Income Taxes (Tables)

12 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Provision for Income Taxes

Income before income tax expense was attributable primarily to the U.S. jurisdiction. Significant components of the Company’s provision for income taxes were as follows:

	For the years ended June 30,
	2023		2022		2021
	(in millions)
U.S.
Federal	$	127	$	88	$	181
State, local and other	35		31		2
Total current	162		119		183
Deferred	321		342		534
Provision for income taxes	$	483	$	461	$	717

Effective Income Tax Rate Reconciliation

The following table is a reconciliation of income tax computed at the statutory rate to income tax expense:

	For the years ended June 30,
	2023		2022		2021
U.S. federal income tax rate	21	%	21	%	21	%
State and local taxes	5		4		4
Valuation allowance movement	2		—		—
Return to accrual(a)	—		2		—
Nondeductible compensation	—		1		1
Adjustments for tax matters, net	—		—		(1)
Other	—		(1)		—
Effective tax rate	28	%	27	%	25	%

(a) Primarily attributable to a remeasurement of the Company’s net deferred tax assets associated with changes in the mix of jurisdictional earnings.

Schedule of Components of Deferred Tax Assets and Liabilities

The following is a summary of the components of the deferred tax accounts:

	As of June 30,
	2023		2022
	(in millions)
Deferred tax assets
Basis difference(a)	$	2,911	$	3,371
Operating lease liabilities	241		123
Pension benefit obligations	14		34
Equity-based compensation	34		30
Net operating loss carryforwards	37		31
Other	188		104
Total deferred tax assets	3,425		3,693
Deferred tax liabilities
Operating lease ROU assets	(229)		(116)
Accrued liabilities	(21)		(2)
Sports rights contracts	(19)		(108)
Total deferred tax liabilities	(269)		(226)
Net deferred tax asset before valuation allowance	3,156		3,467
Less: valuation allowance	(72)		(34)
Total net deferred tax assets(b)	$	3,084	$	3,433

(a)

As a result of the Separation and the Transaction, which was a taxable transaction for which the estimated tax liability of $5.8 billion was included in the Transaction Tax paid by the Company, FOX obtained a tax basis in its assets equal to their respective fair market values. This amount includes the additional estimated deferred tax asset recorded as a result of the increased tax basis (See Note 1—Description of Business and Basis of Presentation under the heading “Basis of Presentation”).

(b)

Includes a $6 million and $7 million deferred tax liability recorded in Other liabilities on the Consolidated Balance Sheet as of June 30, 2023 and 2022, respectively.

Change in the Accrual for Uncertain Tax Positions

The following table sets forth the change in the uncertain tax positions, excluding interest and penalties:

	For the years ended June 30,
	2023		2022		2021
	(in millions)
Balance, beginning of year	$	28	$	30	$	73
Additions for prior year tax positions	2		1		—
Additions for current year tax positions	2		2		2
Reduction for prior year tax positions(a)	(6)		(5)		(45)
Balance, end of year	$	26	$	28	$	30

(a) The reduction for tax positions in fiscal 2023 of $6 million is primarily due to audit settlements and the expiration of statutes of limitations. The reduction for tax positions in fiscal 2022 of $5 million is primarily from the expiration statutes of limitations. The reduction for tax positions in fiscal 2021 includes $31 million from the settlement of audits and $14 million from the expiration of statutes of limitations.