NEW WORLD TELEVISION INC, 10-K405, 1997-03-31

NEW WORLD TELEVISION INC
10-K405, 1997-03-31
TELEVISION BROADCASTING STATIONS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO

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COMMISSION FILE NUMBER 33-64546
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NEW WORLD TELEVISION INCORPORATED
(Exact name of Registrant as specified in its charter)

DELAWARE 59-2813891 90025
(State or other jurisdiction of (I.R.S. Employer (Zip Code)
incorporation or organization) Identification No.)

1999 SOUTH BUNDY DRIVE
LOS ANGELES, CALIFORNIA
(Address of Principal Executive Offices)

(310) 584-2000
(Registrant's telephone number, including area code)

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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
NONE NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
(TITLE OF CLASS)

Indicate by check mark whether the registrant: (1) has 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) has 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/

As of March 14, 1997, no voting stock of the Registrant was held by any non-
affiliates. As of such date, the Registrant was a wholly owned subsidiary of New
World Communications Group Incorporated.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes /x/ No / /

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As of March 14, 1997, the Registrant had 100 shares of Common Stock, par
value $.01 per share outstanding.
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NEW WORLD TELEVISION INCORPORATED

ANNUAL REPORT

DECEMBER 31, 1996
TABLE OF CONTENTS

PART I
PAGE
----

Item 1. Business........................................... 1

Item 2. Properties......................................... 9

Item 3. Legal Proceedings.................................. 10

Item 4. Submission of Matters to a Vote of Security Holders 10

PART II

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters........................ 10

Item 6. Selected Historical Consolidated Financial Data.... 11

Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Condition................. 12

Item 8. Financial Statements and Supplementary Data........ 14

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................ 33

PART III

Item 10. Directors and Executive Officers of the Registrant 33

Item 11. Executive Compensation............................ 34

Item 12. Security Ownership of Certain Beneficial Owners
and Management 39

Item 13. Certain Relationships and Related Transactions.... 40

PART IV

Item 14. Exhibits, Financial Statement Schedule and
Reports on Form 8-K............................... 42
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ITEM I: BUSINESS

GENERAL

New World Television Incorporated, a Delaware corporation ("NW Television" or
the "Company") is part of the television broadcasting operations of New World
Communications Group Incorporated ("NWCG"), a vertically integrated
entertainment company which operates through its principal subsidiaries NW
Television, NWC Acquisition Corporation ("NW Acquisition") and New World
Entertainment, Ltd. ("NW Entertainment"). For revenue and related financial
data, see Item 7, "Management's Discussion and Analysis of Results of Operations
and Financial Condition" and Item 8, "Financial Statements and Supplementary
Data" included herein. For the history of the Company, see "--History of the
Company."

RECENT DEVELOPMENTS

On January 22, 1997 (the "Fox Merger Date"), a special meeting (the
"Special Meeting") of stockholders of NWCG was held. At the Special Meeting,
the Agreement and Plan of Merger dated as of September 24, 1996 (the "Fox Merger
Agreement"), by and among NWCG, The News Corporation Limited, a South Australian
corporation ("News Corp."), Fox Television Stations, Inc., a Delaware
corporation in which News Corp. has an indirect interest ("Fox"), and Fox
Acquisition Co., Inc., a Delaware corporation and a wholly owned subsidiary of
Fox ("Merger Sub"), was approved. Immediately following the Special Meeting,
the transactions contemplated by the Fox Merger Agreement were consummated,
including the merger of Merger Sub with and into NWCG and a stock purchase
pursuant to the Stock Purchase Agreement dated as of September 24, 1996 (the
"Stock Purchase Agreement"), by and among News Corp., Fox and NWCG (Parent)
Holdings Corporation, a Delaware Corporation ("Parent") (the transactions
contemplated by the Fox Merger Agreement and the Stock Purchase Agreement,
collectively, the "Fox Merger").

Pursuant to the Merger Agreement, (a) each issued and outstanding share of
NWCG's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock") (other than any shares owned, directly or indirectly, by News Corp. or
any News Corp. Subsidiary (as such term is defined in the Fox Merger
Agreement)), was converted into the right to receive 1.45 American Depositary
Shares of News Corp. ("ADSs"), each of which represents four fully paid and non-
assessable Preferred Limited Voting Ordinary Shares of A$.50 of News Corp., and
(b) each issued and outstanding share of NWCG's Class B Common Stock, par value
$.01 per share (other than any shares owned, directly or indirectly, by News
Corp. or any News Corp. Subsidiary), was converted into the right to receive
1.45 ADSs. Pursuant to the Stock Purchase Agreement, Fox purchased from Parent
2,682,236 shares of Class A Common Stock of NWCG owned by Parent and all of the
outstanding shares of capital stock of NWCG Holdings Corporation, a Delaware
corporation and a wholly owned subsidiary of Parent ("Holdings").

Prior to the consummation of the Fox Merger, the Company was an affiliate
of Mafco Holdings, Inc. ("Mafco"), a Delaware corporation which is wholly owned
by Mr. Ronald O. Perelman, the former Chairman of the Board of NWCG.

The descriptions of the Company's business which appear in this Item 1 are
provided as of March 14, 1997, unless otherwise indicated.

TELEVISION BROADCASTING OPERATIONS

The Company currently owns and operates the following television Stations:
WJBK-TV (Detroit), WAGA-TV (Atlanta), WJW-TV (Cleveland), WTVT-TV (Tampa), and
WITI-TV (Milwaukee) (the "Stations"), all of which

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are affiliated with the FOX network. KNSD-TV (San Diego) was sold in November
1996 and WSBK-TV (Boston) was sold in March 1995.

The Company has focused on research to determine viewer preferences in its
markets to select programming which (i) enhances the image of the Stations as
FOX network affiliates and (ii) focuses on identified local market and
demographic choices. These efforts, along with efforts to promote viewer
awareness of the Stations' network affiliation, generally have resulted in
improved audience viewing shares of targeted demographic groups. The affiliation
with FOX allows the Stations to offer substantially more locally produced
programming since, on a weekly basis, the FOX network programs approximately 15
hours of prime-time programming, one hour of latenight programming on Saturday
and sports programming during certain times of the year. Further, the Stations
are used as a platform for distributing programming developed by companies
affiliated with FOX and by NW Entertainment.

INDUSTRY OVERVIEW

Television Broadcasting Industry Overview. The United States television
market, the largest in the world, is primarily served by three distribution
channels: (1) the ABC, CBS, NBC and FOX networks ("Major Networks"); (2)
independent commercial television stations; and (3) cable television services
(including pay cable). ABC, CBS and NBC provide their affiliates with
approximately 22 hours of prime time programming per week, as well as with a
substantial amount of programming for other time periods. FOX provides its
affiliates with approximately 15 hours of prime time programming per week, as
well as one hour of late night programming on Saturday and sports programming
during certain times of the year. This relationship results in the network
being able to reach virtually all of the significant television markets in the
United States. Over the past several years the United Paramount Network and the
Warner Brothers Network have formed affiliation agreements with certain
independent commercial television stations and stations formerly affiliated with
one of the Major Networks to provide up to seven hours of prime-time programming
per week; both networks have announced programming expansion. Cable services
are generally classified as being in one of three categories: super stations
(such as WGN), basic cable (advertiser-supported) and pay cable networks
(Showtime, HBO). The most successful cable networks each can reach more than
two-thirds of United States television households.

Revenues of television stations are derived primarily from (i) national spot
advertising, which consists of advertising time sold to national and regional
advertisers; (ii) local advertising, which consists of advertising time sold to
local advertisers; and (iii) network compensation payments, which are made by a
network to an affiliated station in consideration for its broadcasting of
network commercial programs. Network compensation payments are not made to the
Stations. Advertising rates are related to the population and number of
television receivers located in the area served by a station and to the
demographic characteristics of such population, as well as to the audience's
acceptance of a station's programming as reflected in surveys by independent
rating services. Many national spot and local advertising contracts are short-
term and revenues from such contracts are sensitive to changes in prevailing
economic conditions.

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The Stations. The Company currently owns and operates five Stations affiliated
with the FOX network. Data presented below regarding television ratings and
market share data are based on published industry data for November 1996.
<TABLE>
<CAPTION>

NATIONAL COMMERCIAL % OF EXPIRATION
RANKING OF TV HOMES TV TOTAL DATE
DMA MARKET IN STATIONS IN U.S. TV OF FCC
MARKET STATION(1) SERVED (2)(3) DMA(3) MARKET(3) HOMES AUTHORIZATION(4)
- -------------------------- ------------------- -------------- ------------ -------------- ------- ----------------

<S> <C> <C> <C> <C> <C> <C>
Detroit, MI WJBK, Channel 2 9 1,771,950 7 1.828 10/1/97
Atlanta, GA WAGA, Channel 5 10 1,625,230 9 1.677 4/1/97 (5)
Cleveland, OH WJW, Channel 8 13 1,461,410 9 1.508 10/1/97
Tampa-St. Petersburg, FL WTVT, Channel 13 15 1,411,440 8 1.456 2/1/97 (5)
Milwaukee, WI WITI, Channel 6 31 786,970 9 .812 12/1/97
</TABLE>

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(1) All of the Stations operate on VHF channels (channels 2 through 13).
(2) National ranking of metropolitan areas is based on estimates of television
households in the Designated Market Area ("DMA"), a standard industry
ranking method as published by A.C. Nielsen Company, an independent media
service.
(3) Source: A.C. Nielsen Company November 1996.
(4) See "Federal Regulation of Television Broadcasting" below.
(5) In October 1996 and December 1996, the Company timely filed applications to
renew the licenses of WTVT and WAGA, respectively. No petitions to deny the
applications were filed. WTVT's and WAGA's licenses remain in effect until
the FCC acts on the renewal applications.

COMPETITION

Each of the Stations competes for audiences and advertising revenues with
radio and television stations and cable systems in its market area and with
other advertising media such as newspapers, magazines, outdoor advertising and
direct mail. All of the Stations are located in highly competitive markets.
Competition for sales of broadcasting time is based primarily on the anticipated
and actually delivered size and demographic characteristics of audiences as
determined by various rating services, price, the time of day when the
advertising is to be broadcast, competition from other television stations,
cable television systems, digital broadcast satellite ("DBS") services and other
media and general economic conditions. Competition for audiences is based
primarily on the selection of programming, the acceptance of which is dependent
on the reaction of the viewing public which is often difficult to predict.
Additional elements which are material to the competitive position of television
stations include management experience, authorized power and assigned frequency.
The broadcasting industry is continuously faced with technical changes and
innovations, the popularity of competing entertainment and communications media,
changes in labor conditions and governmental restrictions or actions of Federal
regulatory bodies, including the FCC and the Federal Trade Commission, any of
which could possibly have a material effect on the Company's operations and
profits. (See "Federal Regulation of Television Broadcasting" below.) There
are sources of television service other than conventional television stations,
the most common being cable television, which can increase competition for a
broadcasting station by bringing into its market distant broadcasting signals
not otherwise available to the station's audience, serving as a distribution
system for national DBS programming and other non-broadcast programming
originated on a cable system and selling advertising time to local advertisers.
All of the Stations are presently carried by some cable television systems both
within and outside of their respective market areas. Other principal sources of
competition include DBS entertainment services and home video exhibition.

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Each of the Stations is believed to compete satisfactorily within its market
with respect to technical facilities, programming and promotional and marketing
activities.

HISTORY OF THE COMPANY

NW Television was incorporated in Delaware in 1987 and, through its
subsidiaries, owns and operates five Stations. NW Television was formed in late
1987 for the purpose of acquiring certain television stations (the "Original
Stations") from Storer Communications, Inc. ("Storer") through the purchase of
all of the capital stock of eight wholly owned subsidiaries of Storer, six
stations and certain related businesses (the "1987 Acquisition"). Upon
formation of NW Television, its principal stockholders were Gillett Corporation
("Gillett"), a wholly owned subsidiary of Gillett Holdings, Inc. ("GHI"), and
Storer. Storer was a wholly owned subsidiary of SCI Holdings, Inc. ("SCI
Holdings"). SCI Holdings and Storer were organized by Kohlberg Kravis Roberts &
Co. in connection with the acquisition of certain broadcast subsidiaries in
1985.

As an outcome of debt restructuring negotiations that began in late 1991, on
January 19, 1993, NW Television and certain related entities commenced a
solicitation from certain of NW Television's creditors for approval of the Plan
under the United States Bankruptcy Code U.S.C. sec. 101 et. seq., as amended
(the "Bankruptcy Code"), with the intention of subsequently filing petitions for
relief under the Bankruptcy Code in what is commonly known as a "prepackaged"
bankruptcy transaction. NW Television's Joint Plan of Reorganization (the
"Plan") was confirmed by the Bankruptcy Court on May 6, 1993, and the Plan
became effective on May 25, 1993 (the "Plan Effective Date"). On, or
immediately prior to, the Plan Effective Date, the following restructuring
transactions (the "1993 Restructuring Transactions") were consummated pursuant
to the Plan:

1. NW Television's pre-Plan Effective Date indebtedness of approximately
$1.3 billion was reduced to approximately $558.7 million and all of NW
Television's pre-Plan Effective Date capital stock was extinguished.

2. Andrews purchased for an aggregate consideration of $100 million (a)
11,808,529 shares of NW Television Common Stock, representing an approximately
54% interest in the outstanding NW Television Common Stock on the Plan
Effective Date and (b) 1,500,000 of $8.47 Warrants (such purchase, the
"Andrews Investment").

3. The remaining capital stock of NW Television, consisting of 10,000,000
shares of NW Television Common Stock (a portion of which, under certain
circumstances, was represented by Class A Warrants) and 1,500,000 $8.47
Warrants, together with an aggregate of $22.6 million in cash, were
distributed to certain holders of pre-Plan Effective Date debt of NW
Television.

4. NW Television acquired the assets constituting the Tampa Station, which
were previously owned indirectly by a former affiliate of NW Television (the
"Tampa Station Purchase"), for consideration consisting of $163.3 million in
cash, provided by (i) the Andrews Investment and (ii) $63.3 million of
proceeds from the sale of $65 million aggregate principal amount of 11%
Secured Senior Notes due 2005, Series 1 (the "11% Notes").

The NWCG Merger. On November 23, 1993, NW Television entered into an
Agreement and Plan of Reorganization and Merger (as amended, the "NWCG Merger
Agreement") with Andrews, NWCG, a newly incorporated, indirect wholly owned
subsidiary of NW Television, and SCI Merger Sub Incorporated, a newly
incorporated, wholly owned subsidiary of NWCG ("NWCG Merger Sub"). A special
committee of independent directors of NW Television and the board of directors
of NW Television approved and recommended the transactions contemplated by the
NWCG Merger Agreement as being in the best interest of NW Television and all of
its stockholders (other than Andrews). The following summary of the NWCG Merger
Agreement is subject to the detailed provisions of the NWCG Merger Agreement.
The NWCG Merger Agreement provided for a number

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of transactions, including the creation of a new holding company to own all of
the stock of NW Television. The NWCG Merger Agreement and the transactions
contemplated thereby reflected, among other things, the following:

1. The formation by NW Television of a wholly owned subsidiary incorporated
in Delaware, known as SCI Subsidiary Corporation ("SCI Subsidiary"). SCI
Subsidiary has no material assets and is not expected to conduct any business.
The stock of SCI Subsidiary was pledged to Chemical Bank, as collateral
trustee, pursuant to the SCI Pledge and Security Agreement and the related
Collateral Trust Agreement.

2. The formation by SCI Subsidiary of a wholly owned subsidiary
incorporated in Delaware, known as NWCG.

3. The formation by NWCG of two wholly owned subsidiaries incorporated in
Delaware, NWCG Merger Sub and NWC Holdings Corporation ("NWC Holdings.")

4. The merger (the "NWCG Merger") of NWCG Merger Sub with and into NW
Television, which occurred on March 7, 1994 (the date of the NWCG Merger being
referred to herein as the "NWCG Merger Effective Date"), with NW Television
being the surviving corporation in the NWCG Merger, all in accordance with the
provisions of Section 251 of the Delaware General Corporation Law. In the NWCG
Merger, all of the then outstanding shares of Common Stock of NW Television
were converted into a like number of shares of common stock, par value $.01
per share, of NWCG (the "NWCG Class B Common Stock"). In addition, in
accordance with the provisions of NW Television's Class A Warrants and Class B
Warrants, from and after the NWCG Merger Effective Date, as a result of the
NWCG Merger and without the taking of any action by the holders of NW
Television's Class A Warrants and NW Television's Class B Warrants, the
holders of such warrants, upon the exercise thereof, have the right to acquire
and receive, in lieu of the shares of NW Television Common Stock immediately
theretofore acquirable and receivable upon the exercise of such warrants, a
like number of shares of NWCG Common Stock. Further, on the NWCG Merger
Effective Date, all previously outstanding shares of common stock, par value
$.01 per share, of NWCG were canceled. As a result of the NWCG Merger, NW
Television became a wholly owned subsidiary of NWCG and NWC Holdings and SCI
Subsidiary remain wholly owned subsidiaries of the NWCG and NW Television,
respectively.

The NWCG Merger did not result in any changes to the assets or liabilities of
NW Television. Following the NWCG Merger NW Television continued to own all of
the assets it previously owned and was liable for all of the indebtedness and
other obligations for which it was previously liable. The provisions of the
Company's debt agreements, certain intercompany notes, and other instruments
related to the indebtedness of NW Television and its subsidiaries continue in
effect following the NWCG Merger. NWCG's stockholders were the same as, and
owned NWCG in the same proportions as did, NW Television's stockholders
immediately prior to the NWCG Merger.

