Welcome to the News Corp Annual Meeting of Stockholders. Thank you for attending. Please make your way to your seats as the meeting will begin shortly. As a reminder, photography and the use of audio and video equipment is prohibited. In addition, we request that each stockholder keep his or her comments and questions to the time allotted. Each stockholder is limited to two questions, which should be no longer than one minute in length each. We ask that you comply with these and the other rules and procedures for conduct of the meeting. If you have not yet received a copy of the rules and procedures for conduct of the meeting, please raise your hand and a staff member will bring a copy to you now. Thank you again for attending the annual meeting. Please make your way to your seats as the meeting will begin shortly.
Good afternoon, ladies and gentlemen. I'm Rupert Murdoch, Executive Chairman of News Corporation. It's my pleasure to welcome all of you to the 2016 annual meeting of stockholders of News Corporation. Before calling this meeting to order, I hope you'll permit me some remarks about the performance of the company and our aspirations for the future. In the three years since the birth of the new News Corp, we have seen the company successfully grow. It is profitable, diversified, and global media business. News Corp is today home to the most popular and influential newspapers on three continents and one of the best book publishers in the business. We've also expanded the digital real estate market. From our position in the REA Group to our acquisition of Move, Inc., we have leading consumer brands in this space. realtor.com is now the second-largest digital real estate site in America.
In this past year, REA has acquired iProperty, Asia's number one property group. The businesses of News Corp add up to a whole that is greater than the sum of its parts, thanks to our ability to work across sectors and geographies. It's also thanks to the effective implementation of technology that we can leverage premium content and scale to monetize advertising, with a special focus on the valuable data we collect. The digital platforms of our mastheads and businesses create powerful networks for news and information. This delivers great value for readers and advertisers. At the same time, News Corp has taken firm steps to control costs, divesting underperformance and non-core businesses while investing in people and enterprises to help us achieve our goals. From startups like Storyful, Checkout 51, and Unruly, to established brands like Harlequin and realtor.com.
More recently, we acquired Wireless Group, home of talkSPORT, the leading sports radio network in the U.K. In Australia, we secured multi-year rights to broadcast the most popular sporting events. Our market is tempered by headwinds, from uncertain global economy to challenges in the print advertising marketplace, which are affecting all publishers. We remain focused on fundamentals, including operating efficiencies, portfolio diversification, and the sharing of data and best practices. As we continue to create new revenue streams, we invest in quality content and digital distribution, including video and mobile, to give consumers what they want. As a result of all these efforts, despite the challenges, we managed to have relatively stable revenues and healthy free cash flow, underscoring our diverse revenue mix and the strength and breadth of our portfolio.
Looking ahead in an increasingly complex world, we see great value in what we do, helping make people make sense what is going on so they can make informed decisions about their lives. It remains our mission to pursue our goals with responsibility as we fulfill our obligations to audiences, investors, and the societies in which we live and work. I'd like to thank my Co-Chairman and son, Lachlan, for his steady and visionary leadership in this time of change. Especially to our Chief Executive, Robert Thomson, who continues to drive the company with energy and intelligence. I'm grateful for the continuing support of our investors and advertisers, as well as the millions of people who we'll work hard to inform and enlighten every day.
We now like to call to the podium Robert Thomson, who will have a few words of his own about the state of our company. Thank you very much, Robert.
Thank you, Rupert. We gather at a particularly fascinating moment politically and economically for the company and the country. As a global company, we are subject to the ebb and flow of international influence, those changing circumstances are also an opportunity for many of our businesses. Some of which are in the midst of a profoundly important transition to digital and mobile. In fiscal 2016, we made progress on our primary goals to become more digital and to develop a digital real estate as a core pillar of the business. By most counts, we are now the world's largest digital property company, giving us a powerful platform that complements our media businesses in the U.S. and Australia in particular, we're also prominent in East Asia and India, where the property market is relatively small, but growing quickly.
While we experienced a 3% decline in total revenues for fiscal 2016, adjusted revenues were flat and our free cash flow was healthy. All of which demonstrate the value of our emerging portfolio. The digital real estate services segment is reshaping the growth profile of News Corp, with revenues more than doubling since 2013. It is expected to become the biggest contributor to EBITDA in the long term, thanks to the ongoing growth of REA and the renaissance of realtor.com. While there are seasonal circumstances unlikely to be as influential in coming quarters, digital real estate comprised about 52% of our EBITDA in Q1 of fiscal 2017.
