin served as
Vice President and Chief Operating Officer of Liberty.

Louis LaTorre has served as Senior Vice President of the Company, President,
Advertising Sales of Fox Sports Net, LLC and President, Advertising Sales of
FX Networks, LLC since January 1997. From July 1994 until December 1996, he
served as President and Chief Operating Officer for the Sales and Marketing
Division of New World Communications, Inc. From October 1993 until June 1994,
Mr. LaTorre served as President of Pro Star Entertainment Inc., a satellite
encryption and entertainment company. From March 1993 until September 1993, he
served as President of Platinum Productions, Inc., a pay-per-view
entertainment company. Prior thereto, from June 1981 until February 1993, Mr.
LaTorre served in various capacities at Turner Broadcasting System, Inc.
including, most recently, as Executive Vice President, Advertising Sales and
Marketing, for the Turner Entertainment Group, a subsidiary of Turner
Broadcasting System, Inc.

Robert L. Thompson has served as Executive Vice President and Chief
Operating Officer of Fox Sports Net, LLC since June 1999. Prior thereto, from
October 1997 to June 1999 he served as its Executive Vice President and, from
July 1996 through October 1997, he served as its Senior Vice President, Rights
and Acquisitions and Regional Network Operations. In addition, since June 1999
he has also served as Executive Vice President and Chief Operating Officer of
International Sports Programming, LLC ("ISP"), an international sports
programming joint venture between Fox and TCI. From October 1994 through July
1996, Mr. Thompson served as Senior Vice President, Regional Network
Operations for Liberty Sports, Inc. and from January 1994 until October 1994
he served as Group Vice President of Liberty Sports, Inc. Prior thereto, from
February 1989 until October 1994, Mr. Thompson served as Vice
President/General Manager of the Rocky Mountain Prime Sports Network.

There are no family relationships between any of the executive officers.

38
<PAGE>

Item 11. EXECUTIVE COMPENSATION

Executive Compensation

The following table sets forth the compensation paid for the years ended
December 31, 1997 and 1998 and the six months ended June 30, 1999, to those
persons who were, at June 30, 1999, the Company's President, the Company's
former President and Chief Executive Officer and the next four most highly
compensated executive officers of the Company (the "Named Executives").

Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------------------------ --------------------- ---------
Restricted Securities Incentive
Name and Principal Other Annual Stock Underlying Plan All Other
Occupation Year Salary Bonus Compensation Awards Option Payouts Compensation
------------------ ---- -------- -------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Hill................. 1999 $250,000(2) $ 75,000(2) -- -- -- -- --
Chairman(1) 1998 $500,000(2) $150,000(2) -- -- -- -- --
1997 $500,000(2) $150,000(2) -- -- -- -- --
Jeff Shell................. 1999 $207,084(4) $120,000(4) -- -- -- -- --
President(3) 1998 $362,315 $100,000 -- -- -- -- --
1997 $254,582 $100,000 -- -- -- -- --
Anthony F.E. Ball.......... 1999 $418,172 $223,333 -- -- -- -- --
Former President and Chief 1998 $538,888 $400,000 -- -- -- -- --
Executive Officer(1)(5) 1997 $250,000(6) $ 75,000(6) -- -- -- -- --
Tracy Dolgin............... 1999 $350,000 $160,000 -- -- -- -- --
Chief Operating Officer(7) 1998 $472,234 $200,000 -- -- -- -- --
1997 $256,597(8) $100,000(8) -- -- -- -- --
James A. Martin............ 1999 $202,108 $ 40,000 -- -- -- -- --
Executive Vice President(9) 1998 $382,762 $125,000 -- -- -- -- $300,000(10)
1997 $358,333 $125,000 -- -- -- -- $300,000(10)
Louis LaTorre.............. 1999 $233,333 $160,000 $13,601 -- -- -- --
Senior Vice President 1998 $464,636 $200,000 $30,714 -- -- -- --
1997 $391,026 $200,000 $20,148 -- -- -- --
</TABLE>
- -------
(1) In October 1997, Mr. Ball succeeded Mr. Hill as Chief Executive Officer
of the Company.

(2) Reflects the compensation received by Mr. Hill for the services he
rendered to the Company from the Company's inception in April 1996
through the six months ended June 30, 1999. During fiscal years 1999,
1998 and 1997, Mr. Hill was, and currently remains employed by Fox
Broadcasting Company. Fox Broadcasting Company grants the Company the
right to utilize Mr. Hill's services. The above disclosure does not
include compensation information for Mr. Hill with respect to the
services he performed at Fox Broadcasting Company. See "Certain
Transactions."

(3) In June 1999, Mr. Shell succeeded Mr. Ball as President of the Company.
Mr. Shell served as Executive Vice President and Chief Financial Officer
of the Company from February 1998 until June 1999. Prior thereto, from
June 1996 to February 1998 Mr. Shell served as Senior Vice President,
Finance and Development.

(4) Reflects the compensation received by Mr. Shell for the services he
rendered to the Company for the six months ended June 30, 1999. During
fiscal year 1999, Mr. Shell became, and currently remains, employed by
The Fox Group. The Fox Group grants the Company the right to utilize Mr.
Shell's services. The above disclosure does not include compensation
information for Mr. Shell with respect to the services he performed at
The Fox Group. See "Certain Transactions."

(5) Mr. Ball ceased rendering services to the Company in May 1999.

(6) Reflects compensation received by Mr. Ball for services he rendered to
the Company for a portion of fiscal year 1997.

(7) Mr. Dolgin served as Joint Chief Operating Officer of Fox Sports Net, LLC
until September 1998.

(8) Reflects compensation received by Mr. Dolgin for services he rendered to
the Company for a portion of fiscal year 1997.

(9) Mr. Martin served as Executive Vice President and Chief Operating Officer
of Fox Sports Net, LLC until June 1997.

(10) In connection with the formation of the Company, a deferred compensation
incentive plan (the "Plan") was approved and adopted by the Company. A
substantially similar plan existed at Liberty Sports, Inc. ("LSI"), then
a subsidiary of Liberty (the "LSI Plan"), prior to the formation of the
Company. The Plan was adopted by the Company in anticipation of certain
LSI employees performing services for the Company. Such employees,
including Mr. Martin, were beneficiaries under the LSI Plan. Pursuant to
the Plan, deferred compensation vests annually at a 20% rate and was
fully vested in 1998. Upon full vesting of the deferred compensation
under the Plan, the Company has incurred charges against earnings in the
amount of $900,000 with respect to Mr. Martin.

39
<PAGE>

The Company does not have a stock option plan and no long term compensation
awards were made in the fiscal years covered by the table above, except as
disclosed above.

In October 1997, the Company adopted the Fox/Liberty Networks, LLC Equity
Appreciation Rights Plan for Management and Key Employees (the "Plan"). The
Plan is designed to provide a flexible mechanism to permit management and key
employees of the Company and its subsidiaries to obtain significant interests
in the equity of the Company, thereby increasing their proprietary interest in
the growth and success of the Company. During fiscal year 1999, there were no
grants under the Plan to the Named Executives.

Employment Arrangements

During fiscal years 1997, 1998 and 1999 Mr. Hill was, and currently remains,
employed by Fox Broadcasting Company, which grants the Company the right to
utilize Mr. Hill's services. For fiscal year 1999 Fox Broadcasting Company
allocated to the Company $325,000 for the services Mr. Hill rendered to the
Company for that period. See "Certain Relationships and Related Transactions."

In June 1999, Mr. Shell became employed by The Fox Group, which grants the
Company the right to utilize Mr. Shell's services. From January 1997 to June
1999, Mr. Shell was employed by the Company under various employment
agreements. During fiscal year 1996 Mr. Shell was employed by Fox, Inc., which
granted the Company the right to utilize Mr. Shell's services as its Senior
Vice President, Finance and Development from June 1996 through December 1996.
Mr. Shell's compensation for the period January 1, 1999 to June 30, 1999,
including an allocation from The Fox Group, was $327,084. See "Certain
Relationships and Related Transactions."

The Company entered into a two year, four month employment agreement with
Mr. Tracy Dolgin which commenced on September 1, 1998. This agreement replaced
Fox/Liberty Sports' prior agreement with Mr. Dolgin, under which Mr. Dolgin
was entitled to receive $339,600 during the period from January 1, 1998 to
August 31, 1998. Pursuant to the current agreement, Mr. Dolgin is entitled to
receive an annual salary of $700,000 for the period September 1, 1998 to
August 31, 1999, $750,000 for the period September 1, 1999 to August 31, 2000
and $787,500 for the period September 1, 2000 to December 31, 2000. The
agreement provides for participation in all employee benefit plans available
to other comparable executives. The agreement contains provisions prohibiting
the disclosure of confidential or proprietary information of Fox/Liberty
Sports. In addition, Mr. Dolgin is prohibited during the term of his
employment and for a period of one year thereafter, from inducing any
managerial, sales or supervisory employee of Fox/Liberty Sports or its
affiliates to render services to another entity.

A subsidiary of the Company, Fox Channels Services, LLC entered into a five
year employment agreement with Mr. Louis LaTorre which commenced on July 1,
1999. Pursuant to the agreement, Mr. LaTorre serves as President, Fox Channels
Group Sales and is entitled to receive an annual base salary of $620,000 for
the period July 1, 1999 to June 30, 2000, $665,000 for the period July 1, 2000
to June 30, 2001, $720,000 for the period July 1, 2001 to June 30, 2002,
$800,000 for the period July 1, 2002 to June 30, 2003, and $900,000 for the
period July 1, 2003 to June 30, 2004. Mr. LaTorre is entitled to receive an
annual bonus (as specified in the agreement) based on the performance of the
Company. The agreement provides for participation in all employee benefit
plans available to other comparable executives. The agreement contains
provisions prohibiting the disclosure of confidential or proprietary
information of the Company. In addition, Mr. LaTorre is prohibited during the
term of his employment and for a period of two years thereafter, from inducing
any managerial, sales or supervisory employee of Fox Channels Services, LLC or
its affiliates to render services to another entity.

Fox Sports Net, LLC entered into a three year employment agreement with Mr.
Robert Thompson which commenced on June 1, 1999 and replaced the Company's
prior agreement with Mr. Thompson. Pursuant to the agreement, Mr. Thompson
renders services to the Company and to ISP. The Company will pay a pro rata
share of Mr. Thompson's compensation, based on the number of days services are
provided to the Company and its affiliates during the contract year. Mr.
Thompson serves as Executive Vice President and Chief Operating Officer of
ISP. The portion of Mr. Thompson's salary and bonus which is allocable to the
Company for fiscal year 1999

40
<PAGE>

is $85,416. Mr. Thompson is eligible to participate in all employee benefit
plans available to other comparable executives. The agreement contains
provisions prohibiting the disclosure of confidential or proprietary
information of the Company. In addition, Mr. Thompson is prohibited during the
term of his employment and for a period of two years thereafter, from inducing
any managerial, sales or supervisory employee of the Company or its affiliates
to render services to another entity.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Not Applicable.

Item 13. Certain Relationships and Related Transactions

Rainbow Transaction

On June 22, 1997, Rainbow and the Company entered into a Formation Agreement
pursuant to which they agreed to form RPP, to hold various programming
interests in connection with the operation of certain RSNs. In accordance with
the terms of the Formation Agreement, upon consummation of the Rainbow
Transaction on December 18, 1997, Rainbow contributed various interests in
RSNs to the partnership in exchange for a 60% partnership interest in RPP and
the Company contributed $850 million in cash for a 40% partnership interest in
RPP. Rainbow serves as managing partner of RPP.

Pursuant to the partnership agreement of RPP (the "RPP Agreement"), after
the third anniversary of the closing of the Rainbow Transaction, upon the
occurrence of a Buy-Out Trigger (as defined in the RPP Agreement), or upon the
date on which Fox Sports RPP, a subsidiary of the Company, submits a notice,
pursuant to the RPP Agreement, to remove the managing partner of RPP following
a Change of Control of RPP (as defined in the RPP Agreement), Rainbow Regional
Holdings, Inc. ("RRH"), a subsidiary of Rainbow, has the right to purchase
from Fox Sports RPP all of Fox Sports RPP's interests in RPP.

Additionally, for each of the (i) 30 days following the fifth anniversary of
the closing of the Rainbow Transaction, (ii) 30 days following each third year
anniversary of the fifth anniversary of the closing of the Rainbow Transaction
and (iii) 30 days following receipt of a notice initiating the buy-out
procedure described above, so long as RPP has not commenced an initial public
offering of its securities, RPP has the right to cause RRH, at RRH's option,
to either (i) purchase all of its interests in Fox Sports RPP or (ii)
consummate an initial public offering of RPP's securities.

In connection with the Rainbow Transaction, Rainbow National Sports
Holdings, Inc. ("RNSH"), a subsidiary of Cablevision, and Fox Sports NSP
Holdings LLC ("Fox Sports NSP"), a subsidiary of the Company, agreed to form
the National Sports Partnership to operate FSN. The National Sports
Partnership is owned 50% by RNSH and 50% by Fox Sports NSP. Fox Sports NSP is
the managing partner of the National Sports Partnership. For the 30 days
following the fifth anniversary of the closing of the Rainbow Transaction and
for the 30 days following each third year anniversary of the first anniversary
of the closing of the Rainbow Transaction, so long as the National Sports
Partnership has not consummated an initial public offering of its securities,
RNSH has the right to cause Fox Sports NSP, at Fox Sports NSP's option, to
either (i) purchase all of its interests in the National Sports Partnership or
(ii) consummate an initial public offering of the National Sports
Partnership's securities. Further, upon a Change of Control (as defined in the
Partnership Agreement of the National Sports Partnership), the party not
experiencing the Change of Control has a call option on all the interests held
by the other party.

Also in connection with the Rainbow Transaction, a subsidiary of Rainbow and
Fox Sports Ad Sales agreed to form the National Advertising Partnership to act
as the national advertising sales representative for the O&O RSNs and the RPP-
owned and managed RSNs. The National Advertising Partnership is owned 50% by a
subsidiary of Rainbow ("Rainbow Ad Sales") and 50% by Fox Sports Ad Sales. Fox
Sports Ad Sales is the managing partner of the National Advertising
Partnership.

41
<PAGE>

For the 30 days following the fifth anniversary of the closing of the
Rainbow Transaction and for the 30 days following each third year anniversary
of the fifth anniversary of the closing of the Rainbow Transaction, so long as
the National Advertising Partnership has not consummated an initial public
offering of its securities, Rainbow Ad Sales has the right to cause Fox Sports
Ad Sales, at Fox Sports Ad Sales' option, to either (i) purchase all of its
interests in the National Advertising Partnership or (ii) consummate an
initial public offering of the National Advertising Partnership's securities.
Further, upon a Change of Control (as defined in the Partnership Agreement of
the National Advertising Partnership), the party not experiencing the Change
of Control has a call option on all the interests held by the other party.

Other Transactions

Under agreements with the Company in connection with its formation, Fox, and
certain of its affiliates provide technical, administrative, financial,
treasury, accounting, tax, legal and other services to the Company and may
make available certain of their respective employee benefit plans to officers
and other employees of the Company. To date, except as disclosed below, the
charges for any such services have been immaterial. In addition, Fox, Liberty,
and their respective affiliates, and the Company have entered into a number of
intercompany agreements covering matters such as lending arrangements, tax
sharing, and the use of trade names and service marks by the Company. To date,
except as disclosed below, the charges for any such arrangements have been
immaterial. The terms of many of these agreements were not the result of arms'
length negotiation. See "Business."

The Company, News Corporation, and Cablevision, through their respective
subsidiaries and affiliates, each own or have interests in television
programming entities. The presence of all such companies in the television
programming business could give rise to potential conflicts of interest
between them, including conflicts which may arise with respect to business
dealings between them and when more than one of them may be pursuing the same
business opportunity.

The Company has a close strategic relationship with News Corporation and
certain of its subsidiaries and affiliates, including Fox Broadcasting Company
("Fox Broadcasting"), and believes that this relationship is materially
important to its business and business strategies. However, neither News
Corporation or its subsidiaries and affiliates, nor the Company are obligated
to engage in any business transactions or jointly participate in any
opportunities with the other, and the possibility exists that the current
strategic relationships between the parties could materially change in the
future.

The Company is currently utilizing three transponders it subleases from
WTCI, a subsidiary of TCI. The rental payment for these three transponders is
approximately $300,000 per month. Two of the WTCI subleases expire on December
31, 1999 and the remaining WTCI sublease expires on December 31, 2000. In
addition, the Company currently subleases one transponder to each of Fox News
Channel, FXM and Fox Sports International (all of which are affiliates of Fox)
and NDTC (an affiliate of Liberty). The monthly rental payment paid to the
Company pursuant to each of these subleases is $190,000, $150,500, $78,000 and
$195,000, respectively. The Company believes that the sublease arrangements
described above are on terms no less favorable than could have been obtained
from an unaffiliated third party. See "Business--Satellite Distribution."

Fox Broadcasting and certain affiliates render marketing, public relations,
legal, promotional, management and other business services to the Company for
which the Company pays an allocated fee. The expenses recognized by the
Company for the provision of the above services for the eight months ended
December 31, 1996, the years ended December 31, 1997 and 1998 and the six
months ended June 30, 1999 were approximately $1,184,900, $2,006,100,
$1,939,000 and $1,359,200 respectively. Included in these amounts are
salaries, benefits and other related costs charged to the Company in
connection with the services rendered to it by Mr. Hill and other individuals.
Certain individuals, including Messrs. Martin, Shell and Thompson, rendering
services to the Company for the eight months ended December 31, 1996 were
employed by either News Corporation or its affiliates or TCI or its
affiliates. Compensation and benefits paid to such individuals and related
payroll costs were charged to the Company at cost. Mr. Shell is employed by
The Fox Group. The Company's pro-rata share

42
<PAGE>

of Mr. Shell's compensation and benefits is charged to the Company at cost.
Similarly, the Company and certain of its affiliates provide production,
programming, accounting, legal, marketing, public relations, promotional,
management and other business services to an affiliate of Fox Broadcasting
Company. The charges for these services to this affiliate for the eight months
ended December 31, 1996, the years ended December 31, 1997 and 1998 and the
six months ended June 30, 1999 were approximately $750,000, $1,000,000,
$1,000,000 and $511,000, respectively. The Company believes that all of the
above-described arrangements are on terms no less favorable to the Company
than could have been obtained from unaffiliated third parties. See "Directors
and Executive Officers of the Company" and "Executive Compensation."

