Work in Progress

ATTORNEY/CLIENT PRIVILEGED AND CONFIDENTIAL

Spider-Man Merchandise Rights Sale UpdateNegotiating Considerations

September 2010

Work in Progress

Negotiating Framework

page 2

Negotiate Now

Buy-out SPE’s Interest Buy-out Controls Defer Off-limits

Avg. of Actual Receipts

+

Adjustment for Under-reporting

(Informed by Audit)

+

Hasbro True-up

+

Disney Upside

• Ease and/or lift Classic black-out

• Leadership of retail promotion discussions for film merch.

• Food category constraints

• Settlement of audit claims

• Litigation

• Restrictions on ability for SPE to promote film beyond merchandise at retail

• Increased SPE commitment to release new films beyond current requirements to retain rights

Work in Progress

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SPE’s Interest in an Average Year

Avg. of Actual Receipts $35 M • Assumes future in-line with history

Adjustment for Under-reporting (Informed by Audit) & Hasbro True-up

$10 M

Disney Upside

Growth from International $12 M• Expand from 52/48 Domestic/Int’l to

40/60 (27% uplift in total WW revenues)

Eliminate Int’l Commissions $4 M• 9% improvement (25% commissions

eliminated on 34% of revenues)

Growth from Disney Retail $1 M• Disney starts selling in Disney-owned

retail and theme parks

Food + Other Categories Minimal• Limited value in freeing up food

categories given current regulatory environment

Source: MPG and CorpDev analysis.

Approx. Avg. Annual Revenues

Comments

Work in Progress

$314

$406

$536

$580

$0

$100

$200

$300

$400

$500

$600

Val

ue

($M

)SPE Internal View of Valuation

Source: SPCP and CorpDev analysis.Note: (1) DCF based on perpetuity growth rate of 2.0%, discount rate of 8.0% and Disney’s effective tax rate of 36.2%. Terminal year revenue = 5-year average of Spider-

Man Film and Classic merch (CY15-CY19)(2) Retail synergies include Disney selling S-M merch in Disney parks & resorts, in Disney stores, and online sales. page 4

Scenarios

Future In-line w/ History (B/f Audit

Adjustments & Hasbro True-up)

+ Audit Adjustments & Hasbro True-up

+ Disney Int’l and Retail

Synergies (2)

+ Eliminate Int’l Commissions

Discounted Cash Flow Methodology (1) Discounted Cash Flow Methodology (1)

+$92

+$130

+$44

Public Media Comps

Public Comps + 30% Control

Prem.

Multiple Marvel Paid for Disney

Implied Multiple of $35-$45MM Trailing Avg.

7.0x – 9.0x 9.0x – 11.6x 11.9x – 15.3x 12.9x – 16.6x

Work in ProgressNegotiating Approach: Two Alternatives for Valuing “Buy-out Interest” and “Buy Controls”

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Controls are a Premium to Base ValueControls are a Premium to Base Value Value of “Just Controls” to DisneyValue of “Just Controls” to Disney

SPE Value Before Controls

$45MM avg. annual CF @ 40% tax rate, 8% discount rate, 3% growth rate

= $540MM = 12x ($45MM Trailing

CF Multiple)

Control Premium Short of what DIS Paid MVL

Base Value of $540MM +(17% / $90MM Control Premium)

= $630MM = 14x ($45MM Trailing

CF Multiple)

Control Premium Equal to what DIS Paid MVL

Base Value of $540MM +(33% / $180MM Control Premium)

= $720MM = 16x ($45MM Trailing

CF Multiple)

• If SPE’s average annual CF is $45MM, then Disney’s is 3x that or $135MM

DIS Share with Controls in

Place

% Increase without Controls

$ Increase Value at 10x

$135 5% $6.8 $68

$135 10% $13.5 $135

$135 15% $20.3 $203

$135 20% $27.0 $270

In addition, there is value to Disney if owning retail discussions provides benefits to other Disney (non-S-M) merch.

Work in Progress

($50)

$0

$50

$100

$150

$200

$250

$300

EB

ITD

A (

$M

)

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Negotiating Approach: Spider-Man was the majority of what Disney paid 16x for; SPE deserves a portion of this premium valuation

Note: * S-M merchandise numbers based on SPE internal data. (1) MVL Total EBITDA defined as EBITDA less SPE’s share of film merchandise. MVL recognizes SPE share as minority

interest, whereas other studios' shares of license royalty income is recorded within SG&A expense.(2) Assumes S-M publishing is 50% of Total Publishing or $23.2MM.

MVL CY 2007-09 Avg. EBITDA (1,2)MVL CY 2007-09 Avg. EBITDA (1,2)

$260.7$260.7

MVL CY 2007-09 Avg. Licensing EBITDA MixMVL CY 2007-09 Avg. Licensing EBITDA Mix

MVL CY 2007-09 Avg. Total EBITDA Mix (2)MVL CY 2007-09 Avg. Total EBITDA Mix (2)

72% 28%S-M Merch. &

Film Participations

S-M Merch. & Film

Participations

Other Licensing

Other Licensing

65%35%Total S-M

BusinessTotal S-M Business OtherOther

S-M - MVL Share of S-M Merch. EBITDA Post Audit & Hasbro

True-up, $138.2

S-M - MVL Share of S-M Merch. EBITDA Post Audit & Hasbro

True-up, $138.2

S-M Publishing, $23.2S-M Publishing, $23.2

Other, ($26.8)Other, ($26.8)

S-M Film Participations,

$8.0

S-M Film Participations,

$8.0

Total S-M Licensing,

$146.2

Total S-M Licensing,

$146.2

Total S-M,

$169.4

Total S-M,

$169.4

Other Licensing, $55.6

Other Licensing, $55.6

Other Publishing, $23.2

Other Publishing, $23.2

Film Production, $39.2

Film Production, $39.2

Work in Progress

Internal View: Potential Areas of Debate with Marvel

Value of SPE's stake, independent of controls

• Marvel may argue that the value should incorporate

– Risk in the Spider-man reboot

– Last 3 year average of $35MM (ignore $10MM in audit and Hasbro true-up)

– Current year run-rate of $22MM

– Market multiples of 10x or lower implies value of $220MM to $350MM

• SPE will counter

– Adjusted historical earnings of $45MM

– Multiple should reflect growth and Spider-Man's brand power (top boys brand, top film franchise)

• Disney’s retail infrastructure will drive growth beyond Marvel’s, particularly internationally and in new media (video games,

internet, and mobile content)

• S-M has grown with every new film release

• Next Hasbro contract is already signed and greater than last contract

• Commissions will be eliminated

Value of lifting controls

• SPE will argue that we lose exposure for the Film if retail focus shifts to non-film product; and Disney benefits both on its Spider-Man

merchandise and ability to drag-through other Disney merchandise

• Marvel may argue

– If controls are lifted without a sale: SPE does not need to be compensated; SPE still financially participates in the growth that will be

driven by lifting these controls

– If controls are lifted in conjunction with a sale: SPE does not need to be compensated; SPE benefits from the increased exposure

Marvel will drive for Film

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