Mid Range Plan Fiscal Years 2009 – 2012 August 2008 [DRAFT]

Mid Range PlanFiscal Years 2009 – 2012

August 2008

[DRAFT]

2

1. Executive Summary

2. Core Programs

3. Programming

4. Digital Networks

5. Strategic Investments

6. Distribution & Licensing

7. SPHE & SPTI Contribution to SPT Product

8. Ad Sales

9. Appendix

3

Television Market Update

[Discuss overall status of the TV market]

• What areas are flat? What areas are growing?

• Where is competition increasing?

• What are the trends in

– Viewership (fragmentation of audiences / networks)

– Advertising (CPMs, ad units, DVRs)

– Programming (growth in reality)

4

Impact of Market Trends on SPT Mid-Range Plan

[Discuss why market trends mean we must take certain actions]

• With local stations in decline, new shows need strong brands in order to be worth a risk (e.g., Dr. Oz)

• Programming shifts require investment in reality

• Advertising landscape requires seeking new inventory (e.g., 3rd party, DR, Sony Ad Network)

• Fragmentation requires careful rights management, dual windowing, addition of digital rights

5

• Secure carriage of a linear FEARnet channel in order to reach scale

• Launch new shows targeted at core GSN demo and integrate skill-based gaming to increase interactivity and multiplatform opportunities

• Manage increasingly complex rights and windowing strategy

• Balance needs of traditional partners with emerging digital/mobile distributors

• Use Dr. Oz to expand client base to include additional network affiliates

• Continue to grow and monetize digital networks across distribution partners

• Further integrate Crackle into the overall studio

• Partner with networks to ensure strong marketing support for our shows

• Build our reality / format business through the acquisition of Embassy Row

Core Programs• Expand Harpo partnership to drive growth in our first run syndication business

• Introduce our core programs to a new generation of viewers

Programming

Digital Networks

Strategic Investments

Distribution & Licensing

Ad Sales• Continue to pursue third party representation of emerging networks

• Aggressively expand our digital ad sales business

• Leverage our content and ad sales assets to build a cross-platform Sony ad network

[Prior pages would be an alternative to this]

Executive Summary

6

EBIT Revenue

$200 $192 $186 $189 $188 $188$165

$9$9 $17 $14

$30 $30

$32

$0

$50

$100

$150

$200

$250

Sony Pictures Television GSN/FEARnet

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

$1,243

$1,136

$1,226

$1,109

$1,259

$1,164

$1,258

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

$209$201 $203 $203

$218 $218

$197

NOTE: Traditional television excluding Digital Networks and Crackle

SPT Financial Summary

[$ TO BE UPDATED][$ TO BE UPDATED]

7

EBIT Before Contribution Revenue

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

EBIT After ContributionFY08

Q2/BDGT.FY09

MRP/PRIORFY10

MRP/PRIORFY11MRP

($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

$15 $14 $16 $18

$32

$55

$47

$0

$10

$20

$30

$40

$50

$60

($19)

($9)

($16)

($12)

($15)($14)($14)

($20)

($16)

($12)

($8)

($4)

$0

$87

$104

$64$58

$43$40$41

$0

$20

$40

$60

$80

$100

$120

NOTE: Excluding Crackle and PY MRP restated for headcount and cost transfers

Digital Networks and Distribution Financial Summary

[$ TO BE UPDATED]

[$ TO BE UPDATED] [$ TO BE UPDATED]

8

From all sources of Domestic TV, Internet and Mobile revenue

Est. MPG/ACQ. Profit $295 $265 $322 $335

$1,016 $953 $985 $1,019$1,178

$1,051 $1,084

$475$479 $423 $429

$512$530 $537

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000 SPT/Other MPG/ACQ.

($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

NOTE: Before Seinfeld producer share

$1,491 $1,432 $1,408 $1,448

$1,690$1,581 $1,621

($ in MM)

SPT Total Revenue

[$ TO BE UPDATED]

9

Net G&A Expenses & Headcount

FY08 FY09 FY10 FY11 FY08 FY09 FY10 FY11SPT

Q2/MRP $49 $51 $53 $56 222 224 224 226Budget/Prior $49 $53 $56 -- 220 242 242 --Variance $0 $2 $3 -- (2) 18 18 --

Digital (1)

Q2/MRP $12 $13 $14 $15 45 51 53 55Budget/Prior $12 $12 $13 -- 41 47 49 --Variance $1 ($1) ($1) -- (4) (4) (4) --

CrackleQ2/MRP $13 $10 $14 $17 52 53 58 68Budget/Prior $17 $16 $23 -- 76 77 83 --Variance $3 $6 $9 -- 24 24 25 --

TotalQ2/MRP $74 $74 $80 $87 319 328 335 349Budget/Prior $78 $81 $91 -- 337 366 374 --Variance $4 $7 $11 -- 18 38 39 --

Net G&A Headcount

(1) PY MRP G&A & headcount restated for headcount included in SPHE/SPD which has since been transferred to DSD ($3.7M / 7 HC in PY09 and $4M / 7 HC in PY10)

[$ TO BE UPDATED]

10


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

11

Core Programs Strategy

• Launch Dr. Oz as the anchor to our first run syndication business

– Grow partnership with Harpo to include additional shows

• Adjust timing of Seinfeld sale to approach broadcast partners under more favorable market conditions

• Introduce innovative marketing programs to keep shows top-of-mind and expose them to a new generation of viewers

• Create new multi-platform extensions of our game shows to increase interactivity and drive viewership

• Continue to aggressively sell SPT library product

– Leverage new windows, rights, and assets to generate additional sales opportunities

12

Harpo / Dr. Oz

EBIT

$86

$64 $59$53

$59$71

$60

$32$32

$32$32

$31

$32

$32

$0

$20

$40

$60

$80

$100

$120

$140

Wheel of Fortune Jeopardy!

[$ PLACEHOLDERS]

MRP Assumptions

Strategy

• SPT has entered into a distribution relationship with Harpo, one of the most successful independent producers in TV history

• Dr. Oz will be the first Harpo show distributed by SPT

– Show launches in the Fall ’09; will benefit from the power of the Oprah platform

– Anticipating highest license fees / barter revenue for a new first run program [$ / episode]

– Complemented by an immersive online experience that will generate meaningful traffic and revenues

• Dr. Oz will serve as a foundation for a deeper partnership that has the potential to redefine SPT’s first run syndication business

– Provides access to top talent and shows through MRP time horizon

– Gets us in business with top 3 affiliates

• Assumption 1• Assumption 2• Assumption 3• Etc.