Fox Broadcasting and certain of its affiliates provide production
facilities, production and post production related services and technical
operations to the Company in connection with the Company's production of Fox
Sports News and other original programming. The services are provided at
competitive market rates and the Company believes that the arrangements are on
terms no less favorable than could have been obtained from an unaffiliated
third party. Expenses related to these services for the eight months ended
December 31, 1996, the years ended December 31, 1997 and 1998 and the six
months ended June 30, 1999 were approximately $8,545,000, $20,416,800,
$5,939,000 and $7,480,000 respectively.

Fox and its affiliates collect certain revenues and pay certain expenses on
behalf of the Company. The Company charges interest to Fox on amounts due the
Company which have been collected by Fox and, in turn, Fox and its affiliates
charge interest to the Company on amounts paid by Fox in connection with
expenses of the Company. All interest rates pursuant to these arrangements are
at market rate. Interest income recognized by the Company for the eight month
period ended December 31, 1996, the years ended December 31, 1997 and 1998 and
the six months ended June 30, 1999 was approximately $785,500, $2,719,100,
$351,000 and $165,100, respectively, and interest expense incurred by the
Company during these periods was $451,300, $1,569,600, $25,000 and $0,
respectively.

Certain of the O&O RSNs have entered into affiliation agreements with
various MSOs and/or individual cable systems which are either owned or
operated by TCI. For the eight months ended December 31, 1996 and the years
ended December 31, 1997 and 1998 and the six months ended June 30, 1999
revenue recognized from such MSOs and/or individual cable systems pursuant to
these affiliation agreements was approximately $28,788,000, $43,687,400,
$56,761,000 and $25,635,000, respectively. FX has also entered into
affiliation agreements with various MSOs and/or individual cable systems which
are either owned or operated by TCI. For the eight months ended December 31,
1996 and the years ended December 31, 1997 and 1998 and the six months ended
June 30, 1999 revenue recognized from such MSOs and/or individual cable
systems pursuant to these affiliation agreements was approximately
$21,388,000, $41,720,300, $37,161,000 and $17,354,000, respectively. The
Company believes that all of the above described affiliation agreements
contain terms no less favorable than could have been obtained from an
unaffiliated third party.

Twentieth Century Fox Film Corporation and its affiliates purchase
advertising time which is shown during the Company's programming. The
advertising revenues recognized for the eight months ended December 31, 1996,
for the years ended December 31, 1997 and 1998 and the six months ended June
30, 1999 were approximately $408,200, $1,213,100, $1,523,000 and $1,080,000,
respectively.

The Company licenses television and feature film programming from Twentieth
Century Fox Film Corporation and affiliates. Expense recognized by the Company
related to program rights amortization for the eight months ended December 31,
1996 and the years ended December 31, 1997 and 1998 and for the six months
ended June 30, 1999 was approximately $7,624,000, $17,963,000, $30,674,000 and
$20,598,000, respectively. Additionally, the Company has a non exclusive,
royalty-free license from Twentieth Century Fox Film Corporation and Fox
Broadcasting Company to use the "FOX" brand name and certain related artwork
in connection with the Company's business.

The Company leases its corporate facilities in Los Angeles from New World
Communications Group Incorporated, an indirect wholly-owned subsidiary of Fox.
The Company has the ability to increase office space in this facility as the
need arises. As of June 30, 1999 the Company rented a total of 64,310 square
feet and the monthly rental was $269,000. See "Properties."

43
<PAGE>

In May 1999, the Company sold its investment in Fit TV to an affiliate of
Fox for $14.5 million in cash and recognized a loss on sale of $2,572,000.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a) The following documents are filed as part of this Annual Report on Form
10-K for the fiscal year ended June 30, 1999.

1. Financial Statements:

Financial Statements filed herewith are listed in the "Index to
Consolidated Financial Statements" at page F-1. In addition, the
following financial statements are incorporated by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998:

Financial Statements of Liberty/Fox ARC, L.P. for the period from
Inception (April 30, 1996) to December 31, 1996,

Financial Statements of Regional Programming Partners as of December
31, 1998 and 1997 and for the year ended December 31, 1998 and the
period from December 18, 1997 (Inception) to December 31, 1997,

Financial Statements of National Sports Partners as of December 31,
1998 and 1997 and for the year ended December 31, 1998 and the
period from Inception (December 18, 1997) to December 31, 1997.

2. Schedules:

Financial statement schedules to this form are listed in the "Index
to Consolidated Financial Statements" at page F-1 herein.

3. Exhibits:

<TABLE>
<CAPTION>
Exhibit No Description of Exhibit
---------- ----------------------
<C> <S>
3.1* Certificate of Formation of Fox/Liberty Networks, LLC (f/k/a
Liberty/Fox U.S. Sports LLC), as amended.
4.1* Form of Notes (included in Exhibits 4(b) & 4(c)).
4.2(a)* Senior Notes Indenture, dated as of August 25, 1997 (the "Senior
Notes Indenture"), among Fox/Liberty Networks, LLC and FLN
Finance, Inc. as co-obligors, and the Bank of New York, as
Trustee.
(b)** First Supplemental Indenture, dated as of March 31, 1998, among
Fox/Liberty Networks, LLC, FLN Finance, Inc. and the Bank of New
York, as Trustee.
4.3(a)* Senior Discount Notes Indenture, dated as of August 25, 1997 (the
"Senior Discount Notes Indenture"), among Fox/Liberty Networks,
LLC and FLN Finance, Inc., as co-obligors and The Bank of New
York, as Trustee.
</TABLE>

44
<PAGE>

<TABLE>
<C> <S>
(b)** First Supplemental Indenture, dated as of March 31, 1998, among
Fox/Liberty Networks, LLC, FLN Finance, Inc. and the Bank of New
York, as Trustee.
4.4* Senior Notes Registration Rights Agreement, dated as of August
25, 1997, among Fox/Liberty Networks, LLC and FLN Finance, Inc.,
as Issuers and Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Bear, Stearns & Co. Inc., as Initial Purchasers.
4.5* Senior Discount Notes Registration Rights Agreement, dated as of
August 25, 1997, among Fox/Liberty Networks, LLC and FLN Finance,
Inc., as Issuers and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Bear, Stearns & Co. Inc., as Initial Purchasers.
4.6* Senior Notes Liquidated Damages Agreement, dated as of August 25,
1997, among Fox/Liberty Networks, LLC and FLN Finance, Inc., as
Issuers and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Bear, Stearns & Co. Inc., as Initial
Purchasers.
4.7* Senior Discount Notes Liquidated Damages Agreement, dated as of
August 25, 1997, among Fox/Liberty Networks, LLC and FLN Finance,
Inc., as Issuers and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Bear, Stearns & Co. Inc., as
Initial Purchasers. Senior Notes Deposit Agreement, dated as of
August 25, 1997, among Fox/Liberty Networks, LLC and FLN Finance,
Inc., and The Bank of New York, as Securities Intermediary and as
Trustee.
4.8* Senior Notes Deposit Agreement, dated as of August 25, 1997,
among Fox/Liberty Networks, LLC and FLN Finance, Inc., and The
Bank of New York, as Securities Intermediary and as Trustee.
4.9* Senior Discount Notes Deposit Agreement, dated as of August 25,
1997, among Fox/Liberty Networks, LLC and FLN Finance, Inc., and
The Bank of New York, as Securities Intermediary and as Trustee.
10.1(a)* Agreement Regarding Ownership Interests, dated April 29, 1996, by
and among Liberty Media Corporation,News America Holdings
Incorporated, Fox Regional Sports Holdings, Inc., LMC Newco U.S.,
Inc., andLiberty/Fox Sports Financing LLC.
(b)* First Amended and Restated Agreement Regarding Ownership
Interests, dated as of December 15, 1997, by and among Liberty
Media Corporation, News America Holdings Incorporated, Fox
Regional Sports Holdings, Inc., LMC Newco U.S., Inc., and
Liberty/Fox
10.2* Operating Agreement of Fox Sports RPP Holdings, LLC, dated June
20, 1997, by and among Fox/Liberty Networks LLC, Liberty Sports
Member, Inc. and Fox Regional Sports Member, Inc.
10.3* Operating Agreement of FX Networks, LLC (f/k/a Liberty/Fox FX
Operations LLC), dated April 29, 1996, by and among Liberty/Fox
U.S. Sports LLC, Liberty FX, Inc. and FX Holdings, Inc.
10.4(a)* Operating Agreement of Fox/Liberty Networks, LLC (f/k/a
Liberty/Fox U.S. Sports LLC), dated April 29, 1996, by and among
LMC Newco U.S., Inc., Fox Regional Sports Holdings, Inc. and
Liberty/Fox Sports Financing LLC.
(b)* First Amended and Restated Operating Agreement of Fox/Liberty
Networks, LLC, dated December 15, 1997 by and among LMC Newco
U.S., Inc., Fox Regional Sports Holdings, Inc. and Liberty/Fox
Sports Financing LLC.
10.5* Operating Agreement of Fox Sports Net, LLC (f/k/a Liberty/Fox
Regional Sports LLC), dated April 29, 1996, by and among
Liberty/Fox U.S. Sports LLC, Liberty Sports Member, Inc. and Fox
Regional Sports Member, Inc.
</TABLE>

45
<PAGE>

<TABLE>
<C> <S>
10.6* Formation Agreement, dated June 22, 1997, among Rainbow Media
Sports Holdings, Inc. and Fox Sports Net, LLC.
10.7* Form of General Partnership Agreement of Regional Programming
Partners between Rainbow Regional Holdings, Inc. and Fox Sports
RPP Holdings, LLC.
10.8* Form of General Partnership Agreement of National Sports
Partners between Rainbow National Sports Holdings, Inc. and Fox
Sports National Holdings, LLC.
10.9* Form of General Partnership Agreement of National Advertising
Partners between Rainbow Advertising Holdings, Inc. and Fox
Sports Ad Sales Holdings, LLC.
10.10(a)* Credit Agreement, dated as of September 12, 1997, among Fox
Sports Net, LLC and FX Networks, LLC, as Borrowers, and
Fox/Liberty Networks, LLC and Subsidiary Guarantors, as
Guarantors, and The Chase Manhattan Bank, as Administrative
Agent, and Chase Securities Inc., as Syndication Agent, and TD
Securities (USA) Inc., as Documentation Agent.
(b)* Form of Amendment and Restated Credit Agreement dated as of
December 15, 1997 among Fox Sports Net, LLC, FX Networks, LLC
and Fox Sports RPP Holdings, LLC, as Borrowers, and Fox/Liberty
Networks, LLC and The Chase Manhattan Bank, as Administrative
Agent, Chase Securities Inc., as Syndication Agent, and TD
Securities (USA) Inc., as Documentation Agent.
(c)** First Amendment to the Credit Agreement, dated as of April 20,
1998 among Fox Sports Net, LLC, FX Networks, LLC, Fox Sports RPP
Holdings, LLC, as Borrowers and Fox/Liberty Networks, LLC and
The Chase Manhattan Bank, as Administrative Agent, Chase
Securities Inc., as Syndication Agent and TD Securities (USA)
Inc., as Documentation Agent.
(d)** Second Amendment to the Credit Agreement, dated as of April 24,
1998, among Fox Sports Net, LLC,FX Networks, LLC, Fox Sports RPP
Holdings, LLC, as Borrowers and Fox/Liberty Networks, LLC andThe
Chase Manhattan Bank, as Administrative Agent, Chase Securities
Inc., as Syndication Agent andTD Securities (USA) Inc., as
Documentation Agent.
(e)**** Third Amendment to the Credit Agreement, dated as of March 9,
1999, among Fox Sports Net, LLC, FX Networks, LLC, Fox Sports
RPP Holdings, LLC, as Borrowers and Fox/Liberty Networks, LLC
and The Chase Manhattan Bank, as Administrative Agent, Chase
Securities Inc., as Syndication Agent and TD Securities (USA)
Inc., as Documentation Agent.
(f) Amended and Restated Credit Agreement dated as of July 15, 1999,
among Fox Sports Net, LLC, FX Networks, LLC, Fox Sports RPP
Holdings, LLC, as Borrowers and Fox Sports Networks, LLC and
19th Holdings Corporation.
10.12***+ Employment Agreement between Fox/Liberty Networks, LLC (f/k/a
Liberty/Fox U.S. Sports LLC) and Jeff Shell, dated February 4,
1998.
10.13+ Employment Agreement between Fox Channels Services, LLC and
Louis LaTorre, dated effective July 1, 1999.
10.14+ Employment Agreement between Fox Sports Net, LLC and Robert L.
Thompson, dated effective June 1, 1999.
10.15****+ Employment Agreement between Fox/Liberty Networks, LLC and Tracy
Dolgin, dated February 12, 1999.
10.16(a)***++ Fox/Liberty Networks, LLC Equity Appreciation Rights Plan for
Management and Key Employees, Effective as of May 1, 1996.
(b)++ Form of Amendment to Fox Sports Networks, LLC Equity
Appreciation Rights Plan for Management and Key Employees,
Effective as of June 30, 1999.
27 Financial Data Schedule.
</TABLE>

46
<PAGE>

- --------
* Incorporated by reference to the Company's Registration Statement on Form
S-4, as amended (File No. 333- 38689).

** Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1998.

*** Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997.

**** Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998.

+ Denotes an employment contract.

++ Denotes a compensation plan.

(b) Reports on Form 8-K

No reports on Form 8-K have been filed during the last quarter of the period
covered by this report.

47
<PAGE>

SIGNATURES

Pursuant to the requirement of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunder duly authorized.

FOX SPORTS NETWORKS, LLC
Dated: November 8, 1999
/s/ Jeff Shell
By: _________________________________
Jeff Shell
President
(Principal Executive Officer)

/s/ Dennis Farrell
By: _________________________________
Dennis Farrell
Senior Vice President, Finance
(Principal Financial Officer and
Principal Accounting Officer)

Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed by the following persons in the capacities and on
the dates stated:

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<C> <S> <C>
Fox Regional Sports Holdings, Inc. Member of Fox Sports November 8, 1999
Networks, LLC
</TABLE>
/s/ Raymond L. Parrish
By: _____________________________
Raymond L. Parrish
Vice President

<TABLE>
<S> <C> <C>
Fox Regional Sports Holdings II, Inc. Member of Fox Sports November 8, 1999
Networks, LLC
/s/ Raymond L. Parrish
By: _____________________________
Raymond L. Parrish
Vice President

Fox Sports Net Financing, LLC Member of Fox Sports November 8, 1999
Networks, LLC

By: Fox Regional Sports Holdings II, Member of Fox Sports Net November 8, 1999
Inc. Financing, LLC
/s/ Raymond L. Parrish
By: _____________________________
Raymond L. Parrish
Vice President

By: Fox Entertainment Group, Inc. Member of Fox Sports Net November 8, 1999
Financing, LLC
</TABLE>
/s/ Raymond L. Parrish
By: _____________________________
Raymond L. Parrish
Vice President

48
<PAGE>

FOX SPORTS NETWORKS, LLC

INDEX TO
FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Fox Sports Networks, LLC
Consolidated Financial Statements....................................... F-2
Report of Independent Public Accountants................................ F-3
Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998
and 1997............................................................... F-4
Consolidated Statements of Operations for the six months ended June 30,
1999, the years ended December 31, 1998 and 1997 and the eight months
ended December 31, 1996................................................ F-5
Consolidated Statements of Members' Equity for the six months ended June
30, 1999, the years ended December 31, 1998 and 1997 and the eight
months ended December 31, 1996......................................... F-6
Consolidated Statements of Cash Flows for the six months ended June 30,
1999, the years ended December 31, 1998 and 1997 and the eight months
ended December 31, 1996................................................ F-7
Notes to Consolidated Financial Statements.............................. F-8
Liberty Sports, Inc. and subsidiaries--Domestic Operations
Financial Statements.................................................... F-23
Independent Auditors' Report............................................ F-24
Combined Statement of Operations and Equity for the period January 1,
1996 to April 29, 1996................................................. F-25
Combined Statement of Cash Flows for the period January 1, 1996 to April
29, 1996............................................................... F-26
Notes to Combined Financial Statements.................................. F-27
FX Networks, LLC
Financial Statements.................................................... F-31
Report of Independent Public Accountants................................ F-32
Statements of Operations for the periods ended April 29, 1996........... F-33
Statements of Cash Flows for the periods ended April 29, 1996........... F-34
Notes to Financial Statements........................................... F-35
Financial Statement Schedules
Report of Independent Public Accountants on Schedules................... S-2
Schedule I--Balance Sheets as of June 30, 1999 and December 31, 1998 and
1997................................................................... S-3
Schedule I--Statements of Operations for the six months ended June 30,
1999, the years ended December 31, 1998 and 1997 and the eight months
ended December 31, 1996................................................ S-4
Schedule I--Statements of Cash Flows for the six months ended June 30,
1999, the years ended December 31, 1998 and 1997 and the eight months
ended December 31, 1996................................................ S-5
Schedule I--Notes to Condensed Financial Statements..................... S-6
Schedule II--Valuation and Qualifying Accounts for the six months ended
June 30, 1999, the years ended December 31, 1998 and 1997 and the eight
months ended December 31, 1996......................................... S-7
</TABLE>

F-1
<PAGE>

FOX SPORTS NETWORKS, LLC

CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 1999 and December 31, 1998 and 1997

With Report of Independent Public Accountants

F-2
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Members of
Fox Sports Networks, LLC:

We have audited the accompanying consolidated balance sheets of Fox Sports
Networks, LLC and subsidiaries, a Delaware limited liability company (the
"Company") as of June 30, 1999 and December 31, 1998 and 1997, and the related
consolidated statements of operations, members' equity and cash flows for the
six months ended June 30, 1999, the years ended December 31, 1998 and 1997 and
the period from inception (April 30, 1996) to December 31, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Fox Sports
Networks, LLC and subsidiaries as of June 30, 1999 and December 31, 1998 and
1997, and the results of their operations and their cash flows for the six
months ended June 30, 1999, the years ended December 31, 1998 and 1997 and the
period from inception (April 30, 1996) to December 31, 1996 in conformity with
generally accepted accounting principles.