Our renovation of realtor.com has propelled Move to improve profitability on an operational basis, but we have been renovating the house whilst living in it and expect growth to increase in coming quarters after a relatively modest 9% increase in revenue in the first quarter of fiscal 2017. Since our acquisition of Move, Inc., nearly two years ago, traffic to realtor.com sites burgeoned more than 60%, while revenue increased 27% in the last fiscal year, and significantly more than that since the acquisition. Our aim is to continue to improve the core site, providing extra insight and intelligence for purchasers, greater guidance for vendors, and enhanced value for realtors. REA continues to strengthen its position in the Australian market with another record year in reported revenues and profitability.
With the acquisition of iProperty, the leading Southeast Asian property portal, REA is poised for future growth in one of the world's fastest-growing regions. We recently announced the formation of a global property network to bring together listings from REA, realtor.com, Mansion Global, PropTiger, and iProperty into a widely accessible database, accentuating our position as the global leader. HarperCollins' success stories included Harper Lee's "Go Set a Watchman," Daniel Silva's "The English Spy," titles by David Walliams, a leading author of children's fiction in the U.K. Interestingly, J.D. Vance's "Hillbilly Elegy," which articulates the ennui of a significant percentage of the U.S. population, has been a strong seller, illustrating the large middle American audience craving empathetic exposition. We see a similar commercial and social trend with the early success of "The Magnolia Story" by Chip and Joanna Gaines, and "Jesus Always" by Sarah Young.
We are optimistic about Megyn Kelly's "Settle for More" and Veronica Roth's "Carve the Mark," set for early release next year. Veronica wrote the best-selling "Divergent" trilogy. HarperCollins has been able to use its clout as a trade publisher to better highlight Harlequin titles with the potential to be crossover successes. Harlequin's international network has transformed HarperCollins' ability to profit from works that have global potential. In the past, we had to cede those works to other publishers. Foxtel is focused on driving higher subscriber volume and continues to improve its content offerings, notably with the acquisition of rights to the Australian Football League through 2022, the recent agreement with the leading English Premier League clubs, and the expanded exclusive HBO programming relationship. At Fox Sports, we saw record ratings driven by the burgeoning popularity of the National Rugby League, Aussie Rules, and V8 Supercars.
Our airing of all NRL matches live is proving to be particularly popular, and the resonance should be enhanced with the launch of a dedicated NRL channel later in fiscal 2017. As a result, we expect advertising trends will remain more positive for Fox Sports than for the industry as a whole, as evidenced by our first quarter results. This underscores the event value of live sports in a world of viewer fragmentation and program promiscuity. In the news and information services segment, while print ad trends remain volatile, we are expanding our digital prowess while reducing costs where appropriate, but certainly not to the point of undermining the quality of our journalism. Circulation revenue at The Wall Street Journal grew mid-single digits this past fiscal year, thanks to digital growth and improved pricing.
In fact, circulation revenues were higher than advertising revenues, underlying the shifting revenue streams at Dow Jones. Overall, more than 50% of Dow Jones revenues came from digital in fiscal 2016, and that share rose to 55% in the first quarter. This is part of a calculated realignment and highlights the growing value of premium content and services, in particular the Risk & Compliance segment, which expanded over 30% quarter-over-quarter. More generally on advertising, it is clear that the disruption to traditional advertising has created conflicts of interest for ad agencies and a confused and confusing market for advertisers. It is right that the market is under increased scrutiny as advertisers find themselves placed in a mire of digital dross or on jaundiced websites which are blatantly biased against business.
We are clearly in the midst of an ephemeral experimental phase of advertising's evolution to the detriment of quality content and truly quantified audiences and communities. At News UK, we are leveraging The Sun's news and entertainment features as we build a stronger mobile offering, having recently relaunched the masthead's website. It's worth highlighting that The Times has increased sales in print and digital over the past fiscal year, as measured by revenue and volume, showing that discerning audiences do navigate towards quality content. The U.K. team is focused on leveraging our brands across platforms, including through our recently completed acquisition, as Rupert mentioned, of Wireless Group, operator of talkSPORT, the leading sports radio network in the U.K. We intend to take full advantage of this valuable platform, which has growing ratings and a strong complementarity of its audience and The Sun.