13

“Seinfeld”

EBIT

$18 $20$17

$20$16 $18 $16

$9$8

$3

$3

$2$3

$1

$11$12

$15

$37

$1

$0

$10

$20

$30

$40

$50

$60

Ad/Promo DVD License Fee

• Despite ad sales inventory being priced among highest in syndication, expect gradual ratings erosion

• 3rd cycle cleared in 99% HH, guaranteed double run in 86%• Domestic DVD sales through FY08:

– $320MM since inception– $31MM from Season 8 and 9 releases in June and November 2007

• Projected sales: FY09: $23MM, FY10: $11MM and FY11: $9MM• FY10 assumes Fox renewal of $[XXX] per episode

MRP Assumptions

Strategy

($ in MM)

[$ TO BE UPDATED]

• Closed 3rd cycle cable renewal with Turner– Digital rights are non-exclusive– SPT retains ad inventory to sell or release back to

Turner• Approaching Fox, Tribune, and new media outlets for 4th

cycle broadcast renewal• Launching cross country bus tour promoting show to a new

generation of viewers• Creating digital assets….[marketing to provide details]• Looking to exploit DST with iTunes, Amazon, etc [Sean]

[TO BE UPDATED]

14

“The Young & the Restless” and “Days of our Lives”

EBIT

$27 $26 $26 $27 $26 $27$25

$17$16 $15 $14

$14 $13$13

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

The Young & The Restless Days of Our Lives

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

Overall• Move both shows to the Sony lot• Leverage new technologies to increase quality while lowering costs• Grow ethnic viewership• Work closely with SPTI to secure renewals and new int’l sales

The Young & The Restless• Close CBS renewal by end of 2009• Continue nationwide talent search to generate publicity and boost

ratings in key markets• Build on success of online magazine Restlesstyle.com by incorporating

advertising / merchandising• Shoot on location in Paris to help grow local audience

Days of Our Lives• Close three-year license fee agreement with NBC• Upgrade show to Hi-Def and tapeless technology• Institute new production procedures to improve operational efficiency

The Young &The Restless:• Show renewed through August 2012• License fees increase to 15% to $85MM while costs decrease [10%]• Show moves to Sony lot and ATL and BTL cross-collateralized

Days of Our Lives:• Show renewed through March 2012• License fees equal costs throughout period

Strategy

MRP Assumptions

$44$42 $41 $41

$40 $40$38

[$ TO BE UPDATED]

15

“Wheel of Fortune” and “Jeopardy!”

EBIT

NOTE: FY10 variance to prior plan result of FY08 IGT advance

$86

$64 $59$53

$59$71

$60

$32$32

$32$32

$31

$32

$32

$0

$20

$40

$60

$80

$100

$120

$140

Wheel of Fortune Jeopardy!

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

• Production costs and CPM/ratings assumed at levels necessary to hold consistent profit margins

• Contractual licenses through 11/12

MRP Assumptions

Strategy

Overall• Wheel of Fortune celebrating its 5000th episode• Jeopardy! celebrating its 25th year in syndication• Both will be fully distributed in Canada under new 4-year deal

Wheel of Fortune: • Use brand integrations for prizing, promotions, and production support• Launch new game element (One Million Dollar Bonus Round) and home

viewing prizes to further engage audience and keep show fresh• Introduce new cross-platform games, including WOF on PS3, World

Winner skill-based online game, and WOF “Road Trip” on mobile

Jeopardy! • Introduce new show elements highlighting 25th season

– 25th anniversary sweepstakes– Features and vignettes, including “Ask Alex”, “Where are they Now”

(highlighting past champions), and “My Proudest Moments” (bringing historical figures to life)

• Tape first ever TV show live from the floor of CES in 2009• Launch new PS3 game, World Winner skill-based game, and new Rock &

Roll Jeopardy! mobile game• Distribute new mobile application (Play Jeopardy! Live) enabling viewers to

play real-time

$118

$96$91

$85$91

$102

$92

[$ TO BE UPDATED]

16

SPT Library

Revenue EBIT

$72 $77 $77 $80

$43

$68$44 $46

$51

$37

$30 $25

$169

$184

$154 $153$1$2

$1

$2 $1$1

$1

$1

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

FY08 FY09 FY10 FY11

($ in MM)

SPTI SPT SPHE SPT Digital Merchandise

Budget/Prior MRP

Variance

$178

($9)

$204

($20)

$186

($32)

• Coordinating with other SPE divisions to identify additional opportunities to sell SPT Library product• Initiating discussions with new partners to expand distribution of library product (e.g., Shout! Factory)• Assuming no demand for TV product on Blu-ray

Budget/Prior MRP

Variance

$72

($13)

$85

($1)

$74

($6)

$69$68

$84

$59

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

FY08 FY09 FY10 FY11

($ in MM)


17


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

18

SPT’s Programming Strategy

Network/Cable

Non-FictionSyndication/Digital

• Maintain a portfolio approach to balancing mainstream scripted development with measured, high concept programming

• Continue to work with network marketing teams on all of our network/cable series

• Work closely with our international division to develop shows that take advantage of strong international demand

• Maintain our cable dominance and continue to develop new markets by creating programs for emerging networks

• Produce high-profile, tent-pole MOWs (Mayflower, Peter Pan)

• Secure Dr. Oz as a successful series and expand relations with Harpo

• Maximize court TV expertise to create and exploit efficiencies between multiple programs

• Expand overall deals into Digital Programming (e.g., Brad Garrett, Kevin James, Barry Sonnenfeld) to help bolster the Crackle initiative.

• Capitalize on ER acquisition to expand footprint in broadcast / cable format business

• Continue to exploit 2-Way formats as a way to attract high-level reality producers

• Utilize the Sony library (e.g., Pyramid, The Dating Game, The Newlywed Game, Pursuit of Happyness) to generate successful, contemporized series

• Seek strategic alliances with key advertisers to create additional revenue streams

19

SPT’s Current Program Lineup

Days of Our Lives

[Lost in the 80’s (pilot)]

Young & The RestlessRules of EngagementCan Openers (pilot)

Jesse Stone: Thin Ice (MOW)Comanche Moon (mini)Stone Cold 6 (MOW)

The Unusuals (pilot)

Raisin in the Sun (mini)

Mayflower (MOW)

Peter Pan (mini)

‘Til Death

Sit Down Shut Up

Wheel of FortuneJeopardy!

Dr. OzJudge Hatchett

Judge David YoungJudge Karen

10 Items or LessMy Boys

Dave Caplan Project (pilot)Gifted Hands (mow)Time Heals (pilot)

Breaking Bad

S.I.S. (pilot/mow)

Boondocks

The Gong Show

Gay Robot (presentation)

The ShieldRescue MeDamagesSpectacular Spider-Man

Dragon Tales

Syndication

The BeastDanny Fricke (pilot)

Drop Dead Diva (pilot)The Gathering (mini)Living Proof (MOW)

The 10th Circle (MOW)The Memory Keeper’s

Daughter (MOW)Sex & Lies in Sin City (MOW)

Flirting with Forty (MOW)

20

2008/2009 Development Snapshot

Writer/Producer Current In Development End Date

Tantamount Sit Down, Shut Up Ab Fab Lost in the 80’s Untitled Rob Pearlstein/Laird Hamilton Surfing

Project

06/14/10

Michael Davies N/A The Dating Game The Newlywed Game American Bandstand All-Star Mr. & Mrs.

