Budget Presentation Fiscal Year 2008 February 2007 Slide 2 2 SPT
Financial Summary (SPT, GSN and FEARnet) EBITRevenue $254 $188 $230
Slide 3 3 SPT Total Revenue $1,368 $1,512 $1,352 $1,473 Slide 4 4
SPT Net G&A Expenses and Headcount Headcount226238220218 NOTE:
Excludes 10-12 SPTAS headcount and 3-4 billing/collection/reporting
headcount that will be requested if DISH Network ad representation
deal closes. Slide 5 5 Headcount NOTE: FY08 MRP included 10
DPG/thebacklot.tv headcount which are NOT being requested. Slide 6
6 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 Slide 7 7 SEINFELD EBIT Strategy Update Develop 4
th 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 Collectors version includes
special packaging 430K Season 7 units sold with limited marketing
vs. 530K units forecasted and 1M units budgeted for FY07 Capitalize
on online marketing outlets for future DVD releases (i.e. MySpace
and Grouper) 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 85%
Domestic DVD revenue through FY07: $260MM since inception $38MM in
FY07 from Seasons 1-7 Projected DVD revenues: $46MM in FY08 $35 $29
$30 $37 Slide 8 8 THE YOUNG & THE RESTLESS/DAYS OF OUR LIVES
EBIT Strategy 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,
characters background available on CBS.com and Verizon DAYS OF OUR
LIVES Considering iTunes deal 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
$18.5K) 07/08 ATL production cost assumes 3.5% growth 07/08 BTL
production cost assumes 0% growth 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
Slide 9 9 WHEEL OF FORTUNE/JEOPARDY! EBIT Strategy Update Renewed
and cleared in 65%+ of the country through 10/11 and 11/12
broadcast seasons Implemented online testing for JEOPARDY!
contestants 100,000 applicants resulting in higher caliber
contestants, creating an online JEOPARDY! community Evaluate future
use of Grouper Utilizing new technology has allowed JEOPARDY! to
remain contemporary Releasing 1 st 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 Slide 10 10 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 Slide 11 11
StrategyUpdate 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 & CHAIN REACTION (picked up for 2 nd season by
GSN) Partnered with 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 MANCHILD Showtime
comedy UNTITLED GLENN CLOSE drama well-positioned for F/X Game
shows not launching in FY07. Exploring network/cable opportunities
Strategy shifted to capitalize on SPTs 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 JESSIES DIARY: Based on
the multi-platform success in Portugal, SOFIAS DIARY The Minisode
Network: 3-5 min episodes of SPTs library content. At least 600
episodes planned for FY08 Network Cable Syndication Digital 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 Slide 12 12 Fort Pitt Viva Laughlin Programming Network
Pilot Pick-ups Cashmere Mafia American Family Suspect The Thick of
It Canterburys Law Hackett Combination Lock Jokers Wild Judge David
Young SYNDICATION Flatliners SWAT BACK DOOR PILOTS Slide 13 13
Kessler, Zelman, Kessler Public Nuisance Programming Cable Network
Pilot Pick-ups Not Another Teen Series Manchild CelebridateBreaking
Bad Slide 14 14 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 (Dawsons Creek) Based on
multi-platform success in Portugal, Sofias Diary Potential
distribution partnership with MySpace Programmed on-demand network
Edited version of episode to 3 5 minutes in length Utilize SPTs
library content (Charlies Angels, Diffrent 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 Slide 15 15 Network: DAYS OF
OUR LIVES and Y&R continue KING OF QUEENS and BIG DAY do not
return TIL DEATH returns for a 2 nd season 8 pilots in 07/08 and
08/09 seasons 2 TBD new series in FY08 10 MOWs (9 MOWs, 1
mini-series) Cable: THE SHIELD returns for 7 seasons RESCUE ME
returns for a 4 th season THE BOONDOCKS returns for a 3 rd season
MY BOYS returns for a 2 nd season 10 ITEMS OR LESS returns for a 2
nd season 4 pilots in FY08 UNTITLED GLENN CLOSE and NOT ANOTHER
TEEN SERIES ordered to series First Run Syndication: WHEEL OF
FORTUNE and JEOPARDY! continue JUDGE HATCHETT returns for 8th
season JUDGE MARIA LOPEZ returns for a 2 nd season JUDGE DAVID
YOUNG launches in 07/08 Animation: SPIDER-MAN Culver Entertainment
series SPT Production Assumptions Changes vs. MRP Network
drama/comedy pilot mix 2 new cable series vs. 1 10 ITEMS OR LESS
assumed for 2 nd season JUDGE MARIA LOPEZ vs. GREG BEHRENDT JUDGE
DAVID YOUNG vs. COMBINATION LOCK Slide 16 16 Programming New Series
Investment & Development ($84) ($96) ($89) ($88) Slide 17 17
Programming New Series Investment & Development Detail Slide 18