Arthur Andersen LLP

Los Angeles, California
September 17, 1999

F-3
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

CONSOLIDATED BALANCE SHEETS
June 30, 1999 and
December 31, 1998 and 1997
(Dollars in thousands)

<TABLE>
<CAPTION>
December 31,
June 30, ---------------------
1999 1998 1997
---------- ---------- ----------
ASSETS
------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.................. $ 59,145 $ 42,918 $ 49,560
Trade and other receivables, net of
allowance for doubtful accounts of
$21,925, $9,324 and $1,714 at June 30,
1999, December 31, 1998 and 1997.......... 164,739 138,139 136,661
Receivables from equity affiliates, net.... 43,892 33,577 37,858
Program rights............................. 106,790 88,620 50,373
Notes receivable, current.................. 1,935 1,928 3,376
Prepaid expenses and other current assets.. 13,968 9,939 7,886
---------- ---------- ----------
Total current assets..................... 390,469 315,121 285,714
Property and equipment, net.................. 53,794 49,306 42,027
Investments in equity affiliates............. 856,948 871,432 850,201
Note receivable, long-term................... 12 24 4,432
Program rights............................... 103,567 106,459 78,110
Excess cost, net............................. 493,965 521,133 514,608
Other assets................................. 33,743 28,460 42,666
---------- ---------- ----------
Total Assets............................. $1,932,498 $1,891,935 $1,817,758
========== ========== ==========

<CAPTION>
LIABILITIES AND MEMBERS' EQUITY
-------------------------------
<S> <C> <C> <C>
Current liabilities:
Accounts payable and accrued expenses...... $ 195,961 $ 164,329 $ 176,241
Program rights payable..................... 73,061 56,651 23,232
Current portion of long-term debt.......... 13,253 15,450 80,216
Accrued interest........................... 18,903 24,833 17,413
Other current liabilities.................. 9,168 13,806 11,515
---------- ---------- ----------
Total current liabilities................ 310,346 275,069 308,617
Non-current program rights payable........... 96,021 123,581 110,693
Long-term debt, net of current portion....... 1,488,178 1,401,891 1,246,291
Minority interest............................ 2,207 1,191 (114)
Commitments and contingencies................
Members' equity.............................. 35,746 90,203 152,271
---------- ---------- ----------
Total Liabilities and Members' Equity.... $1,932,498 $1,891,935 $1,817,758
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Periods Ended June 30, 1999
and December 31, 1998, 1997 and 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
Six months Year ended Year ended April 30 to
ended June December 31, December 31, December 31,
30, 1999 1998 1997 1996
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Programming................ $171,085 $301,734 $226,469 $ 85,288
Advertising................ 95,583 160,499 117,874 37,685
Direct broadcast........... 56,725 121,759 91,663 5,711
Infomercial................ 12,735 23,270 16,420 4,261
Other...................... 28,125 47,932 19,366 11,847
-------- -------- -------- ---------
364,253 655,194 471,792 144,792
-------- -------- -------- ---------
Expenses:
Operating.................. 296,059 485,276 420,888 197,445
General and
administrative............ 39,264 90,662 65,558 31,609
Depreciation and
amortization.............. 12,239 21,662 18,968 8,507
-------- -------- -------- ---------
347,562 597,600 505,414 237,561
-------- -------- -------- ---------
Operating income (loss)...... 16,691 57,594 (33,622) (92,769)
-------- -------- -------- ---------

Other (income) expenses:
Interest, net.............. 54,781 110,425 34,142 3,819
Subsidiaries' income tax
expense (benefit), net.... 233 1,456 (1,590) 3,437
Loss on sale of assets..... 2,767 121 -- 4,913
Equity loss of affiliates,
net....................... 11,160 5,913 9,018 12,024
Other...................... 471 (1,478) 401 --
Minority interest.......... 1,736 3,225 2,864 187
-------- -------- -------- ---------
71,148 119,662 44,835 24,380
-------- -------- -------- ---------
Net loss..................... $(54,457) $(62,068) $(78,457) $(117,149)
======== ======== ======== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY

For the Periods Ended June 30, 1999
and December 31, 1998, 1997 and 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
LMC Liberty/Fox Fox Regional Total
Newco Sports Sports Members'
US, Inc. Financing, LLC Holdings, Inc. Equity
-------- -------------- -------------- --------
<S> <C> <C> <C> <C>
BALANCE, APRIL 30, 1996...... $ 8,000 $243,577 $96,300 $347,877
(representing the initial
contributions of the
members)
Net loss................... (36,132) (44,885) (36,132) (117,149)
-------- -------- ------- --------
BALANCE, DECEMBER 31, 1996... (28,132) 198,692 60,168 230,728
Net loss................... (24,199) (30,059) (24,199) (78,457)
-------- -------- ------- --------
BALANCE, DECEMBER 31, 1997... (52,331) 168,633 35,969 152,271
Net loss................... (19,144) (23,780) (19,144) (62,068)
-------- -------- ------- --------
BALANCE, DECEMBER 31, 1998... (71,475) 144,853 16,825 90,203
Net loss................... (16,796) (20,865) (16,796) (54,457)
-------- -------- ------- --------
BALANCE, JUNE 30, 1999....... $(88,271) $123,988 $ 29 $ 35,746
======== ======== ======= ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Periods Ended June 30, 1999
and December 31, 1998, 1997 and 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
Six months Year ended Year ended April 30 to
ended June December 31, December 31, December 31,
30, 1999 1998 1997 1996
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss................... $(54,457) $(62,068) $ (78,457) $(117,149)
Adjustments to reconcile
net loss to net cash
(used in) provided by
operating activities:
Additional amortization
of program rights....... -- -- -- 80,000
Depreciation and
amortization............ 12,239 21,662 18,968 8,507
Interest accretion and
amortization of debt
issuance costs.......... 15,660 29,868 9,431 --
Loss on sale of assets... 2,767 121 -- 4,913
Equity loss of
affiliates.............. 11,160 5,913 9,018 12,024
Minority interest........ 1,736 3,225 2,864 187
Changes in operating assets
and liabilities:
Trade and other
receivables............. (13,441) (1,373) (47,296) (8,029)
Program rights........... (16,578) (65,871) (77,266) (3,205)
Prepaid expenses and
other operating assets.. (7,130) (4,812) (10,715) (239)
Accounts payable and
accrued expenses........ 37,417 (14,529) 51,462 33,939
Program rights payable... (10,872) 46,278 26,749 (1,149)
Other operating
liabilities............. (10,568) 9,553 18,517 4,512
-------- -------- ---------- ---------
Net cash (used in)
provided by operating
activities............ (32,067) (32,033) (76,725) 14,311
-------- -------- ---------- ---------
Cash flows from investing
activities:
Advances from equity
affiliates................ 3,883 96,084 102,497 56,666
Advances to equity
affiliates................ (14,198) (92,913) (106,555) (78,651)
Notes receivable collected
from (issued to)
third parties............. 16,005 5,856 540 (1,700)
Purchases of property and
equipment................. (9,942) (14,665) (31,321) (11,202)
Distributions from equity
affiliates................ 6,752 40,051 4,704 563
Investments in equity
affiliates................ (23,063) (67,671) (857,325) (4,046)
Purchase of program rights
and related assets........ -- -- (45,000) --
Acquisition of FIT TV, net
of cash acquired.......... -- (3,618) -- --
Proceeds from sale of
investment................ -- 900 -- --
Cash sold upon sale of
merchandising assets...... -- -- -- (429)
-------- -------- ---------- ---------
Net cash used in
investing activities.. (20,563) (35,976) (932,460) (38,799)
-------- -------- ---------- ---------
Cash flows from financing
activities:
Cash overdraft, included in
accounts payable.......... -- -- -- 2,133
Borrowings of long-term
debt...................... 92,000 155,000 1,720,078 48,448
Repayment of long-term
debt...................... (22,423) (91,713) (648,960) (24,800)
Deferred debt issuance
costs..................... -- -- (18,357) --
Distribution to minority
shareholder of
subsidiary................ (720) (1,920) (1,980) (600)
-------- -------- ---------- ---------
Net cash provided by
financing activities.. 68,857 61,367 1,050,781 25,181
-------- -------- ---------- ---------
Net increase (decrease) in
cash and cash equivalents... 16,227 (6,642) 41,596 693
Cash and cash equivalents,
beginning of period......... 42,918 49,560 7,964 7,271
-------- -------- ---------- ---------
Cash and cash equivalents,
end of period............... $ 59,145 $ 42,918 $ 49,560 $ 7,964
======== ======== ========== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-7
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 1999
(Dollars in thousands)

(1) Organization

Fox Sports Networks, LLC (formerly Fox/Liberty Networks, LLC), a Delaware
limited liability company, (together with its subsidiaries, the "Company") was
formed in April 1996, to own and operate programming services featuring
predominantly sports and sports related programming, as well as a national
general entertainment programming service.

The Company's members as of June 30, 1999 and December 31, 1998 and 1997,
were:

<TABLE>
<CAPTION>
Interest
--------
<S> <C>
Fox Regional Sports Holdings, Inc. ("FRSH") ...................... 30.843%
(a wholly-owned subsidiary of Fox Entertainment Group, Inc.
("Fox"), a majority owned subsidiary of News America Incorporated
("NAI"), a wholly-owned subsidiary of The News Corporation
Limited "TNCL")
LMC Newco U.S., Inc. ("LMCI")..................................... 30.843%
(a wholly-owned subsidiary of Liberty Sports, Inc. ("LSI"), a
wholly-owned subsidiary of Liberty Media Corporation ("LMC"))
Liberty/Fox Sports Financing, LLC................................. 38.314%
-------
(50% owned by each of LMCI and NAI)
100.000%
=======
</TABLE>

Liberty Sports, Inc. (a predecessor operation) contributed its interest in
regional sports programming businesses (which then operated under the name
"Prime Sports"), interests in non-managed sports businesses, satellite
distribution services and technical facilities. Fox and its subsidiaries
contributed cash, all of its assets and liabilities in the FX cable network (a
predecessor operation), and certain assets related to regional sports
programming.

In July 1999, TNCL acquired substantially all of Liberty Sports, Inc.'s
interest in the Company and transferred the interest acquired to Fox in
exchange for common stock (See Note 13).

(2) Significant Accounting Policies

(a) Basis of Presentation

The accompanying consolidated financial statements include the operations of
the Company and those majority-owned subsidiaries and entities for which there
is a controlling voting interest. All significant intercompany accounts and
transactions have been eliminated in consolidation. The subsidiaries
consolidated include the following intermediary holding companies (and their
subsidiaries):

Fox Sports Net, LLC, which is comprised of the following:

<TABLE>
<S> <C>
--Liberty/Fox West LLC --Liberty/Fox ARC LP
--Fox/Liberty Ad Sales LLC --Liberty/Fox Southeast LLC
--Liberty/Fox Northwest LP --Liberty/Fox Utah LLC
--Liberty/Fox Sunshine LLC --Liberty/Fox Arizona LLC
--Fox Sports Detroit, LLC --Fox/Liberty Network Programming LLC
FX Networks, LLC
Fox Sports RPP Holdings, LLC
</TABLE>

F-8
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

On March 13, 1997, upon the acquisition of the remaining interests in
Affiliated Regional Communications, Ltd. and affiliates ("ARC") by Liberty/Fox
ARC LP, the Company assumed management control of the consolidated
subsidiaries of Liberty/Fox ARC LP, and from that date the consolidated
subsidiaries of ARC and their operations were consolidated.

In September 1997, Fox Sports Detroit, LLC, a majority-owned subsidiary of
the Company, was formed for the purpose of providing sports and sports related
programming in the Detroit, Michigan area (See Note 3(e)).

In December 1997, the Company consummated a transaction with Rainbow Media
Sports Holdings, Inc. ("Rainbow"), a subsidiary of CSC Holdings, Inc.
(formerly Cablevision Systems Corporation) ("Cablevision"), pursuant to which
(i) Fox Sports RPP Holdings, LLC was formed to hold an interest in Regional
Programming Partners ("RPP"), which in turn was formed to hold interests in
Rainbow's existing regional sports networks ("RSN's") and certain other
businesses, (ii) National Sports Partners ("NSP") was formed to operate Fox
Sports Net ("FSN") a national programming service, and (iii) National
Advertising Partners ("NAP") was formed to act as the national advertising
sales representative for the RSNs which are affiliated with FSN. The Company
contributed $850,000 for its 40 percent interest in RPP, which exceeded its
equity in the underlying net assets of RPP by $314,420 (See Note 6(b)). Had
the investment occurred at the beginning of the year ended December 31, 1997
(January 1, 1997) and the eight month period December 31, 1996 (April 30,
1996), pro-forma net loss would have increased by $2,234 and $9,099,
respectively. The pro-forma results have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which actually would have resulted had the investment occurred on the dates
indicated, or which may result in the future.

(b) Cash Equivalents

Cash equivalents consist of short-term investments with an original maturity
of less than 90 days. The carrying amounts of cash and cash equivalents
approximate their fair values due to their short maturities.

The Company has multi-year contracts for the cable telecast rights of
syndicated entertainment programs and sporting events. Pursuant to these
contracts, an asset is recorded for the rights acquired and a liability is
recorded for the obligation incurred, at the gross amount of the liability
when the programs or sporting events are available for telecast. Program
rights for entertainment programs are amortized over the term of the contract
using the straight-line method. Program rights for sporting events which are
for a specified number of games are amortized on an event-by-event basis, and
those which are for a specified season are amortized over the term of the
season on a straight-line basis.

The Company and its predecessor, Liberty Sports, Inc., have entered into or
committed to contracts for program rights to telecast college football and
Major League Baseball games, respectively. In 1996, the Company performed an
in-depth evaluation and determined that these contracts would produce losses
over the term of the

F-9
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

respective contracts. Accordingly, the Company and its affiliates recorded
$109,000 in additional amortization related to these contracts during the
period from inception (April 30, 1996) to December 31, 1996.

(d) Property and Equipment

Property and equipment are stated at cost, which includes acquisition costs
allocated to tangible assets acquired. Depreciation for financial statement
purposes is provided using the straight-line method over an estimated useful
life of three to five years.

(e) Other Assets

At June 30, 1999 and December 31, 1998 and 1997 other assets included
$16,342, $17,063 and $17,896, respectively, of debt issuance costs related to
the issuance of Senior Notes and Senior Discount Notes (the "Notes"--See Note
7(c)) and $4,639, $4,989 and $5,391, respectively, of debt issuance costs
related to a credit facility with a group of banks (the "Credit Agreement"--
See Note 7(b)). These costs are amortized using the effective interest method
over the term of the respective debt instrument. Amortization expense was
$1,147, $2,321 and $461 in the aggregate for the six months ended June 30,
1999 and the years ended December 31, 1998 and 1997, respectively, and is
included in interest expense.

(f) Investments in Affiliates

The consolidated financial statements include the operations of subsidiary
companies more than 50% owned. Investments in and advances to affiliates in
which the Company has a substantial ownership interest of approximately 20 to
50%, or for which the Company owns more than 50% but does not control policy
decisions, are accounted for by the equity method. Under this method of
accounting, the original investment is increased or decreased by the Company's
share of income or losses and dividends.

Partnerships in which the Company acts as a limited partner, but in which
the third party general partner exercises management control, are not
consolidated regardless of the ownership interest. If these investments meet
the conditions outlined in the paragraph above then the partnerships are
accounted for under the equity method.

(g) Excess Cost

Excess cost represents the difference between the cost of acquiring
programming entities and amounts assigned to their tangible and intangible
assets. Such amounts are amortized on a straight-line basis over 40 years.
Amortization expense was $7,037, $14,300, $11,776 and $5,241 for the six
months ended June 30, 1999, the years ended December 31, 1998 and 1997 and the
period from inception (April 30, 1996) to December 31, 1996, respectively. At
June 30, 1999 and December 31, 1998 and 1997, excess cost, net included
accumulated amortization of $92,813, $86,470 and $72,170, respectively.

The Company periodically reviews the propriety of the carrying amount of its
excess cost as well as the related amortization period to determine whether
current events or circumstances warrant adjustments to the carrying value
and/or the estimates of useful lives. This evaluation consists of the
Company's projection of undiscounted operating cash flows over the remaining
lives of the excess cost. Based on its review, the Company believes that no
significant impairment of its excess cost has occurred.

(h) Long-Lived Assets

In March 1995, the Financial Accounting Standards Board issued Statement No.
121 ("SFAS 121") on accounting for the impairment of long-lived assets,
certain identifiable intangibles and goodwill related to assets

F-10
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

to be held and used. SFAS 121 also establishes accounting standards for long-
lived assets and certain identifiable intangibles to be disposed of. The
Company adopted the SFAS 121 from inception (April 30, 1996). See Note 2(g)
for the policy on excess cost.

