budget presentation fiscal year 2008 february 2007 [draft]

Budget Presentation Fiscal Year 2008

February 2007

[DRAFT]

22[DRAFT]

SPT Financial Summary (SPT, GSN and FEARnet)SPT Financial Summary (SPT, GSN and FEARnet)

EBIT Revenue

$254

$188 $188

$230

$231$249

$183 $179

$7

$8

$15 $15

($6)($3) ($10)($8)

($50)

$0

$50

$100

$150

$200

$250

$300

FY07Budget

FY07Forecast

FY08 MRP

FY08Budget

($ in MM)

SPT GSN FEARnet

$1,136$1,194

$1,087

$1,298

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

FY07Budget

FY07Forecast

FY08 MRP

FY08Budget

($ in MM)

33[DRAFT]

SPT Total RevenueSPT Total Revenue

$1,368

$1,511

$1,360

$1,473

$514 $557 $561 $572

$486$474 $437 $424

$455 $449

$317 $311

$18

$34 $34

$31

$19$19

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

FY07 Budget FY07 Forecast FY08 MRP FY08 Budget

($ in MM)

TV Initial Market MPG TV Distribution Acquisitions Grouper

44[DRAFT]

SPT Net G&A Expenses and HeadcountSPT Net G&A Expenses and Headcount

Headcount 226 238 220218

NOTE: Excludes 10-12 SPTAS headcount and 3-4 billing/collection/reporting headcount that will be requested if DISH Network ad representation deal closes.

$46.9$45.0

$50.2 $49.1

$0

$10

$20

$30

$40

$50

$60


($ in MM)

55[DRAFT]

HeadcountHeadcount

FY07 Budgeted Headcount 218

ADD: Conversion of 6 MGM Headcount 6

ADD: Internet Ad Sales AE and Planner (Grouper) 2

FY07 Forecasted Headcount 226

Transfer Out: TV Physical Distribution to WPF (8)

ADD: Internet Ad Sales AE and Planner (Grouper) 2

FY08 Budgeted Headcount 220

NOTE: FY08 MRP included 10 DPG/thebacklot.tv headcount which are NOT being requested.

66[DRAFT]

SPT Strategy Update

1. Core Assets

2. Programming

3. Ad Sales

4. Distribution and Library Sales

5. Game Show Network, FEARnet and ITN

6. Financials

77[DRAFT]

““Seinfeld” Seinfeld”

EBITStrategy Update

Develop 4th cycle sales strategy

– Current station license runs through 3/11

– Current TBS license runs through 9/11

Release Season 8 in 6/07 and Season 9 in 11/07

Release 2 DVD Series compilations in 11/07

– Standard version has every season

– Collector’s version includes special packaging

430K Season 7 units sold w/limited marketing vs. 530K units forecasted and 1M units budgeted

Capitalize on online marketing outlets for future DVD releases (i.e. MySpace and Grouper)

Review potential for 08/09 Blu-ray release

Budget Assumptions

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

– 07/08 Season M-F estimated rating of 4.8 vs. 06/07 rating of 5.2

3rd cycle cleared in 98.6% HH, guaranteed double run in 98.6%

Domestic DVD revenue through FY07:

– $260MM since inception

$38MM in FY07 from Seasons 1-7

Projected revenues: FY08: $46MM

$35

$29$30

$37

$28

$23 $24$21

$9

$7

$11

$8

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM)

Ad Sales DVD Sales

88[DRAFT]

““The Young & The Restless/Days of Our Lives” The Young & The Restless/Days of Our Lives”

EBITStrategy Update

THE YOUNG & THE RESTLESS: CBS deal through August 2007; close to finalizing extension through August 2009

DAYS OF OUR LIVES: NBC deal through March 2009

The two highest rated shows on SOAPnet

Due to daytime soaps facing long-term economic challenges, SPT is working with networks to manage costs and increase viewership

