Fox Warner. Is Wupert Hunting Wabbits? Companies Ticker Price Exchange 21 st Century Fox (FOXA - $ NYSE) Time Warner (TWX - 69.

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1 G.research, LLC One Corporate Center Rye, NY Tel (914) November 16, 2015 Fox Warner Is Wupert Hunting Wabbits? Companies Ticker Price Exchange 21 st Century Fox (FOXA - $ NYSE) Time Warner (TWX NASDAQ) Brett Harriss (914) Please Refer To Important Disclosures On The Last Page Of This Report-

2 G.research, LLC One Corporate Center Rye, NY Tel (914) November 16, st Century Fox (FOXA - $ NASDAQ) Fox Warner - Buy (a) Rupert Murdoch & family own 4 and 317 million Class A & B shares, respectively, representing 12% economic and 40% voting interest COMPANY OVERVIEW 21 st Century Fox, located in New York, NY, is a diversified media company with operations in cable network television, television broadcasting, filmed entertainment and direct broadcast satellite (DBS) television. We estimate FOX will generate revenue for the fiscal year ending June 30, 2015 of $31 billion and EBITDA of $6.6 billion. Reason For Comment In June of 2014, FOX made an offer for Time Warner consisting of $32.42 in cash and shares of non-voting FOXA shares ($85 per TWX share at the time). Time Warner rejected the offer citing 1) expectations for standalone value creation at TWX, 2) risks surrounding the value of FOXA non-voting stock, and 3) governance risk in the Murdoch controlled company. On October 14, 2014, Time Warner management held an investor day, introducing long-term guidance of $6.00 EPS in 2016 and $8.00 EPS in After climbing into the $90 s, TWX shares have since declined to $68 per share as management cut 2016 EPS guidance to ~$5.25. We believe FOX could return to re-bid for TWX. The industrial logic is compelling; a combined Fox Warner would eclipse Disney as the dominant US media network company. - FOX and TWX operate similar businesses: TV networks and TV and movie studios. We expect traditional operating synergies would be material in a combination. Fox estimated $1 billion of operating synergies as part of its 2014 offer which we expect to be conservative. - Negotiating leverage with MVPDs will become increasingly important as Pay-TV subscribers decline. Combined, FOX and TWX would have industry leading leverage on par with Disney. We expect Time Warner has been disadvantaged in negotiations with MVPDs without a broadcast network, and would benefit from the FOX broadcast network leverage. Similarly the combined portfolio of sports rights (TWX s NCAA & NBA and Fox s broadcast (NFL), national (FS1) and local (RSNs) sports rights) would have scale on par with ESPN. - A merger would create unique international scale. While the US video bundle remains under pressure from OTT competition and online advertising, international markets remain healthy. Both FOX and TWX have a leading international channel footprint. Much as in the US, we expect a combination would generate traditional operating synergies as well as improved leverage with distributors. - With direct to consumer products increasingly important, a combined company would be better positioned to build a wholly owned OTT product. With the traditional bundle under threat, many media companies are developing OTT products as a hedge. We expect HBO Now could benefit from FOX s extensive content library. When competing against Netflix, Amazon and Hulu, size matters. As a combined company, Fox Warner would have the size and scale to go at it alone on an over-the-top basis either in the US or international markets. We expect regulatory issues could be managed. In bid 1, FOX offered to divest CNN which we estimate generates ~ $450 million of EBITDA and at 11x is worth ~$5 billion. We expect combining the two companies film and television studios would not face any regulatory hurdles as both those businesses are highly competitive. The proliferation of original content production has made every channel a TV studio. Film production is less concentrated with seven major players. In 2013, TWX represented 17.1% and Fox 10% of domestic box office and we would look on Warner s 17% share as a cyclical high. FYE 6/30 EBITDA EV/EBITDA PMV Dividend: $0.30 Current Return: 1.0% 2018P $9, x $70 A shares O/S: 1,178 million (non-voting) 2017P 8, B " " : 799 " (voting) 2016E 6, Total shares: 1,976 million (a) 2015A 6, Week Range: $ $22.81 After missteps and a sharp price decline, TWX management has less authority to pursue a just say no strategy should FOX return with an offer. Following the massive 2014 content write-off and 2016 guidance cut, management has lost much of its credibility. Should FOX to make an $80-85 per share offer, we expect it would be very difficult for management to once again convince investors of the superiority of TWX s standalone plan