(i) Revenue

Revenue from programming represents monthly subscriber fees received from
cable system operators and is recognized as earned. Advertising revenue is
recognized upon airing of commercials. The Company has sold advance
subscriptions to its direct broadcast satellite customers. Such amounts are
amortized to revenue monthly as revenue is earned. Infomercial revenue is
recognized when the program is aired.

(j) Non-Monetary Transactions

The Company trades commercial advertising spots in return for other
services, primarily programming. These trades are recorded at the fair value
of the asset surrendered or the fair value of the asset obtained, whichever is
more clearly evident. These transactions resulted in the recording of
approximately $0, $4,173, $8,539 and $2,512 in both advertising revenue and
programming expenses during the six months ended June 30, 1999, the years
ended December 31, 1998 and 1997 and the period from inception (April 30,
1996) to December 31, 1996, respectively.

(k) Income Taxes

No provision has been made for federal, state or foreign income taxes, as
the liability for such income taxes is the responsibility of the members.

(l) Segment Reporting

In June 1997, the Financial Accounting Standards Board issued Statement No.
131 ("SFAS 131") on the disclosure of segments of an enterprise. SFAS 131
establishes guidelines for determining operating segments within public
business enterprises. Based on these guidelines the Company reports
information under a single cable programming segment. The Company adopted SFAS
131 as of January 1, 1998.

(m) Major Customers

The Company recognized revenue from one customer which represented 11.8%,
14.3%, 18.1% and 34.6% of consolidated revenues for the six months ended June
30, 1999, the years ended December 31, 1998 and 1997 and the period from
inception (April 30, 1996) to December 31, 1996, respectively.

(n) Use of Estimates

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of revenues and
expenses during the reporting period. Because of the use of estimates inherent
in the financial reporting process, actual results could differ from those
estimates.

(o) Reclassifications

Certain reclassifications have been made to the prior year balances in order
to conform to the current year presentation.

F-11
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

(3) Supplemental Disclosures to Consolidated Statements of Cash Flows

Supplemental disclosure of cash flow information and non-cash investing and
financing activities for the period from inception (April 30, 1996) to
December 31, 1996 are as follows:

<TABLE>
<CAPTION>
Acquisition Disposal Total
------------------------- --------------- --------
Prime Sports
Northwest(a) SportSouth(b) Merchandising(c)
------------ ------------ ---------------
<S> <C> <C> <C> <C>
Fair value of net assets
acquired/(disposed):
Cash.................. $ 1,328 $ 3,626 $ (429) $ 4,525
Accounts receivable... 4,663 10,691 (600) 14,754
Prepaid program
rights............... 425 -- -- 425
Prepaid expenses and
other current
assets............... 304 84 (10) 378
Inventory............. -- -- (3,064) (3,064)
Investment............ -- (2,135) -- (2,135)
Excess cost........... -- -- (5,771) (5,771)
Other assets.......... 46 102 (105) 43
Property and
equipment, net....... 2,832 259 (1,064) 2,027
Notes receivable...... 40 -- -- 40
Accounts payable and
accrued expenses..... (809) (1,640) 2,330 (119)
Program rights
payable.............. (91) -- -- (91)
Notes payable......... -- (18,002) -- (18,002)
------- -------- ------- --------
8,738 (7,015) (8,713) (6,990)
Less: existing
investment in
affiliates............. (6,427) 471 -- (5,956)
------- -------- ------- --------
2,311 (6,544) (8,713) (12,946)
Satisfied by:
Cash.................. (9,000) -- -- (9,000)
Note payable.......... -- (65,334) -- (65,334)
Note receivable....... -- -- 3,800 3,800
------- -------- ------- --------
Subtotal................ -- -- -- (83,480)
------- -------- ------- --------
Excess cost............. $(6,689) $(71,878) $(78,567)
======= ======== ========
Loss on sale............ $(4,913) $ (4,913)
======= ========
</TABLE>
- --------
(a) In July 1996, the Company paid $9,000 to Viacom, Inc. to purchase an
additional 40% interest in its affiliate, Prime Sports Northwest Network.
Subsequent to the purchase, Prime Sports Northwest Network was
consolidated with the Company. Had the additional 40% interest been
acquired at inception (April 30, 1996), the consolidated pro forma revenue
and income would have increased by $5,886 and $648, respectively. These
pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of the results of operations which actually
would have resulted had the acquisitions occurred on the date indicated,
or which may result in the future.

(b) In October 1996, the Company purchased an additional 44% interest in its
affiliate, SportSouth Network, Ltd. ("SportSouth"), through the issuance
of a note in the amount of $65,334. SportSouth was then consolidated with
the Company. Had the additional 44% interest been acquired at inception
(April 30, 1996), the consolidated pro forma revenue and income would have
increased by $19,490 and $5,072, respectively. These pro forma results
have been prepared for comparative purposes only and do not purport to be
indicative of results of operations which actually would have resulted had
the acquisitions occurred on the date indicated, or which may result in
the future.

(c) In September 1996, the Company received a note receivable for
approximately $3,800 in connection with the sale of its merchandising
assets.

F-12
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

Supplemental disclosure of cash flow information and non-cash investing and
financing activities for the year ended December 31, 1997(e) (f) is as
follows:

<TABLE>
<CAPTION>
ARC Ltd(d)
----------
<S> <C>
Fair value of net assets acquired:
Cash............................................................ $ --
Accounts receivable............................................. 26,793
Prepaid program rights.......................................... 4,764
Prepaid expenses and other current assets....................... 19,249
Investment...................................................... 6,739
Excess cost..................................................... 103,806
Other assets.................................................... 305
Property and equipment, net..................................... 11,818
Notes receivable................................................ 6,869
Accounts payable and accrued expenses........................... (25,520)
Program rights payable.......................................... (3,522)
Unearned revenue................................................ (4,744)
Notes payable................................................... (49,000)
-------
97,557
Satisfied by:
Original investment............................................. (97,557)
-------
Excess cost....................................................... $ --
=======
</TABLE>
- --------
(d) In March 1997, Liberty/Fox ARC LP, an affiliate of the Company, paid
$40,000 to Group W to purchase the remaining 12.78% interest in Affiliated
Regional Communications, LTD and Affiliates ("ARC"). This transaction
resulted in Liberty/Fox ARC LP recording $25,785 in excess costs. In
conjunction with this transaction, the Company assumed management control
of the consolidated subsidiaries of Liberty/Fox ARC LP. Subsequent to the
purchase, the consolidated subsidiaries of ARC were consolidated with the
Company (see Note 2(a)). Had the additional 12.78% interest been acquired
at January 1, 1997 with respect to the year ended December 31, 1997 and
April 30, 1996 with respect to the eight months ended December 31, 1996,
the pro forma consolidated revenue would have increased by $29,913 and
$107,531, respectively, and pro forma consolidated income would have
increased by $372 and $482, respectively. These pro forma results have
been prepared for comparative purposes only and do not purport to be
indicative of the results of operations which actually would have resulted
had the acquisitions occurred on the date indicated, or which may result
in the future.

(e) In September 1997, the Company formed Fox Sports Detroit, LLC for the
purpose of providing sports and sports related programming to the Detroit,
Michigan area. Fox Sports Detroit, LLC entered into agreements to pay cash
of $45,000 and issue notes payable totaling $25,558 to secure certain
sports programming rights and other assets. Amounts remaining as excess
cost will be amortized over 40 years. Had the acquisition occurred at the
beginning of the period (January 1, 1997), and assuming that the full
$70,713 is recorded as excess cost and amortized over 40 years, the pro-
forma consolidated revenue would have increased, and loss would have
decreased, by $17,940 and $2,143, respectively. These pro-forma results
have been prepared for comparative purposes only and do not purport to be
indicative of the results of operations which actually would have resulted
had the acquisitions occurred on the date indicated, or which may result
in the future.

(f) In December 1997, the Company contributed net assets of $14,926 and $2,741
to NSP and NAP, respectively, for a 50% interest in each partnership. The
net assets contributed were comprised of certain accounts receivables,
fixed assets, investments and accrued liabilities.

F-13
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

Supplemental disclosure of cash flow information and non-cash investing and
financing activities for the year ended December 31, 1998 is as follows:
<TABLE>
<CAPTION>
Fit TV(g)
---------
<S> <C>
Book value of net assets acquired:
Cash............................................................. $ 132
Accounts receivable.............................................. 650
Prepaid program rights........................................... 725
Prepaid expenses................................................. 200
Property and equipment, net...................................... 11
Other assets..................................................... 156
Accounts payable and accrued expenses............................ (3,762)
Program rights payable........................................... (29)
Other current liabilities........................................ (158)
-------
(2,075)
Satisfied by:
Cash............................................................. 18,750
-------
Excess cost........................................................ $20,825
=======
</TABLE>
- --------
(g) In April 1998, the Company completed the acquisition of Fit TV
Partnership, with an effective date as of January 1, 1998, in which the
Company paid $15,000 to Cable Health TV, Inc. in 1997 and $1,875 each to
Reebok CHC, Inc. and Liberty CHC, Inc., representing 100% capital
interest and a 92% profit interest in Fit TV Partnership, and
accordingly, has been consolidated with the Company. An 8% minority
profit interest in Fit TV Partnership was acquired by a third party. Had
the capital interest been acquired at January 1, 1997 with respect to the
year ended December 31, 1997, and April 30, 1996 with respect to the
eight months ended December 31, 1996, the pro forma revenue would have
increased by $4,074 and $2,855, respectively, and net loss would have
increased by $7,561 and $4,429, respectively. These pro forma results
have been prepared for comparative purposes only and do not purport to be
indicative of the results of operations which actually would have
resulted had the acquisition occurred on the date indicated, or which may
result in the future.

Supplemental disclosure of cash flow information and non-cash investing and
financing activities for the six months ended June 30, 1999 (i) is as follows:
<TABLE>
<CAPTION>
Fit TV(h)
---------
<S> <C>
Book value of net assets disposed:
Accounts receivable............................................. $ (1,341)
Prepaid program rights.......................................... (1,300)
Prepaid expenses and other current assets....................... (274)
Property and equipment, net..................................... (57)
Excess cost..................................................... (20,131)
Other assets.................................................... (32)
Accounts payable and accrued expenses........................... 5,785
Program rights payable.......................................... 278
--------
(17,072)
Satisfied by:
Receivable...................................................... 14,500
--------
Loss on sale...................................................... $ (2,572)
========
</TABLE>
- --------
(h) In May 1999, the Company recorded a receivable from an affiliate of Fox
in connection with the sale of Fit TV Partnership.

F-14
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

(i) In April 1999, the Company received notes receivable of $19,635 as a
distribution from Liberty/Fox KBL LP.

Cash paid for interest was $46,426, $76,154, $24,848 and $5,330 for the six
months ended June 30, 1999, the years ended December 31, 1998 and 1997 and the
period from inception (April 30, 1996) to December 31, 1996, respectively.

(4) Related Party Transactions

For the six months ended June 30, 1999, the years ended December 31, 1998
and 1997 and the period from inception (April 30, 1996) to December 31, 1996,
the Company recognized the following revenue and expenses as a result of arms-
length transactions with affiliates of LSI and Fox :

<TABLE>
<CAPTION>
Six
months
ended Year ended Year ended April 30 to
June 30, December 31, December 31, December 31,
1999 1998 1997 1996
-------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue:
Programming.............. $43,521 $93,922 $92,244 $23,229
Advertising.............. 895 1,523 3,183 326
Direct broadcast......... -- -- 2,082 5,711
Interest income.......... 165 351 2,719 108
Other.................... 14,240 19,606 -- 3,358
Expenses:
Operating................ 31,997 62,216 65,736 12,631
General and
administrative.......... 3,202 2,775 4,156 2,340
Interest expense......... -- 25 1,570 293
</TABLE>

At June 30, 1999 and December 31, 1998 and 1997, receivables from related
parties were $23,012, $19,962 and $29,293, respectively, and payables to
related parties were $7,690, $19,631 and $21,476, respectively.

The Company has a non exclusive, royalty-free license from affiliates of Fox
to use the "FOX" brand name and certain related artwork in connection with the
Company's business.

(5) Property and Equipment

Property and equipment at June 30, 1999 and December 31, 1998 and 1997
consisted of the following:

<TABLE>
<CAPTION>
June 30, December 31, December 31,
1999 1998 1997
-------- ------------ ------------
<S> <C> <C> <C>
Studio and production equipment.......... $ 55,832 $ 50,455 $ 26,847
Office equipment......................... 17,986 16,733 14,823
Construction in progress................. 16,164 13,603 21,357
Other.................................... 4,200 4,365 5,614
-------- -------- --------
94,182 85,156 68,641
Accumulated depreciation................. (40,388) (35,850) (26,614)
-------- -------- --------
$ 53,794 $ 49,306 $ 42,027
======== ======== ========
</TABLE>

F-15
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

(6) Investments Accounted for Under the Equity Method

(a) Significant Subsidiaries

Summarized unaudited financial information for significant subsidiaries, as
defined in Rule 1-02(w) of Regulation S-X, accounted for under the equity
method is as follows:

Combined Financial Position

<TABLE>
<CAPTION>
June 30, December 31, December 31,
1999 1998 1997
---------- ------------ ------------
<S> <C> <C> <C>
Current assets............................. $ 395,827 $ 523,347 $ 584,433
Non-current assets......................... 1,857,925 1,883,399 1,820,560
---------- ---------- ----------
Total assets............................... $2,253,752 $2,406,746 $2,404,993
========== ========== ==========

Current liabilities........................ $ 246,878 $ 356,004 $ 400,986
Non-current liabilities.................... 634,259 573,111 588,881
Minority interest.......................... -- 64,117 129,495
Members' equity............................ 1,372,615 1,413,514 1,285,631
---------- ---------- ----------
Total liabilities and equity............... $2,253,752 $2,406,746 $2,404,993
========== ========== ==========
</TABLE>

Combined Operations

<TABLE>
<CAPTION>
Six months ended Year ended Year ended April 30 to
June 30, December 31, December 31, December 31,
1999 1998 1997 1996
---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue................. $454,885 $783,156 $66,167 $125,373
Operating (loss)
income................. (27,904) (65,062) (24,647) 14,270
Net (loss) income....... (21,634) (29,834) (24,663) 7,205
</TABLE>

Liberty/Fox ARC LP was formed on April 30, 1996 and was accounted for under
the equity method for the period until March 1997. In March 1997, the Company
assumed management control of the consolidated subsidiaries of Liberty/Fox ARC
LP and, subsequent to this event, the consolidated subsidiaries of ARC were
consolidated with the Company.

F-16
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

(b) Unconsolidated Affiliates

The following table reflects the Company's ownership interests in majority
and minority owned affiliates as of:

<TABLE>
<CAPTION>
June 30, December 31, December 31,
Entity 1999 1998 1997
------ -------- ------------ ------------
<S> <C> <C> <C>
Majority Owned Affiliates
Liberty/Fox Chicago LP.................... 98.0% 98.0% 98.0%
Liberty/Fox KBL LP........................ 60.0% 60.0% 60.0%
Liberty/Fox Bay Area LP................... 98.0% 98.0% 98.0%
Liberty/Fox Upper Midwest LP.............. 98.0% 98.0% 98.0%
Liberty/Fox Distribution LP............... 98.0% 98.0% 98.0%
Minority Owned Affiliates
LMC Sunshine Inc. ........................ 48.5% 48.5% 48.5%
Cable Ad Partners-cost method............. 0.0% 0.0% 8.0%
Sunshine Network Joint Venture............ 49.0% 49.0% 49.0%
Prime Sports Network-Upper Midwest Joint
Venture.................................. 33.0% 33.0% 33.0%
Home Team Sports Limited Partnership...... 34.3% 34.3% 34.3%
Prime Sports Channel Prism Associates..... 0.0% 0.0% 33.3%
Mountain Mobile TV........................ 33.3% 33.3% 33.3%
Regional Programming Partners............. 40.0% 40.0% 40.0%
National Sports Partners.................. 50.0% 50.0% 50.0%
National Advertising Partners............. 50.0% 50.0% 50.0%
CTV Sports Net............................ 20.0% 20.0% 0.0%
Carolina Hurricanes Programming Joint
Venture.................................. 33.3% 33.3% 0.0%
</TABLE>

The following table reflects the carrying value of the Company's investments
accounted for under the equity method and the Company's equity in earnings
(losses) of its majority and minority owned affiliates:

<TABLE>
<CAPTION>
Investment
-----------------------------------
June 30, December 31, December 31,
Entity 1999 1998 1997
------ -------- ------------ ------------
<S> <C> <C> <C>
Majority Owned Affiliates................ $(21,163) $ (7,734) $(20,845)
Minority Owned Affiliates................ 878,111 879,166 871,046
-------- -------- --------
$856,948 $871,432 $850,201
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
Equity in Earnings (Losses)
-------------------------------------------------------
Six months ended Year ended Year ended April 30 to
June 30, December 31, December 31, December 31,
Entity 1999 1998 1997 1996
------ ---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Majority Owned
Affiliates............. $ 6,205 $ 13,111 $(2,288) $(17,163)
Minority Owned
Affiliates............. (17,365) (19,024) (6,730) 5,139
-------- -------- ------- --------
$(11,160) $ (5,913) $(9,018) $(12,024)
======== ======== ======= ========
</TABLE>

F-17
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

Prior to the contribution of the above majority owned entities to the
Company (see Note 1), there were certain regional networks that were wholly
owned and consolidated by Liberty Sports, Inc. (a predecessor company and a
Company shareholder). Upon contribution of these entities to the Company,
Liberty Sports, Inc. retained management control through a general partnership
minority interest. Hence, these operations are not consolidated by the
Company, although it owns the majority of the limited partnership interests.

