Income Taxes

12 Months Ended

Jun. 30, 2026

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The following table summarizes Income before income tax expense by U.S. and foreign jurisdictions:

	For the years ended June 30,
	2026		2025		2024
	(in millions)
U.S.	$	2,274	$	3,052	$	2,097
Foreign	4		9		7
Income before income tax expense	$	2,278	$	3,061	$	2,104

Significant components of the Company’s provision for income tax expense were as follows:

	For the years ended June 30,
	2026		2025		2024
	(in millions)
Current
Federal	$	198	$	455	$	300
State and local	69		138		41
Foreign	13		11		6
Total current	280		604		347
Deferred
Federal	259		164		168
State and local	14		1		36
Foreign	(2)		(1)		(1)
Total deferred	271		164		203
Provision for income taxes	$	551	$	768	$	550

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

	For the years ended June 30,
	2026				2025				2024
	Amount		%		Amount		%		Amount		%
	(in millions, except %)
U.S. federal income tax rate	$	478	21	%	$	643	21	%	$	442	21	%
State and local income tax, net of federal income tax effect(a)	62		3		107		3		55		3
Foreign tax effects	—		—		4		—		—		—
Tax credits - research and development	(9)		—		(14)		—		(17)		(1)
Valuation allowance movement	(1)		—		10		—		37		2
Nontaxable or nondeductible items
Nondeductible compensation	30		1		17		1		18		1
Tax (windfall) shortfall on share-based payment awards	(26)		(1)		(7)		—		(1)		—
Other	16		1		17		—		16		1
Changes in unrecognized tax benefits	5		—		2		—		5		—
Other	(4)		(1)		(11)		—		(5)		(1)
Effective tax rate	$	551	24	%	$	768	25	%	$	550	26	%

(a) State taxes in California, New York, Pennsylvania, New Jersey and Massachusetts contributed to the majority of the tax effect in this category in fiscal 2026, 2025 and 2024.

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

	As of June 30,
	2026		2025
	(in millions)
Deferred tax assets
Basis difference(a)	$	2,108	$	2,288
Operating lease liabilities	233		210
Sports rights contracts	70		90
Tax credit carryforwards	51		45
Net operating loss carryforwards	48		48
Equity-based compensation	47		44
Other	197		339
Total deferred tax assets	2,754		3,064
Deferred tax liabilities
Operating lease ROU assets	(206)		(198)
Accrued liabilities	—		(10)
Total deferred tax liabilities	(206)		(208)
Net deferred tax asset before valuation allowance	2,548		2,856
Less: valuation allowance	(109)		(140)
Total net deferred tax assets(b)	$	2,439	$	2,716

(a)

As a result of the Disney Transaction (See Note 14—Commitments and Contingencies under the heading "Tax Contingencies"), 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 remaining estimated deferred tax asset recorded as a result of the additional tax basis.

(b)

Includes a $4 million and $5 million deferred tax liability recorded in Other liabilities in the Balance Sheets as of June 30, 2026 and 2025, respectively.

As of June 30, 2026, the Company had $48 million of tax attributes from net operating loss carryforwards available to offset future taxable income. A substantial portion of these losses can be carried forward indefinitely. As of June 30, 2026, the Company has $51 million of tax credit carryforwards primarily attributable to the corporate alternative minimum tax credit which can be carried forward indefinitely.

The net decrease in the valuation allowance to $109 million as of June 30, 2026 was primarily due to the valuation allowance decrease on the basis difference deferred tax asset.

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

	For the years ended June 30,
	2026		2025		2024
	(in millions)
Balance, beginning of year	$	50	$	26	$	26
Additions for prior year tax positions(a)	3		26		6
Reduction for prior year tax positions(b)	—		(2)		(6)
Balance, end of year	$	53	$	50	$	26

(a)	The additions for prior year tax positions in fiscal 2026 is primarily due to state tax matters. The additions for prior year tax positions in fiscal 2025 is primarily due to federal tax matters related to the corporate alternative minimum tax. The additions for prior year tax positions in fiscal 2024 is primarily due to the impact of state tax law changes.
(b)	The reduction for tax positions was primarily due to audit settlements or the expiration of statute of limitations.

The Company recognizes interest and penalty charges related to uncertain tax positions as income tax (expense) benefit. The Company recorded liabilities for accrued interest of $19 million and $15 million as of June 30, 2026 and 2025, respectively, and the amounts of interest income/expense recorded in each of fiscal 2026, 2025 and 2024 were not material.

The Company is subject to tax primarily in various domestic jurisdictions and, as a matter of ordinary course, the Company is regularly audited by federal and state tax authorities. The Company believes it has appropriately accrued for the expected outcome of all pending tax matters and does not anticipate that the resolution of these pending tax matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity. The movement in the balance of uncertain tax positions in fiscal 2026 is primarily attributable to state tax matters. As of June 30, 2026 and 2025, $22 million and $20 million respectively, would affect the Company's effective income tax rate if the Company's position with respect to the uncertainties is sustained.