1 india sports channel opportunity september 25, 2009 sports
TRANSCRIPT
1
India Sports Channel OpportunitySeptember 25, 2009
SPORTS
2
Executive Summary
SPT currently has 3 sports properties (IPL Cricket, NZ Cricket, FA Cup Soccer) that air on MAX and PIX; we could better leverage these on a dedicated sports channel
– Sports is an opportunity to build equity in a new channel and reach an attractive demographic (youth / males and southern viewers)
– Our sports properties on MAX and PIX (film channels) dilute these brands and would be more valuable on a sports channel
BCCI Cricket rights for 4 years are up for bid in November and would be the cornerstone of a sports channel; we would receive an option for an additional 4 years
– BCCI Cricket rights include all international cricket matches that are played in India– Working assumption is that the bidding range would be between $350MM and $420MM for first
four years
Based on preliminary analysis, we recommend bidding for BCCI rights with the intent of launching a Sports channel in August 2010
– If bid is won, 3 existing sports properties would also be moved to new channel– Incremental investment in other “filler” properties, G&A, headcount, and marketing– Key economic assumptions (BCCI price, cash flow timing) are preliminary but imply modest
incremental profits
3
MSM India has begun to turnaround
SET has almost doubled its rating from GRP’s in the mid 70’s to over 130 since the management change in February
SAB during the same period has grown a further 50% in rating and in August had the highest advertising sales in its history
MAX is still the number 1 movie channel and has consistently led amongst the movie channels for the last 6 weeks
IPL Sales for Season 3 are encouraging
– Signed a presenting sponsor for $10.5 MM and is one of the largest contracts executed in India
– 4 associate sponsors on board for an average of $6MM each
– 25% of budget sold and expect 60% of budget to be sold by December
Source: TAM Media Research: All India CS 4+
4
Opportunity for SONY to create a billion dollar asset (detail on page 7) Sports channel will help ensure continued growth in distribution revenues
– Easier to monetize distribution on a sports channel than on MAX– The Sports channel will reinforce bouquet strength and increase diversity making
“One Alliance” a must have / reduce reliance on Colors The sports channel will create a large revenue opportunity for MAX
– Shifting of IPL to the sports channel will create opportunity for additional ad revenue on MAX
– Eliminate confusion of MAX positioning which will only grow as IPL teams expand The sports channel timing is right
– Major rights (BCCI) are coming up for bid– IPL is likely to increase the number of teams to 10 (from 8) from Season 4 which
will add 34 additional matches The sports channel can mitigate downside risk to IPL
– Rating declines, if any, can be offset with bonus spots across all properties– The sports channel will help in IPL brand building – Will help de-risk the entire network
The sports channel allows for better monetization of NZ cricket, FA Cup and IPL
Strategic Rationale
5
Overview of BCCI Rights
Board of Control for Cricket in India (“BCCI”) is the governing body of Indian cricket
BCCI tentatively plans on issuing an Invitation to Tender (“ITT”) in October 2009 with the winner being announced in early November 2009
MSM has the opportunity to bid for media rights for India covering all international country matches and domestic cricket matches played in India (ODI’s, test matches and Twenty/20)
– Media rights include Television (Cable, Satellite & Terrestrial)
– The four year BCCI package includes 55 ODIs, 22 tests, 10 T20s’s resulting in approximately 50 days of International cricket each year. In addition there are approximately 110 days of domestic cricket each year
The BCCI rights are for 4 years however MSM will obtain an option for an additional 4 years with a 10% license fee increase
The BCCI international cricket season extends from September to March and the domestic cricket goes from September to June
Bank draft of $15M - $30M tender security deposit will be required in FY 10
6
Sports Channel Economics
MSM expects the bidding range to be between $350 MM and $ 420 MM Additional rights for the second four years would be 10% higher; no option fee assumed Ad revenue assumptions have been benchmarked against IPL / current rates commanded by Neo Sports
– Ad rates - ODI: Rs. 275k per 10 seconds vs. IPL Season 2: Rs. 370k per 10 seconds (ODIs for Pakistan are at Rs. 375k per 10 seconds)
– Sell out - ODI: 96% vs. IPL Season 2: 82% The Sports channel would go into B3 and be sold through TheOneAlliance Cash assumptions are 25% of BCCI license fee paid one month in advance and 75% 3 months after the
tournament ends
Note: For purpose of NPV and IRR of incremental investment in BCCI and channel infrastructure, 4 year calculation applies 13X multiple to FY14 EBITDA; 8 year calculation applies 13x to FY18 EBITDA.
