Goodwill and Other Intangible Assets

12 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying values of the Company’s intangible assets and related accumulated amortization for the fiscal years ended June 30, 2022 and June 30, 2021 were as follows:


	As of June 30,
	2022		2021
	(in millions)
Intangible Assets Not Subject to Amortization
Trademarks and tradenames	$	411	$	389
Newspaper mastheads	281		282

Imprints	218		250
Radio broadcast licenses	118		136
Total intangible assets not subject to amortization	1,028		1,057
Intangible Assets Subject to Amortization
Publishing rights(a)	348		383
Customer relationships(b)	1,233		697
Other(c)	62		42
Total intangible assets subject to amortization, net	1,643		1,122
Total Intangible assets, net	$	2,671	$	2,179

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(a)Net of accumulated amortization of $306 million and $275 million as of June 30, 2022 and 2021, respectively. The useful lives of publishing rights range from 3 to 30 years primarily based on the weighted-average remaining contractual terms of the underlying publishing contracts and the Company’s estimates of the period within those terms that the asset is expected to generate a majority of its future cash flows.

(b)Net of accumulated amortization of $759 million and $693 million as of June 30, 2022 and 2021, respectively. The useful lives of customer relationships range from 3 to 25 years. The useful lives of these assets are estimated by applying historical attrition rates and determining the resulting period over which a majority of the accumulated undiscounted cash flows related to the customer relationships are expected to be generated.

(c)Net of accumulated amortization of $85 million and $81 million as of June 30, 2022 and 2021, respectively. The useful lives of other intangible assets range from 3 to 15 years. The useful lives represent the periods over which these intangible assets are expected to contribute directly or indirectly to the Company’s future cash flows.

The Company recognized impairment charges on its intangible assets of $194 million for the fiscal year ended June 30, 2020, primarily related to indefinite-lived intangible assets in the News Media segment.

Amortization expense related to amortizable intangible assets was $140 million, $112 million and $108 million for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

Based on the current amount of amortizable intangible assets, the estimated amortization expense for each of the succeeding five fiscal years is as follows: 2023—$163 million; 2024—$154 million; 2025—$151 million; 2026—$148 million; and 2027—$142 million.

The changes in the carrying value of goodwill, by segment, are as follows:


	Digital Real Estate Services		Subscription Video Services		Dow Jones		Book Publishing		News Media		Total Goodwill
	(in millions)
Balance, June 30, 2020	$	1,333	$	885	$	1,368	$	264	$	101	$	3,951
Acquisitions(a)	224		—		166		124		—		514

Dispositions	—		—		—		(1)		—		(1)
Foreign exchange and other	60		93		(2)		26		12		189
Balance, June 30, 2021	$	1,617	$	978	$	1,532	$	413	$	113	$	4,653
Acquisitions(a)	39		—		659		8		32		738


Foreign exchange and other	(95)		(99)		—		(14)		(14)		(222)
Balance, June 30, 2022	$	1,561	$	879	$	2,191	$	407	$	131	$	5,169

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(a)See Note 4—Acquisitions, Disposals and Other Transactions for the primary drivers of increases in goodwill by segment.

The carrying amount of goodwill as of June 30, 2022 and 2021 both reflected accumulated impairments of $4.8 billion principally relating to impairments at the Dow Jones and News Media segments that were recognized prior to the Company’s separation of its businesses from Twenty-First Century Fox, Inc. (“21st Century Fox”) on June 28, 2013 (the “Separation”).

Annual Impairment Assessments

Fiscal 2022

In accordance with ASC 350, the Company’s goodwill and indefinite-lived intangible assets are tested annually in the fourth quarter for impairment or earlier if events occur or circumstances change that would more likely than not reduce the fair values below their carrying amounts. See Note 2—Summary of Significant Accounting Policies.