In addition, pursuant to the NWCG Merger Agreement, Andrews sold to NWCG all
of the capital stock of each of New World Entertainment Ltd., a Delaware
corporation and wholly owned subsidiary of Andrews, and Four Star International,
Inc. a California corporation and wholly owned subsidiary of Andrews
(collectively, "NW Entertainment"), in exchange for 25,383,707 additional shares
of NWCG Class B Common Stock. As a result of these transactions, NW Television
and NW Entertainment each became wholly owned subsidiaries of NWCG. However, the
acquisition of NW Entertainment did not result in NW Television having any
equity interest in NW Entertainment. As a result of the NWCG Merger and such
acquisition, NW Television and NW Entertainment are sister entities under the
common control of NWCG.

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FEDERAL REGULATION OF TELEVISION BROADCASTING

Television broadcasting is subject to the jurisdiction of the FCC under the
Communications Act of 1934, as amended (the "Communications Act"). The
Communications Act prohibits the operation of television broadcasting stations
except under a license issued by the FCC and empowers the FCC, among other
things, to issue, revoke and modify broadcasting licenses, determine the
locations of stations, regulate the equipment used by stations, adopt
regulations to carry out the provisions of the Communications Act and impose
penalties for violation of such regulations. The Communications Act prohibits
the assignment of a license or the transfer of control of a licensee without
prior approval of the FCC. The Communications Act also empowers the FCC to
adopt such regulations as may be necessary to carry out the provisions of the
Communications Act and to impose certain penalties for violation of its
regulations. On February 8, 1996, the Telecommunications Act of 1996 (the
"Telecommunications Act"), which substantially amended the Communications Act,
was enacted. Set forth below is a general description of some of the principal
areas of FCC regulation of the broadcast and cable television industries.

License Grant and Renewal. Broadcast stations must seek renewal of their
licenses from the FCC at the end of each license term. On January 24, 1997,
pursuant to the Telecommunications Act, the FCC increased the terms of such
licenses and their renewal to eight years. The Telecommunications Act directs
the FCC to grant renewal of a broadcast license if it finds that the station has
served the public interest, convenience, and necessity and that there have been
no serious violations (or other violations which would constitute a "pattern of
abuse") by the licensee of the Communications Act or FCC rules. If the FCC
finds that a licensee has failed to meet these standards, and there are no
sufficient mitigating factors, it may deny renewal or condition renewal
appropriately, including renewing for less than a full term. Any other party
with standing may petition the FCC to deny a broadcaster's application for
renewal. However, only if the FCC issues an order denying renewal will it
accept and consider applications from other parties for a construction permit
for a new station to operate on the channel subject to such denial. The FCC may
not consider any such applicant in making determinations concerning the grant or
denial of the licensee's renewal application.

The Company is not aware of any facts or circumstances that would prevent the
renewal of the licenses for the Stations at the end of the respective license
terms. The Telecommunications Act provides that licenses continue in effect
until the FCC acts upon the renewal application and any petition for rehearing.

Multiple- and Cross-Ownership Restrictions. Current FCC regulations also
impose significant restrictions on certain positional and ownership interests in
broadcast and other media. The officers, directors and certain equity owners of
a broadcasting company are deemed to have "attributable interests" in the
broadcasting company. In the case of a corporation controlling or operating
television stations, ownership is attributed only to officers, directors and
stockholders who own 5% or more of the company's outstanding voting stock.
Institutional investors, including mutual funds, insurance companies and banks
acting in a fiduciary capacity, may own up to 10% of the outstanding voting
stock without being subject to attribution, provided that such stockholders
exercise no control over the management or policies of the broadcasting company.

Under current FCC rules governing multiple ownership of broadcast stations, a
license to operate a television station will not be granted (unless established
waiver standards are met) to any party (or parties under common control) that
has an attributable interest in another television station with an overlapping
service area (the "Duopoly Rule"). FCC regulations prohibit one owner from
having attributable interests in television broadcast stations that reach in the
aggregate more than 35% of the nation's television households. For purposes of
this calculation, stations in the UHF band (channels 14-69) are attributed only
50% of the households attributed to stations in the VHF band (channels 2-13).
The rules also currently prohibit (with certain qualifications) the holder of an
attributable interest in a television station from also having an attributable
interest in a radio station, daily newspaper or cable television system serving
a community located within the relevant coverage area of that television
station. Separately, the FCC's "cross-interest" policy may, in certain
circumstances, prohibit the common ownership of an attributable interest in one
media outlet and a non-attributable equity interest in another media outlet in
the same market. In pending rulemaking proceedings, the FCC is considering (a)
the modification of its attribution rules and the "cross-interest" policy and
(b) the modification of the Duopoly Rule in addition to certain other changes.

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Review of "Must-Carry" Rules. FCC regulations implementing the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act") require each television broadcaster to elect, at three year intervals
beginning June 17, 1993, to either (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"). In a 2-1 decision
issued on December 13, 1995, a special three-judge panel of the U.S. District
Court for the District of Columbia upheld the constitutionality of the must-
carry provisions. The District Court's decision has been appealed to the U.S.
Supreme Court, which has heard the appeal and is expected to issue a decision
prior to June 30, 1997.

Children's Television. On August 8, 1996 the FCC amended its rules
implementing the Children's Television Act of 1990 (the "CTA") to establish a
"processing guideline" for broadcast television stations of at least three hours
per week, averaged over a six-month period, of "programming that furthers the
educational or informational needs of children 16 and under in any respect,
including the child's intellectual/cognitive or social/emotional needs." "Core
Programming" has been defined as educational or informational programming that,
among other things, (a) has, as a "significant purpose," serving the educational
or informational needs of children, (b) has a specified educational or
informational objective and a specified target child audience, (c) is regularly
scheduled, weekly programming, (d) is at least 30 minutes in length, and (e)
airs between 7:00 a.m. and 10:00 p.m. A television station ultimately found not
to have complied with the CTA could face sanctions, including monetary fines and
the possible non-renewal of its broadcast license. The Company does not believe
that these changes will adversely affect its operations.

The CTA and FCC rules require television station licensees to identify
programs specifically designed to educate or inform children at the beginning of
each program and in published listings. In addition, the Telecommunications Act
directed the broadcast and cable television industries to develop and transmit
an encrypted rating in all video programming that, when used in conjunction with
so-called "V-Chip" technology, would permit the blocking of programs with a
common rating. On January 17, 1997, an industry proposal was submitted to the
FCC describing a voluntary ratings system under which all video programming
would be designated in one of six categories. Pursuant to the
Telecommunications Act, the FCC has initiated a proceeding to determine whether
to accept the industry proposal or to establish and implement an alternative
system for rating and blocking video programming. The FCC has indicated that it
will commence a separate proceeding shortly addressing technical issues related
to the "V-Chip". The Company cannot predict whether the FCC will accept the
industry proposal regarding the rating and blocking of video programming, or
how changes in this proposal could affect the Company's business.

Distribution of Video Services by Telephone Companies. The Telecommunications
Act allows local telephone companies to provide multichannel program
distribution services within their telephone service areas and in competition
with cable television systems. Local telephone companies serving most or all of
the markets in which the Company operates television stations have indicated
that they intend to enter the video distribution market. Before the
Telecommunications Act, under prior court and FCC rulings, certain local
telephone companies had announced or had initiated multichannel video
distribution market trials. The Company cannot predict the impact of these
developments.

Advanced Television Service. The FCC has proposed the adoption of rules for
implementing digital advanced television ("DTV") service in the United States.
Implementation of digital DTV will improve the technical quality of television
signals and will provide broadcasters the flexibility to offer new services,
including high-definition television ("HDTV") and data broadcasting.

Before DTV services can be implemented the FCC must determine the eligibility
for DTV licenses, adopt a table of DTV allotments, assign DTV licenses, and
adopt DTV service rules. The FCC is conducting a rulemaking proceeding to
devise a table of channel allotments. The FCC has issued a preliminary table,
subject to public comment and further modification, allotting a second broadcast
channel to each full-power television station for DTV operation. Under the
FCC's preliminary decisions, stations would be permitted to phase in their DTV

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operations over a period of years following the adoption of a final table of
allotments, after which they would be required to surrender their non-DTV
channel. A proposal is currently under consideration whereby broadcasters in
the top ten DMAs would initiate DTV service within an eighteen to thirty-six
month period following the adoption of a final table of allotments. Meanwhile,
Congress has from time to time considered proposals that would require incumbent
broadcasters to bid at auction for the additional spectrum required to effect a
transition to DTV, or, alternatively, would assign DTV spectrum to incumbent
broadcasters and require the early surrender of their non-DTV channel for sale
by public auction.

The Telecommunications Act imposes certain conditions on the FCC's
implementation of DTV service. Among other requirements, the FCC must (i) limit
the initial eligibility for such licenses to existing television broadcast
licensees or permittees; (ii) allow DTV licensees to offer ancillary and
supplementary services; (iii) charge appropriate fees to broadcasters that
supply ancillary and supplementary services for which such broadcasters derive
certain non-advertising revenues; and (iv) recover at an unspecified time either
the DTV license or the original license (the "NTSC" license) held by the
broadcaster. These requirements are generally consistent with the FCC's
tentative proposals.

Conversion to DTV operations could reduce a station's geographical coverage
area. Equipment and other costs associated with the DTV transition, including
the necessity of temporary dual-mode operations, will impose some near-term
financial costs on television stations providing the service. The potential
also exists for new sources of revenue to be derived from DTV. Although the
Company believes the FCC will authorize DTV, the Company cannot predict when or
under what conditions the authorization might be given, whether, or the amount,
broadcasters will be required to pay direct compensation to the government as a
condition of transitioning to DTV operations, when NTSC broadcasting might
cease, or the overall effect the transition to DTV might have on the Company's
business.

Other Pending FCC Proceedings. In 1995 the FCC issued notices of proposed
rulemaking proposing to modify or eliminate most of its remaining rules
governing the broadcast network-affiliate relationship. The network-affiliate
rules were originally intended to limit networks' ability to control programming
aired by affiliates or to set station advertising rates and to reduce barriers
to entry by new networks. These proceedings are pending. The dual network
rule, which generally prevents a single entity from owning more than one
broadcast television network, is among the rules under consideration in these
proceedings. However, the Telecommunications Act substantially relaxed the dual
network rule by providing that an entity may own more than one television
network; however, no two national television networks in existence on February
8, 1996 may merge or be acquired by the same party. The Company is unable to
predict how or when the FCC proceedings will be resolved or how those
proceedings or the relaxation of the dual network rule may affect the Company's
business.

Pursuant to a Congressional directive contained in the Telecommunications Act,
the FCC has commenced a proceeding to devise rules and an implementation
schedule for universal closed captioning of video programming.

The FCC continues to enforce strictly its regulations concerning broadcasters'
equal employment obligations, "indecent" programming, political advertising,
environmental concerns, technical operating matters and antenna tower
maintenance. In particular, the FCC has indicated its intent to enforce
strictly its limits with respect to the amount of commercial matter presented
during children's programming by levying substantial monetary forfeitures for
commercial overages. The FCC also has indicated its intent to enforce equal
employment guidelines and recruitment efforts and record-keeping requirements,
by imposing substantial monetary forfeitures, periodic reporting conditions, and
short-term license renewals.

There are additional FCC regulations and policies, and regulations and
policies of other federal agencies, affecting the business and operations of
broadcast stations. Proposals for additional or revised rules are considered by
federal regulatory agencies and Congress from time to time. It is not possible
to predict the resolution of these issues or other issues discussed above,
although their outcome could, over a period of time, affect, either adversely or
favorably, the broadcasting industry generally or the Company specifically.

8
<PAGE>

The foregoing does not purport to be a complete summary of all the provisions
of the Communications Act, the Telecommunications Act or other Congressional
acts or of the regulations and policies of the FCC thereunder. Reference is
made to the Communications Act, the Telecommunications Act, other Congressional
acts, such regulations and policies, and the public notices promulgated by the
FCC for further information.

EMPLOYEES

As of December 31, 1996, the Company had approximately 1,240 employees, 311 of
whom belonged to collective bargaining units. Renewals of collective bargaining
agreements covering approximately 105 employees were being negotiated as of
December 31, 1996, and collective bargaining agreements covering approximately
225 employees are due for renewal in 1997. The Company believes its
relationships with its employees are satisfactory.

ITEM 2: PROPERTIES

The principal offices of the Company are located at 1999 South Bundy Drive,
Los Angeles, California 90025, telephone (310) 584-2000. The other principal
facilities are as follows:

LOCATION OWNERSHIP USE
- -------- --------- ---
<S> <C> <C>

Southfield, MI (WJBK-TV) Owned Office, Studio and Tower
Atlanta, GA (WAGA-TV) Owned Office, Studio and Tower
Cleveland, OH (WJW-TV) Owned Office and Studio
Parma, OH (WJW-TV) Owned Tower
Tampa, FL (WTVT-TV) Owned Office and Studio
Riverview, FL (WTVT-TV) Owned Tower
St. Petersburg, FL (WTVT-TV) Leased Office -- News bureau
Milwaukee, WI (WITI-TV) Owned Office and Studio
Shorewood, WI (WITI-TV) Owned Tower
</TABLE>

Management believes that its properties are currently adequate and suitable to
conduct its business and will remain so in the foreseeable future.

9
<PAGE>

ITEM 3: LEGAL PROCEEDINGS

The Company and its subsidiaries are parties to a number of pending legal
proceedings. The Company does not expect that the outcome of such proceedings,
either individually or in the aggregate, will have a material effect on the
Company's operations or financial results.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the quarter
ended December 31, 1996.

ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

There is no established public trading market for any of the Company's equity
securities.

As of March 14, 1997, there were 100 outstanding shares of Common Stock, par
value $0.01 per share, outstanding.

The Company has not paid any dividends during the two most recent fiscal
periods. The Company is currently prohibited by its debt instruments from
paying dividends.

10
<PAGE>

ITEM 6. SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables set forth, in thousands, for the periods and for the dates
indicated, summary historical consolidated financial data derived from the
consolidated financial statements of the Company and should be read in
connection with the consolidated financial statements and related notes included
elsewhere herein. As a consequence of the purchase by Andrews of approximately
54% of the Company's Common Stock and the application of "Fresh Start" reporting
upon emergence from bankruptcy, the Company revalued its assets and liabilities
at estimated reorganization value (which approximates fair value) as of the Plan
Effective Date. Fresh Start reporting, pursuant to Statement of Position 90-7
issued by The American Institute of Certified Public Accountants ("SOP 90-7"),
is prescribed for entities in and emerging from bankruptcy reorganization with a
change in control. Accordingly, the pre-Plan Effective Date financial
statements are reported on a different basis of accounting than the post-Plan
Effective Date financial statements. As a result of the above and the addition
of the Tampa Station results beginning May 25, 1993, the post-Plan Effective
Date financial statements of the Company are not comparable to pre-Plan
Effective Date financial statements.
<TABLE>
<CAPTION>
POST-PLAN EFFECTIVE DATE
--------------------------------------------------------
For the period
from
May 25, 1993
For the year ended December 31, to December 31,
1996 1995 1994 1993
--------- --------- --------- -----------------

STATEMENT OF OPERATIONS DATA
<S> <C> <C> <C> <C>
Net revenue . . . . . $ 247,518 $ 230,774 $ 285,830 $ 164,875
Income from operations . . 44,216 32,007 54,606 29,346
Interest expense . . . . (52,241) (54,983) (61,014) (36,091)
Reorganization items (a) . . - - - -
Income (loss) before extraordinary
item and change in accounting
principle . . . . . 57,027 (13,369) (9,650) (9,912)
Extraordinary item (b) . . . - - - -
Cumulative effect of change in
accounting principle . . - - - -
Net income (loss) . . . . 57,027 (13,369) (9,650) (9,912)

BALANCE SHEET DATA
Total assets . . . . . . 837,973 823,926 951,744 964,100
Long-term debt including capital lease
lease obligations (including
current maturities) . . . 481,626 515,734 621,722 623,735
Stockholder's equity
(deficit) (c) . . . . . 208,792 151,765 165,134 174,780
</TABLE>

<TABLE>
<CAPTION>
PRE-PLAN EFFECTIVE DATE
--------------------------------
For the period
from
January 1, For the
1993 to year ended
May 24, 1993 1992
---------------- ------------

STATEMENT OF OPERATIONS DATA
<S> <C> <C>
Net revenue . . . . . $ 82,106 $ 221,544
Income from operations . . 6,023 31,429
Interest expense . . . . (21,974) (102,809)
Reorganization items (a) . . (223,165) -
Income (loss) before extraordinary
item and change in accounting
principle . . . . . (226,792) (76,829)
Extraordinary item (b) . . . 697,401 -
Cumulative effect of change in
accounting principle . . (64,000) -
Net income (loss) . . . . 406,609 (76,829)

BALANCE SHEET DATA
Total assets . . . . . . 1,004,916
Long-term debt including capital lease
lease obligations (including
current maturities) . . . 1,305,137
Stockholder's equity
(deficit) (c) . . . . . (406,609)
</TABLE>

(a) Represents the loss on restructuring transactions related to the Company's
emergence from bankruptcy.
(b) Represents the extraordinary gain from debt forgiveness related to the
Company's emergence from bankruptcy.
(c) No dividends were declared on common stock for any periods presented.

11
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION

The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the accompanying consolidated
financial statements and related notes of the Company which provide additional
information on financial activities and condition.