Low Case (Values in $MM)
Monthly Annual
Before Terminal w/ Terminal Value Before Terminal w/ Terminal Value
Bid Level EBIT DWM NPV IRR NPV IRR EBIT DWM NPV IRR NPV IRR
4 years
$ 350 MM 35 (31) 2 14% 123 82% 35 (15) 8 64% 134 142%
$ 375 MM 10 (45) (17) n/ a 34 38% 10 (15) (10) n/ a 42 88%
$ 400 MM (15) (64) (36) n/ a n/ a n/ a (15) (15) (29) n/ a n/ a n/ a
$ 420 MM (36) (80) (52) n/ a n/ a n/ a (36) (22) (44) n/ a n/ a n/ a
8 years
$ 350 MM 306 (31) 142 59% 571 79% 306 (15) 151 105% 594 119%
$ 375 MM 254 (45) 108 45% 491 68% 254 (15) 119 83% 514 102%
$ 400 MM 201 (64) 75 33% 411 58% 201 (15) 87 61% 434 87%
$ 420 MM 159 (80) 48 24% 347 50% 159 (22) 61 44% 370 75%
7
Creation of Equity Value
Launching a dedicated Sports Channel represents the opportunity to establish a channel that could exceed $1 Billion in long-term value
Public Indian Comparables Value Implications
(1) Sun TV Limited and Zee Entertainment based on 2009 EBITDA projections; Ten Sports based on 3 year forward average EBITDA as of the time that Zee Entertainment acquired 50% of company (11/13/2006).
(2) FY17 demonstrates high profitability in a year with BCCI and IPL both highly profitable.
(3) Risk of decreased EBITDA if properties are renewed at higher cost, not renewed, or replaced with lower value properties.
Values in $MM EnterpriseValue EBITDA (1) EV/EBITDA
Sun TV Limited $2,382 $163 14.6X
Ten Sports $114 $14 8.1X
Zee Entertainment Ent. $1,915 $122 15.7X
Average 12.8X
Bid Level FY17 EBITDA (2) Multiple Value
$350 $121 13.0X $1,574
$375 $112 13.0X $1,460
$400 $104 13.0X $1,347
$420 $97 13.0X $1,256
Average $1,409
Potential Risk on Renewal (3) ($30-$50) 13.0X ($390-$650)
Risk Adjusted $759-$1,019
8
Risks and Mitigators
Risk Mitigation
Cost of acquisition of key sports properties (BCCI)
Limit bid amount
ODI format for cricket may see a decline in viewership
Conversion of One Day into T-20 – value remains unchanged
Distribution revenues may be impacted with adverse regulatory environment
Current government favors less regulation
Current lack of experience in managing a sports channel
Talent identified to manage this shortfall
Perpetual need to acquire increasingly expensive sports rights to program the channel
Cricket is the main stay of the channel and both key properties are secure for 8 years
9
Schedule
NZNZ
Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Time Band
Midnight
Prime
Evening
Afternoon
Mid-morning
Morning
Early Morning
Night
IPL
BCCI
BCCI Domestic
EPL / FA cup
NBA
PGA or Equivalent
NZ
FA Cup FA Cup
BCCI BCCI
BCCI Domestic
IPL
NBA NBA
PGA / Equivalent
NZ
10
Two new IPL franchises
BCCI have informally signaled their intent to add 2 new teams to the IPL competition from season 4 onwards
– This results in 34 extra matches within the competition up from the current 59/60
MSM have the option within their contract to pick up the broadcast rights to these extra matches at a pre determined fixed price
The total License cost to MSM of picking up the option would be $400m from season 4 through season 9 (includes an assumed fee for the 3 rd/4th place play off)
– $29m of non License fee costs would also need to be incurred as a result of the extra matches– MSM will try to negotiate this predetermined License fee cost down at the appropriate time
Due to the increase in adsales inventory and the mix of matches skewing unfavorably to daytime from prime, it is anticipated that MSM will not be able to recover all of the extra License fees through increased revenues. $357m in extra revenue is forecasted across the period
– This creates an EBIT shortfall of $72m
However, unconnected to the two new teams, non License fee cost savings have been identified of $89m that more than cover the EBIT shortfall