3 - 2 - TRANSACTION OVERVIEW To model the transaction, we assume FOX pays a 20% premium to TWX current price or ~$85 per share. This would value TWX at ~11x pre-synergy 2015 & 2016 EBITDA. Fox could contribute up to $40 per share in stock, such that the pro forma company would be levered at 4.0x EBITDA, at the higher end of its peers but still reasonable. Table 1 Pro Forma Analysis Ratio Per share Shares FOX Total FOX Offer FOX/TWX Value Issued Value Cash $40.00 $32,882 Equity 1.5x ,216 36,101 Total consideration $83.92 $68,984 Premium 20.0% Pro Forma Fox Warner TWX FOX Fox Divest Fox Balance Sheet as of: 9/30/15 9/30/15 + Bid - CNN = Warner A Shares - non voting 822 1,178 1,216 2,393 B Shares - voting Options (a) Fully diluted shares 841 1,992 1,216 3,208 A shares $69.93 $29.69 $29.69 $29.69 B Shares Common market cap $58,819 $59,413 $36,101 $95,514 Plus: existing debt 21,153 19,011 21,153 40,164 Plus: new debt 32,882 (5,000) 27,882 Less: (Cash) (5,830) (5,830) Net Debt $21,153 $13,181 $54,035 ($5,000) $62,216 Less: Public Assets (10,056) (10,056) Less: Private Assets (366) (2,968) (366) (3,333) Plus: Minority Interest Total Capitalization $79,606 $60,022 $89,771 ($5,000) $144,793 FYE 12/31 Synergies 2016 EBITDA / multiple $8, x $7, x $8, x $1,250 $16, x 2015 EBITDA / multiple 8, x 6, x 8, x 1,000 15, x Net Debt / EBITDA 2.6x 2.0x 4.0x Note: FOX-Time Warner EBITDA assumes $1 billion in synergies Table 2 Pro Forma 2016P Competitive Landscape Company Network Network TV Network Ticker EBITDA EBITDA % Total Channels PF Fox Warner NA $16,853 $14,034 83% HBO, Turner, Fox Broadcast, Fox News, FIC, STAR, FS1, FX/FXX Disney DIS 17,811 8, ESPN, Disney Channel, A&E, Biography, ABC Time Warner TWX 8,157 6, HBO, TBS, TNT, TruTV, CNN Fox FOXA 7,446 6, Fox News, FX, NatGeo, Fox Sports 1, STAR, FIC (Fox Int. Channels), FOX NBC Universal CMCSA 6,348 4, USA, Bravo, Oxygen, Syfy, NBC Viacom VIAB 4,219 4, Nickelodeon, Comedy Central, MTV, BET, CBS & Showtime CBS 3,386 3, CBS, Showtime Discovery DISCA 2,574 1, Discovery Channel, Animal Planet, TLC, ID, Science Channel Scripps SNI 1,356 1, Travel, HGTV, Cooking, DIY, Food AMC Networks AMCX AMC Channel, Sundance, IFC, WeTV Starz Media STRZA Starz, Encore MSG Networks MSGN MSG/MSG+ Total $52,955 $39,422 74

4 Table 3 PMV Analysis '15 - '20P FYE 6/ A 2012A 2013A 2014A 2015A 2016E 2017P 2018P 2019P 2020P CAGR Cable Network Programming Revenue $8,212 $9,324 $10,881 $12,273 $13,773 $14,849 $16,706 $18,802 $21,168 $23, % EBITDA 3,009 3,549 4,177 4,407 4,648 5,274 6,230 7,178 8,270 9, Valuation Multiple 12.0x 12.0x 12.0x 12.0x 12.0x 12.0x 12.0x 12.0x 12.0x 12.0x Segment Value $37,118 $43,363 $50,579 $54,897 $55,822 $64,191 $75,525 $87,527 $101,507 $112,761 Television Revenue 4,844 4,803 4,860 5,296 4,895 5,050 5,565 5,756 6,005 6, EBITDA , Valuation Multiple 9.0x 9.0x 9.0x 9.0x 9.0x 9.0x 9.0x 9.0x 9.0x 9.0x Segment Value $6,930 $7,119 $7,695 $7,938 $6,462 $6,555 $8,464 $8,370 $8,756 $9,182 Filmed Entertainment Revenue $7,813 $8,363 $8,642 $9,679 $9,525 $8,874 $9,317 $9,410 $9,505 $9, EBITDA 1,058 1,312 1,308 1,358 1,445 1,239 1,210 1,601 1,620 1, Valuation Multiple 8.0x 8.0x 8.0x 8.0x 8.0x 8.0x 8.0x 8.0x 8.0x 8.0x Segment Value $8,464 $10,496 $10,464 $10,864 $11,560 $9,910 $9,681 $12,811 $12,962 $13,115 Total PMV $52,512 $60,978 $68,738 $73,699 $73,844 $80,655 $93,670 $108,708 $123,225 $135, Less: Net Debt (5,829) (9,799) (13,643) (10,611) (13,790) (15,914) (17,226) (17,796) (17,784) Less: Options (a) (300) (325) (349) (393) (451) (573) (738) (940) (1,169) Plus: Non-consolidated Assets, n 13,023 13,023 13,172 13,327 13,893 14,483 15,099 15,741 16,410 Equity Private Market Value $67,873 $71,637 $72,879 $76,168 $80,307 $91,667 $105,843 $120,229 $132,516 Shares Outstanding (year-end) 2,383 2,320 2,197 2,038 1,871 1,684 1,509 1,345 1,192 (10.2) PMV per share $28 $31 $33 $37 $43 $54 $70 $89 $ Current Discount to PMV (4%) 4% 10% 21% 31% 45% 58% 67% 73% Value of shares repurchased $4,589 $2,784 $3,772 $5,940 $5,000 $6,000 $6,000 $6,000 $6,000 Shares repurchased Table 4 Cable Network Precedent Transactions Trailing Buyer Property Seller Date EV EBITDA EV/EBITDA Per sub Discovery Eurosport TF1 Group Jun-14 1, x 7.42 Scripps Networks TVN TF1 Group Mar-15 1, x NA Discovery The Hub Hasbro Sep-14 $ $8.86 Liberty Global ITV BSkyB Jul-14 7, x na Viacom Channel 5 Richard Desmond May-14 $ x " SiTV (NUVOtv) fuse Madison Squar Garden Sep nm 4.15 FOX YES Network Yankees, Goldman, Providence Jun-14 3, x 475 Discovery Eurosport TF1 Group Jun x 6.77 AMC Networks Chellomedia Liberty Global May-13 1, x 3.45 Kroenke Sport & ent Outdoor Channel OUTD May x 5.42 CBS TV Guide One Equity Partners May x 2.50 Discovery SBS Nordic ProSiebenSat.1 Apr-13 1, x - Al Jazeera Current TV Current TV Jan Comcast NBCU JV GE Feb-13 34,082 3, x - Discovery Eurosport TF1 Group Dec-12 1, x - News Corp YES Network Goldman, Providence Nov-12 3, x 200 Disney/Hearst A&E Comcast Jul-12 19,146 1, x - Scripps UK TV Virgin Media Aug-11 1, x - Sony GSN DirecTV May-11 1, Hfs4-3 -