RESULTS OF OPERATIONS

Year ended December 31, 1996 Compared to December 31, 1995. Net revenue
increased $16.7 million or 7.3% in 1996 over 1995. The increase reflects an
increase of $19.8 million for the five stations owned for both periods (the
"Current Stations") and an increase of $2.6 million reflecting the revenue
increase at the San Diego Station which was sold in November 1996, offset by a
decrease of $5.7 million reflecting the sale of the Boston Station in March
1995. The increase in revenue for the Current Stations reflects significant
political revenues in the 1996 presidential election year and an increase in
local revenue of $10.6 million or 10.8% due to both improved ratings and
increased advertiser spending in the local markets. The Company had expected
the conversion of the Current Stations' affiliation to the FOX network in late
1994 to result in an initial decline in revenues.

Operating expenses decreased $5.3 million due primarily to a decrease of
$8.1 million reflecting the sale of both the Boston Station in March of 1995 and
the San Diego Station in November 1996, offset by an increase of $2.8 million
for the Current Stations due primarily to higher employee benefit costs.

Depreciation and amortization of intangible assets increased $.8 million in
1996 due to capital additions offset by a decrease resulting from the sale of
both the Boston Station and the San Diego Station. The increase in corporate
expenses of $9.0 million reflects the allocation of additional expenses from
NWCG related primarily to Fox Merger and compensation costs.

The decrease in interest expense of $2.7 million reflects the reduced
principal balance of debt due to debt payments. The increase in interest income
of $1.3 million results from higher cash and restricted cash balances in 1996.

The gain on the sale of stations reflects the November 1996 sale of the
assets constituting the San Diego Station for gross proceeds of $231.7 million.

The income tax expense recorded in 1996 resulted primarily from the
recognition of income taxes on the sale of the San Diego Station. The liability
associated with these taxes will be offset by utilization of pre-Plan Effective
Date operating losses. The utilization has been reflected as a reduction of
excess reorganization value.

Year ended December 31, 1995 Compared to December 31, 1994. Net revenue
decreased $55.1 million or 19.3% in 1995 over 1994. The decrease reflects a
decrease of $16.9 million for the six stations owned for both periods (the "Six
Stations") and a decrease of $38.2 million reflecting the sale of the Boston
Station in March 1995. The Company had expected the conversion of five of the
six stations' affiliation to the FOX network in late 1994 to result in an
initial decline in revenues. The decrease in revenue for the Six Stations
reflects a temporary reduction of revenue due to the conversion, a softening of
national and local revenues late in the third quarter and in the fourth quarter
of 1995, and higher revenues in 1994, a year with significant political revenue
and in which the majority of the stations broadcast the 1994 Winter Olympics.

Operating expenses decreased $30.2 million due to a decrease of $35.9
million reflecting the sale of the Boston Station in March 1995 offset by an
increase of $5.7 million for the Six Stations due to higher staffing levels to
support the increase in locally produced programming, increased promotional and
advertising activities and non-recurring costs associated with the conversion of
certain broadcast stations to the FOX network.

12
<PAGE>

Depreciation and amortization of intangible assets decreased $2.4 million
in 1995 due primarily to the sale of the Boston Station.

The decrease in interest expense of $6.0 million reflects the reduced
principal balance of debt due to debt payments.

The gain on the sale of stations reflects the March 1995 sale of the
Company's investment in the Boston Station for gross proceeds of $107.5 million.

The income tax expense recorded in 1995 resulted primarily from the
recognition of income taxes on the sale of the Boston Station. The liability
associated with these taxes will be offset by utilization of pre-Plan Effective
Date net operating losses. The utilization has been reflected as a reduction of
excess reorganization value.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1996, the Company had total debt outstanding of
approximately $481.6 million of which approximately $4.7 million is due in 1997.
On January 6, 1997, in conjunction with the sale of the San Diego Station, the
Company repaid $41 thousand of the 11% Notes. Further, the balance of the
excess net proceeds from the station sale of $193.2 million, which is reflected
as restricted cash at December 31, 1996, reverted to the Company free of any
liens for use as permitted under the terms of the Step-up Notes and the 11%
Notes.

On March 6, 1997, the Company used a portion of the excess net proceeds
from the San Diego Station sale to redeem the Step-up Notes for a purchase price
equal to 100% of the outstanding principal balance of the notes of $107.9
million. As a result of the Fox Merger, on February 13, 1997 the Company made
an offer to purchase the outstanding balance of the 11% Notes at a repurchase
price in cash equal to 100% of the principal amount outstanding. Currently the
11% Notes are the only debt outstanding.

To service the 11% Notes, the Company plans to utilize broadcasting
operating cash flow. The Company believes that operating cash flow will be
sufficient to satisfy current requirements for operating, investing and
financing activities of the Company, including debt service prior to final
maturity. The Company expects that the funds required to meet principal
payments upon the final maturity of the 11% Notes in 2004 and 2005 will be
provided by a combination of broadcasting operating cash flow, excess net
proceeds from the San Diego Station sale and cash to be made available by NWCG
and Fox. Provisions of the Company's 11% Notes limit the amount of additional
debt the Company may incur.

The Company's capital budget for 1997 of approximately $8 million will be
used primarily to support the news gathering and reporting operations.

In connection with the overall business strategy to participate in an
integrated entertainment company capable of developing, producing and
distributing television programming, the Company may invest in ventures which
produce and distribute television programming, operate a national advertising
and/or sales representation firm or syndicate programming (a "Program Co").
Certain of the Company's agreements, including the debt agreements, place
limitations on the Company's financial and business relationships with Program
Co. As permitted under the Company's debt agreements, the Company made an
aggregate investment of $30.0 million in preferred stock and debt of NW
Entertainment, which for purposes of the Company's debt agreements is a Program
Co.

13
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Page
----

New World Television Incorporated

Report of Independent Auditors.................................... 15

Consolidated Balance Sheet as of December 31, 1996 and 1995....... 16

Consolidated Statement of Operations for the years ended
December 31, 1996, 1995 and 1994.................................. 17

Consolidated Statement of Stockholder's Equity for the years ended
December 31, 1996, 1995 and 1994.................................. 18

Consolidated Statement of Cash Flows for the years ended
December 31, 1996, 1995 and 1994.................................. 19

Notes to Consolidated Financial Statements........................ 20

Supplemental Financial Information................................ 32

14
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholder
New World Television Incorporated

We have audited the accompanying consolidated balance sheet of New
World Television Incorporated as of December 31, 1996 and 1995 and the related
consolidated statements of operations, stockholder's equity and cash flows for
each of the three years in the period ended December 31, 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.

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 consolidated financial
position of New World Television Incorporated at December 31, 1996 and 1995 and
the consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.

/s/ Ernst & Young LLP

Atlanta, Georgia
March 7, 1997

15
<PAGE>

NEW WORLD TELEVISION INCORPORATED

CONSOLIDATED BALANCE SHEET
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
-------------------------
1996 1995
----------- ----------
<S> <C> <C>
ASSETS

Current assets:
Cash and cash equivalents.................................. $ 42,053 $ 20,391
Restricted cash and cash equivalents....................... 193,163 -
Receivables................................................ 57,840 62,062
Television program contract rights......................... 12,366 15,529
Prepaid expenses........................................... 1,167 1,615
Deferred income taxes...................................... 4,210 3,120
----------- ----------
Total current assets..................................... 310,799 102,717
Property, plant and equipment................................ 97,818 114,928
Television program contract rights........................... 3,775 4,134
Intangible assets............................................ 392,717 576,539
Note receivable from related party and other assets.......... 32,864 25,608
----------- ----------
$ 837,973 $ 823,926
=========== ==========

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
Accounts payable and accrued expenses...................... $ 31,166 $ 27,632
Income taxes payable....................................... 5,890 3,978
Payable to related parties................................. 9,845 3,647
Television program contracts payable....................... 12,898 18,262
Current portion of long-term debt.......................... 4,691 5,967
----------- ----------
Total current liabilities................................ 64,490 59,486
Non-current television program contracts payable............. 4,345 4,499
Long-term debt............................................... 476,935 509,767
Other non-current liabilities................................ 19,216 20,049
Deferred income taxes........................................ 64,195 78,360
Commitments and contingencies
Stockholder's equity:
Common stock, $.01 par value, 40,000,000 shares
authorized, 100 shares issued and outstanding
Additional paid-in capital................................. 184,696 184,696
Retained earnings (deficit)................................ 24,096 (32,931)
----------- ----------
Total stockholder's equity............................... 208,792 151,765
----------- ----------
$ 837,973 $ 823,926
=========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

16
<PAGE>

NEW WORLD TELEVISION INCORPORATED

CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
-----------------------------------
1996 1995 1994
--------- --------- ---------

<S> <C> <C> <C>
Net revenue................................. $ 247,518 $ 230,774 $ 285,830
Operating expenses:
Technical and programming................ 101,671 109,641 134,684
Selling, general and administrative...... 49,676 46,986 52,133
Depreciation and amortization of
intangible assets........................ 35,934 35,103 37,549
Corporate expenses.......................... 16,021 7,037 6,858
--------- --------- ---------
Income from operations................... 44,216 32,007 54,606
Other income (expense):
Interest income.......................... 4,590 3,249 1,624
Interest expense......................... (52,241) (54,983) (61,014)
Gain on sale of stations................. 127,109 41,671 -
Other.................................... (123) (233) (731)
--------- --------- ---------
Other income (expense), net.......... 79,335 (10,296) (60,121)

Income (loss) before income taxes........... 123,551 21,711 (5,515)
Provision for income taxes.................. (66,524) (35,080) (4,135)
--------- --------- ---------
Net income (loss)........................... $ 57,027 $ (13,369) $ (9,650)
========= ========= =========
</TABLE>

See accompanying notes to consolidated financial statements

17
<PAGE>

NEW WORLD TELEVISION INCORPORATED

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>

RETAINED
ADDITIONAL EARNINGS TOTAL
COMMON PAID-IN (ACCUMULATED STOCKHOLDER'S
STOCK CAPITAL DEFICIT) EQUITY
---------- ------------ -------------- ------------------

<S> <C> <C> <C> <C>
Balance at December 31, 1993............ $ 218 $ 184,474 $ (9,912) $ 174,780
Exercise of Class A Warrants............ - 4 - 4
Conversion of shares in connection
with the NWCG Merger................. (218) 218 - -
Net loss................................ - - (9,650) (9,650)
---------- ------------ -------------- ------------------

Balance at December 31, 1994............ 184,696 (19,562) 165,134
Net loss................................ - - (13,369) (13,369)
---------- ------------ -------------- ------------------

Balance at December 31, 1995............ 184,696 (32,931) 151,765
Net income.............................. - - 57,027 57,027
---------- ------------ -------------- ------------------

Balance at December 31, 1996............ $ $ 184,696 $ 24,096 $ 208,792
========== ============ ============== ==================

</TABLE>

See accompanying notes to consolidated financial statements

18
<PAGE>

NEW WORLD TELEVISION INCORPORATED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
---------- ---------- ---------
<S> <C> <C> <C>
Cash flow from operating activities:
Net income (loss)............................... $ 57,027 $ (13,369) $ (9,650)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Deferred tax provision.......................... 60,886 32,880 3,750
Depreciation and amortization of
intangible assets............................... 35,934 35,103 37,549
Gain on sale of stations........................ (127,109) (41,671) -
Television program contract amortization
net of payments................................. (325) 1,369 3,343
Noncash interest expense and other.............. 356 291 1,393
Changes in assets and liabilities, net of
dispositions:
Receivables and other assets.................... (4,806) (5,881) 1,601
Liabilities..................................... 11,685 (677) 4,698
---------- ---------- ---------
Total adjustments............................... (23,379) 21,414 52,334
---------- ---------- ---------
Net cash provided by operating activities......... 33,648 8,045 42,684
Cash flow from investing activities:
Proceeds from sale of stations.................. 231,721 107,500 -
Increase in restricted cash..................... (193,163) - -
Capital expenditures............................ (8,936) (11,120) (15,372)
Investment in Program Co........................ (7,500) (7,500) (7,500)
Other........................................... - 631 -
---------- ---------- ---------
Net cash provided by (used in) investing
activities...................................... 22,122 89,511 (22,872)
Cash flow from financing activities:
Repayments of long-term debt.................... (34,108) (105,988) (2,013)
Other........................................... - - (356)
---------- ---------- ---------
Net cash used in financing activities............ (34,108) (105,988) (2,369)
---------- ---------- ---------
Net increase (decrease) in cash................... 21,662 (8,432) 17,443
Cash balance at beginning of period............... 20,391 28,823 11,380
---------- ---------- ---------
Cash balance at end of period..................... $ 42,053 $ 20,391 $ 28,823
========== ========== =========
Supplemental disclosures of cash flow
information:
Cash paid during the period for interest........ $ 52,163 $ 54,223 $ 59,558
========== ========== =========
Cash paid for income taxes...................... $ 2,875 $ 350 $ 704
========== ========== =========
Supplemental schedule of noncash investing
and financing activities:
Purchase of television program contract
rights.......................................... $ 23,377 $ 24,684 $ 27,669
========== ========== =========
</TABLE>

See accompanying notes to consolidated financial statements

19
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

New World Television Incorporated (the "Company" or "NW Television"), a
Delaware corporation and wholly-owned subsidiary of New World Communications
Group Incorporated ("NWCG"), was formed in 1987.

On January 22, 1997 (the "Fox Merger Date"), a special meeting (the
"Special Meeting") of stockholders of NWCG was held. At the Special Meeting,
the Agreement and Plan of Merger dated as of September 24, 1996 (the "Fox Merger
Agreement"), by and among NWCG, The News Corporation Limited, a South Australian
corporation ("News Corp."), Fox Television Stations, Inc., a Delaware
corporation in which News Corp. has an indirect interest ("Fox"), and Fox
Acquisition Co., Inc., a Delaware corporation and a wholly-owned subsidiary of
Fox ("Merger Sub"), was approved. Immediately following the Special Meeting,
the transactions contemplated by the Fox Merger Agreement were consummated,
including the merger of Merger Sub with and into NWCG and a stock purchase
pursuant to the Stock Purchase Agreement dated as of September 24, 1996 (the
"Stock Purchase Agreement"), by and among News Corp., Fox and NWCG (Parent)
Holdings Corporation, a Delaware Corporation ("Parent") (the transactions
contemplated by the Fox Merger Agreement and the Stock Purchase Agreement,
collectively, the "Fox Merger").

Pursuant to the Merger Agreement, (a) each issued and outstanding share
of NWCG's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock") (other than any shares owned, directly or indirectly, by News Corp. or
any News Corp. Subsidiary (as such term is defined in the Fox Merger
Agreement)), was converted into the right to receive 1.45 American Depositary
Shares of News Corp. ("ADSs"), each of which represents four fully paid and non-
assessable Preferred Limited Voting Ordinary Shares of A$.50 of News Corp., and
(b) each issued and outstanding share of NWCG's Class B Common Stock, par value
$.01 per share (other than any shares owned, directly or indirectly, by News
Corp. or any News Corp. Subsidiary), was converted into the right to receive
1.45 ADSs. Pursuant to the Stock Purchase Agreement, Fox purchased from Parent
2,682,236 shares of Class A Common Stock of NWCG owned by Parent and all of the
outstanding shares of capital stock of NWCG Holdings Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent ("Holdings").

As a result of the Fox Merger, Fox has acquired all of the shares of
common stock of NWCG (other than any shares previously owned, directly or
indirectly, by News Corp. or any News Corp. Subsidiary) and NWCG has become a
subsidiary of Fox. The Fox Merger has resulted in a change of control of the
Company. The accompanying consolidated financial statements are derived from
the historical books and records of the Company and do not give effect to any
purchase accounting adjustments which Fox may record as a result of such
acquisition.

Prior to the consummation of the Fox Merger, the Company was an
affiliate of Mafco Holdings, Inc. ("Mafco"), a Delaware corporation which is
wholly-owned by Mr. Ronald O. Perelman, the former Chairman of the Board of
NWCG. On May 25, 1993, as one of a series of transactions comprising the
Company's Chapter 11 bankruptcy reorganization on that date, Andrews Group
Incorporated ("Andrews), an indirect subsidiary of Mafco, contributed $100
million to the Company in exchange for 54.15% of the Company's common stock. On
March 7, 1994, in accordance with an Agreement and Plan of Reorganization and
Merger with Andrews, NWCG and SCI Merger Sub Incorporated, all outstanding
shares of the Company were converted to a like number of shares of NWCG common
stock (the "NWCG Merger"). Further, the holders of the Class A Warrants and
Class B Warrants obtained the right to acquire and receive a like number of
shares of NWCG common stock. As a result of the NWCG Merger, the Company became
a wholly-owned subsidiary of NWCG.

20
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

The five broadcast stations owned by the Company on December 31, 1996
became part of the group of stations owned and operated by Fox on the Fox Merger
Date. All of the stations, which are located throughout the United States, are
affiliated with the FOX network. See Note 2 for a discussion of station
dispositions.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation. The accompanying consolidated financial
statements include the accounts of the Company and its subsidiaries. Certain
prior period amounts have been reclassified to conform to current presentation.

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 amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Cash and cash equivalents. Cash equivalents are highly-liquid
investments with original maturities of three months or less.

Restricted cash. Restricted cash represents highly-liquid investments
with original maturities of three months or less, the use of which is restricted
under the terms of the Company's long-term debt agreements. See Notes 2 and 4
for a further discussion of restricted cash.

Television program contract rights. The rights to broadcast non-network
programs are stated at the lower of cost, less accumulated amortization, or net
realizable value. Costs are amortized based upon the usage of programs under
methods which generally result in straight-line amortization. The cost of
program rights expected to be used within one year is classified as a current
asset. Sports broadcast rights are generally expensed when the events are
televised.