The performance of the Company’s annual impairment analysis resulted in no impairments to goodwill and indefinite-lived intangible assets in fiscal 2022. Significant unobservable inputs utilized in the income approach valuation method were discount rates (ranging from 8.0% to 19.0%), long-term growth rates (ranging from 1.0% to 3.0%) and royalty rates (ranging from 0.25% to 7.0%). Significant unobservable inputs utilized in the market approach valuation method were EBITDA multiples from guideline public companies operating in similar industries and control premiums (ranging from 5.0% to 10.0%). Significant increases (decreases) in royalty rates, growth rates, control premiums and multiples, assuming no change in discount rates, would result in a significantly higher (lower) fair value measurement. Significant decreases (increases) in discount rates, assuming no changes in royalty rates, growth rates, control premiums and multiples, would result in a significantly higher (lower) fair value measurement.

Fiscal 2021

The performance of the Company’s annual impairment analysis resulted in no impairments to goodwill and indefinite-lived intangible assets in fiscal 2021. Significant unobservable inputs utilized in the income approach valuation method were discount rates (ranging from 8.0% to 22.0%), long-term growth rates (ranging from 0.0% to 3.0%) and royalty rates (ranging from 0.25% to 6.0%). Significant unobservable inputs utilized in the market approach valuation method were EBITDA multiples from guideline public companies operating in similar industries and control premiums (ranging from 5.0% to 10.0%). Significant increases (decreases) in royalty rates, growth rates, control premiums and multiples, assuming no change in discount rates, would result in a significantly higher (lower) fair value measurement. Significant decreases (increases) in discount rates, assuming no changes in royalty rates, growth rates, control premiums and multiples, would result in a significantly higher (lower) fair value measurement.

Fiscal 2020

The performance of the Company’s annual impairment analysis resulted in impairments of $89 million to goodwill and indefinite-lived intangible assets in fiscal 2020, primarily related to goodwill at a reporting unit within the News Media segment. Significant unobservable inputs utilized in the income approach valuation method were discount rates (ranging from 9.0% to 22.5%), long-

term growth rates (ranging from 0.0% to 3.0%) and royalty rates (ranging from 0.25% to 6.0%). Significant unobservable inputs utilized in the market approach valuation method were EBITDA multiples from guideline public companies operating in similar industries and control premiums (ranging from 5.0% to 10.0%). Significant increases (decreases) in royalty rates, growth rates, control premiums and multiples, assuming no change in discount rates, would result in a significantly higher (lower) fair value measurement. Significant decreases (increases) in discount rates, assuming no changes in royalty rates, growth rates, control premiums and multiples, would result in a significantly higher (lower) fair value measurement.

Foxtel: During the third quarter of fiscal 2020, the Company recognized non-cash impairment charges totaling $931 million related to the goodwill and indefinite-lived intangible assets at its Foxtel reporting unit. Due to the impact of adverse trends resulting from lower expected broadcast subscribers and the impact that COVID-19 was expected to have on advertising, streaming and commercial subscriber revenues in the near term, the Company revised its future outlook which resulted in a reduction in expected future cash flows of the business. As a result, the Company determined that the fair value of the reporting unit was less than its carrying value and recorded non-cash impairment charges of $882 million to goodwill and $49 million to indefinite-lived intangible assets. The assumptions utilized in the income approach valuation method for Foxtel were discount rates ranging from 10.5% to 11.5%, a long-term growth rate of 2.0% and a royalty rate of 1.5%. The assumptions utilized in the market approach valuation method were EBITDA multiples from guideline public companies operating in similar industries and a control premium of 10.0%.

News America Marketing: During the third quarter of fiscal 2020, the Company recognized a non-cash impairment charge of $175 million on the disposal group as a result of the reclassification of its News America Marketing reporting unit to assets held for sale. See Note 4—Acquisitions, Disposals and Other Transactions. During the fiscal year ended June 30, 2020, in addition to the write-down to fair value less costs to sell, the Company recognized non-cash impairment charges of $235 million related to goodwill and indefinite-lived intangible assets at the News America Marketing reporting unit. In the first quarter of fiscal 2020, as a result of the Company’s review of strategic options for the News America Marketing business and other market indicators, the Company determined that the fair value of the reporting unit was less than its carrying value. As a result, the Company recorded non-cash impairment charges of $122 million to goodwill and $113 million to indefinite-lived intangible assets. The assumptions utilized in the income approach valuation method for News America Marketing were discount rates ranging from 17.0% to 18.5% and long-term growth rates ranging from 0.6% to 1.5%.