THE YOUNG & THE RESTLESS

Revamped writing staff

Launched on SOAPnet

Highest rated daytime drama in HHs for 18 yrs in a row

#1 in key demos: 18-49, 25-54 and HHs

Only drama with a 2.0+ rating in 18-49

New character introduced on Y&R, character’s background available on CBS.com and Verizon

DAYS OF OUR LIVES

Providing promotional materials on NBC.com

06/07 cost reduction plan is ongoing

Budget Assumptions

THE YOUNG & THE RESTLESS

$100M annual license fee extension through 08/09 assumed

SOAPnet assumed at $21.5K per episode (currently $18.5M)

ATL production cost growth of 3.5% [confirming]

DAYS OF OUR LIVES

Contractual 07/08 license fee of $60M

SOAPnet contract at $22K per episode

07/08 production costs assumes a decrease of 15%

$43$41

$48

$45

$30 $29 $28$25

$15 $19

$15$16

$0

$10

$20

$30

$40

$50

$60

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM)

The Young & the Restless Days of Our Lives

99[DRAFT]

““Wheel of Fortune/Jeopardy!” Wheel of Fortune/Jeopardy!”

EBITStrategy Update

Renewed and cleared in 65%+ of the country through 2010-2011 and 2011-2012 broadcast seasons

Implemented online testing for Jeopardy! contestants

100,000 applicants resulting in higher caliber contestants. Has created an online Jeopardy! community

Evaluate future use of Grouper

Utilizing new technology has allowed Jeopardy! to remain contemporary

Releasing 1st ever Interactive Jeopardy! DVD in association with Sony Consumer Products (Christmas ’07 Release)

3.5M members in the Wheel Watchers Club

Mobile Opportunities:

New versions of the mobile Jeopardy! game utilizing Rock & Roll and Sports questions and brands

Create a branded application that supports video playback

Send final Jeopardy! and WOF video clips to mobile users

Working with Google to create a co-branded website with a puzzle board representing a Jeopardy! “Question of the Day”

Budget Assumptions

Assumes slight ratings decline offset by increased CPM

IGT advances unrecouped

Wheel of Fortune 07/08 production costs assumes 0% growth

Jeopardy! 07/08 production costs assumes a decrease of 5% due to one-time HD stage costs and remotes in 06/07

$87 $89

$96 $96

$58 $60$55 $57

$38 $36

$32 $32

$0

$20

$40

$60

$80

$100

$120

FY07Budget

FY07Forecast

FY08 MRP

FY08Budget

($ in MM)

Wheel of Fortune Jeopardy!

1010[DRAFT]

SPT Strategy Update

1. Core Assets

2. Programming

3. Ad Sales



6. Financials

1111[DRAFT]

Strategy Update

Programming Update Programming Update

Co-develop game shows with King World Launch new 1st run syndication programs with Tribune and

other station groups in order to guarantee access to key time periods

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

Create digital short-form internet content – viral video Utilize content already created (e.g., Gay Robot, library

products) for online use

Leverage the strength of our overall deals Sign one “big” writer to an overall term deal Expand programming into the reality genre Partner with networks to secure the future of our shows

through marketing partnerships and digital initiatives

Create a signature comedy for cable Work with emerging networks to develop their own original

content Capitalize on the success of cable dramas to produce more

scripted series

All pickups to-date are from existing overall deals Signed Mitch Hurwitz to an overall deal Michael Davies development: Power of 10, The Dating Game

and Chain Reaction (picked up for 2nd season by GSN) Partnered w/CBS & TiVO to stream the first 8 min. of Rules of

Engagement for TiVO subscribers

Debuted 2 new signature cable comedies – My Boys and 10 Items or Less

Sold Breaking Bad to AMC Untitled Glenn Close drama well-positioned for F/X

Not launching in FY07. Exploring network/cable opportunites Strategy shifted to capitalize on SPT’s expertise in the Court

Show genre The selling of a Court Show wheel (Young, Hatchett, Lopez)

has been well received by ad agencies

Creation of a single digital programming group Gay Robot: Released full episode on BitTorrent and MySpace

to create successful viral buzz Jessie’s Diary: Based on the multi-platform success in

Portugal, Sofia’s Diary Minisodes: 3-5 min episodes of SPT’s library content. At least

600 episodes planned for FY08

NetworkNetwork

CableCable

SyndicationSyndication

DigitalDigital

Culver Ent.Culver Ent.