Meanwhile, The Australian newspaper grew to a record high readership of more than 3.4 million print and digital readers during fiscal 2016, and all of our Australian mastheads continue to develop digital journalism and meaningful customized content for advertisers. The New York Post digital network had 54 million users in June, and 40% of advertising revenues were digital. By September, according to independent analytics, the number of users had exceeded 65 million. News America Marketing ended the fiscal year on a strong note, which extended into the first quarter of 2017, thanks to muscular growth in the in-store business. Meanwhile, the company is accelerating mobile adoption, notably through Checkout 51, which this week is expected to record its 10 millionth user almost two months ahead of schedule. This clever app helps consumers save money and generates a wealth of granular data, which can be leveraged across News Corp businesses.
That culture of commercial collaboration is crucial. The Wall Street Journal and New York Post played a pivotal role in the rise of realtor.com. While our property sites around the world now share news, software, market metrics, and listings data. Storyful supplies video to News Corp mastheads, including The Sun, the New York Post, and The Wall Street Journal, and is enabling HarperCollins to extend its video outreach. Our viral video experts at Unruly are providing valuable advertising metrics to enhance the brand-building of our companies, as well as assisting external clients with their unique expertise. The rapid pace at which the contemporary world is turning with attendant economic and social upheaval has put a premium on premium content. Fast, accurate news and incisive analysis are invaluable in these turbulent times.
Our strategy focuses on product development, particularly in mobile and video, to drive engagement, leveraging data by linking our audiences to create a powerful digital network for advertisers, capitalizing on opportunities through acquisitions to further buttress our revenue stream and fortify the foundations for future growth. I thank Rupert for his leadership, for his energy, and his curiosity. I thank the board for its thoughtful, critical support, and I thank all employees at News Corp who've contributed to the transformation of the company over the past year. I'm grateful to our shareholders who appreciate that we are on a long-term journey in building a company with social purpose and robust returns for investors. Thank you.
Thank you, Robert. I now call the meeting to order. It is 3:15 P.M. Before presenting the business of the meeting, I'd like to introduce our directors and members of our management. Mr. Peter Barnes, the Lead Director. Mr. Masroor Siddiqui, President Aznar, Mr. Singh, our Chief Financial Officer. David Pitofsky, our Chief Counsel. Natalie Bancroft down here. Ms. Elaine Chao, James Murdoch, and Ms. Pessoa. Also present today, Minnie Krishnan and Mr. Darrington Hobson of Ernst & Young LLP, the company's independent registered public accounting firm. In accordance with the company's bylaws, I hereby appoint Mr. Jim Raitt from American Election Services, LLC, as the independent inspector of election for this annual meeting.
This meeting is held pursuant to a notice of the annual meeting of the stockholders mailed in or about October the 12th, 2016 to each record holder of the company's common stock as of October the 11th. The list of holders of the company's Class B common stock entitled to vote at this meeting has been available for examination at the company's headquarters for the past 10 days, and is available for examination at this meeting as well. All documents concerning the call and notice of this meeting are available here today and will be filed with the records of the meeting. The inspector of election has examined the proxies received and reports that holders of a majority in voting power of all of the outstanding shares of Class B common stock entitled to vote at this meeting are present in person or represented by a proxy.
I hereby declare a quorum present at the meeting. On behalf of our board of directors, I'd like to express my appreciation to all stockholders who returned their proxies. It is now 3:18 P.M. on November the 10th, 2016. The polls are now open for voting. Those stockholders voting in person should mark their ballots, and a company representative will be available to collect them for tabulation. Those of you who requested a ballot so that you could vote in person were provided with a ballot when you entered the meeting. Ballots are also available at the desk registration took place. We urge stockholders to allow their proxies to stand. We'll have an opportunity to ask questions after all matters being submitted to stockholders for a vote are presented. Please hold your questions until that time.
The first matter to be acted upon by the stockholders is proposal one, the election of directors. The board has nominated José María Aznar, Natalie Bancroft, Peter Barnes, Elaine Chao, Joel Klein, James Murdoch, Ana Paula Pessoa, Masroor Siddiqui, Robert Thomson, Lachlan Murdoch, and myself to serve as directors. If elected, these director nominees will each serve a one-year term expiring at the 2017 annual meeting, or until his or her successor is duly elected and qualified. Proposal two is the ratification of the selection of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending June 30, 2017. Proposal three is an advisory vote to approve executive compensation. We also have a stockholder proposal co-filed by Nathan Cummings Foundation, the Nathan Cummings Foundation and H.E.S.T. Australia Limited, as trustees for Health Employees Superannuation Trust Australia.