01/01/09

Happy Madison Rules of Engagement

Gong Show

Gay Robot Joe Dirt Untitled Adam Goldberg Project

08/07/11

Timberman/Beverly Productions

N/A Untitled Steinfelds Project Untitled Wallace & Wolfe Project Black List, Hitman

06/08/09

Barry Sonnenfeld N/A Los Simuladores Things a Man Should Never Do Past 30 Untitled Chelsea Handler Project

03/31/09

Neal Moritz N/A Untitled Dave Caplan Project Vantage Point

02/06/10

Fanfare (Jamie Tarses) My Boys Time Heals Eva Adams Slummy Mummy

05/03/10

21

Overall Term Deal Financials

1716 1616

0

2

4

6

8

10

12

14

16

18

FY08 FY09 FY10 FY11

(# of Term Deals)

# of Term Deals

($10)($10)

($12)

($10)

($0)

($1)

($2)

($3)

($4)

($5)

($6)

($7)

($8)

($9)

($10)

($11)

($12)

($13)

FY08 FY09 FY10 FY11

($ in MM)

Net Cost Per Year

NOTE: Deals with total gross commitments of $1MM or more


22

SPT Production Assumptions

Network:• DAYS OF OUR LIVES / Y&R continuing throughout plan• RULES OF ENGAGEMENT and CANTERBURY’S LAW continue throughout the plan (5 seasons and 4 seasons, respectively)• POWER OF 10 continues for 3 seasons• 9 pilots per season, resulting in 3 series per year• One new series succeeds – 09/10 TBD Drama (co-production)

Cable:• RESCUE ME is ordered for a 5th season• THE BOONDOCKS continues throughout the plan (4 seasons)• DAMAGES, BREAKING BAD, and MY BOYS continue throughout the plan (4 seasons and 5 seasons, respectively)• 4 pilots per year, resulting in 1 new series in FY09 and FY11 and 2 series in FY10• One drama series succeeds in FY10

First-Run Syndication:• WHEEL OF FORTUNE & JEOPARDY! continue throughout plan• JUDGE MARIA LOPEZ and DAVID YOUNG continue throughout the plan (5 seasons and 4 seasons, respectively)• TBD COURT SHOW launches in 08/09 and continues throughout the plan (3 seasons)• THE NINE launches in 08/09 and continues throughout the plan (3 seasons)• POWER OF 10 launches in 09/10 and continues throughout the plan (2 seasons)

Animation:• One new season produced each year

MOW:• 9 movies and 1 miniseries per year

Culver Entertainment:• Production levels sufficient to generate $2MM in profits per year

[C. MOLINA TO UPDATE]

23

Programming – New Series Investment & Development

($49) ($47) ($47) ($50)

($29)($25) ($25)

($26)

($22)($23) ($23) ($19)

($0)

($20)

($40)

($60)

($80)

($100)

($120)

FY08 FY09 FY10 FY11

($ in MM)

Pilot/Series Investment Development Allocated Overhead

($95)($95) ($95)($100)

Budget/Prior MRP ($90)

Variance ($10)

($82)

($13)

($83)

($12)

[$ TO BE UPDATED]

24


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

25

Overview

• There continues to be significant opportunity for digital networks

– Demand for online content, including long form, is strong and growing

– We have had early success in launching new brands

– New platforms, including mobile and PS3, are proving popular for video consumption

• Crackle serves as our online entertainment destination to capitalize on this opportunity

– Focusing on content and programming rather than pure technology

– Co-locating in Culver City

– Leveraging studio resources for content and marketing

• Securing a broad distribution footprint for all of our content

– Packaging original and library content into network brands for distribution

– Developing scalable approach to expand existing base of partners and implementations

– Collaborating with Sony outlets (including PSN and BIVL) to further expand reach

26

Crackle.com Overview

Purpose Content Programming

• Online entertainment destination

• Hub of our distribution network

• Deeper, richer & more robust user experience

• Syndicated as its own network brand

• SPE digital originals developed specifically for Crackle

• Film and TV library repurposed for Crackle’s target demo

• Acquired / licensed content

• Originals debut on Crackle before being broadly distributed

• Programmed in series and genres

• New shows released daily

• Packaged into brands (e.g., Crackle Comedy) that can be easily syndicated

27

Crackle’s 4 Tier Content Strategy

Tent Pole• Angel of Death• Boom Studios• Quentin Tarantino

• High production value, talent-driven vehicles with significant revenues in ancillary markets

Stars of Today• Original series for studio-level talent

(actors, producers)

• Dating Brad Garrett• Jason Alexander• Barry Sonnenfeld

Stars of Tomorrow

• Shows from online “stars” witha proven audience

• Owen Benjamin• Michael Jai White• Sebastian Foucan

Library• Leverage SPT’s deep TV and film assets

• Men-in-Black (PIX)• Silver Spoons (Vault)• 3 Stooges (Minisodes)

DescriptionTier Examples

28

Crackle Programming Strategy

• Being programmed as a true network, not just a website

• Combines traditional TV scheduling with the on-demand aspects of the web

• Programming in seasons and by genre

– 4 seasons with at least one tent pole each season

– Original series focused on three genres (comedy, action, reality)

– Premium content (TV and movies) programmed specifically for Crackle

• New episodes debut daily, giving viewers multiple reasons to come back

– Mix of series that debut new episodes same day each week (e.g., Video Village on Fridays) and daily shows (e.g., Rocket Boom, Penn Says)

29

Distributed Networks Programming Strategy

• Distribute originals under Crackle brand

• Program library content into network brands

– PIX: Movies from SPE’s deep library of 4,000+ titles

– Minisodes: All your favorites TV shows, only shorter

– SPT Vault: Classic action series and TV sitcoms

• Tailor Crackle and other network brands for each distribution partner

– PIX on Crackle is different than PIX on Gaia

• Create specific version of Crackle for PlayStation Network

– PSN receives compelling originals and repurposed content

– Crackle receives valuable exposure

SPT Vault

30

Distribution of our Networks

Goals

• 38 live implementations with 16 partners

• Majority of partners are “Tier 1” today

• Further expansion with Tier II and Tier III partners requires a scalable solution– Coordinating with corporate

technology and WPF

Size

Tier II

Gro

wth

Tier III

Tier I

Show logos of smaller sites that, once

aggregated, create meaningful distribution

Show logos or all major distribution

partners by network for large sites

Show logos of existing and potential future

smaller scale but high growth partner sites

[PRELIMINARY]

31

Distribution Example

• Show how the content / experience differs for original programming on Crackle versus the same content distributed to our partner sites (e.g., Video Village on Crackle vs. Video Village on YouTube)

[PLACEHOLDER]

32

Leveraging Studio Assets to Further Expand Reach

Commitments

• MPG committed to spending $2MM over next 16 months on Crackle

• Live streaming of premieres

• Streaming HD trailers

• Producing / programming podcasts

Opportunities for Further Support(expand marketing support across divisions)

• Original behind the scenes content from theatrical releases

• DVD inserts

• Promotion on www.sonypictures.com

• Viewer-focused contests

• Crackle provides SPE with promotional opportunities unavailable on 3 rd party sites

• SPE promotional elements provide Crackle with compelling and differentiated content

• Consolidation of Crackle in Culver City will facilitate additional cross-studio opportunities

33

Traffic Forecasts

Monthly Figures for the Last Month of the Fiscal Year

(MM)July ‘08 Actuals

FY09 FY10 FY11 FY12

Crackle.com

Unique Users

Streams

Network Streams

Total Streams

[PLACEHOLDER]

34

Revenue Plan for Digital Networks [CARNEY / COUPER TO PROVIDE]

35

Digital Networks Financials

EBIT Before Contribution Revenue

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

$6

($3)

($4)

$0.1

$5

($0)

$3

($6)

($4)

($2)

$0

$2

$4

$6

$8 $19

$10

$3

$2

$14

$4

$7

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

[$ TO BE UPDATED]

[$ TO BE UPDATED]

($ in MM) ($ in MM)

36

Crackle Financial Summary

EBIT Revenue

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

($ in MM)

$10

($10)

($18)

$0

$28

($18)

$10

($20)

($15)

($10)

($5)

$0

$5

$10

$15

$20

$25

$30

$50

$31

$15

$4

$84

$11

$52

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

[$ TO BE UPDATED]

[$ TO BE UPDATED]

37


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

38

GSN Summary

Challenges

Improvements

CompanyPlans

Next Stepsfor SPT

• Audience remains small and demographics skew toward an older-female audience, which is less valuable to advertisers