Develop a slate of programs geared toward a 50+ audience

Pursue Culver Ent. licensing deal with Starz Continue to develop series for direct to consumer

distribution

AARP – exploring opportunities in all genres Continuing to discuss strategic alliances with Starz Pursuing iTunes deal Busted Dane Cook pilots packaged for DVD release Deal with CW for Spider-man animated series

1212[DRAFT]

Fort Pitt (P)The Watch

Anonymous LawyerAu Pair

Viva Laughlin (P)Angriest Man in Suburbia

Untitled (Joel Stein)Miller Time

G’Town LadiesMed School Project

Cold BloodedRed Crane

Programming – Network Pilot Pick-ups/FY07 Development Programming – Network Pilot Pick-ups/FY07 Development

Cashmere Mafia (P)American Family (S&R) (P)

Suspect (P) The Thick of It (P)

My Life is NowSelf Help

Wyatt AwakeEden Prairie Moms

Assisted Living (L&R)BootsBriefs

Wrights BrainVerdict

Ordinary JoeRevenge of the Jocks

Canterbury’s Law (P)Hackett (P)

The NutThe Co-op

ChanceMacho Steve

Dating Tara CooleyThink Tank

DimePulse

No AngelsSaints & Strangers

GeorgetownThe Get DownLebrontourage

PublicityMy New Partner

SmashLaw Rats

N.O.CBarely Legal

Combination LockJoker’s Wild

Judge David Young

– SYNDICATION –

FlatlinersSWAT

– BACK DOOR PILOTS –

1313[DRAFT]

Programming – Cable Network Pilot Pick-ups/FY07 Development Programming – Cable Network Pilot Pick-ups/FY07 Development

Public Nuisance (P) Notebook Girls

Life LaughsUntitled (Brigette Bako)

Kessler, Zelman, Kessler (P)

Angry White MenCop Out Riviera

Corruption Show

Celebridate (P) Breaking Bad (P)

Uncommon Sense

Manchild (P)Nighty NightPrivate Dick

Not Another Teen Series (P)Fugly

Held Up

Zombie Land Middletown

Biscayne BayStatute of Limitations

Town & CountrySkin Deep FirebrandMistresses

Family Kinglare

1414[DRAFT]

• Online video diary series of a newcomer to Hollywood with dreams of becoming an actress

– Web series with interactive elements

– Edited video footage of her day

– Web cam confessionals

• Produced by Paul Stupin (Dawson’s Creek)

• Based on multi-platform success in Portugal, Sofia’s Diary

• Potential distribution partnership with MySpace

• Programmed on-demand network

• Edited version of episode to 3 – 5 minutes in length

• Utilize SPT’s library content (Charlie’s Angels, Diff’rent Strokes, Dilbert, etc.)

• Launch with portal partners i.e. MySpace and Google to build brand awareness and then rollout channel to other online video destinations

Digital Programming Group

1515[DRAFT]

Network: DAYS OF OUR LIVES and Y&R continue KING OF QUEENS and BIG DAY do not return ‘TIL DEATH returns for a second season 8 pilots in 07/08 and 08/09 seasons, resulting in 2 series per year 2 TBD new series in FY08 10 MOWs (5 productions, 1 mini-series, 4 acquisitions)

Cable: THE SHIELD is produced for 7 seasons RESCUE ME is produced for 4 seasons THE BOONDOCKS is produced for 3 seasons 4 pilots per year, resulting in 2 series per year MY BOYS returns for a second season (contractual minimum 15 episodes) 10 Items or Less returns for a second season (6 eps) Untitled Glenn Close and Not Another Teen Series get ordered