Property, plant and equipment. The property, plant and equipment of the
Company are carried at cost net of accumulated depreciation. Depreciation is
computed on the straight-line method for financial accounting purposes using
lives of 26 to 30 years for buildings, 11 to 19 years for land improvements, 14
to 17 years for towers, 4 to 8 years for broadcast equipment, 8 to 12 years for
office furniture and fixtures, 4 to 8 years for automobiles and other assets and
5 to 7 years for leasehold improvements.

Deferred financing costs. Costs incurred with the issuance of debt are
included in note receivable from related party and other assets, net of
accumulated amortization. Amortization is charged to income over the respective
lives of the applicable issues; unamortized costs will be written off when the
related debt is retired.

Intangible assets. Intangible assets include network affiliation
agreements, broadcast licenses, goodwill and excess reorganization value. The
components of intangible assets are amortized on a straight-line basis over the
following lives:

Network affiliation agreements.................. 40 years
Broadcast licenses, goodwill and excess
reorganization value.......................... 20-40 years

The carrying values of intangible assets as well as other long-lived
assets are reviewed if the facts and circumstances suggest that they may be
impaired. If this review indicates that the assets will not be recoverable,

21
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

as determined based on undiscounted estimated cash flows of the Company over the
remaining amortization period, the Company's carrying value of the assets would
be reduced to their estimated fair value.

Fair market value of financial instruments. The carrying values of
all financial instruments, excluding long-term debt, approximate fair value.
The fair value of the Company's long-term debt is estimated using discounted
cash flow analyses, based on the Company's current incremental borrowing rates
for similar types of borrowing arrangements, or quoted market rates (Note 4).

Income taxes. The Company accounts for income taxes using Statement
of Financial Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS
109"). Under SFAS 109, a current or deferred income tax liability or asset is
recognized, subject to certain limitations, for the current or deferred tax
consequences of all basis differences and events which have been recognized in
the financial statements. The deferred income tax asset or liability is
measured by the provisions of enacted tax laws. The Company has provided a
valuation allowance for net operating loss carryovers ("NOL") restricted in use
as a result of the Company's bankruptcy reorganization on May 25, 1993. Any
benefit recognized in future periods related to the NOL generated prior to this
date will be accounted for as a reduction in excess reorganization value when
recognized. The Company has recorded a valuation allowance of $17.4 million for
the NOL generated prior to May 25, 1993.

Stock options. The Company has elected to follow Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and
related Interpretations in accounting for employee stock options issued by NWCG
to certain of the Company's employees because the alternative fair value
accounting provided for under FASB Statement No. 123, "Accounting for Stock-
Based Compensation", requires use of option valuation models that were not
developed for use in valuing employee stock options. Under APB 25, because the
exercise price of NWCG's stock options equals the market price of the underlying
stock on the date of the grant, no compensation expense is recognized.

2. STATION DISPOSITIONS AND PRO FORMA FINANCIAL INFORMATION

In March 1995, the Company sold its investment in WSBK-TV (the "Boston
Station") for gross proceeds of $107.5 million. The Company recorded a gain on
the sale of $41.7 million. The Company repaid $19.5 million of the Bank Credit
Agreement Loans in March 1995 and $77.3 million of the Step-up Notes in April
1995 from the net proceeds of the Boston Station sale.

In November 1996, the Company sold the assets constituting KNSD-TV
(the "San Diego Station") for gross proceeds of $231.7 million. The Company
recorded a gain on the sale of $127.1 million. The Company repaid the
outstanding balance of $27.6 million of the Bank Credit Agreement Loans in
November 1996 and $1.7 million of the Step-up Notes in December 1996 from the
net proceeds of the San Diego Station sale. The use of the remaining net
proceeds of $193.2 from the San Diego Station sale was restricted at December
31, 1996 under the terms of the Company's debt agreements pending the outcome of
the Company's offer to purchase a portion of the 11% Notes (Note 4).

The following condensed pro forma consolidated statement of operations
information gives effect, as of January 1, 1995 and 1996, to the sale of the
Boston Station, the sale of the San Diego Station and repayment of debt with the
net proceeds from the sales. The pro forma financial results do not necessarily
reflect either future

22
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

results or the results that would have occurred had the transactions discussed
above actually occurred on the dates indicated.

In thousands:

FOR THE YEAR ENDED
DECEMBER 31,
----------------------
1996 1995
--------- ---------
(UNAUDITED)
Statement of Operations Data
- ---------------------------------------------
Net revenues.............................. $ 207,757 $ 187,931
Net loss.................................. $ (13,798) $ (19,791)

3. SUPPLEMENTAL BALANCE SHEET INFORMATION

The composition of receivables at December 31, 1996 and 1995 was as
follows (in thousands):

1996 1995
-------- --------
Trade receivables............................. $ 57,446 $ 63,331
Other receivables............................. 2,932 1,520
-------- --------
60,378 64,851
Less: Allowance for doubtful accounts......... (2,538) (2,789)
-------- --------
$ 57,840 $ 62,062
======== ========

The broadcast television stations sell advertising time to a variety
of customers in diversified industries. The Company performs periodic credit
evaluations of its customers' financial condition and generally does not require
collateral. Receivables are generally due within 30 days. Credit losses have
consistently been within management's expectations and industry standards.

The composition of property, plant and equipment at December 31, 1996
and 1995 was as follows (in thousands):

1996 1995
--------- ---------
<S> <C> <C>
Land, buildings and land improvements.................... $ 42,805 $ 46,651
Broadcast towers......................................... 5,692 5,843
Other broadcast and news gathering equipment............. 67,113 70,932
Office furniture and fixtures............................ 15,271 14,384
Automobiles.............................................. 5,160 4,951
Leasehold improvements................................... 109 109
Construction in progress................................. 968 2,653
--------- ---------
137,118 145,523
Total accumulated depreciation and amortization.......... (39,300) (30,595)
--------- ---------
$ 97,818 $ 114,928
========= =========
</TABLE>

23
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

The composition of note receivable from related party and other assets at
December 31, 1996 and 1995 was as follows (in thousands):
<TABLE>
<CAPTION>

1996 1995
-------- --------
<S> <C> <C>
Note receivable from Program Co. (Note 8)........... $ 29,500 $ 22,000
Investment in Program Co. (Note 8).................. 500 500
Deferred financing costs............................ 2,565 2,857
Other............................................... 299 251
-------- --------
$ 32,864 $ 25,608
======== ========

</TABLE>

The composition of intangible assets at December 31, 1996 and 1995 was as
follows (in thousands):

1996 1995
--------- ---------
<S> <C> <C>
Network affiliation agreements, broadcast licenses,
goodwill and excess reorganization value.......... $ 471,111 $ 638,177
Total accumulated amortization...................... (78,394) (61,638)
--------- ---------
$ 392,717 $ 576,539
========= =========

</TABLE>

The composition of accounts payable and accrued expenses at December 31, 1996
and 1995 was as follows (in thousands):

1996 1995
-------- --------
<S> <C> <C>
Trade payables...................................... $ 4,693 $ 3,610
Accrued interest.................................... 10,278 10,423
Accrued salaries and wages.......................... 6,840 6,521
Other payables...................................... 9,355 7,078
-------- --------
$ 31,166 $ 27,632
======== ========
</TABLE>

4 LONG-TERM DEBT

Long-term debt at December 31, 1996 and 1995 was as follows (in thousands):
<TABLE>
<CAPTION>

1996 1995
--------- ---------
<S> <C> <C>
Bank Credit Agreement Loans......................... $ - $ 27,619
Step-up Notes....................................... 107,891 114,380
11% Notes........................................... 373,735 373,735
--------- ---------
481,626 515,734
Less current portion................................ 4,691 5,967
---------- ---------
$ 476,935 $ 509,767
========== =========
</TABLE>

24
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

Bank Credit Agreement Loans -- The Bank Credit Agreement Loans were paid in full
in connection with the sale of the San Diego Station (Note 2). The Bank Credit
Agreement Loans were secured by a lien on common stock and intercompany notes of
the broadcast stations held by the Company (the "Pledged Collateral").

Step-up Notes -- Senior secured notes maturing on June 30, 1998;
interest at 7 1/2% to May 25, 1996, 8 1/2% to May 25, 1997 and 9 1/2%
thereafter, payable quarterly; minimum annual principal payments of $4.7 million
in 1997 and $103.2 million in 1998 (as adjusted for mandatory payments made in
1995 and 1996), plus mandatory annual prepayments based upon the excess cash
flow of the Company, as defined, redeemable at the Company's option at any time
prior to maturity at 100% of outstanding principal plus accrued interest;
secured by the Pledged Collateral. Interest expense on the Step-up Notes was
accrued at 7.82%, which represents the effective interest rate over the term of
the notes. The excess of interest accrued at the effective rate over interest
at the stated rate of the notes is included in other noncurrent liabilities.
Prior to the repayment of the Bank Credit Agreement Loans, the minimum annual
principal payments and all mandatory payments were required to be shared with
the Bank Credit Agreement Loans on a pro rata basis, and the security interest
in the Pledged Collateral was held on a pari passu basis with the Bank Credit
Agreement Loans.

11% Notes -- Secured senior notes maturing June 30, 2005; interest at
11% to maturity, payable semi-annually; redeemable at the Company's option at
any time on or after June 30, 1998 at 101% of outstanding principal amount prior
to June 30, 1999 and 100% thereafter, plus accrued interest; mandatory
redemption of 50% of original principal amount on June 30, 2004 at 100% of
outstanding principal amount plus accrued interest; remaining balance due at
maturity; secured by lien on Pledged Collateral, third in priority behind
permitted letters of credit and Step-up Notes.

On January 6, 1997, in conjunction with the sale of the San Diego
Station, the Company repaid $41 thousand of the 11% Notes. Further, the balance
of the excess net proceeds from the sale of the San Diego Station, which is
reflected as restricted cash at December 31, 1996, reverted to the Company for
use as permitted under the terms of the Step-up Notes and the 11% Notes.

As a result of the Fox Merger, on February 13, 1997 the Company made
an offer to purchase the outstanding balance of the 11% Notes at a repurchase
price in cash equal to 100% of the principal amount outstanding.

As of December 31, 1996, the Company's debt matures in the following
years (in thousands): $4,691 in 1997, $103,200 in 1998, $186,868 in 2004 and
$186,867 in 2005.

The Company's debt agreements include various ratios and covenants,
including restrictions on additional indebtedness, investments, capital
expenditures, transactions with affiliated companies and payment of dividends.

The fair value of the Company's long-term debt at December 31, 1996 is
approximately $501.0 million.

25
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

5. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

The Company is a party to a number of pending legal proceedings. The
Company does not expect that the outcome of such proceedings, either
individually or in the aggregate, will have a material effect on the Company's
operations or financial results.

PROGRAMMING COMMITMENTS

As of December 31, 1996, the Company has commitments aggregating
approximately $7.1 million for various broadcast programming rights through
1999. Certain agreements require the Company to purchase programming that has
not yet been produced; the dollar amount of such contracts are not estimable.

6. INCOME TAXES

As a result of the NWCG Merger, effective January 1, 1994 the Company
is included in the consolidated federal and certain state income tax returns of
NWCG and its subsidiaries. The Company will make tax sharing payments in
amounts equivalent to the tax liability the Company would have reflected on its
separate consolidated federal income tax return if such return had been filed.
Income taxes have been provided as if the Company were a separate taxpayer.

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and income tax purposes. Significant components of the
Company's deferred tax liabilities and assets are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------------
CURRENT NONCURRENT
ASSETS ASSETS
(LIABILITIES) (LIABILITIES)
---------------- --------------
<S> <C> <C>

Property, plant and equipment.................................... $ - $ (5,543)
Intangible assets................................................ - (94,584)
Long-term debt discount.......................................... - 2,367
Financial reporting accruals and reserves........................ 2,071 7,134
Other temporary differences...................................... 2,139 (5,747)
AMT credit carryover............................................. - 6,048
NOL carryover.................................................... - 43,549
Valuation allowance.............................................. - (17,419)
-------------- --------------
$ 4,210 $ (64,195)
============== ==============
</TABLE>

26
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

DECEMBER 31, 1995
CURRENT NONCURRENT
ASSETS ASSETS
(LIABILITIES) (LIABILITIES)
---------------- ----------------
<S> <C> <C>
Property, plant and equipment................................. $ - $ (4,280)
Intangible assets............................................. - (116,159)
Long-term debt discount....................................... - 3,033
Financial reporting accruals and reserves..................... 1,390 7,697
Other temporary differences................................... 1,730 (5,741)
AMT credit carryover.......................................... - 1,600
NOL carryover................................................. - 129,514
Valuation allowance........................................... - (94,024)
--------------- ---------------
$ 3,120 $ (78,360)
=============== ===============

</TABLE>

At December 31, 1995, the Company's NOL for federal income tax
purposes was $332.1 million, which expires in 2002 through 2009. The NOL at
December 31, 1996 was approximately $112 million of which approximately $10.6
million is not subject to the limitations under Section 382 described below.
Limitations imposed by Section 382 of the Internal Revenue Code (the "Code")
after a change of control, which occurred on May 25, 1993, will limit the amount
of NOL which will be available to offset future taxable income. At December 31,
1996, the Company has a valuation allowance against such restricted NOL for the
excess of the NOL over the amount of taxable temporary differences which will
reverse during the permitted carryover period. Remaining NOL at December 31,
1996 in excess of the Section 382 limitation may be used to the extent of built-
in gains realized through May 24, 1998. As a result of the Fox Merger, another
change of control under Section 382 of the Internal Revenue Code occurred.
Management believes that the ownership change will not have a material effect on
the use of NOL's.

Significant components of the provision for income taxes are as
follows (in thousands):
<TABLE>
<CAPTION>

FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
--------- --------- --------
Current
<S> <C> <C> <C>
Federal.................................... $ 4,448 $ 1,500 $ (460)
State...................................... 1,190 700 845
--------- --------- --------
5,638 2,200 385
Deferred
Federal.................................... 50,582 25,568 3,227
State...................................... 10,304 7,312 523
--------- --------- --------
60,886 32,880 3,750
--------- --------- --------
Total provision for income taxes............. $ 66,524 $ 35,080 $ 4,135
========= ========= ========
</TABLE>

27
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

A reconciliation of the income tax provisions is as follows (in
thousands):

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
--------- --------- --------
<S> <C> <C> <C>
Provision assuming federal income tax rate..... $ 43,243 $ 7,599 $ (1,930)
Amortization and sale of intangibles........... 15,340 21,009 4,962
State income tax............................... 7,471 5,207 885
Other.......................................... 470 1,265 218
--------- --------- --------
$ 66,524 $ 35,080 $ 4,135
========= ========= ========
</TABLE>

Income tax expense in 1996 and 1995 resulted primarily from the
recognition of income taxes on the sale of the San Diego Station and the Boston
Station due to the lower historical tax bases of the Stations' assets. The
liability associated with these taxes will be offset by utilization of pre-May
25, 1993 net operating losses. The utilization has been reflected as a
reduction of excess reorganization value of approximately $76.2 million in 1996
and $21.6 million in 1995.

7. EMPLOYEE BENEFITS

NW Television Defined Benefit Plan

Substantially all full time employees of NW Television not
participating in union sponsored plans who meet eligibility requirements ("Plan
Participants") are included in a defined benefit pension plan (the "Pension
Plan").

Under the provisions of the Pension Plan, benefits are earned based on
years of service and the employees' average earnings during the employees'
highest paid three consecutive calendar years of employment.

Data relating to the Pension Plan is as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1996 1995
--------- -----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $51,623 and $46,520....................... $ 52,153 $ 47,107
========= ===========

Projected benefit obligation for services rendered to
date................................................. $ 66,933 $ 65,322
Pension Plan assets at fair value, primarily listed
stocks and U.S. bonds................................ (49,510) (46,679)
--------- -----------

Projected benefit obligation in excess of Pension
Plan assets.......................................... 17,423 18,643
Unrecognized prior service cost....................... 2,985 3,784
Unrecognized net loss................................. (7,860) (10,771)
--------- -----------
Accrued pension liability recognized in consolidated
balance sheet........................................ $ 12,548 $ 11,656
========= ===========
</TABLE>

28
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Net pension cost includes the following components:
Service cost -- benefits earned during the period..... $ 3,484 $ 2,348 $ 3,193
Interest cost on projected benefit obligation........ 4,826 3,990 4,053
Actual (return) loss on Pension Plan assets.......... (1,992) (7,262) 1,836
Amortization of prior service cost.................... (278) (285) (175)
Unrecognized gain (loss) subject to amortization..... (1,985) 3,742 (5,103)
--------- --------- ---------
Net periodic pension cost............................ $ 4,055 $ 2,533 $ 3,804
========= ========= =========
</TABLE>

The weighted average discount rates used in determining the actuarial
present value of the projected benefit obligation and net pension cost are 7.5%,
7.25% and 8.5% at December 31, 1996, 1995, and 1994, respectively. The rate of
increase in future compensation levels and the expected long-term rate of return
on assets are 5% and 9%, respectively, in all periods presented. The Company
funds minimum amounts required by ERISA.

The Pension Plan experienced a curtailment as a result of the sale of
the San Diego Station. The related curtailment gain of $.5 million has been
included in the calculation of the gain on the sale of the station.

In conjunction with the Fox Merger, the Company has announced that it
will cease the accrual of benefits under the Pension Plan on March 31, 1997.
Immediately thereafter, substantially all of the participants in the Pension
Plan will become participants in the Fox Inc. Pension Plan, which offers
benefits that are substantially similar to the benefits offered by the Pension
Plan. In addition, Fox plans to merge the Pension Plan into the Fox Inc.
Pension Plan. No curtailment is expected to occur as a result of the foregoing.

