The TOM Group

Expanding Our Sporting Rights Portfolio

15th August 2002

2

Addition of ATP Tennis Rights to TOM’s Sports Portfolio

Telecom VAS

Internet Access

Wireless VAS

Media & Entertainment

Music & Entertainment Outdoor OnlinePublishing

Virtual Network Operator

YC Companies

SPORTS

basketball, volleyballuniversity soccerwomen’s soccertable tennis, golfgymnastics, bowling

Philips Sports ReportNokia Sports Daily NewsSpecial programmingJV with China Sports Industry

Tennis Management GroupRights to ATP

TennisTV programmes (including Salem Open)

Commercial rights

Programming

3

Part I

About The Transaction

4

About Tennis Management Group

Tennis Management Group is a leading sports marketer in the industry

Tennis Management Group 2002E Revenue:

HK$46 million

• Programme syndication

• Sports event consulting

• Promotion & Advertising

25%

Event sponsorship75%

• 46% of i-cable’s HK$100M in World Cup revenues

• Recurrent annual revenue

5

Perpetual Ownership Of Asia’s Leading Sports Event The Association of Tennis Professionals (ATP) has granted Tennis

Management Group rights to the Hong Kong ATP Open since 1990

The rights are renewed automatically every year upon payment of an annual fee (US$25,000 p.a.) and compliance with regulations

Only one ATP right granted in Hong Kong

In discussions with ATP to alternate the tournament between Hong Kong and Beijing

6

About the Salem Open

One out of only 3 ATP authorised tennis tournaments in Asia that entitle players to international ranking credits (others in Shanghai and Tokyo)

One of the most profitable international tennis tournaments in Asia

Organised by Tennis Management Group once a year since 1990

Attracts 50-70 international players including 5-8 star players every year: Michael Chang, Andre Agassi, Pete Sampras, Mark Philippoussis …

2002 Star Players

Marat Safin World No. 2 & 2000 US Open Champion

Juan Carlos Ferrero 2002 French Open Finalist & 2000 Davis Cup Champion

Alex Corretja 1998 World Championship & 2001 Davis Cup Champion

Carlos Moya World No. 5 & 1998 French Open Champion

Mark Philippousis Winner of 9 ATP Singles Titles & Former US Open Finalist

Jan-Michael Gambill Winner of 2 ATP Singles Titles

Nicolas Lapentti Former World No. 6

Taylor Dent ATP Title Winner in 2002

7

Contract Term (2002)

Strong Sponsorship Revenue from Long-Term Sponsors

Major Sponsors

Nortel Networks

Citizen Watches

Perrier

Jebsen (Blue Girl)

Circle K

Fortress

Mercedez Benz

United Airlines

1 year78%

2-3 years22%

Loyal sponsor base:

Average years of participation of top 5 sponsors: 6 years

Years of Participation (2002)

1-4 years32%

13 years55%

5-8 years13%

                                                      

8

Contract Term (2002)

Stable Tour Club Membership (TCM) Revenue

Major TCM Customers

BNP Paribas Peregrine

PCCW

Schindler Lift

Hutchison Whampoa

Fuji Xerox

Hong Kong Jockey Club

Bank of America

Ernst & Young

JPMorgan

1 year39%

2-3 years61%

Loyal TCM customer base:

Average years of participation of top 5 TCM customers: 6 years

Years of Participation (2002)

1-4 years36%

5+ years64%

9

Additional Revenue from Ticketing & TV Syndication

0

20,000

40,000

60,000

80,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Attendance at thematches

Attendance at thematches & theFestival Area

Ticketing

TV Programme Syndication

Salem Open and other sports TV programmes are distributed to over 25 TV stations in China (including TVB, CCTV, Guangdong TV) and worldwide (e.g. Eurosport)