First Run Syndication: WHEEL OF FORTUNE and JEOPARDY! continue JUDGE HATCHETT returns for 8th season THE GREG BEHRENDT SHOW does not return JUDGE MARIA LOPEZ returns for a second season JUDGE DAVID YOUNG launches in 07/08

Animation: Spider-man Culver Entertainment gets produced

SPT Production Assumptions

Changes vs. MRP

• Network drama/comedy pilot mix• 2 new cable series vs. 1• 10 Items or Less assumed for 2nd season• Judge Hatchett vs. Greg Behrendt• Judge David Young vs. Combination Lock

1616[DRAFT]

Programming – New Series Investment & DevelopmentProgramming – New Series Investment & Development

($48) ($51)

($37) ($38)

($23)($25)

($25)($29)

($17)

($20)

($22)

($22)

($0)

($20)

($40)

($60)

($80)

($100)

($120)


($ in MM)

Pilot/ Series Investment Development Allocated Overhead

($84)

($96)

($89)($88)

1717[DRAFT]

Programming – New Series Investment & Development DetailProgramming – New Series Investment & Development Detail

FY07 Budget

FY07 Forecast

MRP FY08

Budget FY08

NETWORK'TIL DEATH -$ -$ (7)$ 0Untitled Comedy 0 0 (5) (5)Untitled Drama 0 0 (5) (5)Network Pilots (12) (20) (13) (18)BIG DAY 0 (6) 0 0RUNAWAY (13) (2) 0 0RULES OF ENGAGEMENT (2) (3) 0 0KIDNAPPED (10) (1) 0 0

CABLEMY BOYS (3) (2) (2) (3)THE BOONDOCKS 0 1 0 (1)10 ITEMS OR LESS 0 0 0 0Untitled Comedy 0 0 (2) (1)Untitled Drama 0 0 0 (3)Cable Pilots (2) (5) (3) (4)HUFF/BEAUTIFUL PEOPLE (1) 5 0 0J ESSIE'S DIARY/CAPTAIN CROSS DRESSER 0 (1) 0 0

FI RST-RUN SYNDI CATIONJ UDGE LOPEZ/GREG BEHRENDT (5) (17) 2 1DAVID YOUNG/COMBINATION LOCK 0 0 (2) 1

Total Pilots / Series (48)$ (51)$ (37)$ (38)$

Development (23) (25) (25) (29)

Subtotal (71)$ (76)$ (62)$ (67)$

Allocated Overhead (17) (20) (22) (22)

Total I nvestment (88)$ (96)$ (84)$ (89)$

1818[DRAFT]

SPT Strategy Update

1. Core Assets

2. Programming

3. Ad Sales



6. Financials

1919[DRAFT]

Ad Sales Update Ad Sales Update


The :10 The :10 SolutionSolution

33rdrd Party Party Represent-Represent-

ationation

DigitalDigital

Maximize revenue by expanding higher paying clients in Upfront

Expand portfolio with select program representation opportunities

Expand client list with traditional :30 buyers

New programming representation opportunities

Continue to build High Definition ad sales with INHD

Seek opportunities to represent new ad sales businesses

Launch ad sales for digital channels on AOL

Establish SPTAS as SPE and Sony’s digital ad sales group

The strong scatter market provides a positive indication for this year’s Upfronts

Acquired Degrassi: The Next Generation & ReGenesis for :30 and :10 representation

Increased number of new advertisers by +25% this season

Acquired Whacked Out Sports for :10 representation only

Passed $1MM mark in INHD ad sales for the 06/07 season. Budgeted to generate $2.5MM for the 07/08 season

In negotiations with DISH to represent all non-direct response inventory. Budget includes $10MM Fee/EBIT

Inventory sold out; advertisers include: Burger King and Chase

Launching ad sales for Grouper; negotiating with Sony BMG to represent Musicbox ad sales. Budget includes $1.5MM Fee/EBIT

SPT is actively seeking out additional digital ad inventory (Wind-up Records, Blip.tv, etc.)