Other Plans

The Company provides certain additional benefits to retired or
involuntarily terminated employees of certain subsidiaries based on years of
service. As of December 31, 1996 and 1995 the Company had a liability of
approximately $4.8 million and $5.4 million, respectively, related to these
benefits.

8. EQUITY TRANSACTIONS

Stock Options

The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for employee stock options issued by NWCG to
certain of the Company's employees because, as discussed below, the alternative
fair value accounting provided for under FASB Statement No. 123, "Accounting for
Stock-Based Compensation" ("Statement 123"), requires use of option valuation
models that were not developed for use in valuing employee stock options. Under
APB 25, because the exercise price of NWCG's stock options equals the market
price of the underlying stock on the date of the grant, no compensation expense
is recognized.

NWCG's 1994 Stock Option Plan had authorized the grant of options to
management personnel for up to 6.0 million shares of NWCG's common stock. All
options granted have maximum 10 year terms and vested over

29
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

a three year period becoming fully vested at the end of 3 years of continued
employment. Options granted expire within 90 days of an employee's termination.

As a result of the Fox Merger, all unvested stock options on the Fox
Merger Date became fully vested and exercisable and all outstanding options were
assumed by Fox and became exercisable to purchase ADSs in a ratio of 1.45 ADSs
for each share of NWCG common stock. In addition, if an option holder's
employment with the Company is terminated within six months of the Fox Merger
Date, the option expiration date will be extended from 90 days to one year after
the employee's termination date.

Pro forma information regarding net income and earnings per share is
required by Statement 123, which also requires that the information be
determined as if the Company has accounted for employee stock options granted
subsequent to December 31, 1994 under the fair value method of Statement 123.
The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for 1996 and 1995, respectively: risk-free interest rates of 5.6%
and 6.3%, a dividend yield of 0%; volatility factors of the expected market
price of NWCG's common stock of 51.6% and 53.1%; and a weighted-average expected
life of the option of 5 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because NWCG's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of NWCG's employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma net income (loss) for the years ended December 31, 1996 and 1995,
assuming statement 123 was adopted on January 1, 1995, was $ 55.8 million and $
(13.9) million respectively.

9. RELATED PARTY TRANSACTIONS

The Company is a wholly-owned subsidiary of NWCG. NWCG also owns 100%
of NWC Acquisition Corporation ("NW Acquisition") and New World Entertainment,
Ltd. ("NW Entertainment").

The Company, NWCG and NW Acquisition share compensation costs for
certain employees and certain other corporate costs, including costs associated
with the employment of certain officers of Andrews who also serve as officers of
the Company. These costs totaled $40.5 million, $20.4 million and $23.2 million
in 1996, 1995 and 1994, respectively. The Company's portion of these total
costs was $16.0 million, $7.0 million and $6.9 million in 1996, 1995 and 1994,
respectively. Amounts payable or receivable from related parties associated
with these costs are settled periodically.

Prior to the Fox Merger, the Company and certain affiliates of Mafco
were afforded coverage under selected common insurance policies obtained by a
subsidiary of Mafco. The Company paid Mafco its allocable portion of the cost
of this insurance coverage.

30
<PAGE>

NEW WORLD TELEVISION INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

In connection with the overall business strategy to participate in an
integrated entertainment company capable of developing, producing and
distributing television programming, the Company may invest in ventures which
produce and distribute television programming, operate a national advertising
and/or sales representation firm or syndicate programming (each a "Program Co").
Certain of the Company's agreements, including the debt agreements, place
limitations on the Company's financial and business relationships with a Program
Co and with Andrews. As permitted under the Company's debt agreements, the
Company made an aggregate investment of $30.0 million in preferred stock and
debt of NW Entertainment, which for purposes of the Company's debt agreements is
a Program Co. The Company received interest income of $2.4 million, $1.6 million
and $.7 million from NW Entertainment related to this investment in 1996, 1995
and 1994, respectively.

The Company licenses programming from NW Entertainment. Film assets and
film liabilities related to the programming licensed from NW Entertainment were
$2.3 million and $2.2 million, respectively, at December 31, 1996 and, $1.8
million and $2.0 million, respectively, at December 31, 1995. The Company made
film payments to NW Entertainment of $2.9 million, $2.8 million and $.8 million
during the years ended 1996, 1995 and 1994, respectively.

In May, 1994, the Company replaced its outside advertising
representation firms with New World Sales and Marketing, a wholly-owned
subsidiary of NW Entertainment. The Company paid or accrued commissions to New
World Sales and Marketing of $7.7 million, $7.5 million and $4.2 million, for
the years ended 1996, 1995 and 1994, respectively.

Andrews and certain subsidiaries of NWE Entertainment lease certain
office space in the Company's Atlanta office. These companies pay the Company
its allocable portion of lease costs.

31
<PAGE>

NEW WORLD TELEVISION INCORPORATED

SUPPLEMENTAL FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION

Summarized unaudited quarterly financial information for the years ended
December 31, 1996 and 1995:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------
DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31,
1996 1996 1996 1996
-------------- --------------- ---------- -----------
<S> <C> <C> <C> <C>
Net revenue............... $ 70,971 $ 56,541 $ 66,771 $ 53,235
Income from operations.... 15,107 6,253 17,963 4,893
Net income (loss)......... 65,369 (4,773) 2,028 (5,597)

</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------------------------------
DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31,
1995 1995 1995 1995
-------------- --------------- ---------- -----------
<S>....................... <C> <C> <C> <C>
Net revenue............... $ 63,137 $ 51,226 $ 61,318 $ 55,093
Income (loss) from
operations.............. 17,414 1,923 13,565 (895)
Net income (loss)......... 3,577 (7,660) (1,097) (8,189)

</TABLE>

32
<PAGE>

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
directors and executive officers of NW Television as of March 15, 1997.

Name Age Position
- ---- --- --------

K. Rupert Murdoch.. 66 Director
Chase Carey........ 43 Director and Chairman
David F. DeVoe..... 50 Director
Lawrence Jacobson.. 38 Executive Vice President and Assistant Treasurer
Mitchell Stern..... 42 President and Chief Operating Officer

K. Rupert Murdoch, Director. Director of the Company since January 22, 1997.
Chairman of the Board of Directors of News Corp. since August 1991. Executive
Director and Chief Executive of News Corp. since 1979. Director of News
Limited, News Corp.'s principal subsidiary in Australia, since 1953. Director
of News International plc ("News International"), News Corp.'s principal
subsidiary in the United Kingdom, since 1969. Director of News America Holdings
Incorporated ("NAHI"), News Corp.'s principal subsidiary in the United States,
since January 1985. Chairman, Chief Executive Officer and President of NAHI
from January 1985 until October 1996. Chairman and a Director of Satellite
Television Asian Region Limited ("STAR TV") since July 1993. Member of the
Board of British Sky Broadcasting Group plc ("BSkyB") since November 1990.
Member of Share Option and Nominating Committees of News Corp.

Chase Carey, Director and Chairman. Director and Chairman of the Company
since January 22, 1997. Executive Director and Co-Chief Operating Officer of
News Corp. since October 1996. Director and Executive Vice President of NAHI
since December 1996. Chairman and Chief Executive Officer of Fox Television
since July 1994. Chief Operating Officer of Fox, Inc. since May 1992 and
Executive Vice President since June 1988.

David F. DeVoe, Director. Director of the Company since January 22, 1997.
Executive Director of News Corp. since October 1990. Senior Executive Vice
President of News Corp. since January 1996 and Chief Financial Officer and
Finance Director since October 1990. Executive Vice President of News Corp.
from October 1990 until January 1996. Director and Executive Vice President of
NAHI since July 1991. Director of STAR TV since July 1993. Director of BSkyB
since December 1994.

Lawrence Jacobson, Executive Vice President and Assistant Treasurer.
Executive Vice President and Assistant Treasurer of the Company since January
22, 1997. Executive Vice President of Fox Television since May 1996. Executive
Vice President and Chief Financial Officer of Fox Broadcasting Company since
July 1994. Senior Vice President, Finance of Fox, Inc. since July 1992 and Vice
President, Finance of Fox, Inc. from December 1990 to July 1992.

Mitchell Stern, President and Chief Operating Officer. President and Chief
Operating Officer of the Company since January 22, 1997. President and Chief
Operating Officer of Fox since January 1993. Executive Vice President and Chief
Operating Officer of Fox from May 1992 to January 1993. Senior Vice President,
Fox and Station Manager of KTTV/Fox 11 from May 1990 to May 1992. Vice
President and Chief Financial Officer of Fox from July 1986 to May 1990.

33
<PAGE>

ITEM 11: EXECUTIVE COMPENSATION

The current executive officers of the Company were appointed as of the Fox
Merger Date. The information discussed below concerns the compensation of the
Company's Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company serving as of December 31, 1996
and one former executive who resigned during 1996 (these six individuals,
collectively, the "named executive officers") for services rendered in all
capacities to the Company and its subsidiaries during the fiscal years ended
December 31, 1996, 1995 and 1994. The employment of the named executive
officers was either terminated or they have been removed as officers of the
Company in January 1997 as a result of the Fox Merger. Any payments which were
required to be made to such executives as a result of their termination are not
reflected in the 1996 financial results of the Company.

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth the annual compensation information for the
highest paid executive officers under the terms of their respective employment
agreements:

Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>

LONG-TERM
ANNUAL COMPENSATION (2) COMPENSATION
---------------------------------- AWARDS
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS AND COMPENSATION
PRINCIPAL POSITION (1) (2) YEAR ($) ($) ($) (8) WARRANTS (#) (7) ($) (9)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Farrell Reynolds 1996 900,000 312,500 - - -
Chairman of the Board 1995 - - - - -
and Chief Executive 1994 - - - - -
Officer (3) (6)...........

Robert E. Selwyn 1996 - - - - 686,972
Chairman and Chief 1995 458,094 200,000 - - -
Executive Officer 1994 445,658 200,000 - 100,000 -
(resigned January 1996)
(4).......................

Carolyn Forrest 1996 150,833 50,000 - - -
Vice President and 1995 141,667 50,000 - - -
Secretary (10)............ 1994 23,872 - 16,954 20,000 -

Larry D. Haugen 1996 268,137 100,000 - - -
Vice President............ 1995 260,269 100,000 - - -
1994 253,208 100,000 - -

David A. Ramon 1996 551,123 500,000 - - -
Chief Operating Officer 1995 536,293 200,000 - - -
(5)....................... 1994 202,567 200,000 - 100,000 -

Gwen C. Wisler 1996 159,383 100,000 - - -
Vice President (10)....... 1995 140,917 80,000 - - -
1994 100,833 60,000 - 20,000 -
</TABLE>

34
<PAGE>

Notes to the Summary Compensation Table:

(1) All officers of the company as of December 31, 1996 were either terminated
or removed as officers in January 1997 as a result of the Fox Merger.

(2) Beginning January 1, 1995, NW Acquisition reimbursed the Company for a
portion of all executive compensation paid by the Company.

(3) Mr. Reynolds became Chairman and Chief Executive Officer of NW Television
in January 1996 upon the resignation of Mr. Selwyn; since he was not
previously employed by NW Television, no compensation information is
presented.

(4) Pursuant to a reimbursement agreement between a wholly-owned subsidiary of
GHI ("GHI Sub"), a former affiliate of the Company, and NW Television, GHI
Sub reimbursed NW Television $175,000 for a portion of Mr. Selwyn's and
another employee's salaries. As of December 31, 1994, the reimbursement
agreement was terminated.

(5) Pursuant to employment agreements between GHI, a former affiliate of the
Company, and certain of its affiliates (the "GHI Employment Agreements")
and Mr. Ramon, Mr. Ramon was paid an annual salary of $300,000 through
December 31, 1994 from GHI.

(6) During 1996, NW Sales and Marketing continued to pay Mr. Reynolds on
behalf of the Company and he participated in the NW Sales and Marketing
benefit plans. His salary costs, net of an allocation of his salary to NW
Sales and Marketing, were reimbursed to NW Sales and Marketing.

(7) Stock option awards received represent options to purchase NWCG Class A
Common Stock.

(8) Other annual compensation paid to Ms. Forrest in 1994 represents
reimbursement for moving expenses.

(9) Other compensation paid to Mr. Selwyn represents amounts paid in
conjunction with his resignation as Chief Executive Officer of the
Company.

(10) Ms. Forrest began her employment with the Company in November 1994. Ms.
Wisler began her employment with the Company in February 1994.

STOCK OPTIONS GRANTS

There were no stock option grants of NWCG Class A Common Stock to the named
executive officers during the year ended December 31, 1996.

35
<PAGE>

AGGREGATED STOCK OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUES

The following table sets forth information concerning options to purchase NWCG
Class A Common Stock exercised during the year ended December 31, 1996 by the
named executive officers and the value of exercised and unexercised options to
purchase NWCG Class A Common Stock held by the named executive officers as of
December 31, 1996. No options to purchase NWCG Class A Common Stock held by the
named executives have been repriced during the year.
<TABLE>
<CAPTION>

Shares Number of Securities Underlying Value of Unexercised In-the-Money
Acquired Value Realized Unexercised Options at Year-end (#) Options at Year-end ($) (1)
on

Exercise ($) Exercisable/Unexercisable Exercisable/Unexercisable
---------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
Farrell Reynolds - - 133,334 / 66,666 1,977,010 / 988,490

Robert E. Selwyn 166,666 2,640,491 0 / 33,334 0 / 441,676

Carolyn Forrest 6,666 88,741 6,667 / 6,667 77,087 / 77,087

Larry D. Haugen 20,000 353,100 20,000 / 0 335,600 / 0

David A. Ramon - - 166,667 / 33,333 2,561,338 / 441,662

Gwen C. Wisler - - 13,333 / 6,667 223,728 / 111,872

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

</TABLE>

(1) This column represents the excess of the fair market value of NWCG's Class
A Common Stock of $25.25 per share as of December 31, 1996 above the
exercise price of the options. One column reports the "value" of the
options that are vested and therefore could be exercised; the other the
"value" of options that are not vested and therefore could not be exercised
as of December 31, 1996.

DEFINED BENEFIT RETIREMENT PLAN

The table below illustrates the estimated annual standard pension benefit
payable upon retirement in 1996 at specified compensation levels and years of
service classifications.

PENSION PLAN TABLE
- -------------------------------------------------------------------------------------
YEARS OF BENEFIT SERVICE
------------------------------------------------------------
REMUNERATION 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 125,000 $11,528 $23,056 $34,584 $46,113 $57,641 $57,641
150,000 13,966 27,931 41,897 55,863 69,828 69,828
175,000 and over 14,291 28,581 42,872 57,163 71,453 71,453
- -------------------------------------------------------------------------------------
</TABLE>

The compensation covered by the Company's defined benefit plan for which the
above table is provided includes the salary and bonus information set forth in
the Summary Compensation Table for all named executives except Mr. Reynolds, who
was not eligible to participate in the plan in 1996. However, in 1996, covered
compensation was limited by the Tax Reform Act of 1986 to $150,000. As of
January 1, 1997, the credited years of service for Selwyn, Forrest, Haugen,
Ramon and Wisler were approximately 9, 2, 9, 9 and 3, respectively. Benefits
set forth in the table are straight life annuity amounts and are subject to
deductions for the satisfaction of Social Security obligations.

36
<PAGE>

COMPENSATION OF DIRECTORS

All of the directors as of December 31, 1996 were officers or employees of the
Company or its affiliates and did not receive incremental compensation in their
capacity as directors.

EMPLOYMENT AGREEMENTS

The Company had an agreement with Farrell Reynolds providing for his
employment as Chairman and Chief Executive Officer for the period January 1,
1996 through December 31, 1998. The employment agreement provided for an
initial annual base salary of $900,000, increased to $975,000 in 1997 and to
$1,050,000 in 1998, with potential annual bonus amounts of up to $750,000 per
year based on the achievement of certain financial goals The employment
agreement also provided for the grant of options to purchase NWCG Class A Common
Stock as well as for certain retirement, insurance and other benefits. Further,
his employment agreement provided that in the event Mr. Reynolds was terminated
without Cause (as defined in his employment agreement) or if the Company
breached his contract, the Company shall (i) retain Mr. Reynolds' services as an
independent consultant through March 1, 1997 for a monthly retainer plus
reasonable out-of-pocket expenses and (ii) pay Mr. Reynolds an amount equal to
(a) all unearned and unpaid amounts of base salary and bonus to the date of
termination, (b) a portion of his then current year bonus (as defined in Mr.
Reynolds' employment agreement), and (c) the difference between (x) the lesser
of one year's base salary or the remaining base salary to be paid for the
balance of the term of the employment agreement and (y) the present value of the
aggregate consulting fees payable to Mr. Reynolds under (i) above. Under the
employment agreement, Mr. Reynolds is prohibited from competing with NWCG during
the term of the employment agreement and for a period of one year after
termination thereof. Mr. Reynolds' employment was terminated on January 31,
1997, and he was paid $975,000 pursuant to the terms of his employment
agreement.

Until January 1996, the Company had an agreement with Robert Selwyn providing
for his employment as Chairman and Chief Executive Officer of the Company; Mr.
Selwyn currently serves as a consultant for the Company in return for annual
compensation of $464,090 (adjusted annually on the basis of the consumer price
index, with such adjustment capped at 5%) through January 29, 1998, a
discretionary bonus, and certain benefits. The original employment agreement,
entered into in 1993, provided for an initial annual base salary to be adjusted
annually on the basis of the consumer price index with such adjustment capped at
5% per year, and annual performance bonuses based on operating cash flow. The
employment agreement also provided for the grant of options to purchase shares
of NWCG Class A Common Stock as well as for certain retirement, insurance and
other benefits. Mr. Selwyn's stock options are fully vested.