Factoring a decrease in business as usual adsales on MAX, of $14m, as a result of airing more IPL matches, the total EBIT impact of the changes is $3m
11
Two new IPL franchises
It is both strategically and financially important for MSM to control all of the IPL broadcast rights in India
– Marketplace and viewer confusion if the IPL was split across broadcasters could reduce the value of the property for all participants
– It is anticipated that MSM revenues would drop $178m across season 4 to season 9, compared to current forecast levels, if MSM do not have the rights to the new teams
• Revenues would drop on a per match basis from current levels no matter who was selling the inventory
MSM is $102m better off in EBIT terms exercising the option than letting a competitor secure the rights to the extra matches
If MSM take two teams
If MSM don't take 2 teams
Revenue impact of 2 teams 357 (178)
Cost impact from 2 teams (429) (10)
Impact on MAX (14) 0
Impact of new deal (86) (188)
Cost savings 89 89
Incremental EBIT compared to current ultimate
3 (99)
Note: also includes impact of 3rd/4th place playoff
Season 1 through Season 9 Totals ($'ms)
Summary of Impact of Two New Teams versus Current Forecast
12
Estimated Timelines
BCCI / Sports Channel
Oct 17
IPL: 2 Additional Teams
Investment Committee Application Due
Oct 23 Investment Committee Meeting (Tokyo)
Oct 14 SPE Business Meetings (NY)
Oct 28 GEC Meeting (Tokyo)
Oct 3rd wk BCCI issues Invitation to Tender
Now Analysis / Informal discussions
May 2010 Investment Committee Meeting (Tokyo)
May 2010 GEC Meeting (Tokyo)
Jul 2010 Sony Corporation Board Meeting (Tokyo)
Jul 1 2010 BCCI issues formal notice to MSM
Sep 15 2010 MSM responds to BCCI re: 2 add’l teams
Note: Items in italics are best estimates
Oct 7 GEC Meeting (preview for Oct 28 GEC MTG)
Early Nov MSM submits BCCI bid
Mid Nov BCCI announces bid winner
13
Appendix
14
Scenario 1: Incremental Channel Economics BCCI License Fees at $350MM
(1) For purpose of NPV and IRR of incremental investment in BCCI and channel infrastructure, 4 year calculation applies 13X multiple to FY14 EBITDA; 8 year calculation applies 13x to FY18 EBITDA.
INCREMENTAL SPORTS CHANNEL ECONOMICS
Low $350 FY10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Increased inventory on Max - - 5 7 8 9 10 11 12 13 75
RODP Billing (bonus spots on chnl) - 1 1 1 1 1 1 2 2 - 10
Net BCCI Advertising - 59 68 82 100 78 93 156 124 - 760
Net BCCI Distribution - 14 30 35 42 48 56 66 77 - 369
Total Revenue - 73 103 125 151 137 161 234 215 13 1,213
License Fees - (60) (81) (96) (117) (71) (83) (123) (112) - (743)
Expenses - (10) (15) (18) (20) (20) (22) (25) (29) - (160)
EBITDA - 3 7 11 14 45 55 85 73 13 306
-
Inflows - 37 95 116 139 145 150 198 224 101 1,206
License Fees (15) (3) (73) (84) (99) (99) (80) (92) (109) (87) (743)
Outflows - (12) (19) (23) (26) (26) (18) (23) (26) (9) (183)
Cash Flow (15) 21 3 10 14 20 51 82 88 5 280
Cume NCF (15) 6 9 19 33 52 104 186 275 280
1st 4 years Monthly Annual Full 8 years Monthly Annual
Total EBIT 34.8 34.8 Total EBIT 306.5 306.5
DWM (30.7) (15.0) DWM (30.7) (15.0)
NPV before Terminal Value $2.0 $8.5 NPV $141.5 $150.6
IRR before Terminal Value 14% 64% IRR 59% 105%NPV with Terminal Value (1)
$122.8 $134.3 NPV with Terminal Value (1)$571.0 $594.0
IRR with Terminal Value (1)81.6% 142.3% IRR with Terminal Value (1)
79.1% 118.7%
15
Scenario 2: Incremental Channel EconomicsBCCI License Fees at $375MM
(1) For purpose of NPV and IRR of incremental investment in BCCI and channel infrastructure, 4 year calculation applies 13X multiple to FY14 EBITDA; 8 year calculation applies 13x to FY18 EBITDA.