The Company's investment in several of its affiliates exceeded its equity in
the underlying net assets by a total of $332,988, $334,096 and $342,302 at
June 30, 1999 and December 31, 1998 and 1997, respectively. These excess
amounts are being amortized on a straight-line basis over 40 years. The
amortization aggregated $4,777, $7,876, $1,025 and $574 during the six months
ended June 30, 1999, the years ended December 31, 1998 and 1997 and the period
from inception (April 30, 1996) to December 31, 1996, respectively, and is
included in the Company's share of equity loss of affiliates.

(7) Debt

Debt at June 30, 1999 and December 31, 1998 and 1997 is summarized as
follows:

<TABLE>
<CAPTION>
June 30, December 31, December 31,
1999 1998 1997
---------- ------------ ------------
<S> <C> <C> <C>
Turner Note Payable(a)................ $ -- $ -- $ 65,334
Chase Manhattan Bank--Term(b)......... 400,000 400,000 400,000
Chase Manhattan Bank--Revolver(b)..... 277,000 205,000 60,000
Senior Notes(c)....................... 500,000 500,000 500,000
Senior Discount Notes(c).............. 300,786 286,878 260,828
Other................................. 23,645 25,463 40,345
---------- ---------- ----------
1,501,431 1,417,341 1,326,507
Less current portion.................. (13,253) (15,450) (80,216)
---------- ---------- ----------
$1,488,178 $1,401,891 $1,246,291
========== ========== ==========
</TABLE>

Annual future minimum maturities of debt are as follows:

<TABLE>
<S> <C>
Year ending June 30:
2000............................................................ $ 13,253
2001............................................................ 2,471
2002............................................................ 2,636
2003............................................................ 2,813
2004............................................................ 2,473
Thereafter...................................................... 1,477,785
----------
$1,501,431
==========
</TABLE>

The fair value of the Company's debt is estimated based on the quoted market
prices for the same or similar issues or on the current rates offered to the
Company for debt of the same remaining maturities. Rates on the Company's debt
approximate current market rates, and as such, the carrying amount of
borrowings outstanding approximates fair value.

(a) On October 10, 1996, LMC Southeast Sports, Inc. purchased Turner Sports
Programming, Inc.'s 44% partnership interest in SportSouth. LMC Southeast
Sports, Inc. signed a promissory note to Turner Broadcasting Company for
$65,334, plus interest at a rate of 7.5% per annum. The Note was paid in
full at maturity on October 10, 1998.

(b) On December 15, 1997, Fox Sports Net, LLC, FX Networks, LLC and Fox Sports
RPP Holdings, LLC (together, the "Co-Borrowers"), entered into a credit
agreement (the "Credit Agreement") with a group of banks. In July 1999,
19th Holdings Corporation, (a wholly-owned subsidiary of Fox) acquired the
debt

F-18
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

outstanding under the Credit Agreement and assumed the rights and
obligations of the group of banks thereunder. The Company and 19th Holdings
Corporation subsequently amended and restated the Credit Agreement and
eliminated substantially all of the affirmative and negative covenants
other than with respect to the payment of principal and interest (the "19th
Agreement"). The 19th Agreement provides for a $400,000 term loan and a
$400,000 revolving credit facility ("the Facilities"). Borrowings under the
Facilities are guaranteed by the Company, the Co-Borrowers and certain
subsidiaries of Fox Sports Net, LLC and are secured by substantially all of
the assets of the Company. Borrowings under the facilities bear interest at
a fixed rate determined on an annual basis by 19th Holdings Corporation.
19th Holdings Corporation has determined that the rate of interest on this
debt through June 2000 shall be 8%. Amounts outstanding under the revolving
credit facility and principal under the term loan are due September 30,
2004.

(c) In August 1997, Fox Sports Networks, LLC (formerly Fox/Liberty Networks,
LLC) (the "Issuer") privately sold $500,000 aggregate principal amount of
its 8 7/8% Senior Notes due 2007 and $405,000 aggregate principal amount at
maturity ($252.3 million gross proceeds) of its 9 3/4% Senior Discount
Notes due 2007 (collectively the "Old Notes") in a transaction (the
"Offering") exempt from registration under the Securities Act of 1933, as
amended ("1933 Act"). In January 1998, pursuant to an exchange offer (the
"Exchange Offer"), the Issuer exchanged all of the Old Notes for new notes
(the "Notes") which were registered by the Issuer under the 1933 Act. The
terms of the Notes are substantially identical to the terms of the Old
Notes. The Issuer received no proceeds from the issuance of the Notes in
the Exchange Offer. Interest on the Senior Notes is payable semi-annually.
Interest payments on the Senior Discount Notes commence in February 2003.
Interest accretes to principal prior to the commencement of interest
payments. At June 30, 1999 and December 31, 1998 and 1997 the unamortized
discount on the Senior Discount Notes was $104,214, $118,122, and $144,669,
respectively. Interest expense, resulting from the amortization of the
discount, was $13,908, $26,547, and $8,053 for the six months ended June
30, 1999, the years ended December 31, 1998 and 1997, respectively. The
indentures pursuant to which the Notes were issued include certain
covenants regarding, among other things, limitations on the incurrence of
debt and distributions to partners. The Notes are unsecured.

Interest expense was $56,052, $112,961, $49,183 and $4,235 for the six months
ended June 30, 1999, the years ended December 31, 1998 and 1997 and the period
from inception (April 30, 1996) to December 31, 1996, respectively. Interest
income was $1,271, $2,536, $15,041 and $416 for the six months ended June 30,
1999, the years ended December 31, 1998 and 1997 and the period from inception
(April 30, 1996) to December 31, 1996, respectively.

(8) Additional Interests Earned by Company's Members

The Company consists of numerous limited liability companies, general and
limited partnerships and corporations. The equity ownership of individual
entities in the chain of entities holding interests in regional sports networks
and FX Networks, LLC include interests held directly by affiliates of LSI and
Fox. Generally, each regional sports network is owned by the Company through a
chain of entities in which the Company has a direct or indirect interest of
approximately 98%, with the remaining fractional interests being held equally
by the affiliates of Fox and LSI. (See Note 13).

(9) 401(k) Plan

During 1997, the Company implemented a defined contribution plan under
section 401(k) of the Internal Revenue Code (the "401(k) Plan") covering most
of the employees of the Company. Under the 401(k) Plan,

F-19
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

participating employees may elect to defer a portion of their compensation.
The Company makes contributions to the 401(k) Plan based on a percentage of
employee contributions. Maximum employee and Company contributions are limited
by Internal Revenue Code regulations and by specific 401(k) Plan provisions.
For the six months ended June 30, 1999, the years ended December 31, 1998 and
1997, the Company contributed $3,186, $4,757 and $4,013, respectively to the
401(k) Plan.

(10) Equity Appreciation Rights Plan

In October 1997, the Company adopted the Fox/Liberty Networks, LLC Equity
Appreciation Rights Plan for management and key employees (the "Plan"), with
an effective date of May 1, 1996. A committee was appointed by the Company to
administer and interpret this Plan. The maximum number of Appreciation Rights
available for grant under this plan was 300,000. The rights vest over five
years and require a minimum number of hours worked per year of vesting.

In August 1999, the Plan was amended, with an effective date of June 30,
1999, to provide that no further Appreciation Rights could be granted under
the Plan after such effective date and the value of Appreciation Rights was
fixed at $250 as of the effective date and as of December 31, 1998. All
participants with outstanding Appreciation Rights will continue to vest over
time, provided that as Appreciation Rights vest, the participant shall be
deemed to have exercised their right to receive cash payments equal to the
excess of $250 over the grant value of such vested Appreciation Rights.

During 1999, the Company granted 18,000 rights at $185. During 1998, the
Company granted 28,000 and 18,000 rights at $185 and $135, respectively.
During 1997, the Company granted 185,100 rights at $135. The value of the 1999
and 1998 grants were based on an independent valuation and the value of the
1997 grants were based on the initial value determined by the Company's
members. At June 30, 1999 and December 31, 1998 and 1997, 118,260, 118,260 and
74,040 rights had vested, respectively, with a weighted average exercise
period of 6.8 years at June 30, 1999. Compensation expense was $5,150 and
$13,526 with respect to vested Appreciation Rights for the six months ended
June 30, 1999 and the year ended December 31, 1998, respectively.

(11) Supplemental Condensed Financial Information (unaudited)

<TABLE>
<CAPTION>
Three months Three months
Six months ended ended
ended June 30, June 30,
June 30, 1998 1999 1998
------------- ------------ ------------
<S> <C> <C> <C>
Revenues............................. $326,023 $192,310 $169,414
Operating income (loss).............. 23,286 (10,425) 6,027
</TABLE>

F-20
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

(12) Commitments and Contingencies

(a) Operating Leases

The Company leases transponders, office facilities, and equipment and
microwave channels used to carry its broadcast signals. These leases, which
are classified as operating leases, expire at various dates through 2010.
Future minimum payments, by year, under noncancelable operating leases with a
term of one year or more consist of the following at June 30, 1999:

Year ending June 30:
<TABLE>
<S> <C>
2000.............................................................. $17,162
2001.............................................................. 12,879
2002.............................................................. 10,832
2003.............................................................. 10,364
2004.............................................................. 8,605
Thereafter........................................................ 17,277
-------
Total minimum lease payments...................................... $77,119
=======
</TABLE>

Total lease expense was approximately $15,030, $27,396, $17,137 and $7,881
for the six months ended June 30, 1999, the years ended December 31, 1998 and
1997 and the period from inception (April 30, 1996) to December 31, 1996,
respectively.

(b) Long-term Program Rights Contracts

The Company has long-term program rights contracts which require payments
through 2010. Future minimum payments, including unrecorded amounts, by year,
are as follows at June 30, 1999:

<TABLE>
<S> <C>
Year ending June 30:
2000........................................................... $ 269,818
2001........................................................... 219,951
2002........................................................... 197,333
2003........................................................... 174,129
2004........................................................... 161,882
Thereafter..................................................... 451,713
----------
Total minimum program rights payments.......................... $1,474,826
==========
</TABLE>

The Company licenses television and feature film programming on a long-term
basis from various related parties, and accordingly records a program rights
asset and payable for the contractual amounts. At June 30, 1999 and December
31, 1998 and 1997, the unamortized program rights were $168,240, $150,771 and
$108,672, respectively, and the program rights payable were $144,256, $134,652
and $103,444, respectively.

In the ordinary course of business, the Company has become involved in
disputes or litigation. While the result of such disputes cannot be predicted
with certainty, in management's opinion, based in part on the advice of
counsel, the ultimate resolution of these disputes will not have a material
effect on the Company's financial position or results of operations.

F-21
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

June 30, 1999
(Dollars in thousands)

(13) Subsequent Event

In July 1999, TNCL acquired from LMCI substantially all of LMCI's 50%
interest in the Company and its businesses. TNCL transferred the acquired
interests to Fox in exchange for common stock of Fox. As a result of these
transactions, Fox owns substantially all of the Company and has changed the
name of the Company to Fox Sports Networks, LLC, has changed the Company's
fiscal year end to coincide with that of Fox and, through 19th Holdings
Corporation, has acquired the debt outstanding under the Credit Agreement (See
Note 7(b)). The Company's fiscal year has been changed from a calendar year to
a 52-53 week fiscal year ending on the Sunday closest to June 30 in each year.

F-22
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

FINANCIAL STATEMENTS

F-23
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

FINANCIAL STATEMENTS

With Independent Auditors' Report

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Fox Sports Networks, LLC:

We have audited the accompanying combined statements of operations and
equity and cash flows of Liberty Sports, Inc. and subsidiaries--Domestic
Operations for the period from January 1, 1996 to April 29, 1996. These
combined financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Liberty Sports, Inc. and subsidiaries--Domestic Operations for the period from
January 1, 1996 to April 29, 1996, in conformity with generally accepted
accounting principles.

KPMG LLP

Dallas, Texas
June 28, 1996

F-24
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

COMBINED STATEMENT OF OPERATIONS AND EQUITY
(amounts in thousands)

<TABLE>
<CAPTION>
January
1, 1996
to April
29, 1996
--------
<S> <C>
Revenues (note 4):
Programming......................................................... $ 37,484
Advertising......................................................... 27,696
Direct broadcast.................................................... 23,709
Network support..................................................... 2,471
Other............................................................... 8,393
--------
99,753
--------
Operating costs and expenses (notes 4 and 7):
Operating........................................................... 60,664
General and administrative.......................................... 27,993
Depreciation and amortization....................................... 10,788
--------
99,445
--------
Operating income (loss)........................................... 308
--------
Other income (expense):
Interest expense.................................................... (1,963)
Interest income..................................................... 91
Equity in earnings of affiliates (note 5)........................... 219
Minority interest in earnings of subsidiaries....................... (1,076)
Other, net.......................................................... 1,467
--------
(1,262)
--------
Loss before income taxes.......................................... (954)
Income tax benefit (note 6)........................................... 217
--------
Net loss.......................................................... (737)
Equity, beginning of period........................................... 236,788
Net change in Parent's investment..................................... (11,570)
--------
Equity, end of period................................................. $224,481
========
</TABLE>

See accompanying notes to combined financial statements.

F-25
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

COMBINED STATEMENT OF CASH FLOWS
(amounts in thousands)

<TABLE>
<CAPTION>
January 1,
1996
to April 29,
1996
------------
<S> <C>
Cash flows from operating activities:
Net loss........................................................ $ (737)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization................................. 10,788
Equity in earnings of affiliates.............................. (219)
Minority interest............................................. 1,076
Deferred income taxes......................................... (1,176)
Changes in operating assets and liabilities:
Receivables................................................. (9,198)
Inventories................................................. (167)
Prepaid program rights...................................... 1,197
Other assets................................................ (1,906)
Payables, accruals and unearned revenue..................... (2,881)
--------
Net cash used in operating activities..................... (3,223)
--------
Cash flows from investing activities:
Capital expended for property and equipment..................... (4,544)
Additional investments in and loans to affiliates............... (2,500)
Return of capital from affiliates............................... 1,000
--------
Net cash used in investing activities..................... (6,044)
--------
Cash flows from financing activities:
Borrowings of long-term debt.................................... 28,600
Repayments of long-term debt.................................... (8,956)
Change in Parent's investment................................... (11,570)
--------
Net cash provided by financing activities................. 8,074
--------
Decrease in cash and cash equivalents............................. (1,193)
Cash and cash equivalents at beginning of period.................. 10,453
--------
Cash and cash equivalents at end of period........................ $ 9,260
========
</TABLE>

See accompanying notes to combined financial statements.

F-26
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS

(1) Organization

Liberty Sports, Inc. was incorporated on November 13, 1989 as TCI Sports,
Inc., a wholly-owned subsidiary of Tele-Communications, Inc. ("TCI"). On March
29, 1991, the name was changed to Liberty Sports, Inc. and the ownership was
transferred to Liberty Media Corporation ("LMC"), an affiliate of TCI. On
August 4, 1994, LMC became a wholly-owned subsidiary of TCI.

Liberty Sports, Inc. and subsidiaries--Domestic Operations primarily provide
television sports programming services to customers throughout the United
States, sell advertising time in such programming and provide management and
technical services to other sports networks.

(2) Significant Accounting Policies

(a) Basis of Presentation

The accompanying combined financial statements include the accounts of
Liberty Sports, Inc. and its domestic majority-owned subsidiaries and other
entities in which it has a controlling voting interest (collectively, "LSI--
Domestic" or the "Company"). All significant intercompany accounts and
transactions have been eliminated in combination.

(b) Investments in Affiliates

Investments in affiliates are accounted for under the equity method. Under
this method, the investment, originally recorded at cost, is adjusted to
recognize LSI-Domestic's share of net earnings or losses of the affiliate as
they occur rather than as dividends or other distributions are received,
limited to the extent of LSI-Domestic's investment in, advances to and
guarantees on behalf of, the investee. LSI's share of net earnings or losses
of affiliates includes the amortization of purchase adjustments.

Revenue from programming represents affiliate fees received from cable
system operators and is recognized monthly as earned. Advertising revenue is
recognized upon airing of commercials.

Network support revenue is received from related parties for network,
traffic and master control operation services provided by the Company. Such
revenue is recognized as earned.

The Company has sold advance subscriptions to its direct broadcast satellite
customers. Such amounts are amortized to revenue monthly as revenue is earned.

(d) Nonmonetary Transactions

The Company trades commercial advertising spots in return for other
services, primarily programming. These trades are recorded at the fair value
of the asset surrendered or the fair value of the asset obtained, whichever is
more clearly evident. These transactions resulted in the recording of
approximately $2,050,000 in both advertising revenue and expenses during the
period January 1, 1996 to April 29, 1996.

(e) Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities

F-27
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Because of the use of estimates inherent in the
financial reporting process, actual results could differ from those estimates.

(3) Supplemental Disclosures to Combined Statements of Cash Flows

Cash paid for interest was $1,805,000 for the period January 1, 1996 to
April 29, 1996. Cash paid for income taxes during the period January 1, 1996
to April 29, 1996 was not material.