18 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 Slide 19 19 Ad Sales Update Syndication The :10
Solution 3 rd Party Represent- ation Digital 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 Sonys
digital ad sales group The strong scatter market provides a
positive indication for this years 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 Network to represent all
non-direct response inventory. Budget includes $10MM Fee/EBIT AOL
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 $900K Fee/EBIT SPT is
actively seeking out additional digital ad inventory (Wind-up
Records, Blip.tv, etc.) StrategyUpdate Slide 20 20 Ad Sales Update
Among the nine syndication companies rated in the Myers annual
survey Sony Pictures Television was ranked first among buyers,
second among media planners - January 11 th 2007 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 available through corporate subscription
only. Sony Pictures Television Advertiser Sales is recognized as
one of the leading sales forces in syndication Slide 21 21 Sony BMG
Ad Sales Representation in Negotiation Representation of Sony BMG
Musicbox Service video inventory 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 1 st channels created by digital
distribution Plans to expand, with 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 Slide 22 22 Secure additional online video ad
inventory Online video channels (e.g. Blip.tv) Online video
syndicators (e.g. Brightcove) Independent record labels with video
content (e.g. Wind-up Records) Internet radio sites (e.g. Pandora)
Working with SOE and Playstation to assess 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 Inventory In-Game Advertising
Ad Networks SPT Digital Ad Sales Inventory Growth Strategy Slide 23
23 Advertiser Sales Net Revenue (non-Internet) NOTE: Potential DISH
Network revenue excluded since the deal is still in negotiation.
Slide 24 24 Advertiser Sales Net Revenue (Internet) $24 $15 $0.6
NOTE: Sony BMG deal is not yet closed. Slide 25 25 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
Slide 26 26 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 Starzs 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--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.) StrategyUpdate Day-and-date not
needed for improved PPV deal (Echostar) Negotiating 3-year
extension (through 12/31/10) for iNDEMAND DIRECTV deal nearing
closure with new deal to go thru 1/12, improved PPV splits, $4M FOD
sales over term and VOD (Push & Broadband) rights Starz
contacted SPT regarding option to extend. Internal meeting to be
set Replaced 8 "3rd party rent-a-system" releases for Peter
Schlessel/acquisition product in calendar 07 and 08 Starz output
deal with higher performing B.O. titles Acquiring additional
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 Executed carve out strategy on key
titles to maximize value, drive sales of additional product and
retain flexibility for future deals: DaVinci Code (Turner, F/X) and
Talladega Nights (Turner, Comedy Central) Graded all library films
and putting grading process in place Focusing on FY08 avails as
part of 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 PPV/VOD Pay TV Free/Basic TV Syndication Slide 27
27 Distribution Sales Total Revenue $694 $675 $868 $846 Slide 28 28
Library Sales Targets by Market Budget $65MM Forecast $160M $90M 2
year annual average of $125 FY07 represents largest 1 year library
sales total Slide 29 29 Library Revenue DivisionMarket $137 $111
$133 $137 $111 $133 Slide 30 30 SPHE Contribution to SPT Product
RevenueNet Contribution $168 $156 $154 $163 $56 $44 $48 $60 Slide
31 31 SPTI & DSD (Digital) Revenue to SPT Product SPTI
RevenueDSD (Digital) Revenue $221 $171 $200 $181 $9 $10 $8 $6 Slide
32 32 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 Slide 33 33 Programming 2 originally produced web
series by Sam Raimi Basic Cable 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 Update Programming Plans to produce a Saturday and
Sunday participation block in early 2007 Plans to build a 2 nd
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 (Moms 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 Sonys
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. Slide 34 34 GSN and FEARnet Financials (Share of
Net Income) GSNFEARnet FY07 Budget FY07 Forecast FY08 MRP FY08
Budget Slide 35 35 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 Slide 36 36 SPT Summary Financials
Slide 37 37 SPT Major Contributions to Earnings Slide 38 38 SPT
Earnings Comparison (Forecast vs. Budget, MRP vs. Budget) Slide 39
39 SPT Earnings Comparison (Year vs. Year)