INCREMENTAL SPORTS CHANNEL ECONOMICS
Low $375 FY10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Increased inventory on Max - - 5 7 8 9 10 11 12 13 75
RODP Billing (bonus spots on chnl) - 1 1 1 1 1 1 2 2 - 10
Net BCCI Advertising - 59 68 82 100 78 93 156 124 - 760
Net BCCI Distribution - 14 30 35 42 48 56 66 77 - 369
Total Revenue - 73 103 125 151 137 161 234 215 13 1,213
License Fees - (64) (86) (103) (125) (76) (89) (132) (120) - (795)
Expenses - (10) (15) (18) (20) (20) (22) (25) (29) - (160)
EBITDA - (1) 1 4 6 40 49 76 65 13 254
-
Inflows - 37 95 116 139 145 150 198 224 101 1,206
License Fees (15) (4) (78) (90) (106) (106) (86) (99) (117) (93) (795)
Outflows - (12) (19) (23) (26) (26) (18) (23) (26) (9) (183)
Cash Flow (15) 20 (2) 4 7 13 46 76 81 (1) 227
Cume NCF (15) 5 3 6 13 26 72 148 228 227
1st 4 years Monthly Annual Full 8 years Monthly Annual
Total EBIT 9.7 9.7 Total EBIT 253.8 253.8
DWM (44.9) (15.0) DWM (44.9) (15.0)
NPV before Terminal Value ($17.2) ($10.1) NPV $108.2 $118.6
IRR before Terminal Value n/ a n/ a IRR 45% 83%NPV with Terminal Value (1)
$33.5 $42.0 NPV with Terminal Value (1)$491.0 $513.8
IRR with Terminal Value (1)38.0% 87.5% IRR with Terminal Value (1)
68.0% 102.3%
16
Scenario 3: Incremental Channel Economics BCCI License Fees at $400MM
(1) For purpose of NPV and IRR of incremental investment in BCCI and channel infrastructure, 4 year calculation applies 13X multiple to FY14 EBITDA; 8 year calculation applies 13x to FY18 EBITDA.
INCREMENTAL SPORTS CHANNEL ECONOMICS
Low $400 FY10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Increased inventory on Max - - 5 7 8 9 10 11 12 13 75
RODP Billing (bonus spots on chnl) - 1 1 1 1 1 1 2 2 - 10
Net BCCI Advertising - 59 68 82 100 78 93 156 124 - 760
Net BCCI Distribution - 14 30 35 42 48 56 66 77 - 369
Total Revenue - 73 103 125 151 137 161 234 215 13 1,213
License Fees - (69) (92) (110) (133) (81) (95) (141) (128) - (848)
Expenses - (10) (15) (18) (20) (20) (22) (25) (29) - (161)
EBITDA - (5) (5) (3) (2) 35 43 67 57 13 201
-
Inflows - 37 95 116 139 145 150 198 224 101 1,206
License Fees (15) (6) (84) (96) (114) (113) (92) (106) (125) (99) (848)
Outflows - (12) (19) (23) (26) (26) (18) (23) (26) (9) (184)
Cash Flow (15) 19 (8) (2) (0) 6 40 69 73 (7) 175
Cume NCF (15) 4 (4) (6) (6) (1) 39 109 182 175
1st 4 years Monthly Annual Full 8 years Monthly Annual
Total EBIT (15.4) (15.4) Total EBIT 201.1 201.1
DWM (64.3) (15.0) DWM (64.3) (15.0)
NPV before Terminal Value ($36.4) ($28.7) NPV $75.0 $86.7
IRR before Terminal Value n/ a n/ a IRR 33% 61%NPV with Terminal Value (1)
($55.7) ($50.2) NPV with Terminal Value (1)$411.1 $433.7
IRR with Terminal Value (1)n/ a n/ a IRR with Terminal Value (1)
58.0% 86.8%
17
Scenario 4: Incremental Channel Economics BCCI License Fees at $420MM
(1) For purpose of NPV and IRR of incremental investment in BCCI and channel infrastructure, 4 year calculation applies 13X multiple to FY14 EBITDA; 8 year calculation applies 13x to FY18 EBITDA.