(4) Related Party Transactions

For the period January 1, 1996 to April 29, 1996, the Company recognized the
following revenue and expenses as a result of transactions with related
parties, primarily TCI and its affiliates (amounts in thousands):

<TABLE>
<S> <C>
Revenues and other:
Programming....................................................... $12,213
Direct broadcast.................................................. 5,908
Network support................................................... 2,375
Other............................................................. 824
Expenses:
Programming fees.................................................. 2,865
Direct broadcast programming fees................................. 3,094
</TABLE>

(5) Investments in Affiliates

The following table reflects LSI Domestic's share of earnings (losses)
(principally accounted for under the equity method) of each of these
affiliates (amounts in thousands):

<TABLE>
<CAPTION>
Entity
------
<S> <C>
SportsChannel Chicago Associates ("SC-CHI").......................... $2,877
Prime SportsChannel Network Associates............................... (2,169)
Sunshine Network Joint Venture ("Sunshine").......................... 669
SportsSouth Network Ltd.............................................. 2,026
Prime Sports Network--Upper Midwest Joint Venture.................... --
SportsChannel Prism Associates....................................... 139
Rocky Mountain Mobile TV............................................. 93
Home Team Sports Limited Partnership ("HTS")......................... 397
SportsChannel Pacific................................................ --
Global Music Channel................................................. (3,813)
------
$ 219
======
</TABLE>

The Company's investment in three of these affiliates (Sunshine, HTS, and
SC-CHI) exceeded its equity in the underlying net assets. These excess amounts
are being amortized over the estimated useful lives of the investment
affiliate agreements and sports contracts. This amortization aggregated
$222,000 for the period January 1, 1996 to April 29, 1996 and is included in
LSI Domestic's share of earnings.

F-28
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Summarized financial operating results for affiliates accounted for under
the equity method is as follows:

Combined Operations
(amounts in thousands)

<TABLE>
<CAPTION>
January 1,
1996 to
April 29,
1996
----------
<S> <C>
Revenues.......................................................... $90,170
Operating, general and administrative expenses.................... (80,772)
Depreciation and amortization..................................... (1,290)
-------
Operating income................................................ 8,108
Interest income................................................... (144)
Other, net........................................................ (30)
-------
Net income...................................................... $ 7,934
=======
</TABLE>

(6) Income Taxes

The Company accounts for income taxes using Statement of Financial
Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for Income Taxes."
SFAS No. 109 requires the use of the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred tax assets
and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax rates in effect for
the year in which those temporary differences are expected to be recovered or
settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes
the enactment date.

The Company is included in the consolidated federal income tax returns filed
by TCI. Federal income taxes are calculated on a separate return basis in the
accompanying consolidated financial statements.

Income tax benefit (expense) attributable to loss before income taxes for
the period January 1, 1996 to April 29, 1996 consists of the following:

<TABLE>
<S> <C>
Current:
Federal............................................................. $(921)
State............................................................... (38)
Deferred.............................................................. 1,176
-----
Total................................................................. $ 217
=====
</TABLE>

Actual income tax benefit differs from the "expected" income tax benefit
for the period January 1, 1996 to April 29, 1996 (computed by applying the
U.S. federal corporate tax rate of 35% to loss before income taxes) as follows
(amounts in thousands):

<TABLE>
<S> <C>
Computed "expected" tax benefit........................................ $334
Minority interest in earnings of consolidated subsidiary............... (640)
Other, net............................................................. 523
----
$217
====
</TABLE>

F-29
<PAGE>

LIBERTY SPORTS, INC. AND SUBSIDIARIES--DOMESTIC OPERATIONS

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

(7) Commitments and Contingencies

Future minimum lease payments under noncancellable operating leases by
calendar year are summarized as follows (amounts in thousands):

<TABLE>
<S> <C>
1996................................................................. $15,791
1997................................................................. 15,196
1998................................................................. 15,073
1999................................................................. 13,561
2000................................................................. 10,177
Thereafter........................................................... 5,500
</TABLE>

Total lease expense was approximately $4,049,000 for the period January 1,
1996 to April 29, 1996.

The Company has long-term sports program rights contracts which require
payments through 2005. Future minimum payments by calendar year are as follows
(amounts in thousands):

<TABLE>
<S> <C>
1996................................................................ $ 58,051
1997................................................................ 59,854
1998................................................................ 56,999
1999................................................................ 53,166
2000................................................................ 45,736
Thereafter.......................................................... 128,187
</TABLE>

The Company has guaranteed obligations of certain equity affiliates under
program rights agreements aggregating $3,331,000 in 1996; $3,598,000 in 1997;
and $2,857,000 in 1998.

Liberty Sports, Inc. and its domestic affiliates are parties to various
lawsuits and claims arising in the ordinary course of business. While the
outcome of such claims, lawsuits or other proceedings against the Company
cannot be predicted with certainty, management expects that such liability, to
the extent not provided through insurance or otherwise, will not have a
material adverse effect on the operating results or financial condition of the
Company.

(8) Subsequent Event

Effective April 29, 1996, Liberty Sports, Inc. contributed substantially all
of its domestic assets and liabilities to certain limited liability companies
and limited partnerships (collectively, the "Domestic Venture"). The members
of the Domestic Venture are certain affiliates of Liberty Sports, Inc. and
certain affiliates of The News Corporation Limited, each of which owns,
through its affiliates, 50% of the Domestic Venture. The Domestic Venture was
formed to provide sports programming services in the United States and Canada.

F-30
<PAGE>

FX NETWORKS, LLC
(A Limited Liability Company)

FINANCIAL STATEMENTS

For the Ten Months Ended April 29, 1996

Together with Report of Independent Public Accountants

F-31
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Fox Sports Networks, LLC:

We have audited the accompanying statements of Operations and Cash Flows of
FX NETWORKS, LLC (the Company, a Delaware limited liability company) for the
ten months ended April 29, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits. The financial
statements of FX Networks, LLC for the four months ended April 29, 1996 were
not audited by us and, accordingly, we do not express an opinion on them.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of FX NETWORKS, LLC's operations and its
cash flows for the ten months ended April 29, 1996 in conformity with
generally accepted accounting principles.

Arthur Andersen LLP

Los Angeles, California
August 4, 1997

F-32
<PAGE>

FX NETWORKS, LLC
(A Delaware Limited Liability Company)

STATEMENTS OF OPERATIONS

For the Periods Ended April 29, 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
Four Ten
Months Ended Months Ended
April 29, April 29,
1996 1996
------------ ------------
(unaudited)
<S> <C> <C>
Revenue:
Programming......................................... $24,291 $ 55,934
Advertising......................................... 8,287 17,358
Infomercial......................................... 947 2,109
------- --------
33,525 75,401
------- --------
Expenses:
Operating........................................... 26,220 63,369
General and administrative.......................... 7,941 19,936
Depreciation and amortization....................... 201 480
------- --------
34,362 83,785
------- --------
Interest expense...................................... 3,354 7,898
------- --------
Net Loss.......................................... $(4,191) $(16,282)
======= ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-33
<PAGE>

FX NETWORKS, LLC
(A Delaware Limited Liability Company)

STATEMENTS OF CASH FLOWS

For the Periods Ended April 29, 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
Four months Ten months
ended April 29, Ended April 29,
1996 1996
--------------- ---------------
(unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net income................................... $(4,191) $(16,282)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization.............. 201 480
Changes in operating assets and liabilities:
Accounts receivables....................... (3,998) (9,110)
Program rights............................. (6,785) (7,194)
Other assets............................... 359 (167)
Accounts payable and accrued expenses...... (1,136) (927)
Program rights payable..................... 6,263 6,254
------- --------
Net cash used in operating activities.... (9,287) (26,946)
------- --------
Cash Flows from Investing Activities:
Purchases of property and equipment.......... (191) (521)
------- --------
Net cash used in investing activities.... (191) (521)
------- --------
Cash Flows from Financing Activities:
Related Party Payable........................ 9,478 27,467
------- --------
Net cash provided by financing
activities.............................. 9,478 27,467
------- --------
Net Increase (Decrease) in Cash and Cash
Equivalents................................... -- --
Cash and Cash Equivalents, beginning of year... -- --
------- --------
Cash and Cash Equivalents, end of year......... $ -- $ --
======= ========
Supplemental Cash Flow Information
Cash paid for interest....................... $ 3,354 $ 7,898
======= ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-34
<PAGE>

FX NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS

(Information for the four month period ended April 29, 1996 is unaudited)

For the Ten Months Ended April 29, 1996
(Dollars in thousands)

(1) Organization

FX Networks, LLC was formed on July 1, 1993 as a division of Fox, Inc.
("Fox"), a subsidiary of The News Corporation Limited, as a basic cable
exclusive service distributed on a per subscriber basis, to provide general
entertainment and sports programming services and sell commercial advertising
time during its programming.

(2) Significant Accounting Policies

(a) Basis of Presentation

The accompanying financial statements of the Company present the operations
and cash flows for the interim four month period ended April 29, 1996
(unaudited) for the purpose of comparison to the year ended December 31, 1997
for its successor company, Fox/Liberty Networks, LLC.

(b) Program Rights

The Company has multi-year contracts for broadcast rights of syndicated
entertainment programs. Program rights are amortized over the term of the
contract using the straight-line method.

At the inception of these contracts and periodically thereafter, the Company
evaluates the recoverability of the costs associated therewith against the
advertising revenues directly associated with the program material and related
expenses. Where an evaluation indicates that a multi-year contract will result
in an ultimate loss, additional amortization is provided to recognize that
loss currently.

Property and equipment are stated at cost. Depreciation for financial
statement purposes is provided using the straight-line method over estimated
useful lives of 3 to 5 years.

(d) Income Taxes

No provision has been made for income tax expense or benefit in the
accompanying consolidated financial statements as the income or losses of the
Company are reported in the respective income tax returns of the partners.

(e) Revenue

Programming revenue represents monthly subscriber fees received from cable
system operations and is recognized as earned. Advertising revenue is
recognized as earned.

(f) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Because of the use of estimates inherent in the financial
reporting process, actual results could differ from those estimates.

F-35
<PAGE>

FX NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information for the four month period ended April 29, 1996 is unaudited)

For the Ten Months Ended April 29, 1996
(Dollars in thousands)

(g) Allocation of expenses

Fox allocates costs, such as rent and payroll, incurred on behalf of the
Company based on the percentage of services rendered to the Company. These
allocated expenses are included in general and administrative expenses in the
Statements of Operations. Management believes the allocation method used is
reasonable.

(h) Interim Financial Data (unaudited)

The interim financial data for the period ended April 29, 1996 has been
prepared by the Company and is unaudited; however, in the opinion of the
Company, the interim data includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results of
operations and cash flows for the interim period. Results for the interim
period are not necessarily indicative of the results to be achieved for the
full year.

(3) Related Party Transactions

The Company recognized the following revenue and expenses as a result of
arms-length transactions with related parties (amounts in thousands):

<TABLE>
<CAPTION>
Four Months Ten Months
Ended April 29, Ended April 29,
1996 1996
--------------- ---------------
(unaudited)
<S> <C> <C>
Revenue:
Advertising................................ $ 159 $ 248
Expenses:
Interest expense........................... 3,354 7,898
Production................................. 7,932 23,068
Programming fees........................... 3,604 7,695
</TABLE>

TCI, which became a related party as a result of the Joint Venture (see Note
5), had transactions with the Company resulting in revenues of $25,310 for the
ten month period ended April 29, 1996.

(4) Commitments and Contingencies

(a) Leases

The Company leases transponders and equipment used to carry its broadcast
signals. These leases, which are classified as operating leases, expire at
various dates through 2006.

Total lease expense was approximately $3,912, and $1,564, for the ten months
and four months ended April 29, 1996 (unaudited).

(b) Long-term Program Rights Contracts

The Company has long-term program rights contracts which require payments
through 1999.

F-36
<PAGE>

FX NETWORKS, LLC
(A Delaware Limited Liability Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information for the four month period ended April 29, 1996 is unaudited)

For the Ten Months Ended April 29, 1996
(Dollars in thousands)

The Company is a party to various lawsuits and claims arising in the
ordinary course of business. While the outcome of such claims, lawsuits or
other proceedings against the Company cannot be predicted with certainty,
management expects that such liability will not have a material adverse effect
on the operating results or financial position of the Company.

(5) Subsequent Event

On April 30, 1996, The News Corporation Limited contributed a majority of
the assets and liabilities of the Company to Fox/Liberty Networks, LLC as part
of a joint venture formed by The News Corporation Limited and Tele-
Communications, Inc.

F-37
<PAGE>

FOX SPORTS NETWORKS, LLC

FINANCIAL STATEMENT SCHEDULES
WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

S-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES

To the Members of
Fox Sports Networks, LLC:

We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Fox Sports Networks, LLC (the
"Company") included elsewhere in this Form 10-K and have issued our report
thereon dated September 17, 1999. Our audit was made for the purpose of
forming an opinion on the basic financial statements taken as a whole.
Schedules I and II are the responsibility of the Company's management and are
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

Arthur Andersen LLP

Los Angeles, California
September 17, 1999

S-2
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF COMPANY

BALANCE SHEETS

June 30, 1999 and
December 31, 1998 and 1997
(Dollars in thousands)

<TABLE>
<CAPTION>
June 30, December 31, December 31,
1999 1998 1997
-------- ------------ ------------
<S> <C> <C> <C>
ASSETS

Cash......................................... $ 151 $ 137 $ --
Investments in subsidiaries.................. 856,045 891,006 911,489
Other assets................................. 16,342 17,063 18,083
-------- -------- --------
Total Assets............................... $872,538 $908,206 $929,572
======== ======== ========
LIABILITIES AND MEMBERS' EQUITY

Accrued liabilities.......................... $ 36,006 $ 31,125 $ 16,473
Long-term debt............................... 800,786 786,878 760,828
Members' equity.............................. 35,746 90,203 152,271
-------- -------- --------
Total Liabilities and Members' Equity...... $872,538 $908,206 $929,572
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these combined balance sheets.

S-3
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF COMPANY

STATEMENTS OF OPERATIONS

For the Periods Ended June 30, 1999,
and December 31, 1998, 1997 and 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
Six months Year ended Year ended April 30 to
ended June 30, December 31, December 31, December 31,
1999 1998 1997 1996
-------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest expense, net... $ 36,817 $ 71,783 $ 12,914 $ --
Other expenses.......... 5,150 13,531 -- --
Equity in (income) loss
of subsidiaries........ 12,490 (23,246) 65,543 117,149
-------- -------- -------- ---------
Net loss................ $(54,457) $(62,068) $(78,457) $(117,149)
======== ======== ======== =========
</TABLE>

The accompanying notes are an integral part of these condensed financial
statements.

S-4
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF COMPANY

STATEMENTS OF CASH FLOWS

For the Periods Ended June 30, 1999,
and December 31, 1998, 1997 and 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
Six months Year ended Year ended April 30 to
ended June 30, December 31, December 31, December 31,
1999 1998 1997 1996
-------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from
operating activities:
Net loss............... $(54,457) $(62,068) $(78,457) $(117,149)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
Interest accretion.... 13,908 26,050 8,550 --
Equity in (income)
loss of affiliates... 12,490 (23,246) 65,543 117,149
Changes in operating
assets and
liabilities:
Other assets.......... 721 1,020 (18,083) --
Accrued liabilities... 4,881 14,652 16,473 --
-------- -------- -------- ---------
Net cash used in
operating
activities......... (22,457) (43,592) (5,974) --
-------- -------- -------- ---------
Cash flows from
investing activities:
Distributions from
equity affiliates..... 42,871 144,267 58,040 --
Investments in equity
affiliates............ (20,400) (100,538) (804,344) --
-------- -------- -------- ---------
Net cash provided by
(used in) investing
activities......... 22,471 43,729 (746,304) --
-------- -------- -------- ---------
Cash flows from
financing activities:
Proceeds from notes.... -- -- 752,278 --
-------- -------- -------- ---------
Net cash provided by
financing
activities......... -- -- 752,278 --
-------- -------- -------- ---------
Net increase in cash and
cash equivalents....... 14 137 -- --
Cash and cash
equivalents, beginning
of period.............. 137 -- -- --
-------- -------- -------- ---------
Cash and cash
equivalents, end of
period................. $ 151 $ 137 $ -- $ --
======== ======== ======== =========
</TABLE>

The accompanying notes are an integral part of these condensed financial
statements.

S-5
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF COMPANY

NOTES TO CONDENSED FINANCIAL INFORMATION
June 30, 1999
(Dollars in thousands)

(1) Debt

Annual future minimum maturities of debt are as follows:

<TABLE>
<S> <C>
Year ending June 30:
2000.............................................................. $ --
2001.............................................................. --
2002.............................................................. --
2003.............................................................. --
2004.............................................................. --
Thereafter........................................................ 800,786
--------
$800,786
========
</TABLE>

(2) Commitments and Contingencies

The Company has guaranteed certain obligations of its subsidiaries.

S-6
<PAGE>

FOX SPORTS NETWORKS, LLC
(A Delaware Limited Liability Company)

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)

<TABLE>
<CAPTION>
Balance at Charged to Balance at
Beginning Costs and End of
of Period Expenses Deductions Other Period
---------- ---------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JUNE
30, 1999
Allowance for doubtful
accounts............. $ (9,234) $(10,991) $ 2,253 $(3,953)(1) $(21,925)
Program rights
reserve.............. (18,727) -- 13,669 -- (5,058)
YEAR ENDED DECEMBER 31,
1998
Allowance for doubtful
accounts............. (1,714) (9,109) 1,570 (71)(1) (9,324)
Program rights
reserve.............. (38,344) -- 19,617 -- (18,727)
YEAR ENDED DECEMBER 31,
1997
Allowance for doubtful
accounts............. (957) (1,586) 1,029 (200)(1) (1,714)
Program rights
reserve.............. (80,000) -- 41,656 -- (38,344)
EIGHT MONTHS ENDED
DECEMBER 31, 1996
Allowance for doubtful
accounts............. (454) (535) 32 -- (957)
Program rights
reserve.............. -- (80,000) -- -- (80,000)
</TABLE>
- --------
(1) Represents balances from businesses sold or acquired during the period and
balances transferred from other accounts.