• Limited reach to launch hit or demo-changing shows

• Strategy to embrace older female demo has halted ratings erosion and laid the foundation for growth in both ratings and VPVH

• Close coordination with FUN Games has transformed GSN Digital into a profitable growth platform for the channel

• Redesigned and expanded GSN Live programming getting traction with both viewers and advertisers

• Continue close coordination with FUN Games (likely through merger) and build properties that increase interactivity and enable multiplatform sponsorship

• Increase investment in original programming to drive ratings/demo improvement• Refresh aging prime strips with contemporary acquired programming to increase ratings and

support original series launches • Invest significantly in re-branding the look and feel of the network to target core demo and embrace

game show fans• Improve affiliate positioning and minimize migrations through pricing and marketing initiatives

• Negotiate fair value at which to acquire 50% of FUN Games or structure an arms length partnership between FUN and GSN

39

FEARnet Summary

Challenges

Initiatives

Cable VODRatings

Web Ratings

• America’s #1 horror site• Average uniques for 2Q08 up 226% over 2Q07 • Uniques hit a historic high in July 2008, up 250% from July 2007• FEARnet.com ranked as one of the top 15 movie sites by PCMagazine.com

• Advertising Challenges:– Dynamic ad insertion still not available– Buyers reluctant to purchase VOD platform– Genre limits the pool of potential advertisers for both VOD and web

• Distribution Challenges: – VOD only network concept has not been embraced by the smaller cable operators– Satellite operators unable to carry VOD only

• HD Linear Opportunity– HD linear and VOD are an attractive package for the smaller cable operators– Linear opens up potential for carriage with the satellite providers– Movies are the #1 content customers want in HD– Exploits current window of opportunity with the smaller cable providers by offering a desirable

package of HD linear and HD VOD content– Linear advertising technology much easier than VOD

• Comcast’s #1 VOD provider for Free Movies • 5 of the top 10 free movie titles on Comcast in 2008 are FEARnet titles• 2Q08 VOD views increased 50% over 2Q07• Averaging 10M views per month

40

Game Show Network – Financial Summary

SPT Share of Net Income SPT Share of Dividends/(Funding)

$21$21

$15

$31 $31$31

$15

$0

$5

$10

$15

$20

$25

$30

$35

($ in MM)

$15

$20

$15

$18

$20 $20

$18

$0

$5

$10

$15

$20

$25

($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP


41

FEARnet Financial Summary

SPT Share of Net Loss/Income SPT Share of Cash Funding

($6)

($5)

($1)

$1

($7)

($1)

($6)

($8)

($7)

($6)

($5)

($4)

($3)

($2)

($1)

$0

$1

$2

($ in MM)

($4)

($5)

($2)

$0

($3)

$0

($4)

($6)

($5)

($4)

($3)

($2)

($1)

$0

($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP


42


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

43

Distribution Strategy Overview

• Established systematic approach to maximizing value of assets across windows and partners

– Evaluate each right separately to determine its fair value and best use

– Carve-out rights, where appropriate, to benefit our digital networks

– Enabled negotiations of both digital and linear rights for third cycle cable sale for Seinfeld

• Institutionalizing approach of managing “all rights under one roof”

– Developing backend platform (Ventana) to manage avails

– Creating new offer template to facilitate cable sales

– Launching dual windows, early / HD VOD, and digital extensions to drive revenue

• Applying approach to an expanding base of content

– Off broadcast (Rules of Engagement, Power of 10)

– Off cable (Rescue Me, Damages, My Boys)

– 1st run (Judge Karen Mills)

– Internet developed shows (Angel of Death)

– Library product online and on mobile (Who’s the Boss?, Monty Python)

– Third party acquisitions (Just for Laughs)

– New library strategies (Minisode network, Cinemactive)

44

Distribution Sales – Total Licensing Revenue

SPT will generate [$745] million in total current and library sales for SPE

$704 $708$637

$693

$873

$695 $706

$41 $40

$43$58

$64

$104 $87

$0

$200

$400

$600

$800

$1,000

TV Sales Online/Mobile Sales($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

$745 $748

$680

$751

$937

$799 $793

[$ TO BE UPDATED]

45

Free TV / Basic Cable

Market Dynamic MRP Initiatives

• Library product faces challenges

– Networks are more selective in what library product they buy due to increased appetite for original programming

– Our library continues to age

– Increasing number of viewing opportunities in earlier windows limits ability to maintain value in Free TV

• Network audiences continue to fragment

– Continued growth in the number of cable platforms and original programming

– Increased competition from emerging digital platforms and new entertainment options

• To remain competitive, networks seeking new digital assets, rights, and windows

• Aggressively sell theatrical releases and library product

– Set individual library sales goals for each sales person

– Sell King of Queens in second cable cycle

– Sell showcase packages

• Create additional windows, assets, and rights

– Dual windows (e.g., Married with Children)

– Multi-platform simulcasting and multiplexing

– Streaming rights to existing episodes

– New digital assets (e.g., Minisodes)

– Interactive games (e.g., Cinemactive)

46

Free TV / Basic Cable - Revenues

$239

$206$219

$145

$234

$282

$198

$0

$50

$100

$150

$200

$250

$300

FY08 FY09 FY10 FY11

Q2/MRP Budget/Prior MRP($ in MM)

[$ TO BE UPDATED]

47

Syndication


• While national ad sales growth is flat, local markets are struggling

• Audience fragmentation continues to erode daytime ratings

• Stations are laying-off staff and decreasing their license fees

• To succeed, new shows needs to be an established brand

• Transition to digital (Feb ’09) opening up valuable real estate

• Stations looking to build websites through exclusive and sponsorable content

• Launch Dr. Oz in Fall ’09 as the cornerstone of our first run syndication business

– Sell on market-by-market to maximize show value (best time slot, station, etc)

– Partner with stations to create a Dr. Oz network (combining linear, digital, and physical reach)

• Build off recent successes of court shows and secure additional double runs and better time slots in key markets

• Provide local stations with non-exclusive streaming rights (with inventory hold backs at our discretion)

• Leverage digital transition as opportunity to increase library sales

48

Syndication - Revenues

$108 $114

$305

$154

$106 $113 $122

$0

$50

$100

$150

$200

$250

$300

$350

FY08 FY09 FY10 FY11

Q2/MRP Budget/Prior MRP

[$ TO BE UPDATED]

($ in MM)

49

Pay Per View / Video On Demand

$683 $727 $761 $796 $825

$1,587

$2,093

$2,613

$3,074

$3,470

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2008 2009 2010 2011 2012

($ in MM) PPV VOD

17% CAGR

Market Dynamic

MRP Initiatives

Source: SNL Kagan, 2007; excludes adult content and events

• Cable VOD will continue to drive overall market growth

• MSOs are partnering with studios to expand their VOD offering, including genre-based channels

– Comcast & MGM recently announced action-based “Impact” channel

• Major players are moving into IPVOD

• Studios exploring Day-and-Date VOD as opportunity to charge premium and increase margins

– Premiums must outweigh any cannibalization of DVD market

• Telecos are rapidly expanding into VOD but only expected to contribute 10% of total market revenues

• Drive views with major partners (DirecTV, Dish, and iN Demand) through marketing initiatives

– Output deals closed earlier in FY09

• Exploit demand for high definition content to improve traditional VOD revenues and margins

• Test early windows to determine appropriate price, timing, and other key terms

Forecasted Market Growth

$2,270

$2,820

$3,374

$3,870

$4,295

50

Pay per View / Video on Demand - Revenue

$85

$73$70

$82

$95

$77 $78

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

FY08 FY09 FY10 FY11


[$ TO BE UPDATED]