NW Television had separate employment agreements (the "Employment Agreements")
with Larry D. Haugen and David A. Ramon, having entered into such Employment
Agreements on May 25, 1993 (the "Effective Date"). Pursuant to each of the
Employment Agreements, the term of employment of each was three years from the
Effective Date, with such term automatically extending in successive one-month
increments each month after the second anniversary of the Effective Date, unless
either NW Television or the employee gave notice to the other of its intention
not to renew the employment term. The Employment Agreements provided for, among
other things, a signing bonus, a base salary (adjusted on the basis of the
consumer price index, with such adjustment capped at 5% per year), annual
performance-based bonuses, certain perquisites, life insurance during the term
of employment in specified amounts and a grant of options to purchase shares of
NWCG Class A Common Stock. Each of the Employment Agreements provided that in
the event that Mr. Haugen or Mr. Ramon was terminated without Cause (as defined
in the Employment Agreements) or either one resigned with Good Reason (as
defined in the Employment Agreements) (i) each would be paid his bonus for the
year of termination, (ii) their respective base salary and benefits would
continue for the lesser of two years or the remaining term of their respective
Employment Agreement and (iii) each would have the right to put his options to
NWCG. On January 23, 1997, both Mr. Ramon's and Mr. Haugen's employment was
terminated. Under the terms of the Employment Agreements, each will be paid his
base salary plus certain benefits through January 22, 1998, all subject to
mitigation.

37
<PAGE>

The Company has an agreement with Carolyn Forrest providing for her employment
as Vice President and General Counsel for the period November 1, 1995 to October
31, 1998, with such term automatically extending on a daily basis for each day
after 180 days before the end of the term that written notice is not given that
the term will not be renewed. The employment agreement provides for a base
salary (adjusted annually by the greater of $10,000 or the percentage increase
in the consumer price index), a discretionary bonus, and certain perquisites.
The employment agreement provides that in the event of Ms. Forrest's death or
disability for more than six months, she is entitled to receive 60% of her base
salary until the end of the term of the employment agreement. In the event that
the Company breaches the employment agreement and the breach is unremedied
within 30 days, Ms. Forrest is entitled to terminate the term with an additional
30 days written notice and receive the balance of the Company's obligation under
the terms of the employment agreement in either one lump payment or over the
balance of the term of the employment agreement. The employment agreement also
provides that in the event that Ms. Forrest is terminated without Cause (as
defined in the employment agreement), the Company shall continue to pay Ms.
Forrest through the end of the term of the employment agreement. Effective as
of the Fox Merger Date, Ms. Forrest was removed as an officer of the Company;
her employment was not terminated as a result of such action.

Gwen C. Wisler was employed as an executive officer of the Company pursuant to
an employment agreement with NWCG. The Company paid Ms. Wisler directly in lieu
of reimbursing NWCG for 100% of all compensation costs. Pursuant to the
employment agreement, the initial term of employment was from February 1, 1994
through March 31, 1997. The employment agreement provided for a base salary
(adjusted on the basis of the consumer price index with a minimum annual
adjustment of 10%), a discretionary bonus, certain perquisites, life insurance
during the term of employment in specified amounts and a grant of options to
purchase NWCG Class A Common Stock. The employment agreement provided that in
the event Ms. Wisler was terminated without Cause (as defined in the employment
agreement), NWCG shall (i) pay the amount of any accrued but unpaid base salary,
(ii) continue to pay the base salary and provide certain benefits through the
earlier of the end of the term of the employment agreement or the second
anniversary of the date of termination. The Company did not incur any severance
obligation as a result of the termination of Ms. Wisler's employment on January
24, 1997.

COMPENSATION DECISIONS

The Company does not have a compensation committee. Prior to the Fox Merger,
decisions regarding executive compensation were generally made by William C.
Bevins, the Chief Executive Officer of NWCG, Farrell Reynolds and David A.
Ramon, with decisions relating to Mr. Reynolds' and Mr. Ramon's compensation
made by NWCG's compensation committee. Prior the Fox Merger, the members of
NWCG's compensation committee were David N. Dinkins, James D. Robinson III and
Howard Gittis, all of whom were non-employee directors of NWCG and the Company.
Mr. Gittis, a director of the Company prior to the Fox Merger, serves as a
director of Mafco and various of its affiliates.

EXECUTIVE COMPENSATION POLICIES

The basic elements of the Company's executive compensation packages, which
were reflected in the various employment agreements among the Company or its
affiliates and the executive officers, were annual base salary, annual incentive
bonuses and long-term incentive bonuses.

Annual Salary and Incentive Bonuses. The base salary levels of the Company's
executive officers were negotiated individually with each executive officer and
were fixed by contract. Base salary of an executive officer was determined
subjectively and was not subject to specific measurable criteria or performance
goals. The emphasis was placed upon fixing salary at the level necessary to
attract the particular executive sought and retain his or her services for a
certain term. In that regard, consideration was given to the individual's then
existing compensation arrangements as well as other alternative employment
opportunities which were then reasonably available to that person.

38
<PAGE>

With certain exceptions, bonuses for the Company's executive management was
within the discretion of Mr. Bevins, Mr. Reynolds and Mr. Ramon. Except for Mr.
Reynolds, all broadcast television operating executives participated along with
other broadcast operating personnel in a bonus pool which approximated a
percentage of operating cash flow of the station group. Mr. Reynolds'
employment agreement contained bonus criteria related to financial performance
levels of the business units he managed.

Long-Term Incentive Compensation. Historically, stock options granted
pursuant to the NWCG 1994 Stock Option Plan was the predominant form of long-
term incentive compensation and was a major portion of the executive
compensation package. No stock options to purchase NWCG Class A Common Stock
were granted during 1996.

Other Compensation. The Company's executive compensation agreements included
a benefits component in addition to base salary, bonuses and long-term
incentives. This component included, among other things, automobile allowances,
enhanced insurance and medical benefits. These benefits were viewed as less
important than the salary, bonus and stock-based elements of compensation and,
therefore, received far less emphasis.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

Mr. Reynolds' compensation as the Company's Chief Executive Officer was
determined based upon the terms of his employment agreement, which provided for
a base salary and a bonus determined based upon the achievement of certain
financial goals (see "Employment Agreements").

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As a result of the Fox Merger on the Fox Merger Date, the Company became a
wholly owned subsidiary of Fox, which is a wholly owned subsidiary of Twentieth
Holdings Corporation ("THC"). K. Rupert Murdoch holds voting preferred shares
of THC representing 76% of the voting power thereof. Such preferred stock is
redeemable at the option of Fox, Inc. News Corp., through Fox, Inc., holds all
of the common stock of THC (representing substantially all of the equity thereof
and 24% of the voting power thereof).

As of March 20, 1997, Cruden Investments Pty. Limited ("Cruden") (a
corporation organized under the laws of the State of Victoria, Australia), a
subsidiary thereof, Mr. Murdoch, members of his family and a corporation which
is controlled by the trustees of settlements and trusts set up for the benefit
of the Murdoch family, certain charities and other persons owned 599,988,254
Ordinary Shares, A$.50 each, of News Corp. (approximately 30.85% of the total
thereof outstanding). Cruden is a private Australian incorporated investment
company owned by Mr. Murdoch, members of his family and various corporations and
trusts, the beneficiaries of which include Mr. Murdoch, members of his family
and charities. By virtue of shares of News Corp. owned by corporations which
are controlled by the trustees of settlements and trusts set up for the benefit
of the Murdoch family, certain charities and other persons, and Mr. Murdoch's
positions as Chairman and Chief Executive of News Corp., Mr. Murdoch may be
deemed to control the operations of News Corp. The business address of THC and
Mr. Murdoch is 10201 West Pico Boulevard, Los Angeles, California 90035, and
the business address of News Corp. is 2 Holt Street, Sydney, New South Wales,
Australia.

39
<PAGE>

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATIONSHIP OF THE COMPANY WITH MAFCO

Mafco is wholly-owned by Ronald O. Perelman. Andrews, an affiliate of Mafco,
is subject to the reporting requirements of the Exchange Act and in accordance
therewith, files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). These reports can be inspected and
copied at certain Commission facilities.

Terry Bridges and Joseph Page are employed by Andrews and, until the Fox
Merger Date, served as Vice President and Chief Administrative Officer and Vice
President and Chief Financial Officer, respectively, of the Company pursuant to
an employment agreement with Andrews. The Company indirectly reimbursed Andrews
for a portion of Mr. Bridges and Mr. Page's salary, through a management fee
paid to NWCG.

Prior to the Fox Merger, the Company and certain affiliates of Mafco were
afforded coverage under selected common insurance policies obtained by a
subsidiary of Mafco. The Company paid Mafco for its allocable portion of the
cost of this insurance coverage.

Andrews leases and, through the Fox Merger Date, certain subsidiaries of NWE
Entertainment leased certain office space in the Company's corporate offices in
Atlanta, Georgia. These companies paid the Company its allocable portion of
lease costs.

CERTAIN RELATIONSHIPS WITH FOX

On the Fox Merger Date, Fox, an entity in which News Corp. has an indirect
interest, acquired all of the shares of common stock of NWCG (other than shares
of common stock previously owned directly or indirectly by News Corp. or any
News Corp. subsidiary) in a transaction referred to as the Fox Merger (see
"Business - Recent Developments").

The Stations are affiliated with the FOX network pursuant to affiliation
agreements which provide for an initial term of ten years, which term may be
extended for additional successive periods of five years each by agreement of
the Fox Broadcasting Company, which operates the FOX network, and the Company.
The affiliation agreements provide for the carriage by the Company stations of
FOX network programming during certain specified time periods and otherwise
contain terms customary for such agreements.

The Stations license certain programming from a unit of the Fox Television
division of News Corp. Such licensing agreements currently in effect were
established prior to the Fox Merger.

The Company and its subsidiaries are insured under policies maintained by News
America Holdings Incorporated and Fox, Inc., both of which are indirect wholly
owned subsidiaries of News Corp. During 1997, Fox will begin to provide health
and retirement benefits to the employees of the Company and its subsidiaries
under plans administered by Fox, Inc. The Company and its subsidiaries will
reimburse Fox for the portion of such costs attributable to the Company and its
subsidiaries.

CERTAIN OTHER RELATIONSHIPS

Certain executives of NW Television were also executives of, and received a
salary from, GHI Sub, a former affiliate of NW Television. See "Item 11,
Executive Compensation -- Employment Agreements." In addition, pursuant to a
reimbursement agreement, NW Television was obligated to reimburse GHI Sub for
payments made by GHI relating to certain operating expenses of NW Television and
for a portion of the cost of certain employee

40
<PAGE>

benefits provided by GHI Sub to certain employees. The reimbursement agreement
also provided that so long as NW Television remained obligated to pay the
salaries of certain employees, including those set forth in "Item 11, Executive
Compensation -- Employment Agreements," GHI Sub would reimburse NW Television
for $175,000 of these employees salaries. As of December 31, 1994, the
reimbursement agreement was terminated.

The Company, NWCG and NW Acquisition share compensation costs for certain
employees and certain other corporate costs. These costs totaled $40.5 million,
$20.4 million and $23.2 million in 1996, 1995 and 1994, respectively. The
Company's portion of these total costs was $16.0 million, $7.0 million and $6.9
million in 1996, 1995 and 1994, respectively. Amounts payable or receivable
from related parties associated with these costs are settled periodically.

In connection with the overall business strategy to participate in an
integrated entertainment company capable of developing, producing and
distributing television programming, the Company may invest in ventures which
produce and distribute television programming, operate a national advertising
and/or sales representation firm or syndicate programming (each, a "Program
Co"). Certain of the Company's agreements, including the debt agreements, place
limitations on the Company's financial and business relationships with a Program
Co and with Andrews. As permitted under the Company's debt agreements, the
Company made an aggregate investment of $30.0 million in preferred stock and
debt of NW Entertainment, which for purposes of the Company's debt agreements is
a Program Co. The Company received interest income of $2.4 million, $1.6 million
and $.7 million from NW Entertainment related to this investment in 1996, 1995
and 1994, respectively.

The Company licenses programming from NW Entertainment. Film assets and film
liabilities related to the programming licensed from NW Entertainment were $2.3
million and $2.2 million, respectively, at December 31, 1996 and $1.8 million
and $2.0 million, respectively, at December 31, 1995. The Company made film
payments to NW Entertainment of $2.9 million, $2.8 million, and $.8 million
during the years ended 1996, 1995 and 1994, respectively.

In May, 1994, the Company replaced its outside advertising representation
firms with New World Sales and Marketing, a wholly-owned subsidiary of NW
Entertainment. The Company paid or accrued commissions to New World Sales and
Marketing of $7.7 million, $7.5 million, and $4.2 million for the years ended
1996, 1995 and 1994, respectively.

41
<PAGE>

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

PAGE
----
(a) (1) Financial Statements commence on p. 16
(2) Supplemental Financial Statement Schedule
Report of Independent Auditors............................ S-1
Schedule II -- Valuation and Qualifying Accounts.......... S-2
(3) Exhibits

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------

2.1 -- Debtors' Joint Plan of Reorganization, dated March 4, 1993 as filed
by NW Television ("NW Television"), GCI Partners, SCI-GP Corp. and
GCI-GP, Inc. (collectively, the "Debtors") (incorporated by
reference to Exhibit 2.1 of the NW Television Registration Statement
on Form S-1 (No. 33-64546) relating to NW Television's 11% Notes
(the "NW Television Registration Statement")).
2.2 -- Debtors' Modification to the Debtors' Joint Plan of Reorganization,
dated April 29, 1993 (incorporated by reference to Exhibit 2.2 of
the NW Television Registration Statement).
2.3 -- Debtors' Further Modifications to the Debtors' Joint Plan of
Reorganization, dated May 3, 1993 (incorporated by reference to
Exhibit 2.3 of the NW Television Registration Statement).
2.4 -- Debtors' Additional Modifications to the Debtors' Joint Plan of
Reorganization, dated May 6, 1993 (incorporated by reference to
Exhibit 2.4 of the NW Television Registration Statement).
2.5 -- Settlement Agreement, dated May 5, 1993 (incorporated by reference
to Exhibit 2.5 of the NW Television Registration Statement).
2.6 -- Stipulation Regarding Implementation of Settlement Agreement and
Resolution of Investment Advisor's Claim, dated May 25, 1993
(incorporated by reference to Exhibit 2.6 of the NW Television
Registration Statement).
2.7 -- Disclosure Statement, dated January 19, 1993 (incorporated by
reference to Exhibit 2.7 of the NW Television Registration
Statement).
2.8 -- Disclosure Statement Supplement, dated February 12, 1993
(incorporated by reference to Exhibit 2.8 of the NW Television
Registration Statement).
2.9 -- Disclosure Statement Second Supplement, dated February 19, 1993
(incorporated by reference to Exhibit 2.9 of the NW Television
Registration Statement).
2.10 -- Agreement and Plan of Reorganization and Merger, dated as of
November 23, 1993, by and among NW Television, Andrews Group, the
Registrant and Merger Sub (the "Agreement and Plan of Reorganization
and Merger") (incorporated by reference to Exhibit 2.11 of the NWCG
Registration Statement on Form S-1 (No. 33-72738) relating to the
registration of certain securities (the "NWCG Registration
Statement")).
2.11 -- Amendment to Agreement and Plan of Reorganization and Merger, dated
as of February 10, 1994 (incorporated by reference to Exhibit 2.11C
of the NWCG Registration Statement).
2.12 -- Memorandum of Understanding among New World Communications Group,
Incorporated ("NWCG"), NWCG (Parent ) Holdings Corporation
("NWCGP"), NWCG Holdings Corporation (the "Company") and The News
Corporation Limited ("News Corp."), dated as of July 17, 1996
(incorporated by reference to Exhibit 2.1 of the NWCG Form 8-K,
dated July 17, 1996).