His representative, if she so desires, may speak briefly on said proposal. First, José María Aznar, the Chairman of the Nominating Corporate Governance Committee, will state the company's position on the stockholder proposal. We'll hear from the Nathan Cummings Foundation, represented by Ms. Margaret Courtney Knapp, who's given notice to the company that she intends to present for action at this meeting a proposal regarding the elimination of the company's dual-class capital structure, which is included in the company's proxy statement as Proposal Four. As disclosed in the proxy statement, the board recommends the stockholders vote against the proposal. President Aznar, will you please state the company's position on the stockholder proposal?
Thank you, Mr. Chairman. The board unanimously recommends a vote against Proposal Four. The board has carefully reviewed the capital structure of the company, including with the input of unaffiliated Class A and Class B stockholders and advice from outside legal and financial advisors. The board has concluded that the current capital structure continues to be appropriate for the company at this time. The board believes that the dual-class capital structure enables the company's long-term business strategy and facilitates the creation of value for all the stockholders. This is particularly important in light of the company's unique circumstances as a young public company in a transforming industry. The board believes that our current dual-class capital structure, together with our sound corporate governance practices, considerably contributes to the company's stability and allows the board and management to focus on executing the business and maximizing long-term value for all stockholders.
Proposal Four is not in the best interest of the company and its stockholders. The board recommends a vote against this proposal. Thank you, Mr. Chairman.
Thank you, President Aznar. Ms. Knapp, would you like to speak for no more than two minutes on your proposal?
Good afternoon, Mr. Chairman, members of the board, and fellow shareholders. I'm Margaret Knapp, I'm here on behalf of the Nathan Cummings Foundation to move proposal number four, asking for the elimination of News Corporation's dual class capital structure. For the last two years, roughly 90% of the unaffiliated Class B shares have voted in favor of a proposal to eliminate the company's dual class capital structure. Last year, a substantially similar proposal was about half a percentage point away from passing. Representatives of the Nathan Cummings Foundation and Hermes have discussed their concerns with the company's lead independent director and certain members of senior management. Unfortunately, the company continues to lack a plan to address its unaffiliated shareholders' demonstrated preference for a one share, one vote capital structure. This is concerning.
Numerous governance experts have observed that a significant concern with respect to dual class share structures is their potential to hamper directors' ability to operate independently. Fidelity's general counsel, for example, observed that management may "have a much greater sway over how directors operate" at companies with dual class structures. The former CFO of the New York Stock Exchange, Euronext, asserted that with the dual class structures, it can become more difficult for boards to look at what is the right answer for shareholders. Unfortunately, the board's failure to respond to multiple near majority votes seem to suggest that this might be the case at our company. As a long-term shareholder with a vested interest in the success of this company, the Nathan Cummings Foundation urges you to listen to the very clear message your unaffiliated shareholders are sending you.
Ask yourselves what's right for all of your shareholders, not just those with the last name Murdoch. Thank you.
Thank you very much, Ms. Knapp. I will now present the Sir, you've got a question.
Sorry. Just out of order. There is a time for comments later in the agenda. If you will hold your comments until then, you will have an opportunity to speak at that time.
Thank you, Mr. Mayne. You are out of order. Please sit down. You will get a chance to talk later. I will now present the results from the Inspector of Election's preliminary report based on the proxies we have received. The Inspector of Election's final report will be filed with our corporate secretary following the meeting. A preliminary report of the Inspector of Elections reflects that more than a majority of the eligible votes cast have been voted for the election of each of the director nominees for the ratification of the selection of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending June the 30th, 2017, and for the advisory approval of executive compensation. More than a majority of eligible votes cast have been voted against the stockholder proposal regarding the elimination of the dual-class capital structure.
Thank you very much for your support. Pursuant to Securities and Exchange Commission rules, we will report the final results in a current report on Form 8-K shortly after this meeting. Due to the holiday, we expect the report will be available on the SEC website on Monday morning. At this time, any stockholder who wishes to ask a question relating to any of the proposal or regarding the business operations of the company, should proceed to the microphone and present the gray or green admission ticket that he or she received upon registering to the company's representative. Before asking your question, please state your name and affiliation. As noted in the rules of procedure for the conduct of the meeting that were provided to you when you registered today, each person is limited to two questions, which should each be no longer than one minute in length.