51

Pay TV Strategy


• Paramount recently terminated output deal with Showtime over disagreement on renewal fees

• Paramount launching new Pay TV joint venture with Viacom, MGM & Lionsgate

– JV has yet to secure distribution– In near term, major titles may not have

Pay TV window

• HBO, Starz, and Showtime are opportunistically buying individual titles on the open market for pennies on the dollar

• Starz seeking cross-platform rights as a differentiator and to help secure carriage

• All players are investing in original content– Showtime enjoying recent success– Starz trying to define voice– HBO struggling to replace Sopranos

• Starz to remain our primary output partner through MRP time horizon

– Recently exercised the option; deal will now expire December 31, 2013

• Starz wants to discuss additional changes to their deal in exchange for an extension through 2016

– Willing to pay premiums in exchange for a cap on titles

– Desired cap exceeds our anticipated output

• Overall market conditions support renewal– Deal guarantee above market rates– Pay TV license fees expected to decline– Starz in litigation with other major studio– Opportunity to use digital rights to

improve negotiating position

52

Pay TV - Revenues

$272

$244

$279

$325

$273

$221

$297

$0

$50

$100

$150

$200

$250

$300

$350

FY08 FY09 FY10 FY11


[$ TO BE UPDATED]

53

Library Sales Targets by Market

• 3 year annual average of $101MM in FY08-FY10, and $100MM in FY09-FY11

• 4 year annual average of $97MM

$82

$104

$75 $78

$5

$7

$22$7

$3

$2

$2

$2

$0

$20

$40

$60

$80

$100

$120

FY08 FY09 FY10 FY11

($ in MM) Free/Basic Pay TV PPV/VOD

$90

In-House $38MM

$113

$99

$87

[$ TO BE UPDATED]

54

Library Revenue by Division

$33 $33

$91

$52$29 $27 $30

$46 $44

$46

$46

$51 $48 $43

$32 $34

$28

$26

$17 $26$17

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200 TV MPG Acquired Product

In-House $91MM In-House

$86MM


$26MM

NOTE: (1) Before net present value adjustment (2) Acquired product revenue in-process as a result of recently revised slate information

($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

$111 $111

$165

$124

$97 $101

$90

[$ TO BE UPDATED]

55

Library Revenue by Market

$83 $83

$131

$92

$63 $67 $63

$17 $16

$16

$19

$14$17

$6

$11 $12

$18

$13

$20$17

$21

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200 Free/Basic PPV/VOD Pay TV


$86MM


$26MM

($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

$111 $111

$165

$124

$97 $101

$90

NOTE: Before net present value adjustment

[$ TO BE UPDATED]

56

Distribution Sales – FY10 Slate

SPT will generate over [$451] million in sales from the FY10 slate

Title PPV Pay TV Free TV

THE OTHER BOLEYN GIRL $2,500 $9,290 $4,000

MADE OF HONOR $3,470 $11,540 $8,940

YOU DON'T MESS WITH THE ZOHAN $5,500 $17,650 $22,750

HANCOCK $4,900 $20,000 $24,380

STEP BROTHERS $5,500 $17,650 $22,750

PINEAPPLE EXPRESS $3,470 $11,540 $8,250

THE INTERNATIONAL $3,600 $12,530 $9,750

I KNOW WHAT BOYS LIKE $2,840 $10,190 $7,310

PASSENGERS $760 $3,060 $1,380

NICK AND NORAH $1,890 $7,550 $4,880

SEVEN POUNDS $3,500 $16,920 $15,000

ANGELS AND DEMONS $4,900 $20,000 $17,500

Total Columbia $42,830 $157,920 $146,890


PROM NIGHT $1,720 $8,420 $4,060

LAKEVIEW TERRACE $2,660 $8,840 $4,810

ARMORED $1,800 $7,550 $4,500

STEP FATHER $1,860 $8,510 $4,380

PHENOM $2,240 $8,650 $4,380

Total Screen Gems $10,280 $41,970 $22,130


SOP $250 $1,580 $700

REDBELT $190 $1,220 $230

THE CHILDREN OF HUANG SHI $60 $380 $250

ASHES OF TIME $40 $290 $100

BRICK LANE $90 $600 $190

DANCING WITH SHIVA $0 $4,090 $300

TBD#1-2009 $60 $380 $150

TBD#2-2009 $470 $2,450 $300

TBD#3-2009 $320 $1,900 $200

TBD#4-2009 $150 $1,000 $230

TBD#5-2009 $30 $190 $100

TBD#6-2009 $40 $290 $100

TBD#7-2009 $630 $2,990 $750

TBD#8-2009 $150 $480 $280

TBD#9-2009 $190 $1,220 $240

TBD#10-2009 $60 $380 $130

TBD#11-2009 $140 $972 $280

TBD#12-2009 $30 $190 $100

TBD#13-2009 $40 $290 $100

TBD#14-2009 $60 $380 $250

Total Sony Pictures Classics $3,000 $21,272 $4,980

[TO BE UPDATED]

57

Digital Licensing


• Digital pure plays offer a more compelling experience than service from traditional retailers

– Apple continues to dominate digital licensing

– Verizon, Sprint, and Netflix and are growing

– Brick and mortar retailers (e.g., Wal-Mart, Best Buy) are not competitive online

• Technologies that create new viewing experiences are also taking off

– Netflix Roku box sold out at retail

– Connected consoles (PS3, Xbox) are increasingly being used for video

– Apple TV is gaining popularity

• Data on DST / VOD mix is limited, but mix has skewed toward DST to-date

– With same titles available on DST and VOD, roughly 65% of units have been DST

– Mix may shift toward VOD as services migrate to set-top-box like devices

• Continue to expand overall content offering across business models and platforms

– Renew Netflix SVOD agreement

– Broaden selection of film and TV product on VOD and DST basis

– Continue to find new ways to reach consumers on emerging platforms and devices

• Maximize value of assets through merchandising, operations, and windowing

– Work directly with partners to promote SPE content and secure valuable real estate

– Leverage operational efficiencies to improve title and partner performance

– Coordinate closely with SPT distribution team to maximize value of windows

58

Digital Licensing Revenues

$24$27

$41

$54

$22

$32

$64

$0

$10

$20

$30

$40

$50

$60

$70

$80

FY08 FY09 FY10 FY11


Apple/Microsoft Opp. $10 $40 $60 $80

($ in MM)

($ in MM)

• Variance to PY MRP is the result of key DST partners not entering the business (Best Buy, Target, Google, Yahoo) and higher than anticipated Apple/Microsoft market share

[$ TO BE UPDATED]

59

Mobile Games & Video

Market Dynamic MRP Initiatives• Overall market is large and expanding

– 280MM domestic subs (vs. 246MM TV viewers ages 12+)

• Mobile video adoption increasing with significant growth potential

– Expected to increase from 17MM domestic consumers in 2008 to 26MM by 2010

• Mobile game market continues to expand– Mobile game consumers expected to increase

from 35M to 44M by 2011– Domestic revenues forecasted to increase from

$1.0B to $1.3B in 2011

• Handsets are rapidly evolving into entertainment devices

– Increased memory (16GB = 40 hours of video)– Better access to content (full Internet browser,

Wi-Fi, 3G) – Greatly improved user experience, led by

iPhone (3” screens, video out to TV, stereo Bluetooth)