INCREMENTAL SPORTS CHANNEL ECONOMICS
Low $420 FY10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Increased inventory on Max - - 5 7 8 9 10 11 12 13 75
RODP Billing (bonus spots on chnl) - 1 1 1 1 1 1 2 2 - 10
Net BCCI Advertising - 59 68 82 100 78 93 156 124 - 760
Net BCCI Distribution - 14 30 35 42 48 56 66 77 - 369
Total Revenue - 73 103 125 151 137 161 234 215 13 1,213
License Fees - (72) (97) (115) (140) (84) (100) (148) (134) - (890)
Expenses - (10) (15) (18) (20) (20) (22) (25) (29) - (161)
EBITDA - (9) (9) (9) (9) 31 39 60 51 13 159
-
Inflows - 37 95 116 139 145 150 198 224 101 1,206
License Fees (15) (7) (88) (101) (119) (119) (96) (111) (131) (104) (890)
Outflows - (12) (19) (23) (26) (26) (18) (23) (26) (9) (184)
Cash Flow (15) 18 (12) (7) (6) (0) 36 64 67 (12) 133
Cume NCF (15) 3 (9) (16) (22) (22) 14 78 144 133
1st 4 years Monthly Annual Full 8 years Monthly Annual
Total EBIT (35.5) (35.5) Total EBIT 158.9 158.9
DWM (79.9) (21.8) DWM (79.9) (21.8)
NPV before Terminal Value ($51.7) ($43.6) NPV $48.3 $61.1
IRR before Terminal Value n/ a n/ a IRR 24% 44%NPV with Terminal Value (1)
($127.1) ($124.0) NPV with Terminal Value (1)$347.1 $369.5
IRR with Terminal Value (1)n/ a n/ a IRR with Terminal Value (1)
50.5% 75.0%
18
Scenario 1: BCCI P&L BCCI License Fees at $350MM
Low Case Best Case
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 TOTAL
8 year P&L 350
Revenue $ mn
Gross Advertising Income 69 80 96 118 92 110 184 146 894
Net Advertising Income 59 68 82 100 78 93 156 124 760
Net Distribution Income 14 30 35 42 48 56 66 77 369
Syndication Income - - - - - - - - -
Bad Debts (0) (0) (0) (0) (0) (0) (1) (1) (4)
Total Income 73 97 116 141 126 149 221 201 1,125
Expenses
Licensee fee 59 80 95 116 70 82 122 111 735
Programming 1 2 3 4 3 2 4 5 23
Boardcast Cost 2 2 2 3 2 2 3 3 19
Sales & Marketing 1 1 1 1 1 1 1 2 9
Dealer Incentive 0 0 0 0 0 1 1 1 3
Cricket Insurance 0 1 1 1 1 1 1 1 7
Bank Gaurantee Charges 0 0 0 0 0 0 0 0 3
G&A 0 0 0 0 0 1 1 1 4
Total Cost 64 86 104 125 78 91 133 123 803
EBIT 8 12 13 16 48 59 88 77 322
19
Scenario 2: BCCI P&L BCCI License Fees at $375MM
Low Case Best Case
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 TOTAL
8 year P&L 375
Revenue $ mn
Gross Advertising Income 69 80 96 118 92 110 184 146 894
Net Advertising Income 59 68 82 100 78 93 156 124 760
Net Distribution Income 14 30 35 42 48 56 66 77 369
Syndication Income - - - - - - - - -
Bad Debts (0) (0) (0) (0) (0) (0) (1) (1) (4)
Total Income 73 97 116 141 126 149 221 201 1,125
Expenses
Licensee fee 64 85 102 124 75 88 131 119 788
Programming 1 2 3 4 3 2 4 5 23
Boardcast Cost 2 2 2 3 2 2 3 3 19
Sales & Marketing 1 1 1 1 1 1 1 2 9
Dealer Incentive 0 0 0 0 0 1 1 1 3
Cricket Insurance 0 1 1 1 1 1 1 1 7