<PAGE>

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------

2.13 -- Agreement and Plan of Merger, dated as of September 24, 1996, by and
among NWCG, News Corp., Fox Television Stations, Inc. ("Fox") and
Fox Acquisition Co., Inc. ("Fox Merger Sub") (incorporated by
reference to Exhibit 2.2 of the NWCG Form 8-K, dated September 24,
1996).
2.14 -- Stock Purchase Agreement, dated as of September 24, 1996, by and
among NWCGP, News Corp. and Fox (incorporated by reference to
Exhibit 2.3 of the NWCG Form 8-K, dated September 24, 1996).
3.1 -- Amended and Restated Certificate of Incorporation of NW Television
(incorporated by reference to Exhibit 3.1 of the NW Television 1994
Form 10-K).
3.2 -- Amended and Restated Bylaws of (incorporated by reference to Exhibit
3.2 of the NW Television 1994 Form 10-K).
4.1 -- Indenture, dated as of May 25, 1993, by and between NW Television,
as Issuer, and Continental Bank, National Association, as Trustee
(incorporated by reference to Exhibit 4.1 of the NW Television
Registration Statement).
4.2 -- Indenture, dated as of May 25, 1993, by and between NW Television,
as Issuer, and NationsBank of Georgia, National Association, as
Trustee (incorporated by reference to Exhibit 4.2 of the NW
Television Registration Statement).
4.3 -- Collateral Trust and Intercreditor Agreement, dated as of May 25,
1993, among NW Television, the Secured Party Representatives named
therein, and Chemical Bank, as Collateral Trustee (incorporated by
reference to Exhibit 4.3 of the NW Television Registration
Statement).
4.4 -- SCI Pledge and Security Agreement, dated as of May 25, 1993, by and
between NW Television, as Pledgor, and Chemical Bank, as Collateral
Trustee (incorporated by reference to Exhibit 4.4 of the NW
Television Registration Statement).
4.5 -- Subsidiary Pledge and Security Agreement by New World Communications
of Atlanta, Inc. in favor of and for the benefit of NW Television,
dated May 25, 1993 (incorporated by reference to Exhibit 4.5A of the
NW Television Registration Statement).
4.7 -- Subsidiary Pledge and Security Agreement by New World Communications
of Milwaukee, Inc. in favor of and for the benefit of NW Television,
dated as of May 24, 1993 (incorporated by reference to Exhibit 4.5C
of the NW Television Registration Statement).
4.8 -- Subsidiary Pledge and Security Agreement by New World Communications
of Detroit, Inc. in favor of and for the benefit of NW Television,
dated May 25, 1993 (incorporated by reference to Exhibit 4.5D of the
NW Television Registration Statement).
4.9 -- Subsidiary Pledge and Security Agreement by New World Communications
of Ohio, Inc. in favor of and for the benefit of NW Television,
dated May 24, 1993 (incorporated by reference to Exhibit 4.5E of the
NW Television Registration Statement).
4.10 -- Subsidiary Pledge and Security Agreement by NW Communications of San
Diego, Inc. in favor of and for the benefit of NW Television, dated
as of May 25, 1993 (incorporated by reference to Exhibit 4.5F of the
NW Television Registration Statement).
4.11 -- Subsidiary Pledge and Security Agreement by New World Communications
of Tampa, Inc. in favor of and for the benefit of NW Television,
dated as of May 25, 1993 (incorporated by reference to Exhibit 4.5G
of the NW Television Registration Statement).
4.12 -- Deed to Secure Debt, Security Agreement, Financing Statement and
Assignment of Rents made May 25, 1993 by New World Communications of
Atlanta, Inc. in favor of NW Television (incorporated by reference
to Exhibit 4.5H of the NW Television Registration Statement).
4.14 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Milwaukee,
Inc. in favor of NW Television (incorporated by reference to Exhibit
4.5J of the NW Television Registration Statement).

43
<PAGE>

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------

4.15 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Detroit, Inc.
in favor of NW Television (incorporated by reference to Exhibit 4.5K
of the NW Television Registration Statement).
4.16 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Ohio, Inc. in
favor of NW Television (incorporated by reference to Exhibit 4.5L of
the NW Television Registration Statement).
4.17 -- Deed of Trust, Security Agreement, Financing Statement and
Assignment of Rents made May 25, 1993 by NW Communications of San
Diego, Inc. in favor of NW Television (incorporated by reference to
Exhibit 4.5M of the NW Television Registration Statement).
4.18 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Tampa, Inc.
in favor of NW Television (incorporated by reference to Exhibit 4.5N
of the NW Television Registration Statement).
4.19 -- New Intercompany Note made by New World Communications of Atlanta,
Inc. in favor of NW Television in the principal amount of
$16,700,000, dated May 25, 1993 (incorporated by reference to
Exhibit 4.5O of the NW Television Registration Statement).
4.20 -- Amended and Restated Intercompany Note made by New World
Communications of Atlanta, Inc. in favor of NW Television in the
principal amount of $161,500,000, dated May 25, 1993 (incorporated
by reference to Exhibit 4.5P of the NW Television Registration
Statement).
4.23 -- New Intercompany Note made by New World Communications of Milwaukee,
Inc. in favor of NW Television in the principal amount of
$14,300,000, dated May 25, 1993 (incorporated by reference to
Exhibit 4.5S of the NW Television Registration Statement).
4.24 -- Amended and Restated Intercompany Note made by New World
Communications of Milwaukee, Inc. in favor of NW Television in the
principal amount of $11,600,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5T of the NW Television Registration
Statement).
4.25 -- New Intercompany Note made by New World Communications of Detroit,
Inc. in favor of NW Television in the principal amount of
$18,400,000, dated May 25, 1993 (incorporated by reference to
Exhibit 4.5U of the NW Television Registration Statement).
4.26 -- Amended and Restated Intercompany Note made by New World
Communications of Detroit, Inc. in favor of NW Television in the
principal amount of $39,100,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5V of the NW Television Registration
Statement).
4.27 -- New Intercompany Note made by New World Communications of Ohio, Inc.
in favor of NW Television in the Principal amount of $14,500,000,
dated May 25, 1993 (incorporated by reference to Exhibit 4.5W of the
NW Television Registration Statement).
4.28 -- Amended and Restated Intercompany Note made by New World
Communications of Ohio, Inc. in favor of NW Television in the
principal amount of $75,000,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5X of the NW Television Registration
Statement).
4.29 -- New Intercompany Note made by NW Communications of San Diego, Inc.
in favor of NW Television in the principal amount of $13,300,000,
dated May 25, 1993 (incorporated by reference to Exhibit 4.5Y of the
NW Television Registration Statement).
4.30 -- Amended and Restated Intercompany Note made by NW Communications of
San Diego, Inc. in favor of NW Television in the principal amount of
$75,000,000, dated May 25, 1993 (incorporated by reference to
Exhibit 4.5Z of the NW Television Registration Statement).
4.31 -- Intercompany Note made by New World Communications of Tampa, Inc. in
favor of NW Television in the principal amount of $65,000,000, dated
May 25, 1993 (incorporated by reference to Exhibit 4.5AA of the NW
Television Registration Statement).
4.32 -- Junior Subordinated Intercompany Note made by New World
Communications of Tampa, Inc. in favor of NW Television in the
principal amount of $64,800,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5BB of the NW Television Registration
Statement).

44
<PAGE>

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------

4.33 -- Stockholders Agreement, dated as of May 25, 1993, among NW
Television, Andrews Group Incorporated, and the Initial Executing
Stockholders listed therein and assumed by the Registrant in
accordance with the provisions of the Agreement and Plan of
Reorganization and Merger filed as Exhibit 2.10 hereto (incorporated
by reference to Exhibit 4.6 of the NW Television Registration
Statement).
4.34 -- Registration Rights Agreement, dated as of May 25, 1993, among NW
Television, and the Stockholders, Warrantholders, and Debtholders
listed on the Signature Pages thereto and assumed by the Registrant
in accordance with the provisions of the Agreement and Plan of
Reorganization and Merger filed as Exhibit 2.10 hereto (incorporated
by reference to Exhibit 4.7 of the NW Television Registration
Statement).
4.35 -- New Equity Stock Subscription Agreement, dated as of January 26,
1993, by and between NW Television and Andrews Group Incorporated,
as amended January 29, 1993 and February 11, 1993 (incorporated by
reference to Exhibit 4.8 of the NW Television Registration
Statement).
4.36 -- Purchase Agreement, dated May 20, 1993, among NW Television, Andrews
Group Incorporated for the limited purpose of acknowledging the
agreement set forth in Section 2 thereto and Bear, Stearns & Co.
Inc. (incorporated by reference to Exhibit 4.9 of the NW Television
Registration Statement).
4.37 -- Registration Agreement, dated May 20, 1993, by and between NW
Television and Bear, Stearns & Co. Inc. (incorporated by reference
to Exhibit 4.10 of the NW Television Registration Statement).
4.38 -- Form of Class A Warrant of NW Television assumed by the Registrant
in accordance with the provisions of the Agreement and Plan of
Reorganization and Merger (incorporated by reference to Exhibit 4.11
of the NW Television Registration Statement).
4.39 -- Form of Class B Warrant of NW Television assumed by the Registrant
in accordance with the provisions of the Agreement and Plan of
Reorganization and Merger (incorporated by reference to Exhibit 4.12
of the NW Television Registration Statement).
4.40 -- Form of Class A, Series 2 Warrants of the Registrant (incorporated
by reference to Exhibit 4.38A of the NWCG Registration Statement).
10.1 -- Credit Agreement, dated as of May 25, 1993, among NW Television, the
Lenders listed therein and Canadian Imperial Bank of Commerce New
York Agency, as Agent (incorporated by reference to Exhibit 10.1 of
the NW Television Registration Statement).
10.2 -- First Amendment, dated as of December 22, 1993, by and among NW
Television, the Institutions listed on the Signature Pages thereof
and Canadian Imperial Bank of Commerce New York Agency (incorporated
by reference to Exhibit 10.1A of the NW Television Registration
Statement).
10.3 -- Affiliation Agreement dated as of June 26, 1995 by and between
National Broadcasting Company, Inc. and NW Communications of San
Diego, Inc.
10.4 -- Affiliation Agreement by and between Fox Broadcasting Company and
WJBK License, Inc. (incorporated by reference to Exhibit 10.0 of
NWCG Holdings Corporation Registration Statement on Form S-1 (No.33-
82274) relating to NWCG Holdings Corporation Senior Discount Notes
(the "Holdings Registration Statement")).
10.5 -- Affiliation Agreement by and between Fox Broadcasting Company and
WAGA License, Inc. (incorporated by reference to Exhibit 10.10 of
the Holdings Registration Statement).
10.6 -- Affiliation Agreement by and between Fox Broadcasting Company and
WJW License, Inc. (incorporated by reference to Exhibit 10.11 of the
Holdings Registration Statement).
10.7 -- Affiliation Agreement by and between Fox Broadcasting Company and
TVT License, Inc. (incorporated by reference to Exhibit 10.12 of the
Holdings Registration Statement).
10.8 -- Affiliation Agreement by and between Fox Broadcasting Company and
WITI License, Inc. (incorporated by reference to Exhibit 10.13 of
the Holdings Registration Statement).
10.9 -- Affiliation Agreement by and between Fox Broadcasting Company and
KSAZ License, Inc. (incorporated by reference to Exhibit 10.14 of
the Holdings Registration Statement).

45
<PAGE>

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------

10.10 -- Affiliation Agreement by and between Fox Broadcasting Company and
WDAF License, Inc. (incorporated by reference to Exhibit 10.15 of
the Holdings Registration Statement).
10.11 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and Robert E. Selwyn, Jr. (incorporated by reference to
Exhibit 10.9 of the NW Television Registration Statement).
10.13 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and Larry D. Haugen (incorporated by reference to Exhibit
10.11 of the NW Television Registration Statement).
10.14 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and James G. Gorman (incorporated by reference to Exhibit
10.12 of the NW Television Registration Statement).
10.15 -- Employment Agreement, dated as of May 24, 1993, by and between NW
Television and David A. Ramon (incorporated by reference to Exhibit
10.13 of the NW Television Registration Statement).
10.16 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and George N. Gillett, Jr. (incorporated by reference to
Exhibit 10.14 of the NW Television Registration Statement).
10.17 -- Amended Employment Agreement, dated December 31, 1994, between the
Registrant and David A. Ramon (incorporated by reference to exhibit
10.17 of the NW Television 1994 Form 10-K).
10.18 -- Merger Agreement, by and between the Company and Viacom
International Inc., dated as of November 28, 1994 (with respect to
the sale of WSBK-TV) (incorporated by reference to Exhibit 1 of the
NW Television Form 8-K dated March 7, 1995).
10.19 -- Employment Agreement, dated as of January 1, 1996, by and between
the Company and Farrell Reynolds (incorporated by reference to
exhibit 10.1 of the New World Communications Group Incorporated form
10-Q for the quarter ended March 31, 1996).
10.20 -- NWCG Parent Voting Agreement, dated as of September 24, 1996, among
Fox, NWCGP and NWCG Holdings (incorporated by reference to Exhibit
10.1 of the NWCG Form 8-K dated September 24, 1996).
10.21 -- Apollo Voting Agreement, dated as of September 24, 1996, among Fox,
News Corp. and Apollo Advisors L.P. ("Apollo") (incorporated by
reference to Exhibit 10.2 of the NWCG Form 8-K dated September 24,
1996).
10.22 -- Guaranty, dated as of September 24, 1996, entered into by News Corp.
in favor of NWCG Holdings, NWCGP, Mafco Holdings Inc. ("Mafco"),
1440 Sepulveda Limited Partnership ("1440") and Andrews Group Inc.
("Andrews") (incorporated by reference to Exhibit 10.3 of the NWCG
Form 8-k dated September 24, 1996).
10.23 -- Guaranty, dated as of September 24, 1996, entered into by Mafco in
favor of News Corp. and Fox (incorporated by reference to Exhibit
10.4 of the NWCG Form 8-K dated September 24, 1996).
21.1 -- Subsidiaries of the Registrant.
24.1 -- Powers of Attorney.
27.1 -- Financial Data Schedule (for SEC use only).

(b) Reports filed on Form 8-K:

September 24, 1996 (Items 1 and 7)
November 20, 1996 (Items 2 and 7)
January 22, 1997 (Items 1, 5 and 7)

46
<PAGE>

SIGNATURES

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

NEW WORLD TELEVISION INCORPORATED
(Registrant)

By: /s/ Mitchell Stern
-----------------------------------------------
Mitchell Stern
President and
Chief Operating Officer

By: /s/ Lawrence Jacobson
-----------------------------------------------
Lawrence Jacobson
Executive Vice President and
Assistant Treasurer

Dated: March 28, 1997

<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on March 28, 1997 in the
capacities indicated.

By: K. Rupert Murdoch*
---------------------------------------

K. Rupert Murdoch
Director

By: Chase Carey*
---------------------------------------

Chase Carey
Director

By: David F. DeVoe*
------------------------------------

David F. DeVoe
Director
<PAGE>

* The undersigned by signing his name does hereby execute this Annual Report
pursuant to powers of attorney filed as exhibits to the Annual Report.

By: /s/ Mitchell Stern
-------------------------------------
Mitchell Stern
Attorney-in-fact
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholder:
New World Television Incorporated

We have audited the consolidated financial statements of New World
Television Incorporated as of December 31, 1996 and 1995 and for the three years
in the period ended December 31, 1996, and have issued our report thereon dated
March 7, 1997 (included elsewhere in this Form 10-K). Our audits also included
the financial statement schedule listed in Item 14a(2). This schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
March 7, 1997

S-1

<PAGE>

SCHEDULE II

NEW WORLD TELEVISION INCORPORATED

VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>

BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED TO END OF
DESCRIPTIONS OF YEAR DISPOSITIONS EARNINGS DEDUCTIONS(1) YEAR
- ------------ ------------ -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1996
Deducted from assets to which they
apply:
Allowance for doubtful accounts $ 2,789 $ (192) $ 1,014 $ 1,073 $ 2,538

FOR THE YEAR ENDED DECEMBER 31, 1995
Deducted from assets to which they
apply:
Allowance for doubtful accounts $ 3,329 $ (334) $ 1,034 $ 1,240 $ 2,789

FOR THE YEAR ENDED DECEMBER 31, 1994
Deducted from assets to which they
apply:
Allowance for doubtful accounts $ 3,078 $ -- $ 722 $ 471 $ 3,329
</TABLE>

- ----------
(1) Deductions made for purposes for which account was established.

S-2
<PAGE>

INDEX TO EXHIBITS

SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------ ----------------------- ----

2.1 -- Debtors' Joint Plan of Reorganization, dated March 4, 1993 as filed
by NW Television ("NW Television"), GCI Partners, SCI-GP Corp. and
GCI-GP, Inc. (collectively, the "Debtors") (incorporated by reference
to Exhibit 2.1 of the NW Television Registration Statement on Form S-
1 (No. 33-64546) relating to NW Television's 11% Notes (the "NW
Television Registration Statement")).
2.2 -- Debtors' Modification to the Debtors' Joint Plan of Reorganization,
dated April 29, 1993 (incorporated by reference to Exhibit 2.2 of the
NW Television Registration Statement).
2.3 -- Debtors' Further Modifications to the Debtors' Joint Plan of
Reorganization, dated May 3, 1993 (incorporated by reference to
Exhibit 2.3 of the NW Television Registration Statement).
2.4 -- Debtors' Additional Modifications to the Debtors' Joint Plan of
Reorganization, dated May 6, 1993 (incorporated by reference to
Exhibit 2.4 of the NW Television Registration Statement).
2.5 -- Settlement Agreement, dated May 5, 1993 (incorporated by reference to
Exhibit 2.5 of the NW Television Registration Statement).
2.6 -- Stipulation Regarding Implementation of Settlement Agreement and
Resolution of Investment Advisor's Claim, dated May 25, 1993
(incorporated by reference to Exhibit 2.6 of the NW Television
Registration Statement).
2.7 -- Disclosure Statement, dated January 19, 1993 (incorporated by
reference to Exhibit 2.7 of the NW Television Registration
Statement).
2.8 -- Disclosure Statement Supplement, dated February 12, 1993
(incorporated by reference to Exhibit 2.8 of the NW Television
Registration Statement).
2.9 -- Disclosure Statement Second Supplement, dated February 19, 1993
(incorporated by reference to Exhibit 2.9 of the NW Television
Registration Statement).
2.10 -- Agreement and Plan of Reorganization and Merger, dated as of November
23, 1993, by and among NW Television, Andrews Group, the Registrant
and Merger Sub (the "Agreement and Plan of Reorganization and
Merger") (incorporated by reference to Exhibit 2.11 of the NWCG
Registration Statement on Form S-1 (No. 33-72738) relating to the
registration of certain securities (the "NWCG Registration
Statement")).
2.11 -- Amendment to Agreement and Plan of Reorganization and Merger, dated
as of February 10, 1994 (incorporated by reference to Exhibit 2.11C
of the NWCG Registration Statement).
2.12 -- Memorandum of Understanding among New World Communications Group
Incorporated ("NWCG"), NWCG (Parent ) Holdings Corporation ("NWCGP"),
NWCG Holdings Corporation (the "Company") and The News Corporation
Limited ("News Corp."), dated as of July 17, 1996 (incorporated by
reference to Exhibit 2.1 of the NWCG Form 8-K, dated July 17, 1996).
2.13 -- Agreement and Plan of Merger, dated as of September 24, 1996, by and
among NWCG, News Corp., Fox Television Stations, Inc. ("Fox") and Fox
Acquisition Co., Inc. ("Fox Merger Sub") (incorporated by reference
to Exhibit 2.2 of the NWCG Form 8-K, dated September 24, 1996).
2.14 -- Stock Purchase Agreement, dated as of September 24, 1996, by and
among NWCGP, News Corp. and Fox (incorporated by reference to Exhibit
2.3 of the NWCG Form 8-K, dated September 24, 1996).
3.1 -- Amended and Restated Certificate of Incorporation of NW Television
(incorporated by reference to Exhibit 3.1 of the NW Television 1994
Form 10-K).
<PAGE>

SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------ ----------------------- ----

3.2 -- Amended and Restated Bylaws of (incorporated by reference to Exhibit
3.2 of the NW Television 1994 Form 10-K).
4.1 -- Indenture, dated as of May 25, 1993, by and between NW Television, as
Issuer, and Continental Bank, National Association, as Trustee
(incorporated by reference to Exhibit 4.1 of the NW Television
Registration Statement).
4.2 -- Indenture, dated as of May 25, 1993, by and between NW Television, as
Issuer, and NationsBank of Georgia, National Association, as Trustee
(incorporated by reference to Exhibit 4.2 of the NW Television
Registration Statement).
4.3 -- Collateral Trust and Intercreditor Agreement, dated as of May 25,
1993, among NW Television, the Secured Party Representatives named
therein, and Chemical Bank, as Collateral Trustee (incorporated by
reference to Exhibit 4.3 of the NW Television Registration
Statement).
4.4 -- SCI Pledge and Security Agreement, dated as of May 25, 1993, by and
between NW Television, as Pledgor, and Chemical Bank, as Collateral
Trustee (incorporated by reference to Exhibit 4.4 of the NW
Television Registration Statement).
4.5 -- Subsidiary Pledge and Security Agreement by New World Communications
of Atlanta, Inc. in favor of and for the benefit of NW Television,
dated May 25, 1993 (incorporated by reference to Exhibit 4.5A of the
NW Television Registration Statement).
4.7 -- Subsidiary Pledge and Security Agreement by New World Communications
of Milwaukee, Inc. in favor of and for the benefit of NW Television,
dated as of May 24, 1993 (incorporated by reference to Exhibit 4.5C
of the NW Television Registration Statement).
4.8 -- Subsidiary Pledge and Security Agreement by New World Communications
of Detroit, Inc. in favor of and for the benefit of NW Television,
dated May 25, 1993 (incorporated by reference to Exhibit 4.5D of the
NW Television Registration Statement).
4.9 -- Subsidiary Pledge and Security Agreement by New World Communications
of Ohio, Inc. in favor of and for the benefit of NW Television, dated
May 24, 1993 (incorporated by reference to Exhibit 4.5E of the NW
Television Registration Statement).
4.10 -- Subsidiary Pledge and Security Agreement by NW Communications of San
Diego, Inc. in favor of and for the benefit of NW Television, dated
as of May 25, 1993 (incorporated by reference to Exhibit 4.5F of the
NW Television Registration Statement).
4.11 -- Subsidiary Pledge and Security Agreement by New World Communications
of Tampa, Inc. in favor of and for the benefit of NW Television,
dated as of May 25, 1993 (incorporated by reference to Exhibit 4.5G
of the NW Television Registration Statement).
4.12 -- Deed to Secure Debt, Security Agreement, Financing Statement and
Assignment of Rents made May 25, 1993 by New World Communications of
Atlanta, Inc. in favor of NW Television (incorporated by reference to
Exhibit 4.5H of the NW Television Registration Statement).
4.14 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Milwaukee,
Inc. in favor of NW Television (incorporated by reference to Exhibit
4.5J of the NW Television Registration Statement).
4.15 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Detroit, Inc.
in favor of NW Television (incorporated by reference to Exhibit 4.5K
of the NW Television Registration Statement).
4.16 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Ohio, Inc. in
favor of NW Television (incorporated by reference to Exhibit 4.5L of
the NW Television Registration Statement).
<PAGE>

SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------ ----------------------- ----

4.17 -- Deed of Trust, Security Agreement, Financing Statement and Assignment
of Rents made May 25, 1993 by NW Communications of San Diego, Inc. in
favor of NW Television (incorporated by reference to Exhibit 4.5M of
the NW Television Registration Statement).
4.18 -- Mortgage, Security Agreement, Financing Statement and Assignment of
Rents made May 25, 1993 by New World Communications of Tampa, Inc. in
favor of NW Television (incorporated by reference to Exhibit 4.5N of
the NW Television Registration Statement).
4.19 -- New Intercompany Note made by New World Communications of Atlanta,
Inc. in favor of NW Television in the principal amount of
$16,700,000, dated May 25, 1993 (incorporated by reference to Exhibit
4.5O of the NW Television Registration Statement).
4.20 -- Amended and Restated Intercompany Note made by New World
Communications of Atlanta, Inc. in favor of NW Television in the
principal amount of $161,500,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5P of the NW Television Registration
Statement).
4.23 -- New Intercompany Note made by New World Communications of Milwaukee,
Inc. in favor of NW Television in the principal amount of
$14,300,000, dated May 25, 1993 (incorporated by reference to Exhibit
4.5S of the NW Television Registration Statement).
4.24 -- Amended and Restated Intercompany Note made by New World
Communications of Milwaukee, Inc. in favor of NW Television in the
principal amount of $11,600,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5T of the NW Television Registration
Statement).
4.25 -- New Intercompany Note made by New World Communications of Detroit,
Inc. in favor of NW Television in the principal amount of
$18,400,000, dated May 25, 1993 (incorporated by reference to Exhibit
4.5U of the NW Television Registration Statement).
4.26 -- Amended and Restated Intercompany Note made by New World
Communications of Detroit, Inc. in favor of NW Television in the
principal amount of $39,100,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5V of the NW Television Registration
Statement).
4.27 -- New Intercompany Note made by New World Communications of Ohio, Inc.
in favor of NW Television in the Principal amount of $14,500,000,
dated May 25, 1993 (incorporated by reference to Exhibit 4.5W of the
NW Television Registration Statement).
4.28 -- Amended and Restated Intercompany Note made by New World
Communications of Ohio, Inc. in favor of NW Television in the
principal amount of $75,000,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5X of the NW Television Registration
Statement).
4.29 -- New Intercompany Note made by NW Communications of San Diego, Inc. in
favor of NW Television in the principal amount of $13,300,000, dated
May 25, 1993 (incorporated by reference to Exhibit 4.5Y of the NW
Television Registration Statement).
4.30 -- Amended and Restated Intercompany Note made by NW Communications of
San Diego, Inc. in favor of NW Television in the principal amount of
$75,000,000, dated May 25, 1993 (incorporated by reference to Exhibit
4.5Z of the NW Television Registration Statement).
4.31 -- Intercompany Note made by New World Communications of Tampa, Inc. in
favor of NW Television in the principal amount of $65,000,000, dated
May 25, 1993 (incorporated by reference to Exhibit 4.5AA of the NW
Television Registration Statement).
4.32 -- Junior Subordinated Intercompany Note made by New World
Communications of Tampa, Inc. in favor of NW Television in the
principal amount of $64,800,000, dated May 25, 1993 (incorporated by
reference to Exhibit 4.5BB of the NW Television Registration
Statement).
4.33 -- Stockholders Agreement, dated as of May 25, 1993, among NW
Television, Andrews Group Incorporated, and the Initial Executing
Stockholders listed therein and assumed by the Registrant in
accordance with the provisions of the Agreement and Plan of
Reorganization and Merger filed as Exhibit 2.10 hereto (incorporated
by reference to Exhibit 4.6 of the NW Television Registration
Statement).
<PAGE>

SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------ ----------------------- ----

4.34 -- Registration Rights Agreement, dated as of May 25, 1993, among NW
Television, and the Stockholders, Warrantholders, and Debtholders
listed on the Signature Pages thereto and assumed by the Registrant
in accordance with the provisions of the Agreement and Plan of
Reorganization and Merger filed as Exhibit 2.10 hereto (incorporated
by reference to Exhibit 4.7 of the NW Television Registration
Statement).
4.35 -- New Equity Stock Subscription Agreement, dated as of January 26,
1993, by and between NW Television and Andrews Group Incorporated, as
amended January 29, 1993 and February 11, 1993 (incorporated by
reference to Exhibit 4.8 of the NW Television Registration
Statement).
4.36 -- Purchase Agreement, dated May 20, 1993, among NW Television, Andrews
Group Incorporated for the limited purpose of acknowledging the
agreement set forth in Section 2 thereto and Bear, Stearns & Co. Inc.
(incorporated by reference to Exhibit 4.9 of the NW Television
Registration Statement).
4.37 -- Registration Agreement, dated May 20, 1993, by and between NW
Television and Bear, Stearns & Co. Inc. (incorporated by reference to
Exhibit 4.10 of the NW Television Registration Statement).
4.38 -- Form of Class A Warrant of NW Television assumed by the Registrant in
accordance with the provisions of the Agreement and Plan of
Reorganization and Merger (incorporated by reference to Exhibit 4.11
of the NW Television Registration Statement).
4.39 -- Form of Class B Warrant of NW Television assumed by the Registrant in
accordance with the provisions of the Agreement and Plan of
Reorganization and Merger (incorporated by reference to Exhibit 4.12
of the NW Television Registration Statement).
4.40 -- Form of Class A, Series 2 Warrants of the Registrant (incorporated by
reference to Exhibit 4.38A of the NWCG Registration Statement).
10.1 -- Credit Agreement, dated as of May 25, 1993, among NW Television, the
Lenders listed therein and Canadian Imperial Bank of Commerce New
York Agency, as Agent (incorporated by reference to Exhibit 10.1 of
the NW Television Registration Statement).
10.2 -- First Amendment, dated as of December 22, 1993, by and among NW
Television, the Institutions listed on the Signature Pages thereof
and Canadian Imperial Bank of Commerce New York Agency (incorporated
by reference to Exhibit 10.1A of the NW Television Registration
Statement).
10.3 -- Affiliation Agreement dated as of June 26, 1995 by and between
National Broadcasting Company, Inc. and NW Communications of San
Diego, Inc.
10.4 -- Affiliation Agreement by and between Fox Broadcasting Company and
WJBK License, Inc. (incorporated by reference to Exhibit 10.0 of NWCG
Holdings Corporation Registration Statement on Form S-1 (No.33-82274)
relating to NWCG Holdings Corporation Senior Discount Notes (the
"Holdings Registration Statement")).
10.5 -- Affiliation Agreement by and between Fox Broadcasting Company and
WAGA License, Inc. (incorporated by reference to Exhibit 10.10 of the
Holdings Registration Statement).
10.6 -- Affiliation Agreement by and between Fox Broadcasting Company and WJW
License, Inc. (incorporated by reference to Exhibit 10.11 of the
Holdings Registration Statement).
10.7 -- Affiliation Agreement by and between Fox Broadcasting Company and TVT
License, Inc. (incorporated by reference to Exhibit 10.12 of the
Holdings Registration Statement).
10.8 -- Affiliation Agreement by and between Fox Broadcasting Company and
WITI License, Inc. (incorporated by reference to Exhibit 10.13 of the
Holdings Registration Statement).
<PAGE>

SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------ ----------------------- ----

10.9 -- Affiliation Agreement by and between Fox Broadcasting Company and
KSAZ License, Inc. (incorporated by reference to Exhibit 10.14 of the
Holdings Registration Statement).
10.10 -- Affiliation Agreement by and between Fox Broadcasting Company and
WDAF License, Inc. (incorporated by reference to Exhibit 10.15 of the
Holdings Registration Statement).
10.11 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and Robert E. Selwyn, Jr. (incorporated by reference to
Exhibit 10.9 of the NW Television Registration Statement).
10.13 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and Larry D. Haugen (incorporated by reference to Exhibit
10.11 of the NW Television Registration Statement).
10.14 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and James G. Gorman (incorporated by reference to Exhibit
10.12 of the NW Television Registration Statement).
10.15 -- Employment Agreement, dated as of May 24, 1993, by and between NW
Television and David A. Ramon (incorporated by reference to Exhibit
10.13 of the NW Television Registration Statement).
10.16 -- Employment Agreement, dated as of May 25, 1993, by and between NW
Television and George N. Gillett, Jr. (incorporated by reference to
Exhibit 10.14 of the NW Television Registration Statement).
10.17 -- Amended Employment Agreement, dated December 31, 1994, between the
Registrant and David A. Ramon (incorporated by reference to exhibit
10.17 of the NW Television 1994 Form 10-K).
10.18 -- Merger Agreement, by and between the Company and Viacom International
Inc., dated as of November 28, 1994 (with respect to the sale of
WSBK-TV) (incorporated by reference to Exhibit 1 of the NW Television
Form 8-K dated March 7, 1995).
10.19 -- Employment Agreement, dated as of January 1, 1996, by and between the
Company and Farrell Reynolds (incorporated by reference to exhibit
10.1 of the New World Communications Group Incorporated form 10-Q for
the quarter ended March 31, 1996).
10.20 -- NWCG Parent Voting Agreement, dated as of September 24, 1996, among
Fox, NWCGP and NWCG Holdings (incorporated by reference to Exhibit
10.1 of the NWCG Form 8-K dated September 24, 1996).
10.21 -- Apollo Voting Agreement, dated as of September 24, 1996, among Fox,
News Corp. and Apollo Advisors L.P. ("Apollo") (incorporated by
reference to Exhibit 10.2 of the NWCG Form 8-K dated September 24,
1996).
10.22 -- Guaranty, dated as of September 24, 1996, entered into by News Corp.
in favor of NWCG Holdings, NWCGP, Mafco Holdings Inc. ("Mafco"), 1440
Sepulveda Limited Partnership ("1440") and Andrews Group Inc.
("Andrews") (incorporated by reference to Exhibit 10.3 of the NWCG
Form 8-k dated September 24, 1996).
10.23 -- Guaranty, dated as of September 24, 1996, entered into by Mafco in
favor of News Corp. and Fox (incorporated by reference to Exhibit
10.4 of the NWCG Form 8-K dated September 24, 1996).
21.1 -- Subsidiaries of the Registrant.
24.1 -- Powers of Attorney.
27.1 -- Financial Data Schedule (for SEC use only)

<PAGE>

Exhibit 21.1

SUBSIDIARIES OF REGISTRANT
- --------------------------
State of Doing
Name Incorporation Business As
- ---- ------------- -----------

New World Television Incorporated Delaware
NW Management Incorporated Delaware
NW Programs Incorporated Delaware
SCI Subsidiary Corporation Delaware
SCI Sub I Incorporated Delaware

New World Communications of Milwaukee, Inc. Delaware WITI-TV
New World Communications of Ohio, Inc. Delaware WJW-TV
New World Communications of Detroit, Inc. Delaware WJBK-TV
New World Communications of Atlanta, Inc. Delaware WAGA-TV
New World Communications of Tampa, Inc. Delaware WTVT-TV
NW Communications of San Diego, Inc. Delaware

KNSD License, Inc. Delaware
WAGA License, Inc. Delaware
WITI License, Inc. Delaware
WJBK License, Inc. Delaware
WJW License, Inc. Delaware
TVT License, Inc. Delaware

<PAGE>

Exhibit 24.1

POWER OF ATTORNEY
-----------------

KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints each of Mitchell Stern and Lawrence Jacobson or either
of them, each acting alone, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, in connection with the NEW WORLD TELEVISION INCORPORATED (the
"Corporation") Annual Report on Form 10-K for the year ended December 31, 1996
under the Securities Exchange Act of 1934, as amended, including, without
limiting the generality of the foregoing, to sign the Form 10-K in the name and
on behalf of the Corporation or on behalf of the undersigned as a director or
officer of the Corporation, and any amendments to the Form 10-K and any
instrument, contract, document or other writing, of or in connection with the
Form 10-K or amendments thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, including this power of
attorney, with the Securities and Exchange Commission and any applicable
securities exchange or securities self-regulatory body, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, each acting alone, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed these presents this
28th day of March 1997.

/s/ K. Rupert Murdoch
---------------------
K. Rupert Murdoch

<PAGE>

POWER OF ATTORNEY
-----------------

IN WITNESS WHEREOF, the undersigned has signed these presents this
28th day of March 1997.

/s/ Chase Carey
---------------
Chase Carey
<PAGE>

POWER OF ATTORNEY
-----------------

IN WITNESS WHEREOF, the undersigned has signed these presents this
28th day of March 1997.

/s/ David F. DeVoe
------------------
David F. DeVoe

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1996 AND THE CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 235,216<F1>
<SECURITIES> 0
<RECEIVABLES> 57,446
<ALLOWANCES> 2,538
<INVENTORY> 0
<CURRENT-ASSETS> 310,799
<PP&E> 97,818<F2>
<DEPRECIATION> 39,300
<TOTAL-ASSETS> 837,973
<CURRENT-LIABILITIES> 64,490
<BONDS> 476,935
0
0
<COMMON> 0
<OTHER-SE> 208,792
<TOTAL-LIABILITY-AND-EQUITY> 837,973
<SALES> 0
<TOTAL-REVENUES> 247,518
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 101,671
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,241
<INCOME-PRETAX> 123,551
<INCOME-TAX> 66,524
<INCOME-CONTINUING> 57,027
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,027
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> Includes $193,163 of restricted cash
<F2> PP&E is stated net of accumulated depreciation
</FN>

</TABLE>