• Continuing to lead in game publishing

– Continue to steal market share with superior product and operations; SPT now #5 in 2Q08

– Refine product offering to support bigger brands; WOF now the #3 game in 2Q08 (#13 in 2Q07)

– Leverage distribution to start representing third party product

• Expanding video service to become a true Mobile Entertainment company

– Monetize feature film library through pay-per-view, subscription, licensing and memory cards

– Drive Crackle’s evolution into a leading mobile video service

• Launching new platforms and creating new mobile business models

– Customize and enhance our game offerings for the iPhone platform and SmartPhones

– Innovate with new interactive mobile gaming experiences, such as JEOPARDY! Live (AirPlay)

– Create new “off-deck,” D2C video networks with dynamic ad-serving capabilities

60

Mobile Games & Personalization – Financial Summary

EBIT Before Contribution (1) Revenue

$4

$6

$11

$6

$7

$11

$10

$0

$2

$4

$6

$8

$10

$12

FY08 FY09 FY10 FY11

($ in MM)


$19

$12

$14$13

$14

$27

$14

$0

$5

$10

$15

$20

$25

$30

$35

FY08 FY09 FY10 FY11

($ in MM)

MRP Budget/Prior MRP

(1) PY MRP mobile costs restated for development costs incurred by SPD now incurred by DSD as a result of the transfer of game production to DSD ($4.4M in PY09 and $0.8M in PY10)

• Variance to PY MRP is the result of a reduced game slate (more than off-set by costs) and lower D2C

[$ TO BE UPDATED]

61

VOD vs. DVD

Physical Digital

Sale Rental Sale Rental

Revenue

New Release $ $ $ $

Library $ $ $ $

Titles

New Release $ $ $ $

Library $ $ $ $

Revenue

New Release % % % %

Library % % % %

Titles

New Release % % % %

Library % % % %

[PLACEHOLDER]

62


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

63

SPHE Contribution to SPT Product

Revenue Net Contribution

Budget/Prior MRP

Variance

$154

$0

$123

($15)

$119

($24)

• MRP reflects declining demand for TV Library product on DVD; securing additional distribution partners that focus on library product (e.g., Shout! Factory)

• MRP does not assume Blu-ray sales for TV Library 0

Budget/Prior MRP

Variance

$49

($4)

$40

($2)

$37

$0

$51$37 $30 $25

$60

$23

$11$9

$43

$47

$54$48

$0

$20

$40

$60

$80

$100

$120

$140

$160

FY08 FY09 FY10 FY11

($ in MM)

Library Seinfeld Current

$11 $10$7 $5

$9

$3

$2$1

$24

$25$28

$24

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

FY08 FY09 FY10 FY11

($ in MM)

Library Seinfeld Current

$154

$107$95

$82

$44

$38 $37

$30


64

SPTI Contribution to SPT Product

Revenue Net Contribution

$159$143 $148 $153

$77 $77$80

$231$220 $225

$232

$72

$0

$50

$100

$150

$200

$250

FY08 FY09 FY10 FY11

($ in MM)

Current Library

Budget/Prior MRP

Variance

$200

$31

$174

$46

$183

$42

$136$121 $125 $129

$64 $64 $66

$197$185 $189 $195

$61

$0

$50

$100

$150

$200

$250

FY08 FY09 FY10 FY11

($ in MM)

Current Library

Budget/Prior MRP

Variance

$167

$30

$146

$39

$152

$37


65


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

66

Expanding SPT’s Advertising Footprint

Syndication :10 SpotCable /

SatelliteDigital / Mobile

PlayStationSony Ad Network

Current Business Lines Emerging Opportunities

SonyElectronics

Direct Response

PS.com

OnlineGames

Wireless

67

Traditional Advertising Market Overview

All Other50%

TV37%

Online & Mobile

13%

$48 $47 $50 $49 $54

$29 $30$31 $32

$35

0

20

40

60

80

100

2008 2009 2010 2011 2012

($ in BN) Broadcast Cable

2008 Ad Market Forecasted to be $205BN (1)

Growth in TV Advertising (1)

• Growth in TV advertising expected to remain relatively flat through 2012 (4% CAGR)

• Syndication generally more resistant to DVR erosion

• Advertisers challenged to create new ad units Increases in upfront CPMs offset declining inventory

• 08/09 upfront was solid, but scatter market could be showing signs of weakness

(1) PWC, 2008 (excludes direct mail)

• Effective use of C3 ratings and Nielson Fusion data to demonstrate effectiveness of SPT shows

• Explore acquisitions to expand advertising footprint (e.g., World Link)

• Expand third party representation

• Maximize advertiser interest in Dr. Oz through product integrations and sponsorships

• Identify ways for traditional and digital ad sales teams to collaborate on cross-platform buys

Marketplace Dynamics MRP Initiatives

$76 $76$81 $82

$89

68

Digital Advertising Market Overview

$19 $20 $24 $26 $28

$7$9

$10

$12

$1.4$1.9

$2.8$3.9

$4.9

$11

0

10

20

30

40

50

2008 2009 2010 2011 2012

($ in BN)All Other Online Video & Display Mobile

Growth in Online & Mobile Advertising (1)

(1) PWC, 2008 (excludes direct mail)

• Online video proven to be complement and not a substitute to traditional TV

• Online video and display ad market forecasted to grow at 40% CAGR over next 4 years to $12BN

• Majority of ad dollars being spent with branded content on traditional network sites (e.g., “Lost” on ABC.com or “The Office” on Hulu)

• Mobile and in-game advertising are projected to be significant in near future, but growth has been slower than expected

• Continue penetration of blue chip advertiser base

• Expand and scale back office to support an increasing range of partners and platforms

• Secure additional 3rd party rep opportunities, including FEARnet

• Leverage growth in emerging platforms through PSN ad sales business and building a cross-Sony ad network

All Other50%

TV37%

Online & Mobile

13%

2008 Ad Market Forecasted to be $205BN (1)

Marketplace Dynamics MRP Initiatives

$25$29

$33$37

$40

69

Sony Ad Network

Ad SalesContent

Devices / Platforms Opportunity

Challenge

Assets

“90% of all Sony devices will have wireless capability by 2010”

- Sir Howard Stringer, June ‘08

• SPE lacks a unified backend and standardized ad units that can provide targeted reach across platforms and content

• Premium TV, movies, music, and digital content

• Large, scalable ad sales org capable with expertise selling across platforms

• Relationships with blue chip advertisers

SONY AD NETWORK

70

SPTAS Acquisitions Strategy

• SPTAS is evaluating ways to expand their business through acquisitions

• WorldLink is an example of a potential acquisition opportunity that would

– Grow SPTAS cash-flow footprint

– Complement third party ad sales representation business / strategy

– Cushion against fluctuations in the ad market

– Leverage and enhance 2waytraffic relationship

[PRELIMINARY; AMY/COUPER TO FLESH-OUT]

71

Advertising Sales Net Revenue (non digital)

$244$234

$224$237$232

$247 $247

$0

$50

$100

$150

$200

$250

$300

FY08 FY09 FY10 FY11

($ in MM) Q2/MRP Budget/Prior MRP

[$ TO BE UPDATED]

72

Digital Ad Sales

$4$11 $15

$52

$31

$84

$50

$4$2

$11

$8

$23

$17

$2$0

$20

$40

$60

$80

$100

$120 Crackle Digital Networks($ in MM)

FY08Q2/BDGT.