Bank Gaurantee Charges 0 0 0 0 0 0 0 1 3
G&A 0 0 0 0 0 1 1 1 4
Total Cost 68 91 111 133 83 96 141 131 856
EBIT 4 6 6 8 43 53 80 69 269
20
Scenario 3: BCCI P&L BCCI License Fees at $400MM
Low Case Best Case
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 TOTAL
8 year P&L 400
Revenue $ mn
Gross Advertising Income 69 80 96 118 92 110 184 146 894
Net Advertising Income 59 68 82 100 78 93 156 124 760
Net Distribution Income 14 30 35 42 48 56 66 77 369
Syndication Income - - - - - - - - -
Bad Debts (0) (0) (0) (0) (0) (0) (1) (1) (4)
Total Income 73 97 116 141 126 149 221 201 1,125
Expenses
Licensee fee 68 91 109 132 80 94 140 127 840
Programming 1 2 3 4 3 2 4 5 23
Boardcast Cost 2 2 2 3 2 2 3 3 19
Sales & Marketing 1 1 1 1 1 1 1 2 9
Dealer Incentive 0 0 0 0 0 1 1 1 3
Cricket Insurance 0 1 1 1 1 1 1 1 7
Bank Gaurantee Charges 0 0 0 0 0 0 0 1 3
G&A 0 0 0 0 0 1 1 1 4
Total Cost 73 97 117 142 88 102 150 139 908
EBIT (0) 0 (1) (0) 38 47 71 61 216
21
Scenario 4: BCCI P&L BCCI License Fees at $420MM
Low Case Best Case
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 TOTAL
8 year P&L 420
Revenue $ mn
Gross Advertising Income 69 80 96 118 92 110 184 146 894
Net Advertising Income 59 68 82 100 78 93 156 124 760
Net Distribution Income 14 30 35 42 48 56 66 77 369
Syndication Income - - - - - - - - -
Bad Debts (0) (0) (0) (0) (0) (0) (1) (1) (4)
Total Income 73 97 116 141 126 149 221 201 1,125
Expenses
Licensee fee 71 96 114 139 83 99 147 133 882
Programming 1 2 3 4 3 2 4 5 23
Boardcast Cost 2 2 2 3 2 2 3 3 19
Sales & Marketing 1 1 1 1 1 1 1 2 9
Dealer Incentive 0 0 0 0 0 1 1 1 3
Cricket Insurance 0 1 1 1 1 1 1 1 7
Bank Gaurantee Charges 0 0 0 1 0 0 1 1 4
G&A 0 0 0 0 0 1 1 1 4
Total Cost 76 102 123 148 92 107 157 146 951
EBIT (3) (4) (6) (7) 34 42 64 55 174
22
Scenario 1: Channel P&L BCCI License Fees at $350MM
Consolidated P&L - Sony Sports starting J uly 2010 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Revenue $ mn
Advertising Income Gross 147 288 343 403 414 473 417 147 0 2,632
Locked Content 66 178 211 244 274 309 199 0 1,481
BCCI 59 68 82 100 78 93 156 124 0 760
RODP Billing 1 1 1 1 1 1 2 2 10
Bad Debts / others (1) (1) (2) (2) (2) (2) (2) (1) (13)
Advertising Income Total 125 245 292 343 351 402 355 125 0 2,237
Distribution Income
Locked Content 5 14 7 8 9 10 12 0 65
BCCI 14 30 35 42 48 56 66 77 369
Total Distribution RevenueNBA 20 43 42 50 58 67 78 77 434
Syndication
Locked Content 3 4 5 5 6 6 3 0 32
BCCI 0 0 0 0 0 0 0 0 0
Total Syndication Revenue 3 4 5 5 6 6 3 0 32
Impact of Content Shift 5 7 8 9 10 11 12 13 75
Total Income 151 300 347 407 425 486 448 216 - 2,778
Expense
License Fees
Locked Content 59 151 168 194 219 246 162 - 1,198
BCCI 59 80 95 116 70 82 122 111 735