We ask that you comply with the rules and procedures for the conduct of the meeting so that we can conduct an orderly meeting. Thank you. Yes.
Hi, Chairman. Stephen Mayne. Look, just as a procedural matter beforehand, I'd like to propose an amendment to the meeting procedures. At point seven, where it says, "Each speaker is limited to a total of no more than two questions," I'd like to formally propose to the meeting, and I'll be seeking a seconder, that the word two be changed to five, that each speaker is limited to a total of no more than five questions.
I'm sorry, sir. You're again-
I believe I have a seconder for that motion.
You're again out of order.
You're out of order.
The rules clearly state that any motions to be brought before this meeting have to be brought before the meeting so that all shareholders have an opportunity to consider them. I'll remind you that most shareholders have voted by proxy and so would not have an opportunity to consider that motion. That motion cannot be taken at this time.
I think you're actually wrong, sir.
No, I'm very sure that I'm right.
You're out of order. I'm sorry. Corporate Counsel.
Not a shareholder resolution vote. It's just how the meeting is conducted. The meeting can choose to change the rules of the meeting.
The rules are set by the bylaws, sir.
Well.
You know the rules. You read the rules last year. You read them again this year before you came here, sir.
All right.
Just ask the question.
All right. Well, look, my first question is, one of the newspapers you've displayed at the front here is The Australian, "PM Trigs in Open Battle on 18C." It goes to this long campaign that's been run in Australia by our papers for free speech. You're arguing that the law should be changed because there's this unfair restriction on free speech in Australia, Section 18C.
My first question is, how can a company which campaigns for lifting restrictions on free speech, which would never allow its journalists to tolerate a politician saying, "You've got two questions, one minute each," how can this entire board of directors and you, Chairman, with your 60-year history in free speech, possibly continue to support this thoroughly undemocratic, almost North Korean attempt to oppress minority shareholders from being able to express their views at the one meeting of the year where shareholders get a voice? Please, why are you not allowing shareholders to have a proper debate rather than these 20 and 30-minute meetings? Why are you continuing to conduct AGMs which are designed to minimize attendance? Meeting in a parking lot. I mean, Disney gets 300. Warren Buffett goes for eight hours with thousands. We've got five shareholders here today. We had six this morning.
You are deliberately trying to make this a non-event, it goes against your full history. I'm just asking you, Chairman, why are you doing this?
We've not changed our practice at all. If 300 people wanted to come, they'd be very welcome. We'd love to see more people.
My second question is, our big three biggest markets for media are Australia, the U.K., and obviously, the U.S. We've had three changes of prime ministers in those key markets in the recent past. Chair, I'd like to hear from you on how our relations are going with Malcolm Turnbull and the prospect of media reform in Australia with Theresa May in the U.K., and the prospect that we could possibly be able to further invest in that country, albeit through our sister company, Fox. Obviously here with all the tumultuous events of this week, how are your relations with Mr. Trump, and how do you see his presidency affecting our company?
Just first, the first half of your question. Let me say that, as you should know, that we have a very strict policy with all our newspapers of church and state. The editors vary in their opinions and they state them. We do not try to control that. As for our relationship with governments, we have a government relations officer. There's no politics involved other than the interest of shareholders.
Just one final follow-up.
Sir-
One-
You're out of order.
One final.
You're out of order again.
One final. It takes 20 seconds. Rupert, you've been quoted saying that you thought Brexit was fabulous. I'm just interested as to which event you rated as a better achievement or a better overall from your point of view, Brexit or not having Hillary as president?
Sir, that question doesn't relate.
I have no comment on that at all. Thank you very much. Any other questions? Please.
Good afternoon. My name is Aaron Epstein. I am a shareholder from North Hollywood, California. My thinking is left at center, many times I do not agree with the positions taking on the editorial pages of your publications. I would be a poor mensch, I would not be a good person if I did not take this opportunity to congratulate you on the rapid and quick and unequivocal decision to get Mr. Roger Ailes out of your employment. It is a statement that is made to all corporations that there is no place for sexual harassment in the workplace. I thank you for listening to me, and God bless.
Thank you, Mr. Epstein. What happens at Fox is no business of News. Thank you. I think the polls are closed, if there is no other business, I declare the meeting closed. Thank you very much.