S-7

<PAGE>

EXHIBIT 10.10(f)

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 15, 1999, among FOX
SPORTS NET, LLC, a Delaware limited liability company ("Sports Net"), FX
NETWORKS, LLC, a Delaware limited liability company ("FX"), FOX SPORTS RPP
HOLDINGS, LLC, a Delaware limited liability company ("RPP" and, together with
Sports Net and FX, individually and collectively, "Borrower"), FOX SPORTS
NETWORKS, LLC, a Delaware limited liability company ("Networks"), and 19TH
HOLDINGS CORPORATION, a Delaware corporation ("Lender").

W I T N E S S E T H :
-------------------

WHEREAS, pursuant to the Credit Agreement, dated as of December 15, 1997 (the
"Existing Credit Agreement"), among Borrower, Networks, the several banks and
-------------------------
other financial institutions or entities from time to time parties to such
agreement (the "Existing Lenders"), TD SECURITIES (USA) INC., as documentation
----------------
agent, CHASE SECURITIES INC., as syndication agent, and THE CHASE MANHATTAN
BANK, as administrative agent for the Lenders thereunder, such Existing Lenders
agreed to extend credit to Borrower;

WHEREAS, pursuant to Assignment and Acceptance Agreements between the
Existing Lenders and the Lender, each Existing Lender assigned all of its rights
and obligations under the Existing Credit Facility to the Lender;

WHEREAS, Borrower and Networks have requested that the Existing Credit
Agreement be amended and restated as hereinafter provided;

WHEREAS, the Lender agrees to such amendment and restatement; and

WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or evidence repayment of all or any of such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Existing Credit Agreement and re-evidence the obligations of
Borrower outstanding thereunder.
<PAGE>

NOW, THEREFORE, the parties hereto hereby agree that the Existing Credit
Agreement will be amended and restated in its entirety as of the date hereof as
follows:

Section

Amount and Terms of Facility.
- ----------------------------

1.1 Term Loans. Each of the parties hereto acknowledge that as of
----------
the date hereof, Borrower, jointly and severally, owes $400,000,000 to the
Lender (the "Term Loan"). Borrower shall execute and deliver to the Lender a
Term Promissory Note, substantially in the form of Exhibit A hereto (the "Term
Note") evidencing the Term Loan.

1.2 Revolving Credit Commitments. Subject to the terms and conditions
----------------------------
hereof and in the Revolving Credit Note executed by Borrower and delivered to
the Lender, substantially in the form of Exhibit B hereto (the "Revolving Credit
Note" and together with the Term Note, each a "Note" and collectively the
"Notes"), the Lender hereby agrees to make revolving credit loans ("Revolving
Credit Loans") to Borrower from the date hereof through September 30, 2004 (the
"Termination Date") in an aggregate principal amount not to exceed $
400,000,000. Borrower shall execute and deliver to Lender the Revolving Credit
Note evidencing the Revolving Credit Loans.

2. Section Interest.
--------

2.1 Interest Rate. Each of the Term Loan and the Revolving Credit
-------------
Loans shall bear interest at a fixed rate of interest set by the Lender from
time to time, upon notice to the Borrower (the "Interest Rate"). For the period
from the date hereof through June 30, 2000, the Interest Rate shall be 8% per
annum. All interest shall be computed on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
elapsed. Notwithstanding any other provision of this Agreement or any Note,
interest paid or becoming due hereunder or thereunder shall be in no event
exceed the maximum rate permitted by applicable law.

2
<PAGE>

2.2 Payment of Interest. Interest on the Term Loan and the Revolving
Credit Loans shall be payable quarterly.

2.3 Default Interest. Any amount owing hereunder or under any Note that
is not paid when due (whether upon demand, by acceleration or otherwise) shall
bear interest from the day when due until such principal amount is paid in full,
payable on demand, at an interest rate per annum equal at all times to two % per
annum above the Interest Rate in effect from time to time

3. Section Payments.
--------

3.1 General.
-------

(a) If any amount payable hereunder or under any Note shall be due on
a day on which banks are required or authorized to close in New York City (any
other day being a "Business Day"), such payment may be made on the next
------------
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest payable hereon.

(b) Both principal and interest are payable in lawful money of the
United States and in immediately available funds at the offices of the Lender,
1211 Avenue of the Americas, New York, NY 10036, or at such other place as the
Lender shall designate in writing to the Borrower.

3.2 Prepayments. Borrower may, at its option and upon not less than
-----------
two Business Days' prior written notice to the Lender, prepay the Term Loan or
Revolving Credit Loans, in whole at any time or in part from time to time,
without penalty or premium, each such prepayment to be accompanied by the
payment of accrued interest to the date of each prepayment on the amount
prepaid, provided that each partial prepayment shall be in a principal amount
--------
equal to $10,000,000 or an integral multiple thereof

3.3 Setoff and Taxes. All payments made by the Borrower hereunder or
----------------
under a Note will be made without setoff, counterclaim or other defense. All
such payments shall be made free and clear of and without deduction for any
present or future income, stamp or other taxes, levies, imposts, deductions,
charges, fees, withholding, restrictions or conditions of any nature now or
hereafter imposed, levied, collected, withheld or assessed by any jurisdiction
or by

3
<PAGE>

any political subdivision or taxing authority thereof or therein, and all
interest, penalties or similar liabilities, excluding taxes on the overall net
income of the Lender (such non-excluded taxes are hereinafter collectively
referred to as the "Taxes"). If the Borrower shall be required by law to deduct
-----
or to withhold any Taxes from or in respect of any amount payable hereunder, (i)
the amount so payable shall be increased to the extent necessary so that after
making all required deductions and withholdings (including Taxes on amounts
payable to the Lender pursuant to this sentence) the Lender receives an amount
equal to the sum it would have received had no such deductions or withholdings
been made, (ii) the Borrower shall make such deductions or withholdings and
(iii) the Borrower shall pay the full amount deducted or withheld to the
relevant taxation authority in accordance with applicable law. Whenever any Tax
is payable by the Borrower, as promptly as possible thereafter the Borrower
shall send the Lender an official receipt showing payment. In addition, the
Borrower agrees to pay any present or future taxes, charges or similar levies
which arise from any payment made hereunder or from the execution, delivery,
performance, recordation or filing of, or otherwise with respect to, this
Agreement, the Note or any other Document (hereinafter referred to as "Other
-----
Taxes"). The Borrower will indemnify the Lender for the full amount of Taxes or
- -----
Other Taxes (including, any Taxes or Other Taxes on amounts payable to the
Lender under this paragraph) paid by the Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
upon written demand by the Lender therefor.

4. Section Default. If any of the following shall occur (each an "Event of
------- --------
Default"): (a) the Borrower shall fail to pay any principal of or interest on
- -------
the Term Loan or the Revolving Credit Loans when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or (b)
Default shall have occurred under the Senior Notes Indenture, dated as of August
25, 1997, among Fox/Liberty Networks, LLC and FLN Finance, Inc. as co-obligors,
and the Bank of New York, as Trustee, as amended and supplemented from time to
time, or the Senior Discount Notes Indenture, dated as of August 25, 1997, among
Fox/Liberty Networks,
<PAGE>

LLC and FLN Finance, Inc. as co-obligors and the Bank of New York, as Trustee,
as amended and supplemented from time to time; or (c) the Borrower shall fail to
pay any debt for borrowed money or other similar obligation or liability
("Indebtedness") (excluding Indebtedness evidenced by the Notes) in excess of
------------
$10,000,000 or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or any other default
under any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or (d) one or more judgments
or orders for the payment of money exceeding any applicable insurance coverage
by more than $10,000,000 in the aggregate shall be rendered against the
Borrower, and either (i) enforcement proceedings shall have been commenced by
any creditor upon any such judgment or order, or (ii) there shall be any period
of 10 consecutive days during which a stay of enforcement of any such judgment
or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(e) the Borrower shall be generally not paying its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against any such entity seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for such
entity or for any substantial part of its property; or Borrower shall take any
action to authorize or effect any of the actions set forth
<PAGE>

above in this clause (e); or (f) any provision of this Agreement, the notes or
any other document executed in connection herewith shall at any time for any
reason be declared to be null and void by a court of competent jurisdiction, or
the validity or enforceability thereof shall be contested by the Borrower or a
proceeding shall be commenced by the Borrower seeking to establish the
invalidity or unenforceability thereof, or the Borrower shall deny that it has
any liability or obligation hereunder or thereunder; or (g) the Loan Documents
(as defined below) shall for any reason fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority lien on or security interest in any of the collateral purported
to be covered thereby; or (h) a material adverse change in the condition or
operations, financial or otherwise, of the Borrower, as determined by the Lender
in its sole discretion, shall occur and written notice thereof shall have been
given to the Borrower by the Lender; then the Lender may (i) declare the
outstanding principal amount of the Term Loan and the Revolving Credit Loans and
all other amounts due hereunder and thereunder to be immediately due and
payable, whereupon the outstanding principal amount of the Notes and all such
other amounts shall become and shall be forthwith due and payable, without
diligence, presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, and (ii) exercise any and all of its other
rights under applicable law, hereunder and under either the Guarantee Agreement
dated as of December 15, 1997 made by each of the guarantors described therein
in favor of The Chase Manhattan Bank, as administrative agent, the Lenders
described therein, from time to time parties to the Credit Agreement (the
"Guarantee Agreement") or the Pledge Agreement dated as of December 15, 1997
made by each of the pledgors described therein in favor of The Chase Manhattan
Bank, as administrative agent, the Lenders described therein from time to time
parties to the Credit Agreement (the "Pledge Agreement" and together with the
Credit Agreement and the Guarantee Agreement, the "Loan Documents".)

5. Section Guarantee. Networks agrees that the Guarantee Agreement is and
---------
shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed.
<PAGE>

6. Section Collateral. Each Borrower agrees that the Loan Documents to which
----------
it is a Party are, and shall continue to be in full force and effect and are
hereby in all respects ratified and confirmed and the security interests
described therein do and shall continue to secure the payment of all obligations
of the Borrower under the Credit Agreement.

7. Section Miscellaneous.
-------------

The Borrower agrees that all notices or other communications provided for
hereunder shall be in writing (including telecommunications) and shall be
mailed, telecopied, telexed, telegraphed or delivered to the Borrower at the
address of the Borrower set forth next to its signature, or at such other
address as may hereafter be specified by the Borrower set forth next to its
signature, or at such other address as may hereafter be specified by the
Borrower to the Lender (at its address set forth herein) in writing. All notices
and communications shall be effective (i) if mailed, when received or three days
after mailing, whichever is earlier, (ii) it telecopied, when transmitted, and
(iii) if delivered, upon delivery.

No failure on the part of the Lender to exercise, and no delay in
exercising, any right, power, privilege or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof by the Lender
preclude any other or further exercise thereof or the exercise of any other
right, power, privilege or remedy of the Lender. No amendment or waiver of any
provision of this Note, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

Any provision hereof which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

Borrower hereby agrees to pay on demand all costs and expenses (including,
without limitation, all fees and expenses of counsel to the Lender) incurred by
the Lender in connection
<PAGE>

with (i) the preparation, execution, delivery, administration and amendment of
this Agreement and the other Loan Documents, and (iii) the enforcement of the
Lender's rights, and the collection of all amounts due, hereunder.

Borrower hereby (i) irrevocably submits to the jurisdiction of any New York
State or Federal court sitting in New York City in any action or proceeding
arising out of or relating to this Agreement, (ii) waives any defense based on
doctrines of venue or forum non conveniens, or similar rules or doctrines, and
----- --- ----------
(iii) irrevocably agrees that all claims in respect of such an action or
proceeding may be heard and determined in such New York State or Federal court.
Each of the Borrowers would (by its acceptance hereof) waive any right to trial
by jury in any action, proceeding or counterclaim arising out of or relating to
this Agreement.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

FOX SPORTS NET, LLC

/s/ Andrew R. Hubsch
By: ________________________________
Name: Andrew R. Hubsch
Title: Vice President, Treasurer

FX NETWORKS, LLC

/s/ Andrew R. Hubsch
By: ________________________________
Name: Andrew R. Hubsch
Title: Vice President, Treasurer

FOX SPORTS RPP HOLDINGS, LLC

/s/ Andrew R. Hubsch
By: ________________________________
Name: Andrew R. Hubsch
Title: Vice President, Treasurer

FOX SPORTS NETWORKS, LLC

/s/ Andrew R. Hubsch
By: ________________________________
Name: Andrew R. Hubsch
Title: Vice President, Treasurer

19TH HOLDINGS CORPORATION

/s/ Paula Wardynski
By: ________________________________
Name: Paula Wardynski
Title: Vice President

<PAGE>

$/NOFOLIO

PROMISSORY NOTE

$ 400,000,000 New York, New York
July 15, 1999

FOR VALUE RECEIVED, the undersigned, FOX SPORTS NET, LLC, a Delaware
limited liability company ("Sports Net"), FX NETWORKS, LLC, a Delaware limited
liability company ("FX"), FOX SPORTS RPP HOLDINGS, LLC, a Delaware limited
liability company ("RPP" and, together with Sports Net and FX, individually and
collectively, "Borrower"), HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY to the
order of 19TH HOLDINGS CORPORATION, a Delaware corporation with offices at
1211 Avenue of the Americas, New York, NY 10036 (the "Lender"),(i) the
principal sum of FOUR HUNDRED MILLION DOLLARS ($ 400,000,000) on the Termination
Date (as defined in Amended and Restated Credit Agreement dated as of July 15,
1999 among the Borrower, Fox Sports Networks, LLC and the Lender (the "Credit
Agreement") and (ii) interest, at the Interest Rate, on any and all principal
amounts remaining unpaid hereunder from time to time outstanding from the date
hereof until such principal amount becomes due, payable as provided in the
Credit Agreement. Defined Terms used herein and not defined herein shall have
the meanings given thereto in the Credit Agreement.

This Note (a) is one of the Notes referred to in the Credit Agreement, (b)
is subject to the provisions of the Credit Agreement, and (c) is subject to
prepayment in whole or in part as provided in the Credit Agreement. This Note
is guaranteed as provided in the Loan Documents. Reference is hereby made to
the Loan Documents for a description of the nature and extent of the guarantees,
the terms and conditions upon which each guarantee was granted and the rights of
the holder of this Note in respect thereof.

Upon occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

10
<PAGE>

All parties now and hereafter liable with respect to this Note, whether
make, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

FOX SPORTS NET, LLC

By:__________________________________

Name:________________________________

Title: ______________________________

FX NETWORKS, LLC

By: _________________________________

Name:________________________________

Title: ______________________________

FOX SPORTS RPP HOLDINGS, LLC

By: ________________________________

Name:_______________________________

Title: _____________________________

11
<PAGE>

REVOLVING PROMISSORY NOTE

$ 400,000,000 New York, New York
July 15, 1999

FOR VALUE RECEIVED, the undersigned, FOX SPORTS NET, LLC, a Delaware
limited liability company ("Sports Net"), FX NETWORKS, LLC, a Delaware limited
liability company ("FX"), FOX SPORTS RPP HOLDINGS, LLC, a Delaware limited
liability company ("RPP" and, together with Sports Net and FX, individually and
collectively, "Borrower"), JOINTLY AND SEVERALLY HEREBY PROMISE TO PAY to the
order of 19th Holdings Corporation, a Delaware corporation (the "Lender"), (i)
------
the principal sum of FOUR HUNDRED MILLION DOLLARS ($ 400,000,000) or, if less,
the aggregate unpaid principal amount of all advances made by the Lender to the
Borrower pursuant to the terms hereof outstanding on the Termination Date (as
defined in the Amended and Restated Credit Agreement dated as of July 15, 1999
among the Borrower, Fox Sports Networks, LLC and the Lender (the "Credit
Agreement")), and (ii) interest at the Interest Rate on any and all principal
amounts remaining unpaid hereunder from time to time outstanding from the date
hereof until such principal amounts become due, payable as provided in the
Credit Agreement. Defined terms used herein and not defined herein shall have
the meanings given thereto in the Credit Agreement.

Borrower may borrow, repay and reborrow hereunder at any time, up to a
maximum aggregate amount outstanding at any one time equal to the principal
amount of this Revolving Credit Note, provided, that Borrower is not in default
under any provision of this Revolving Credit Note, the Credit Agreement, the
Term Note, any other documents executed in connection herewith or therewith, and
provided that the borrowings hereunder do not exceed any borrowing base or other
limitation on borrowings by Borrower. Lender shall incur no liability for its
refusal to advance funds based upon its determination that any conditions of
such further advances have not been met. All advances made by the Lender to
Borrower hereunder and all payments made to the Lender on account of principal
hereof shall be noted by the Lender on the schedule that is attached hereto and
hereby made a part hereof; provided, however, that any error or omission by the
Lender in this regard shall not affect the obligation of Borrower to pay the
full amount of the principal of and interest on all advances made to Borrower by
the Lender. Lender records of the amounts borrowed from time to time shall be
conclusive proof thereof.

the terms and conditions upon which each guarantee was granted and the rights of
the holder of this Note in respect thereof.

Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

FOX SPORTS NET, LLC

By: ___________________________________

Name:__________________________________

Title: ________________________________

FX NETWORKS, LLC

By: __________________________________

Name:_________________________________

Title: _______________________________

FOX SPORTS RPP HOLDINGS, LLC

By: __________________________________

Name:_________________________________

Title: _______________________________
<PAGE>

ADVANCES AND PAYMENTS OF PRINCIPAL

Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

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

- -------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

EXHIBIT 10.13

Louis LaTorre
New York, NY

Dear Mr. LaTorre:

This letter, when executed by both you and Fox Channels Services, L. L.C.
(hereinafter referred to as "the Company"), will confirm the Agreement between
you and the Company relating to your employment by the Company, and will
supersede all prior agreements between you and the Company relative to your
employment with the Company.