Other Content 1 1 1 1 1 1 1 1 8
License Fees 119 231 264 311 289 330 285 112 1,941
Expenses
Programming
Property 4 9 11 12 12 12 10 5 75
Corporate 3 5 5 6 7 8 9 10 53
Broadcast & Uplink Cost 4 5 5 6 6 6 5 4 41
Marketing - - - - - - - - -
Property 2 4 3 4 4 4 3 2 25
Distribution + Corporate 1 2 1 1 1 1 1 1 7
Salaries & Incentives 1 2 2 2 2 3 3 4 18
Dealer Incentives 0 1 1 1 1 1 1 1 6
Cricket Insurance 1 2 3 3 3 4 3 1 21
Bank Guarantee Charges 2 3 4 4 4 5 3 0 26
G&A 1 1 1 1 2 2 1 1 11
Total Fixed Expenses 17 33 36 40 42 45 40 29 283
Total Expense 136 264 300 351 331 375 325 141 2,224
EBITDA 15 36 46 56 93 111 122 74 555
10% 12% 13% 14% 22% 23% 27% 35% 20%
23
Scenario 2: Channel P&L BCCI License Fees at $375MM
Consolidated P&L - Sony Sports starting J uly 2010 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Revenue $ mn
Advertising Income Gross 147 288 343 403 414 473 417 147 0 2,632
Locked Content 66 178 211 244 274 309 199 0 1,481
BCCI 59 68 82 100 78 93 156 124 0 760
RODP Billing 1 1 1 1 1 1 2 2 10
Bad Debts / others (1) (1) (2) (2) (2) (2) (2) (1) (13)
Advertising Income Total 125 245 292 343 351 402 355 125 0 2,237
Distribution Income
Locked Content 5 14 7 8 9 10 12 0 65
BCCI 14 30 35 42 48 56 66 77 369
Total Distribution RevenueNBA 20 43 42 50 58 67 78 77 434
Syndication
Locked Content 3 4 5 5 6 6 3 0 32
BCCI 0 0 0 0 0 0 0 0 0
Total Syndication Revenue 3 4 5 5 6 6 3 0 32
Impact of Content Shift 5 7 8 9 10 11 12 13 75
Total Income 151 300 347 407 425 486 448 216 - 2,778
Expense
License Fees
Locked Content 59 151 168 194 219 246 162 - 1,198
BCCI 64 85 102 124 75 88 131 119 788
Other Content 1 1 1 1 1 1 1 1 8
License Fees 123 237 271 319 294 336 294 120 1,993
Expenses
Programming
Property 4 9 11 12 12 12 10 5 75
Corporate 3 5 5 6 7 8 9 10 53
Broadcast & Uplink Cost 4 5 5 6 6 6 5 4 41
Marketing - - - - - - - - -
Property 2 4 3 4 4 4 3 2 25
Distribution + Corporate 1 2 1 1 1 1 1 1 7
Salaries & Incentives 1 2 2 2 2 3 3 4 18
Dealer Incentives 0 1 1 1 1 1 1 1 6
Cricket Insurance 1 2 3 3 3 4 3 1 21
Bank Guarantee Charges 2 3 4 4 4 5 3 1 26
G&A 1 1 1 1 2 2 1 1 11
Total Fixed Expenses 17 33 36 40 42 45 40 29 283
Total Expense 140 270 307 359 336 381 334 149 2,276
EBITDA 11 30 39 48 88 105 114 66 502
7% 10% 11% 12% 21% 22% 25% 31% 18%
24
Scenario 3: Channel P&L BCCI License Fees at $400MM
Consolidated P&L - Sony Sports starting J uly 2010 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Revenue $ mn
Advertising Income Gross 147 288 343 403 414 473 417 147 0 2,632
Locked Content 66 178 211 244 274 309 199 0 1,481
BCCI 59 68 82 100 78 93 156 124 0 760
RODP Billing 1 1 1 1 1 1 2 2 10
Bad Debts / others (1) (1) (2) (2) (2) (2) (2) (1) (13)
Advertising Income Total 125 245 292 343 351 402 355 125 0 2,237