5 Companies Mentioned Liberty Global (LBTYA - NASDAQ) 21st Century Fox (FOXA - NASDAQ) Madison Square Garden (MSG - NYSE) Amazon.com (AMZN - " ) MSG Networks (MSGN - " ) AMC Networks (AMCX - " ) Netflix Inc. (NFLX - NASDAQ) CBS Corporation (CBS - NYSE) News Corp. (NWSA - " ) Comcast Corporation (CMCSA - NASDAQ) Scripps Networks Interactive (SNI - NYSE) Discovery Communications (DISCA - " ) Sony (SNE - " ) General Electric (GE - NYSE) Starz (STRZA - NASDAQ) Goldman Sachs (GS - " ) Time Warner (TWX - NYSE) Hasbro Inc. (HAS - NASDAQ) Viacom Inc. (VIAB - NASDAQ) ITC Holdings (ITC - NYSE) The Walt Disney Company (DIS - NYSE) 21 st Century Fox Price Performance Source: Public data. As of July 2, 2013 FOXA was rated BUY. I, Brett Harriss, the Research Analyst who prepared this report, hereby certify that the views expressed in this report accurately reflect the analyst s personal views about the subject companies and their securities. The Research Analyst has not been, is not and will not be receiving direct or indirect compensation for expressing the specific recommendation or view in this report. Brett Harriss (914) Important Disclosures ONE CORPORATE CENTER RYE, NY GABELLI & COMPANY TEL (914) FAX (914) is the marketing name for the registered broker dealer G.research, LLC, which was formerly known as G.research, Inc. ("we" or "us") attempts to provide timely, value-added insights into companies or industry dynamics for institutional investors. Our research reports generally contain a recommendation of "buy," "hold," "sell" or "non-rated. We do not undertake to "upgrade" or "downgrade" ratings after publishing a report. We currently have reports on 532 companies, of which 51%, 33%, 3% and 13% have a recommendation of buy, hold, sell or non-rated, respectively. The percentage of companies so rated for which we provided investment banking services within the past 12 months is 0%, 0%, 0% and less than 1%. Ratings Analysts ratings are largely (but not always) determined by our private market value, or PMV methodology. Our basic goal is to understand in absolute terms what a rational, strategic buyer would pay for an asset in an open, arms-length transaction. At the same time, analysts also look for underlying catalysts that could encourage those private market values to surface. A Buy rated stock is one that in our view is trading at a meaningful discount to our estimated PMV. We could expect a more modest private market value to increase at an accelerated pace, the discount of the public stock price to PMV to narrow through the emergence of a catalyst, or some combination of the two to occur. A Hold is a stock that may be trading at or near our estimated private market value. We may not anticipate a large increase in the PMV, or see some other factors at work. A Sell is a stock that may be trading at or above our estimated PMV. 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