TV ROLLOUTS: SAP AND ARIBA IMPLEMENTATION

October 3, 2013

Executive Summary

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Task: This initiative is to bring 20 SPT International entities that have either been formed or acquired over the past several years onto SAP & ARIBA with full functionality (including the integration with Payroll and Concur). These entities need to be operational on SAP so they can operate efficiently, meet compliance requirements and institute standard internal controls available to finance and accounting. The following 8 entities are the key focus for this greenlight

TV Prod – Cairo, TV Prod – Lebanon, TV Prod – Dubai, Argentina TV-N, SET – Brazil, AXN – Japan, SET Generadora – Argentina, Scarlet Media (JV UK Prod)

Approach: Each roll-out will leverage a similar implementation model and design that has previously been employed in its respective territory. Design for new territories utilize the Global SAP Design Template as a foundation. Statutory requirements and requirements for any RICEF components will be reviewed and accommodated as part of the design and implementation.

Implementation Strategy:As per previous SAP rollouts:

– Gather Requirements: Project team will conduct workshops with local teams to gather and confirm requirements as well as conduct fit/gap analysis

– Configuration: Phases of configuration and testing will be progressed through SAP test clients followed by formal user testing. Master data build and user signoff will occur in test clients RQA and BQA.

– User Training: Training will be provided at the SPE facilities and/or on site.– Local Expertise: We will engage local experts for design, configuration, and implementation as needed– Support: SGS and Home Office on and off-site support will be provided at go-live as needed

Critical Business Dates:Network connectivity required by the end of the 1st month of implementation for SAP implementation (please refer to timeline for go-live dates)

Key Drivers

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Currently our non-integrated ITV entities:

Have no systemic COFA structure in place Are not integrated with our Corporate financial systems, SAP,

Ariba, Concur and Payroll Are at risk of fraud through lack of visibility and transparency to

local books Are at risk for system controls to validate that financial and

operational transactions are in compliance Are at risk for potential related party transactions Follow inconsistent processes and procedures

Its imperative to implement an integrated system to enable real time financial and operational reporting, increased financial controls, and consistency in

financial processes and procedures

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Estimated Total Hours and Costs

Business Entity Total Hours Labor Cost Travel / Other Cost

Total Cost of Roll-out (in 1,000s)(in 1,000s) (in 1,000s)

Scarlet Media (JV UK Prod)

813 70 0 70

TV Prod – Arabia (Cairo, Lebanon, Dubai)

4,544 376 80 456*

Argentina TV-N 2,542 206 40 246

SET - Brazil 575 46 0 46

AXN Japan 517 43 0 43

SET Generadora - Argentina

557 47 0 47

Total 9,548 788 120 908

* Arabia rollout consists of 3 legal entities. Estimates were derived based upon the actuals incurred to roll out Russia Prod and Networks as these rollouts are similar in nature in the respect that SPE SAP does not currently have a footprint in this territory and complexity is anticipated as high.

Financial Summary – Argentina TV Networks

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Project Costs• Software: $

0K• Hardware $

0K• Internal Labor: $

35K• External Labor: $

171K• Other/Miscellaneous $

40KTotal Year One Costs: $

246K

Project Benefits• Hard $ Benefits: $

61K• Soft $ Benefits (Error prevention): $

0K• Soft $ Benefits (Efficiencies): $

0K

Total Project Benefits: $ 61K

Five-year Summary and Payback•Five-year total costs: $246K•Five-year total benefits: $ 61K•Five-year net benefit: ($190K)•Internal Rate of Return n/a•Net present value @ 10%: ($182K)•Payback: 73

This project is in the FY14 BudgetFunding Needed FY14 $ 246KFunding Needed FY15 $ 0K

Total Project Costs $ 246K

Depreciation:

On Going Costs: Ongoing cost post implementation is captured in the standard SAP support and maintenance budget

Financial Summary – TV Prod Arabia

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Project Costs• Software: $

0K• Hardware $

0K• Internal Labor: $

97K• External Labor: $

279K• Other/Miscellaneous $

80KTotal Year One Costs: $

456K

Project Benefits• Hard $ Benefits: $

0K• Soft $ Benefits (Error prevention): $

0K• Soft $ Benefits (Efficiencies): $

0K

Total Project Benefits: $ 0K

Five-year Summary and Payback•Five-year total costs: $456K•Five-year total benefits: 0K•Five-year net benefit: ($456K)•Internal Rate of Return n/a•Net present value @ 10%: n/a•Payback: n/a

This project is in the FY14 BudgetFunding Needed FY14 $ 385KFunding Needed FY15 $ 71KTotal Project Costs $ 456K

Depreciation:

On Going Costs: Ongoing cost post implementation is captured in the standard SAP support and maintenance budget

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BenefitsCategory $ Benefit Description

Cost Avoidance N/A Retirement of GL and billing modules of existing systems Replacement of 3rd party support for General Ledger and Billing

Cost Efficiencies N/A

Reduction of manual processing in payments processing through standard SPE bank configuration with automatic outbound interfaces to bank

Reduction of period-end manual processing through automated interfaces from Production Accounting systems, ADP/Payroll, and Concur to SAP and directly transacting in SAP

Risk Mitigation N/A

Reduction of financial risk through centralized IT security control access to sensitive information (e.g., payments, purchase commitments)

Implementation of SAP Global Template allows for consistency in financial processes and procedures in line with SPE global standards to better meet compliance requirements

Implementation of COFA rules to improve security and assure compliance with commitment and spending policies