Strategy Update

2020[DRAFT]

Ad Sales Update Ad Sales Update

“ “ Among the nine syndication companies rated in the Myers annual Among the nine syndication companies rated in the Myers annual survey…survey…

Sony Pictures Television was ranked first among buyers, second Sony Pictures Television was ranked first among buyers, second among media planners”among media planners”

- January 11- January 11thth 2007 2007

The Jack Myers Media Business Report subscription newsletter is considered a "daily The Jack Myers Media Business Report subscription newsletter is considered a "daily first-read," by more than 20,000 subscribers. Jack Myers Media Business Report is first-read," by more than 20,000 subscribers. Jack Myers Media Business Report is available through corporate subscription only.available through corporate subscription only.

Sony Pictures Television Advertiser Sales is recognized as one of the leading sales forces in syndication

2121[DRAFT]

• Sony BMG Ad Sales Representation in Negotiation

− Exclusive representatives of video inventory of Sony BMG “Music Box” Service

− Currently serves 15 million streams per month, expected to double in the year

− SPTAS Commission = 30% of net proceeds (Gross – Agency Fees – Ad Serving

Costs)

− 1 year term with a mutual option for a 2 year extension

• AXN and Funny Bone channels on AOL

– Successfully sold 1st channels distributed by ODE

– Plans to expand distribution of channels to more portals

– Blue Chip advertisers

Chase Credit Cards

Burger King

Netflix

• Grouper

– Prepared to begin selling Grouper ad inventory (including video ads) in February

Sponsorships

Rich media interstitials between videos

Skyscraper and Banners

Search

SPT Digital Ad Sales

2222[DRAFT]

• Secure additional online video ad inventory

− Online video channels (eg. Blip.tv)

− Online video syndicators (eg. Brightcove)

− Independent Record Labels with Video Content (eg. Wind-up Records)

− Internet Radio Sites (eg. Pandora)

• Working with SOE and Playstation to asses the in-game advertising market

• Developing go-forward strategy (acquisition vs. partnership)

• Example candidates

• Evaluating advertising networks for potential acquisition targets

– Vast and diversified advertising inventory

– Established affiliate network

– Ad Serving Technology

• Example Candidates

Third Party Online Video InventoryThird Party Online Video Inventory

In-Game AdvertisingIn-Game Advertising

Ad NetworksAd Networks

SPT Digital Ad Sales Inventory Growth Strategy

2323[DRAFT]

Advertiser Sales Net Revenue (non-Internet)Advertiser Sales Net Revenue (non-Internet)

$243

$273$263

$244

$0

$50

$100

$150

$200

$250

$300


($ in MM)

NOTE: Potential DISH Network and Sony BMG revenue excluded since both deals are in negotiations.

2424[DRAFT]

Advertiser Sales Net Revenue (Internet)Advertiser Sales Net Revenue (Internet)

$3

$19 $19

$2 $2

$3 $3

$2

$0

$0.3

$0.2

$0

$5

$10

$15

$20

$25

$30


($ in MM)

Grouper DPG Digital Channels Sony BMG

$24

$26

$4

[FIGURES TO BE FINALIZED, BUT CURRENTLY $10M FOR BUDGET]

2525[DRAFT]

SPT Strategy Update

1. Core Assets

2. Programming

3. Ad Sales



6. Financials

2626[DRAFT]

Distribution and Library Sales Update Distribution and Library Sales Update

Leverage day-and-date negotiations with DISH and DIRECTV to secure premiere channel placements

Expand on VOD rights to enable customers to sell on multiple platforms

Close a 3 year iNDEMAND extension without guarantees

Develop a plan for exercising the Starz extension option Leverage Starz’s interest in VONGO to close DST deal Pursue library deals with Showtime and HBO Pursue Culver Entertainment licensing deal with Starz

Develop a sophisticated movie database to better position SPE titles vis-à-vis the competition – will track movie performance by title, genre, and studio for SPT and competitors’ titles and include SPT research

Utilize creative carve-out and shorter window to retain network window value

SPT graded all feature films and tracks open windows (both short & long)

SPT sells current year open windows to the greatest extent possible, since this generates current year revenue

Pursue co-development deals with Tribune and other station groups to guarantee access to key time periods when launching new 1st run programs

Expand our streaming of products onto Local TV Station websites in conjunction with ODE (e.g. Minisodes, etc.)