FY09MRP/PRIOR

FY10MRP/PRIOR

FY11MRP

$6

$15 $17

$63

$39

$107

$67

[$ TO BE UPDATED]

73


2. Core Programs

3. Programming

4. Digital Networks




8. Ad Sales

9. Appendix

74

SPT – Major Contributions to Earnings

($ in MM) FY08 FY09 FY10 FY11

Wheel of Fortune 86$ 56% 59$ 51% 59$ 50% 60$ 50%

Jeopardy! 32 42% 32 42% 32 42% 32 42%

Library - SPT 17 37% 40 57% 26 57% 28 58%

Library - HE 5 10% 5 14% 4 13% 2 8%

Library - SPTI 38 53% 40 52% 39 51% 40 50%

The Young and the Restless 27 19% 26 18% 26 18% 25 18%

Days of Our Lives 17 19% 15 17% 14 16% 13 15%

Seinfeld Fee 38 100% 20 100% 55 100% 18 100%

King of Queens 13 18% 13 18% 6 15% 6 19%

Rescue Me 6 15% 11 19% 7 16% 1 23%

The Shield 3 15% 3 19% 1 37% - 37%

ENCORE Bonus 48 100% 48 100% 48 100% 48 100%

Long Form 6 8% 4 7% 5 9% 5 9%

Culver Entertainment 2 20% 3 16% 2 19% 2 19%

Power of 10 / The Nine 1 - 2 4% 6 9%

Rules of Engagement & Canterbury's Law n/a n/a n/a 18 18%

New Series Investment (100) (95) (95) (95)

All Other Products 10 14 10 12

Net G&A (49) (51) (53) (56)

GSN 15 21 31 31

FearNet (6) (5) (1) 1

Total 209$ 17% 203$ 17% 218$ 17% 197$ 16%

[TO BE UPDATED]

75

SPT – Earnings Comparison (Year vs. Year)

($ in MM) FY08 to FY09 FY09 to FY10 FY10 to FY11

EBIT 209$ 203$ 218$

King of Queens (1) (7) -

New Series Investments 5 - -

Daytime - Lower license fees for future seasons (primarily DOOL) (4) (1) (1)

Wheel of Fortune / Jeopardy! - IGT advance / royalties (27) 1 -

Rescue Me 5 (4) (5)

Seinfeld Fee - 3rd/4th cycle sale, lower ad sales and lower HE contribution (18) 35 (36)

Library - Domestic TV avails & Digital Licensing 25 (17) 2

GSN / FEARnet 8 14 1

Rules of Engagement & Canterbury's Law n/a n/a 18

All Others, Net 1 (6) -

Total Variance (6) 15 (21)

EBIT 203$ 218$ 197$

[TO BE UPDATED]

76

SPT – Earnings Comparison (FY09 vs. FY12)

($ in MM)EBIT FY 2008 209$

IGT Advances / Royalties (26)

Seinfeld - Primarily TBS renewal assumed in FY08 (19)

King of Queens (7)

Rescue Me / The Shield (7)

Daytime (6)

GSN / FearNet Performance 23

Rules of Engagement & Canterbury's Law 18

Library - Digital Licensing 10

New Series Investments 5

All Others, Net (3)

Total Variance (12)

EBIT FY 2011 197$

[TO BE UPDATED]

77

SPT – Earnings Comparison (Plan vs. Plan)

($ in MM) FY08 FY09 FY10

Budget / Prior MRP 201$ 203$ 218$

King of Queens - Primarily cable and syndication sales 2 8 1

Rescue Me (2) 5 1

New Series Investments (10) (13) (12)

Library product (9) (1) (6)

Days of Our Lives 2 1 1

Young and the Restless 1 (2) (1)

Wheel of Fortune - IGT royalty / advance 22 6 (12)

Seinfeld Fee - Primarily shift in timing of assumed station renewals (3) (18) 34

Long Form 3 (2) -

Power of 10 / The Nine 1 - 2

GSN / FEARnet - 2 -

All Others, Net 1 14 (8)

Total Year-to-Year Change 8 - -

Q2 Forecast / Current MRP 209$ 203$ 218$

[TO BE UPDATED]

78

SPT – Major Contributions to Revenue


Wheel of Fortune 152$ 116$ 118$ 119$

Jeopardy! 76 77 77 77

Library SPT 46 70 46 48

Library HE 51 37 31 25

Library SPTI 72 77 77 80

The Young and the Restless 142 142 141 141

Days of Our Lives 91 87 88 88

Seinfeld Fee 38 20 55 18

King of Queens 75 71 38 32

Rescue Me 39 56 42 6

The Shield 22 14 1 -

Long Form 79 58 55 52

Power of 10 / The Nine - 18 49 66

Culver Entertainment 10 15 12 11

Rules of Engagment & Canterbury's Law n/a n/a n/a 21

ENCORE Bonus 48 48 48 48

New Series Investment 239 241 315 234

All Other Products 63 79 66 192

Total 1,243$ 1,226$ 1,259$ 1,258$

[TO BE UPDATED]

79

SPT – Summary Financials


Initial Market Licenses 516$ 552$ 555$ 608$

Off Network Licenses 107 89 247 71

Ad and Promo Sales 236 240 253 256

Co-Distributor Share and Other 85 24 25 25

Domestic Pay TV/VOD - SPT Product 51 51 50 48

Free TV/Cable-MPG/HE/SPTI Product 156 140 177 120

Pay TV/VOD-MPG/HE/SPTI Product 295 254 288 356

Crackle 4 15 31 50

SPT Generated Gross Revenue 1,450$ 1,365$ 1,626$ 1,534$

Producer Share (147) (71) (205) (77)

SPTI Contribution - Library 72 77 77 80

SPTI Contribution - Current 159 143 148 152

SPHE Contribution - Library 51 37 30 25

SPHE Contribution - Current 103 70 65 57

CP/SPD Contribution 10 14 15 14

Contribution to Crackle (4) (15) (31) (50)

Contribution to Other SPE Divisions (451) (394) (466) (477)

Total SPT Product Net Revenue 1,243$ 1,226$ 1,259$ 1,258$

COGS (960) (951) (966) (994)

Marketing & Promotion (36) (37) (52) (43)

G&A (49) (51) (53) (56)

Other 2 - - -

GSN 15 21 31 31

FEARnet (6) (5) (1) 1

Total EBIT 209$ 203$ 218$ 197$

Operating Margin 17% 17% 17% 16%

Budget/Prior MRP 201$ 203$ 218$

Variance 8$ -$ -$

[TO BE UPDATED]

80

Digital – Summary Financials

($ in thousands) FY 2011

Q2 FrcstFY08

BudgetVariance

Current MRP

Prior MRP VarianceCurrent

MRPPrior MRP Variance

Current MRP

REVENUEInternet & Mobile Advertising /Sponsorships $1,790 $3,572 ($1,782) $3,189 $7,350 ($4,161) $9,720 $13,700 ($3,980) $19,449Physical Media 5,480 3,500 1,980 2,000 3,000 (1,000) 3,000 2,000 1,000 4,000Mobile Games/Personalization 14,256 14,254 2 12,448 19,000 (6,552) 12,747 26,500 (13,753) 13,548Digital Sell-Thru 6,854 10,000 (3,146) 14,350 20,200 (5,850) 21,944 48,000 (26,056) 30,485Digital Rental/Subscription 11,224 8,099 3,125 9,050 7,250 1,800 14,944 12,500 2,444 16,109Bundling, Allowances & Other 571 225 346 1,500 1,210 290 1,500 1,200 300 3,000NET REVENUE 40,176 39,650 526 42,537 58,010 (15,473) 63,854 103,900 (40,046) 86,591