Revenue from the sale of broadcasting rights / resale of commercial airtime

Stable Attendance with Growth in Recent Years

The Festival Area opened to the public

from 1997

Att

en

dan

ce

10

A Profitable Business

HK$'M 2001A 2002E

Revenue 41.4 46.4

Gross Profit 19.2 31.2

Gross Margin 46% 67%

Net Profit 15.0 28.0

Net Profit Margin 36% 60%

80% confirmed

with contracts

signedas at Aug 15

Significant margin increase in 2002 over 2001

Increase in sponsor and TCM customer base

Joint promotions and barter deals with the media reduced A&P expenses by 40%

Reduced player appearance fees – without compromising the number of star players

Re-negotiations with contractors cut event expenses by 34%

*Profit Guarantee

*

11

Highlights of the Transaction

Investment

TOM to acquire a 60% equity interest in Tennis Management Group for HK$101M

All-equity transaction: 18.29M TOM shares issued at $5.51 per share

Warranty

Consideration shares are pledged until the end of 2006 against any possible shortfall of profits and in the unlikely event that the ATP rights are cancelled

Profit GuaranteeHK$’M

Profit After Tax Guarantee

Minimum 10% CAGR

guaranteed

Failing achievement of 2002 guarantee, valuation will be adjusted accordingly

Any shortfall of cumulative 2003 – 2005 guarantee will be compensated by dividends of the vendor

12

Valuation Analysis

US$'M

Revenue Revenue / staff(US$'000)

Net profit Profit margin

International Speedway 529 587 88 17%

Sportsworld Media Group 52 156 13 24%

CSS Stellar 33 163 2 7%

Sports Resource Group 14 194 (1) -7%

Tennis Management Group 5.3 592 1.9 36%

2001 A

Tennis Management Group is the most efficient company …

… with the most attractive valuation

P/E

International Speedway 23.6

Sportsworld Media Group 12.7

CSS Stellar 22.0

Sports Resource Group 14.2

Tennis Management Group 6.0*

*Based on 2002 profit guarantee

13

Part II

TOM’s Sports & Entertainment Division

14

Divisional Management

COOMichelle Leung

COOMichelle Leung

GM - BDMichael NgGM - BD

Michael Ng

GM – Corp DevAnthony Tse

GM – Corp DevAnthony Tse

Hong XiangZhang Bao Cheng

Hong XiangZhang Bao Cheng

YC CompaniesBen Li / Sarah Fung

YC CompaniesBen Li / Sarah Fung

Corporate – Sports & Entertainment Team

PRC Operation Center

Finance DirectorQuincy Tang

Finance DirectorQuincy Tang

Senior AdvisorTan Zhi

Senior AdvisorTan Zhi

Tennis Management Group

Tennis Mgt GroupLincoln

Venancio / Anna Pang

Tennis Mgt GroupLincoln

Venancio / Anna Pang

Lincoln VenancioFounder & Managing Director

• Former Olympic team tennis coach

• 16 years of experience in organising 500+ sports events, including tennis, golf, basketball, table tennis, volleyball, etc., in Greater China, Japan, Korea, Southeast Asia, the US, Brazil, Spain …Anna Pang

General Manager

• 10 years of experience in organising and marketing 200+ sports events; and in sports TV production and programme syndication

15

Growth Of YC Companies Under TOM’s Management

HK$’M

YC Companies Revenue Trend

Q1 is historically the weakest quarter due to advertising seasonality

Rights Portfolio

VolleyballUniversity SoccerTable TennisBowling

Gymnastics

Basketball

TennisGolfWomen’s Soccer

TOM acquires YC

KCRC Chinese Gymnastic Gold Medallists Show

World Cup

Philips Inter-University Football Game

Major Cross Media Events

•Grew advertiser base by 10% since acquisition

•Developed new co-sponsorship packages to monetise existing rights

16

Higher Margins for the Sports Division

Net Profit Margin Analysis

9%

36%

13%7%

60%

15%7%

0%

10%

20%

30%

40%

50%

60%

70%

YC Companies TennisManagement

Group

Combined YC Companies TennisManagement

Group

Combined Avg of Int'lSports Marketing

Co's

2001A2001A 2002E2002E

International sports marketing companies include World Wrestling Entertainment, International Speedway, Sportsworld Media Group, CSS Stellar, Sports Resource Group, Sport Entertainment Media and Proactive Sports Group

17

Synergies With TOM

Sports & Entertainment Division

YC Companies

China Sports Industry JV

Tennis Management

Group

Hong Xiang Audio Video

Production & distribution of sports programming

• Sports consultancy• Athlete

representation

• Launch an alternate ATP Open in Beijing

• Cross-leverage client base

• Expand sports TV programme syndication business – new programmes and new distribution channels