Implementation of IMSM will enable project spend management to budget in territories

Home Office increased visibility to detailed local office books

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TimelineThe scheduling / timing of each roll-out was determined under the following considerations:• Resource availability• Priority of each roll-out as determined by Networks• Year-end• Implementation effort

Phase 1• TV Prod – Arabia (3)• Argentina TV-N• Scarlet Media• SET Brazil• AXN Japan• SET Generadora - Argentina

Phase 3• Floresta (Brazil)• Czech (Distribution)• Romania / Croatia (Dist)• Malaysia TV-N• MAA TV – India• Braddock Productions Services

Phase 2• Poland (Distribution)• Silver River• SPT Networks Games• Cine Sony• Left Bank• Teleset Mexico

Appendix

A. TV Implementation Plan SummaryB. Key Stakeholders and Project TeamC. High Level RisksD. CBA Costs and Summary

Rick Mark Rollout Description Functionality PriorityImplementation

EffortSPE

Network

X Argentina TV Networks New office opening SPE/SAP Global template High High ?

X Czech (Distribution)New SAP company to bring Distribution in house

SPE/SAP Global template Medium Medium ?

X Poland (Distribution)New SAP company to bring Distribution in house

SPE/SAP Global template Medium Medium ?

XRomania / Croatia (Distribution)

Leverage existing Cable Direct company

SPE/SAP Global templateCable Direct company currently set-up as upload companyExtend existing profit centers to Cable Direct company

Medium Low ?

XSilver River(67% ownership)

Newly acquired production companyTarget SAP rollout date = Purchase acquisition date + 12 months

SPE/SAP Global template Low Low ?

XCPE US Networks II dba Cine Sony Television

?

SPE/SAP Global templateProfit center has been set-up to an existing company codeWill be set up as an upload company

Low Low ?

X Malaysia TV Networks New office opening SPE/SAP Global template Low High ?

XLeft Bank (51% ownership)

Newly acquired production company

SPE/SAP Global template Low Low ?

X Spin BR - HOLD

New LLC company to be able to attend new statutory rules issue by Ancine (Brazilian Audio Visual Government Agency)

SPE/SAP Global template Medium Low ?

X Scarlet Media SPE/SAP Global template

Medium Low ?

TV IMPLEMENTATION PLAN SUMMARY (1 of 2)

Rick Mark Rollout Description Functionality PriorityImplementation

EffortSPE

Network

X Set BR Same as Spin BR SPE/SAP Global template Medium Low ?

X AXN BR - HOLD Same as Spin BR SPE/SAP Global template Medium Low ?

X Teleset – Mexico SPE/SAP Global template Medium Medium ?

X Sister channel Crackle In LatAM – profit center only N/A N/A N/A N/A

X AXN – JapanBroadcasting company Upload company set-up

SPE/SAP Global Template Medium Medium ?

XSet Generadora LLC Argentina

Upload company SPE/SAP Global Template Medium Medium ?

X SPT Networks Games Upload company SPE/SAP Global Template Low Low ?

XSPTI Russia Networks LLC

Upload company – full implementation will not be required

N/A N/A N/A N/A

X

Cable Direct Holdings LTDCable Direct Romania SRLCable Direct Media Zagreb DOO

Upload companies – full implementation will not be required

N/A N/A N/A N/A

X Televiva JV

Own 50%. Equity accounting only. Bought by SET NETWORKS AFRICA (UK) LIMITED. Will be looked after by Li Kian and her team. New profit center needed and Li Kian and her team will need access to the company codeImplementation will not be required

N/AN/A N/A N/A

X GET TV

US 100% owned channel under Superna – launch isn’t for a while, but need to be able to capture costs – Colin and Bill + team will look after this one

SPE/SAP Global TemplateLow Low ?

XBraddock Productions Services, Inc

P&O advised that a small group of employees need to be moved from Crackle Inc to this new company ASAP so this request is very time-sensitive.

Upload company High Low ?

TV IMPLEMENTATION PLAN SUMMARY (2 of 2)

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Key Stakeholders and Project TeamProject Team

• Project Lead

– Sherly Lam• Territory Leads

– Richard Randall, Susana Beahin, Stephen Chow• SAP Production Support Services

– RTR, PIC, PTP, SD, Security, MDMA, Change

Management/Training, Reporting, Basis, Web

Methods• Home Office Finance

– Donna Falzon– Kim Tran

• Subject Matter Expert

– Susie Supalo

Sponsors

• Finance

– Drew Shearer

– Mark Rogers

– Rick Rodriguez

– Niloo Rezai

– Kate Davies

• IT

– David Buckholtz

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High-level Risks• Business Engagement is critical to ensure processes and systems are robust and

adopted. • Responsiveness of and coordination with banking partners is critical to ensure

deadlines are adhered to and deliverables with dependencies on banks are completed in a timely manner

• Strong control over the functional and technical scope will be critical. Seemingly small scope changes can have unforeseen impacts on timeline, cost, and quality, particularly if implemented after the completion of design.

• Network connectivity must be set-up and tested by the end of the 1st month of the implementation to ensure we can implement SAP and Ariba.

• Concurrent roll-outs within and across territories will result in overlap of resource needs

• SGS non-dedicated resources and Asia-Pac territory support staff will be key to testing, training and overall support, but have competing priorities

• Finance function relocation to GBS may present project risks• Local resource availability is critical to project success for some territories (e.g.,

Russia)

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CBA Costs and Summary – Argentina Networks

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CBA Costs and Summary – Arabia Productions