COST OF REVENUESMobile Game Production (320) (790) 470 (772) (5,918) 5,146 (1,002) (5,097) 4,095 (1,159)Mobile Game Porting/QA Testing Costs (424) (400) (24) (2,566) (4,618) 2,052 (2,693) (2,797) 104 (2,700)Original Video Production (4,058) (3,101) (957) (3,000) (1,905) (1,095) (4,500) (4,905) 405 (7,000)Outside Participation/License Fees (200) (320) 120 (244) (3,480) 3,236 (552) (4,500) 3,948 (844)Physical Media Costs (500) (500) 0 (104) (1,575) 1,471 (110) (1,225) 1,115 (117)Music & Other Distribution Costs (1,514) (1,779) 265 (880) (2,855) 1,975 (1,169) (5,610) 4,441 (1,970)COST OF REVENUES (7,016) (6,890) (126) (7,565) (20,350) 12,785 (10,026) (24,133) 14,107 (13,790)

CONTRIBUTION MARGIN BEFORE OP. EXPENSES 33,160 32,760 400 34,972 37,660 (2,688) 53,828 79,767 (25,939) 72,801

OPERATING EXPENSESWebsite/Technology (3,310) (3,160) (150) (3,022) (1,645) (1,377) (3,750) (1,710) (2,040) (5,409)Sales and Marketing (3,465) (3,465) 0 (3,750) (6,340) 2,590 (5,000) (10,590) 5,590 (6,000)

GROSS PROFIT 26,385 26,135 250 28,200 29,675 (1,475) 45,078 67,467 (22,389) 61,392

Less: Contribution (28,582) (27,750) (832) (30,873) (30,245) (628) (47,746) (64,301) 16,555 (65,656)SPD (6,043) (6,599) 556 (1,081) 0 (1,081) (577) (577) (544)TV (3,241) (4,469) 1,228 (5,804) (6,928) 1,125 (6,622) (14,382) 7,759 (9,153)Motion Pictures (19,298) (16,682) (2,616) (23,989) (23,317) (672) (40,547) (49,919) 9,372 (55,959)

RETAINED GROSS PROFIT (2,197) (1,615) (582) (2,673) (570) (2,103) (2,668) 3,166 (5,834) (4,264)

General and Administrative (11,603) (12,185) 582 (12,727) (11,563) (1,164) (13,732) (12,506) (1,226) (14,736)

EBIT ($13,800) ($13,800) $0 ($15,400) ($12,133) ($3,267) ($16,400) ($9,340) ($7,059) ($19,000)

Opportunities: Apple / Microsoft deals 5,000$ 19,200$ 36,400$ 70,000$

Note: PY MRP G&A restated for headcounts transferred from SPHE/SPD and PY MRP mobile costs restated for development costs now incurred by DSD as a result of game production

transferred from SPD to DSD

FY 2008 FY 2009 FY 2010

[TO BE UPDATED]

81

Digital – Earning Comparison FY09 vs. FY12

EBIT Before Contribution

EBIT AfterContribution

($ in thousands)EBIT FY 2008 14,800$ (13,800)$

Digital Distribution & Networks business 39,700 (2,700)

Mobile Content business before impact of reduced slate 1,000 600

Reduction in Mobile Content slate (1,800) -

Intercompany Classification:Mobile game costs incurred by SPT (formally SPD) (2,600) -

G&A - primarily 10 headcount growth (3,100) (3,100)

All Others, Net (1,300) -

Total Variance 31,900 (5,200)

EBIT FY 2011 46,700$ (19,000)$

[TO BE UPDATED]

82

Digital – Earning Comparison to Prior MRP

($ in thousands)EBIT Before Contribution EBIT

EBIT Before Contribution EBIT



FY08 Budget / Prior MRP 14,000 (13,800) 18,100 (12,100) 55,300 (9,300)

Digital Licensing business 3,000 - 1,100 - (10,500) -

Digital Networks business (3,600) (1,400) (6,900) (5,100) (8,900) (8,400)

Mobile Content business before impact of reduced slate(primilary due to D2C / personalization) (3,300) (3,200) (5,600)

Reduction of Mobile content slateand associated cost reduction/cost savings 500 800 6,200 6,200 1,000 2,600

G&A - 6 headcount growth in FY09, 2 in FY10 600 (700) (700) (900) (900)

All Other 900 1,000 (500) 1,000 (400)

Total Variance 800 - (2,600) (3,300) (23,900) (7,100)

FY08 Q2 / Current MRP 14,800 (13,800) 15,500 (15,400) 31,400 (16,400) 46,700 (19,000)

FY 2008 FY 2009 FY 2010 FY 2011

[TO BE UPDATED]

83

Crackle – Summary Financials

($ in thousands) FY 2011

Q2 Frcst FY08 Budget Variance Current MRP Prior MRP Variance Current MRP Prior MRP Variance Current MRP

GROSS REVENUEAdvertising/Sponsorships $3,937 $10,604 ($6,667) $15,171 $51,499 ($36,328) $31,000 $83,515 ($52,515) $50,000

COST OF REVENUESContent Development (2,228) (3,852) 1,624 (6,000) (4,735) (1,265) (7,000) (6,695) (305) (10,000)Revenue Share (distribution) (106) (468) 362 (600) (600) (1,200) (1,200) (1,800)Bandwidth (1,270) (2,670) 1,400 (1,289) (11,524) 10,235 (1,939) (16,967) 15,028 (3,309)Ad Serving Fees (249) (459) 210 (660) (660) (1,309) (1,309) (2,566)TOTAL COST OF REVENUES (3,853) (7,590) 3,737 (8,549) (16,259) 7,710 (11,448) (23,662) 12,214 (17,675)

OP. EXPENSESWebsite/Technology

Streaming/Traffic (290) (697) 407 (360) (240) (120) (480) (240) (240) (600)Depreciation (1,166) (1,226) 60 (1,467) (672) (795) (1,612) (672) (940) (1,007)Amortization of Intangibles (1,090) (2,275) 1,185 (816) (2,856) 2,040 (816) (356) (460) (816)

Sub-Total Website/Technology (2,546) (4,199) 1,653 (2,643) (3,768) 1,125 (2,908) (1,268) (1,640) (2,423)Advertising/Marketing/Ad player (2,355) (5,562) 3,207 (4,000) (5,112) 1,112 (3,000) (7,899) 4,899 (3,000)General and Administrative (13,387) (16,734) 3,347 (10,000) (16,129) 6,129 (11,100) (20,136) 9,036 (16,521)Retention Bonus (2,500) (2,500) 0

TOTAL OP. EXPENSES (18,288) (26,495) 8,207 (16,643) (25,009) 8,366 (19,508) (31,803) 12,295 (21,944)

Minority Interest/Other Income (Exp) 3 5,281 (5,278)

EBIT ($18,200) ($18,200) ($0) ($10,022) $10,231 ($20,253) $44 $28,050 ($28,006) $10,381

Traffic Statistics (in millions)Onsite 224 1,167 (943) 1,195 5,095 (3,900) 2,450 9,286 (6,836) 4,868 Offsite 1,850 1,077 773 1,878 5,224 (3,346) 3,642 7,587 (3,945) 7,598

FY 2008 FY 2009 FY 2010

[TO BE UPDATED]

Mid Range Plan Fiscal Years 2009 – 2012 August 2008 [DRAFT]

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Transcript of Mid Range Plan Fiscal Years 2009 – 2012 August 2008 [DRAFT]