Distribution Income
Locked Content 5 14 7 8 9 10 12 0 65
BCCI 14 30 35 42 48 56 66 77 369
Total Distribution RevenueNBA 20 43 42 50 58 67 78 77 434
Syndication
Locked Content 3 4 5 5 6 6 3 0 32
BCCI 0 0 0 0 0 0 0 0 0
Total Syndication Revenue 3 4 5 5 6 6 3 0 32
Impact of Content Shift 5 7 8 9 10 11 12 13 75
Total Income 151 300 347 407 425 486 448 216 - 2,778
Expense
License Fees
Locked Content 59 151 168 194 219 246 162 - 1,198
BCCI 68 91 109 132 80 94 140 127 840
Other Content 1 1 1 1 1 1 1 1 8
License Fees 127 243 278 327 299 342 302 128 2,046
Expenses
Programming
Property 4 9 11 12 12 12 10 5 75
Corporate 3 5 5 6 7 8 9 10 53
Broadcast & Uplink Cost 4 5 5 6 6 6 5 4 41
Marketing - - - - - - - - -
Property 2 4 3 4 4 4 3 2 25
Distribution + Corporate 1 2 1 1 1 1 1 1 7
Salaries & Incentives 1 2 2 2 2 3 3 4 18
Dealer Incentives 0 1 1 1 1 1 1 1 6
Cricket Insurance 1 2 3 3 3 4 3 1 21
Bank Guarantee Charges 2 3 4 4 5 5 3 1 26
G&A 1 1 1 1 2 2 1 1 11
Total Fixed Expenses 17 33 36 40 42 45 40 29 283
Total Expense 145 276 314 367 341 386 343 157 2,329
EBITDA 7 24 32 39 83 99 105 59 449
5% 8% 9% 10% 20% 20% 23% 27% 16%
25
Scenario 4: Channel P&L BCCI License Fees at $420MM
Consolidated P&L - Sony Sports starting J uly 2010 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Total
Revenue $ mn
Advertising Income Gross 147 288 343 403 414 473 417 147 0 2,632
Locked Content 66 178 211 244 274 309 199 0 1,481
BCCI 59 68 82 100 78 93 156 124 0 760
RODP Billing 1 1 1 1 1 1 2 2 10
Bad Debts / others (1) (1) (2) (2) (2) (2) (2) (1) (13)
Advertising Income Total 125 245 292 343 351 402 355 125 0 2,237
Distribution Income
Locked Content 5 14 7 8 9 10 12 0 65
BCCI 14 30 35 42 48 56 66 77 369
Total Distribution RevenueNBA 20 43 42 50 58 67 78 77 434
Syndication
Locked Content 3 4 5 5 6 6 3 0 32
BCCI 0 0 0 0 0 0 0 0 0
Total Syndication Revenue 3 4 5 5 6 6 3 0 32
Impact of Content Shift 5 7 8 9 10 11 12 13 75
Total Income 151 300 347 407 425 486 448 216 - 2,778
Expense
License Fees
Locked Content 59 151 168 194 219 246 162 - 1,198
BCCI 71 96 114 139 83 99 147 133 882
Other Content 1 1 1 1 1 1 1 1 8
License Fees 131 247 283 334 303 346 309 134 2,088
Expenses
Programming
Property 4 9 11 12 12 12 10 5 75
Corporate 3 5 5 6 7 8 9 10 53
Broadcast & Uplink Cost 4 5 5 6 6 6 5 4 41
Marketing - - - - - - - - -
Property 2 4 3 4 4 4 3 2 25
Distribution + Corporate 1 2 1 1 1 1 1 1 7
Salaries & Incentives 1 2 2 2 2 3 3 4 18
Dealer Incentives 0 1 1 1 1 1 1 1 6
Cricket Insurance 1 2 3 3 3 4 3 1 21
Bank Guarantee Charges 2 3 4 4 5 5 3 1 26
G&A 1 1 1 1 2 2 1 1 11
Total Fixed Expenses 17 33 36 40 42 45 40 29 283
Total Expense 148 280 320 374 345 391 350 163 2,371
EBITDA 4 20 27 33 79 94 98 52 407
2% 7% 8% 8% 19% 19% 22% 24% 15%