Strategy Update

Day-and-date not needed for improved PPV deal (Echostar). Negotiating 3-year extension (through 12/31/10) for iNDEMAND DIRECTV deal nearing closure w/new deal to go thru 1/12,

improved PPV splits, $4M FOD sales over term, VOD (Push & Broadband) rights

Starz and SPT discussions initiated regarding extension option Replaced 8 "3rd party rent-a-system" releases for Peter

Schlessel/acquisition product in 07/08 Starz output deal with higher performing B.O. titles

Acquiring addtl. product (King of the Cage) to package with library deals

Culver Entertainment TV discussions to be further explored

Movie database is almost ready to go live. All data has been inputted and testing begins by mid-February

Working with Digital Group regarding rights and windows to maximize revenue

[To confirm with Rohrs/Marx] Graded all library films and put grading process in place Focusing on FY08 avails for selling efforts

Pursuing opportunities with NBC and Fox station groups to develop shows for the 08/09 season and beyond

Evaluate using Grouper application to stream products onto Tribune station websites

Judge David Young cleared in 23 of the top 25 markets, 80%+ overall

PPV/VODPPV/VOD

Pay TVPay TV

Free/Basic Free/Basic TVTV


2727[DRAFT]

Distribution Sales – Total RevenueDistribution Sales – Total Revenue

$370 $373

$190 $197

$217 $218

$289 $275

$149 $172

$116 $107

$90$94

$84$81

$20$11

$15$15

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000


($ in MM)

Free/ Basic TV PayTV Syndication PPV Free VOD

$694$675

$868$846

2828[DRAFT]

$77 $81

$60

$5

$8

$15

$2

$2

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

FY07 FY08 Budget/MRP

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

Library Sales Targets by MarketLibrary Sales Targets by Market

In-House $126MM

Budget $65MM

FY07 In-House:Starz/Encore 59.0$ Tigres 32.0 TCM 15.0 FEARnet VOD 10.7 HE Pay & PPV 7.7 ION 1.3

125.7$ FY07 To Go:

Just Shoot Me 26.0$ HE Free/Cable & PPV 4.0 Direct TV Broadband 4.0

34.0$

FY07 Total 159.7$

Forecast $160M

$90M

2 year annual average of $125

FY07 represents largest 1 year library sales total

2929[DRAFT]

Library RevenueLibrary Revenue

Division Market

$75 $72

$33 $33

$40$33

$44 $44

$18 $32

$34 $34

$0

$25

$50

$75

$100

$125

$150

$175

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM)

TV MPG Acquisitions

$137

$111 $111

$133

$103 $104

$83 $83

$7

$2 $2

$10

$15

$12 $12

$20

$11

$14 $14

$0

$25

$50

$75

$100

$125

$150

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

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

$137

$111 $111

$133

3030[DRAFT]

SPHE Contribution to SPT ProductSPHE Contribution to SPT Product

Revenue Net Contribution

$83 $84

$62 $64

$57 $48

$70$54

$23 $36$24

$36

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM)

Library Seinfeld Current

$168

$156 $154$163

$35$29

$20$17

$9

$7

$11

$8

$16

$20

$13 $23

$0

$10

$20

$30

$40

$50

$60

$70

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM)

Library Seinfeld Current

$56

$44

$48

$60

3131[DRAFT]

SPTI & DSD (Digital) Revenue to SPT ProductSPTI & DSD (Digital) Revenue to SPT Product

Revenue DSD (Digital) Revenue

$56$79 $74 $71

$125

$142

$97

$129

$0

$40

$80

$120

$160

$200

$240

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM)

Library Current

$221

$171

$200

$181

$1$2 $2

$6

$8

$8

$6

$0

$2

$4

$6

$8

$10

$12

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM)

Library Current

$9

$10

$8

$6

3232[DRAFT]