1. (a) The Company hereby employs you for a period of five years, commencing
July 1, 1999 and ending June 30, 2004 ("the Term"). If you continue in the
employ of the Company after the end of the above Term, your employment shall be
on an at-will basis at the weekly salary rate paid during your last regular pay
period hereunder.

2. You shall perform such duties consistent with your position set forth in
paragraph 3.(a), as are assigned to you from time to time (and agree to take
such trips both within and outside the United States as shall be determined to
be desirable) by the Company's Board of Directors, its Executive Committee,
Chairman of the Board, Vice Chairman of the Board, and President, President, or
persons occupying substantially identical positions thereto.

3. (a) You shall serve as President, Fox Channels Group Sales. For purposes of
this Agreement, Fox Channels Group will be considered the set of businesses
currently known as Fox Sports Networks (including the Fox Sports Regional Sports
Networks, Fox Sports Net, and Fox Sports World), FX, FXM and the Health Network.
Additional networks/responsibilities may be added during the Term. You shall
report to either Jeff Shell and or the President of Fox Television Group, or to
other executives with comparable titles and responsibilities.

(b) If you are elected a member of the Board of Directors or to any other
office of the Company or any of its affiliates, you agree to serve in such
capacity or capacities without additional compensation.

4. You hereby accept such employment and agree to devote the time and attention
necessary to fulfill the duties of your employment hereunder.

1
<PAGE>

5. For your services hereunder, the Company will, during the term
of your employment described in Paragraph 1.(a) hereof, on regular pay dates as
then in effect under applicable Company policy, pay you at the rate of:

(a) $620,000 per annum for the twelve month period from
July 1, 1999 through June 30, 2000;

(b) $665,000 per annum for the twelve month period from
July 1, 2000 through June 30, 2001;

(d) $800,000 per annum for the twelve month period from
July 1, 2002 through June 30, 2003;

(e) $900,000 per annum for the twelve month period from
July 1, 2003 through June 30, 2004.

6. In addition to the amounts to be paid to you pursuant to
Section 5, the Company shall provide the following:

(a) You shall receive a discretionary annual bonus of between
40% to 60% of your base salary per year, based on your group's performance
against annual budgets.

(b) You shall participate in the News Corporation Stock
option plan commencing with fiscal 1999 grants, at a level no less favorable to
other comparable Fox Entertainment Group Executives with similar
responsibilities, titles and/or salaries.

(d) You shall receive a car allowance in the amount of
$1100.00 per month.

(e) Your existing Fox/Liberty Networks Stock Appreciation
Rights units shall be paid as vested, at a price per unit of no less than
$250.00

7. (a) You agree that during the term of your employment, you will have no
interest, directly or indirectly, in any motion picture or television program
producing, distributing or exhibiting business, or in any broadcasting, cable or
film laboratory business or in any related business other than the Company and
its affiliates, and you will perform no services for any person, firm or
corporation engaged in any such business. The foregoing does not prohibit your
ownership of less than one percent (1%) of the outstanding common stock of any
company whose shares are publicly traded.

2
<PAGE>

(b) Enclosed is a copy of the News Corporation Limited Standard of
Business Conduct Statement. You agree to abide by the provisions of this
statement at all times during your employment by the Company.

8. You will not during the term of your employment and for a period of two
years thereafter, directly or indirectly, induce or attempt to induce any
managerial, sales or supervisory employee of the Company or its affiliates to
render services to any other person, firm or corporation.

9. (a) You acknowledge that the relationship between the parties
hereto is exclusively that of employer and employee and that the Company's
obligations to you are exclusively contractual in nature. The Company shall be
the sole owner of all the fruits and proceeds of your services hereunder,
including, but not limited to, all ideas, concepts, formats, suggestions,
developments, arrangements, designs, packages, programs, promotions and other
intellectual properties which you may create in connection with and during the
term of your employment hereunder, free and clear of any claims by you (or
anyone claiming under you) of any kind or character whatsoever (other than your
right to compensation hereunder). You shall, at the request of the Company,
execute such assignments, certificates or other instruments as the Company may
from time to time deem necessary or desirable to evidence, establish, maintain,
perfect, protect, enforce or defend its right, title and interest in or to any
such properties.

(b) All memoranda, notes, records and other documents made or
compiled by you, or made available to you during the term of this Agreement
concerning the business of the Company or its affiliates shall be the Company's
property and shall be delivered to the Company on the termination of this
Agreement or at any other time on request. You shall keep in confidence and
shall not use for yourself or others, or divulge to others, any information
concerning the business of the Company or its affiliates which is not otherwise
publicly available and which is obtained by you as a result of your employment,
including but not limited to, trade secrets or processes and information deemed
by the Company to be proprietary in nature, unless disclosure is permitted by
the Company or required by law.

(c) The Company shall have the right to use your name, biography and
likeness in connection with its business, including in advertising its products
and services, and may grant this right to others, but not for use as a direct
endorsement.

(d) The covenants set forth above in this paragraph shall survive the
termination of this Agreement.

3
<PAGE>

10. The services to be furnished by you hereunder and the rights and privileges
granted to the Company by you are of a special, unique, unusual, extraordinary,
and intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and a breach by you of any of the provisions contained herein will cause the
Company irreparable injury and damage. You expressly agree that the Company
shall be entitled to seek injunctive and other equitable relief to prevent a
breach of this Agreement by you. Resort to such equitable relief, however,
shall not be construed as a waiver of any preceding or succeeding breach of the
same or any other term or provision. The various rights and remedies of the
Company hereunder shall be construed to be cumulative and no one of them shall
be exclusive of any other or of any right or remedy allowed by law.

11. Any prior agreements that do not relate to your current employment,
including but not limited to any Consulting Agreement, Business Agreement,
Development Agreement, Production Agreement, General Release, and Settlement
Agreement shall remain in full force and effect, notwithstanding this Agreement.

12. In consideration of the making of this Agreement, as well as of the other
consideration stated herein, you expressly agree that any contract, agreement or
understanding between you and the Company with respect to severance or
termination pay, notice of severance or termination, or pay in lieu of notice of
severance or termination previously extended to you whether by way of contract,
letter, or Company termination policy, is hereby rescinded. You further agree
that if you continue in the employ of the Company after the end of this
Agreement, your employment may be terminated in accordance with the provisions
of such then existing Company policies as may then be in effect applicable to
comparable executives of the Company.

13. This Agreement shall be governed by the laws of the State of
California applicable to contracts performed entirely therein.

4
<PAGE>

14. This Agreement shall inure to the benefit of the successors and general
assigns of the Company and to the benefit of any other corporation or entity
which is a parent, subsidiary or affiliate of the Company to which this
Agreement is assigned, and any other corporation or entity into which the
Company may be merged or with which it may be consolidated. Except as herein
provided, this Agreement shall be nonassignable.

Sincerely,

Fox Channels Services, L. L. C.

/s/ Jeff Shell
By______________________________________
Jeff Shell
President, Fox Sports Networks, L.L.C.

July 29, 1999
______________________________________
Date

THE FOREGOING IS AGREED TO:

/s/ Louis LaTorre
______________________________
Louis LaTorre

August 3, 1999
_________________________
Date

<PAGE>

EXHIBIT 10.14

Mr. Robert Thompson
Los Angeles, California

Dear Mr.Thompson:

This letter, when executed by both you and Fox Sports Net, L.L.C. (hereinafter
referred to as ("the Company"), will confirm the agreement between you and the
Company relating to your employment by the Company, and will supersede all prior
agreements between you and the Company relative to your employment with the
Company.

1. The Company hereby employs you for a period of three years, commencing June
1, 1999 and ending May 31, 2002 ("the Term").

2. You shall perform such duties consistent with your position set forth in
Paragraph 3, as are assigned to you from time to time (and agree to take such
trips both within and outside the United States as shall be determined to be
desirable) by the Company.

3. (a) You shall serve as Executive Vice President and Chief Operating
Officer, Fox Regional Sports Networks and Executive Vice President and Chief
Operating Officer, Fox Sports International and report directly to the
President, Fox Sports Networks. If the Company shall be reorganized (by merger,
dissolution or otherwise), your title and reporting relationship will be
adjusted to give appropriate effect to the reorganization, it being understood
that any new title and reporting relationship will be commensurate with the
title and reporting relationship you have heretofore held with the Company.

4. You hereby accept such employment and agree to devote the time
and attention necessary to fulfill the duties of your employment hereunder.

5. For your services hereunder, the Company will, during the term
of your employment described in Paragraph 1 hereof, on regular pay dates as then
in effect under applicable Company policy, pay you at the rate of:

(a) $600,000 per annum for the twelve month period from June 1, 1999
through May 31, 2000;

1
<PAGE>

(b) $625,000 per annum for the twelve month period from June 1, 2000
through May 31, 2001;

6. If you substantially neglect the duties of your position, or fail to perform
your duties in compliance with applicable law, are convicted of any crime or
offense of a serious nature, willfully refuse or fail to comply with policies or
directives of the Company's management, materially breach any affirmative or
negative covenant or undertaking hereunder, or have engaged in conduct which has
injured or would injure the business or reputation of the Company or otherwise
adversely affect its interests, then, and in any such event, the Company may
give you written notice of default and, if the default is of a type that is
curable, a ten (10)day period within which to cure such default. If the default
is not cured within such ten (10) day period or is of a type which cannot be
cured, the Company may at any time thereafter by written notice to you terminate
your employment hereunder, and you shall have no right to receive any
compensation or benefit hereunder on and after the effective date of such
notice.

(b) Enclosed is a copy of the News Corporation Limited Standard of Business
Conduct Statement. You agree to abide by the provisions of this statement at all
times during your employment by the Company.

2
<PAGE>

designs, packages, programs, promotions and other intellectual properties which
you may create in connection with and during the term of your employment
hereunder, free and clear of any claims by you (or anyone claiming under you) of
any kind or character whatsoever (other than your right to compensation
hereunder). You shall, at the request of the Company, execute such assignments,
certificates or other instruments as the Company may from time to time deem
necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, title and interest in or to any such properties.

(b) All memoranda, notes, records and other documents made or compiled by
you, or made available to you during the term of this Agreement concerning the
business of the Company or its affiliates shall be the Company's property and
shall be delivered to the Company on the termination of this Agreement or at any
other time on request. You shall keep in confidence and shall not use for
yourself or others, or divulge to others, any information concerning the
business of the Company or its affiliates which is not otherwise publicly
available and which is obtained by you as a result of your employment, including
but not limited to, trade secrets or processes and information deemed by the
Company to be proprietary in nature, unless disclosure is permitted by the
Company or required by law.

(d) The covenants set forth above in this paragraph shall survive the
termination of this Agreement.

10. During the Term, the Company shall pay to, or provide to you
the following additional amounts or rights:

(a) You shall be eligible to participate in all employee benefit plans of
the Company available to other comparable executives of the Company. For
purposes of the plans described in this Paragraph 10 (a), you shall be deemed to
be a President, notwithstanding your position of Executive Vice President and
Chief Operating Officer designated in Paragraph 3(a).

(b) You shall participate in the Company's discretionary bonus program and
the News Corporation Limited Share Option Plan. Your eligibility to participate
in such plans shall be governed by the rules applicable to comparable News
Corporation executives.

(c) Fox/Liberty Networks, L.L.C. has granted you certain rights to
compensation pursuant to the provisions of Fox/Liberty Networks, L.L.C. Equity
Appreciation Rights Plan for Management and

3
<PAGE>

Key Employees ("EAP"). It is acknowledged that in executing this employment
agreement neither you nor the Company shall be deemed to have waived or lost any
rights, claims or position with respect to the issue of the EAP. Your employment
hereunder shall count toward any required additional time for vesting purposes.

(d) During the Term, the Company shall reimburse Employee for, or assume
Employees' obligation for the cost of a reasonable apartment and automobile
lease in Los Angeles.

11. The services to be furnished by you hereunder and the rights and privileges
granted to the Company by you are of a special, unique, unusual, extraordinary,
and intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and a breach by you of any of the provisions contained herein will cause the
Company irreparable injury and damage. You expressly agree that the Company
shall be entitled to seek injunctive and other equitable relief to prevent a
breach of this Agreement by you. Resort to such equitable relief, however, shall
not be construed as a waiver of any preceding or succeeding breach of the same
or any other term or provision. The various rights and remedies of the Company
hereunder shall be construed to be cumulative and no one of them shall be
exclusive of any other or of any right or remedy allowed by law.

12. Any prior agreements that do not relate to your current employment,
including but not limited to any Consulting Agreement, Business Agreement,
Development Agreement, Production Agreement, General Release, and Settlement
Agreement shall remain in full force and effect, notwithstanding this Agreement.

13. This Agreement shall be governed by the laws of the State of California
applicable to contracts performed entirely therein.

4
<PAGE>

Sincerely,

Fox Sports Net, L.L.C.

By /s/ Gloria Dickey
-------------------------------------

July 22, 1999
---------------------------------------
Date

THE FOREGOING IS AGREED TO:

/s/ Robert Thompson
- -----------------------------
Robert Thompson

July 22, 1999
- -----------------------------
Date

<PAGE>

EXHIBIT 10.16(b)

AMENDMENT TO
THE FOX SPORTS NETWORKS, LLC
EQUITY APPRECIATION RIGHTS PLAN
FOR MANAGEMENT AND KEY EMPLOYEES
--------------------------------

Fox/Liberty Networks, LLC, whose name has been changed to Fox Sports
Networks, LLC (the ("Company"), established the Fox/Liberty Networks, LLC Equity
Appreciation Rights Plan for Management and Key Employees (the "Plan").

RECITALS
--------

The terms used herein shall have the same meaning as under the Plan unless
otherwise indicated.

A. The Company now desires to rename and amend the Plan.

B. The Company, under Plan Section 7.1, has the right to amend or terminate
this Plan and to suspend the grant of Appreciation Rights under this Plan, at
any time and from time to time in any manner it determines, provided that any
amendment or termination will not affect the vested Appreciation Rights granted
prior to the effective date of such amendment, termination or suspension.

C. The Employees and the Company now desire to amend the Plan whereby
Employees will receive the opportunity to obtain greater benefits under the Plan
than if the Company had terminated the Plan and paid out only the vested
Appreciation Rights as of the effective date of this amendment, while the
Employees in consideration of this, agree to maintain the confidentiality of the
terms of the Plan and the amounts paid thereunder.

D. NOW, THEREFORE, the Company and the Employees agree as follows, effective
as of June 30, 1999 (the "Effective Date").

1. The name of the Plan is hereby changed to the Fox Sports Networks, LLC
Equity Appreciation Rights Plan for Management and Key Employees.

2. The Value of an Incentive Unit as of December 31, 1997 is $185; as of
December 31, 1998 is $250; and as of the Effective Date is $250. There shall be
no further adjustments after the Effective Date to the Value of an Incentive
Unit.
<PAGE>

3. No further Appreciation Rights shall be awarded under the Plan after the
Effective Date, however, Employees will continue to vest annually in a portion
or all of their Appreciation Rights under the Plan with the completion of Years
of Active Employment, as provided on Schedule A, as applicable to the Employee.

4. As of the Effective Date and as an Employee becomes vested in a portion
of or all of his Appreciation Rights under the Plan, the Employee shall be
deemed to have elected to exchange all of his Vested Appreciation Rights for the
amount payable under Section 5.1(b) of the Plan utilizing the Value of an
Incentive Unit as set forth herein in making the relevant calculations.

5. Each Eligible Employee agrees not to disclose any details concerning
this Plan, excepting to attorneys or accounts of the Eligible Employees (who
shall agree not to disclose such information) or as may otherwise be required by
law. In the event of a breach of the foregoing sentence, the Eligible Employee
agrees to refund to the Company an amount equal to all payments received under
this Plan and to forfeit the right to all future payments, if any, under the
Plan.

6. Amounts payable under the Plan may be paid by an affiliate of the
Company, including but not limited to Fox Entertainment Group, Inc.

7. Amounts payable under Section 4 of this Amendment shall be payable on or
before September 1st of each year, with respect to the amount payable on account
of the preceding calender year.

8. In all other respects, the Plan is hereby ratified and affirmed.

9. IN WITNESS WHEREOF, the Company has caused this Plan to be executed this
20th day of August, 1999, and each employee has signed the applicable Schedule
A, attached hereto, as of the date set forth by his signature.

FOX SPORTS NETWORKS, LLC

Fox Regional Sports Holdings II, Inc.,
a member of Fox Sports Networks, LLC
<PAGE>

By:
Jay Itzkowitz Senior Vice President

Fox Regional Sports Holdings, Inc.,
a member of Fox Sports Networks, LLC

By:
Jay Itzkowitz Senior Vice President

Fox Sports Net Financing LLC,
a member of Fox Sports Networks, LLC

By: Fox Regional Sports Holdings, II, Inc.,
a member of Fox Sports Net Financing, LLC

By:
Jay Itzkowitz Senior Vice President

And By: Fox Entertainment Group, Inc.,
a member of Fox Sports Nets Financing, LLC

By:
Jay Itzkowitz Senior Vice President

<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 59,145
<SECURITIES> 0
<RECEIVABLES> 232,491
<ALLOWANCES> (21,925)
<INVENTORY> 0
<CURRENT-ASSETS> 390,469
<PP&E> 94,182
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<TOTAL-ASSETS> 1,932,498
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0
0
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<OTHER-SE> 35,746
<TOTAL-LIABILITY-AND-EQUITY> 1,932,498
<SALES> 364,253
<TOTAL-REVENUES> 364,253
<CGS> 296,059
<TOTAL-COSTS> 347,562
<OTHER-EXPENSES> 16,367
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 54,781
<INCOME-PRETAX> (54,457)
<INCOME-TAX> 0
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<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> (54,457)
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</TABLE>