SPT Strategy Update

1. Core Assets

2. Programming

3. Ad Sales



6. Financials

3333[DRAFT]

Programming

• 2 originally produced web series by Sam Raimi

• Basic Cable VOD Premieres of: The Exorcism of Emily Rose, Hostel, Silent Hill, Resident Evil, Open Water 2 and When a Stranger Calls

Cable VOD Ratings

• Top 10 VOD network out of over 200

• #7 VOD service overall in January

• Averaging 6.4 million views per month

Web Ratings

• #1 Horror site in America (registered users, unique users and impressions)

• Nearly 40,000 registered users

Marketing Highlights

• FEARnet/”The Messengers” user generated content contest launching on Youtube 1/15

Enhancements to FEARnet.com

• Phase 2 Website redesign

• Easily searchable exclusive and new content

• My Gallery concept for User Generated Content (video, pics, stories, art, etc.)

Mobile (Mike Arrieta – Project Lead)

• SPE to include FEARnet on Sprint Channel and create wallpapers/ring-tones

• FEARnet and SPE to create mobile video channel and mobile games

GSN, FEARnet and ITN UpdateGSN, FEARnet and ITN Update

Programming

• Plans to produce a Saturday and Sunday participation block in early 2007

• Plans to build a 2nd small studio space to develop new, original formats in Q2 2007

• Building a team to produce broadband content for GSN.com including behind the scenes, interviews, and original content

Advertising Sales

• GSN has successfully utilized Playmania for advertising sponsorship and plans to continue to expand participation formats

Content Distribution

• GSN signed a 5 year extension with Dish and is currently negotiating with Charter and DirecTV for renewals

• Signed contracts with Verizon and AT&T and will add subscribers as the Telcos rollout their services

Future Growth

• Evaluating several casual game developers for their library

• GSN is developing a new branding strategy to rollout in the Q2

Divestiture Update

• Engaged Salem Partners to perform valuation assessment of GSN and Fun Technologies as it relates to Liberty Media

• Arrange meeting to discuss recommended strategies

Highlights

• Q1 scatter results up 90% vs. last year

• Brand centric strategy (Mom’s Time Network) paying off - $5M deal with major insurance company

Potential New Sources of Inventory:

Sony Platforms

• SPE and ITN can work together to create advertising opportunities across ITN and many of Sony’s businesses/platforms (e.g., films, music, electronics, video games, etc.)

Growth Strategy

• Develop a multi-platform solution: Broadcast Television, Broadband, Digital Stations and Content

• Continue to develop state-of-the-art software that enables ITN to interface with multiple, pre-existing technologies

Potential Acquisition Targets

• ARM, Telemerica, Medialink, Dayport, Waterfront Media, Worldlink, etc.

3434[DRAFT]

GSN and FEARnet – Financials (Share of Net Income)GSN and FEARnet – Financials (Share of Net Income)

GSN FEARnet

($3)

($10)

($8)

($6)

($12)

($10)

($8)

($6)

($4)

($2)

$0

($ in MM)

$15

$7

$15

$8

$0

$2

$4

$6

$8

$10

$12

$14

$16

FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

($ in MM) FY07 Budget

FY07 Forecast

FY08 MRP

FY08 Budget

3535[DRAFT]

SPT Strategy Update

1. Core Assets

2. Programming

3. Ad Sales



6. Financials

3636[DRAFT]

SPT – Summary Financials SPT – Summary Financials

FY07 Budget FY07 Forecast FY08 MRP Budget FY08

Initial Market Licenses 411$ 464$ 445$ 465$ Off Network Licenses 190 210 65 69 Ad and Promo Sales 273 243 267 261 Co- Distributor Share and Other 44 38 50 36 Domestic Pay TV/VOD - SPT Product 51 51 51 51 Free TV/Cable- MPG/HE/SPTI Product 227 233 131 135 Pay TV/VOD- MPG/HE/SPTI Product 277 272 340 324 Grouper - - 19 19

SPT Generated Gross Revenue 1,473$ 1,511$ 1,368$ 1,360$

Producer Share (127) (109) (130) (109) SPTI Contribution - Current 125 142 97 129 SPTI Contribution - Library 56 79 74 71 SPHE Contribution - Current 23 36 24 36 SPHE Contribution - Library 83 84 62 64 SPHE Contribution - Seinfeld 57 48 70 54 CP/SPD Contribution 8 12 12 9 Contribution to Grouper - - (19) (19) Contribution to MPG (504) (505) (471) (459)

Total SPT Product Net Revenue 1,194$ 1,298$ 1,087$ 1,136$

EBIT 230$ 254$ 188$ 188$

Operating Margin 19% 20% 17% 17%

3737[DRAFT]

SPT – Major Contributions to EarningsSPT – Major Contributions to Earnings

Budget FY07

Forecast FY07

MRP FY08

Budget FY08

Wheel of Fortune 58$ 52% 60$ 52% 55$ 48% 57$ 50%

J eopardy! 38 47% 36 45% 32 41% 32 42%

Library Product 79 42% 83 39% 72 40% 65 37%

The Young and the Restless 30 22% 29 20% 28 19% 25 18%

Days of Our Lives 15 14% 19 21% 15 17% 16 17%

Seinfeld Fee 37 100% 30 100% 35 100% 29 100%

J ust Shoot Me 19 51% 14 42% - N/A - N/A

King of Queens 25 15% 47 20% 12 16% 14 16%

Rescue Me 4 11% 10 23% 5 16% 8 20%

The Shield 3 16% 3 18% 2 15% 3 17%

ENCORE Bonus 48 100% 48 100% 47 100% 48 100%

New Series Investment (88) (96) (84) (89) All Other Products 8 8% 13 17% 10 8% 8 9%

ITN - - 2 2 DISH - - - 10 Net G&A (45) (47) (48) (49) GSN (Net of Reserve for Liberty Stock) 7 8 15 15 FEARnet (8) (3) (10) (6)

Total 230$ 19% 254$ 19% 188$ 17% 188$ 17%

3838[DRAFT]

SPT – Earnings Comparison (Forecast vs. Budget, MRP vs. Budget)SPT – Earnings Comparison (Forecast vs. Budget, MRP vs. Budget)

FY07 BUDGET/ FY08MRP 230$ 188$

KING OF QUEENS primarily 2nd Cycle Sales 23 -

DISH Network Ad Sales representation - 10

Elimination of unidentified challenge - (8)

Sony BMG Ad Sales representation - 2

FEARnet 5 4

DAYS OF OUR LIVES NBC Renegotiation and higher Int'l ultimate 4 -

New Series Investment (FY07 = more pilots and series, FY08 = Drama/Comedy pilot and addtl. cable series) (8) (5)

The Young and The Restless CBS Renegotiation (1) (2)

G&A (FY07 = 6 headcount and bonus accrual, FY08 = headcount transfer to WPF) (2) 1

All Other, Net 3 (2)

Total Variance 24 -

FY2007 FORECAST/ FY2008 BUDGET 254$ 188$

3939[DRAFT]

SPT – Earnings Comparison (Year vs. Year)SPT – Earnings Comparison (Year vs. Year)

FY2007 FORECAST 254$

KING OF QUEENS last production season, 2nd Cycle renewals and TBS availability in FY07 (33)

Library: SPT Product availability (7)

Library: Lower Home Entertainment revenue (9)

DAYS OF OUR LIVES and Y&R renegotiations (8)

J UST SHOOT ME Cable Sale in FY07 (11)

J eopardy! and Wheel of Fortune IGT and international ultimate increases (7)

G&A (primarily salrary/fringe increases) (2)

Lower SEINFELD Ad Sales primarily as a result of assumed lower ratings (2)

FEARnet (3)

Game Show Network performance 7

DISH Network 10

Sony BMG 2

All Other, Net (3)

Total Variance (66)

FY2008 BUDGET 188$

budget presentation fiscal year 2008 february 2007 [draft]

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