Confidential Draft

Embassy Row Acquisition Update

December 1, 2008

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• Reality remains a critical growth area for SPE and requires further investment

– Sector offers attractive program economics and continues to grow

– GSN is increasingly dependent on original game shows to drive growth

– 2waytraffic provides strong international distribution but needs additional U.S. product to fill distribution capacity

• Through the acquisition of his production company (Embassy Row / “ER”), Michael Davies will serve as a cornerstone of our reality strategy

– Strong track record, credible internationally and works well with 2way and GSN

– ER earnings will be below CY08 budget, but we continue to believe in ER’s potential and do not anticipate a significant negative impact on overall economics

– ER recently received orders for new shows (Newlywed Game, Make My Day, Empire, PopTub) and has key properties in development (American Bandstand, Dating Game)

• We are seeking approval to close the Embassy Row acquisition

– Long-form negotiated in-line with terms previously discussed ($25MM at close, up to an additional $50MM of earn-outs)

– RAD to be signed week after Thanksgiving

– Target closing December 5th

Executive Summary

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• Creates new formats that leverage 2way's distribution capacity

• Drives significant global profits for 2way by validating shows in the U.S. market

– Driving force behind 2waytraffic’s format “All-Star Mr. and Mrs.” being developed for the U.S. (likely with CBS)

Strategic Benefits

International Credibility • Well regarded both domestically and internationally

• Strong relationships with networks in multiple territories

Fit with 2waytraffic

Fit with GSN

• Successful, original programming is key to GSN’s growth strategy

• Embassy Row is now a key source of GSN originals, including:

– Shows in production: Newlywed Game

– Shows in development: Hold on to Your Seat, It’s A Knockout: U.S. vs. France, Honey Please and Game Show Talk Show

• In active discussions with GSN to renew and possibly expand Davies’ deal

Track Record

• Michael Davies has a history of success with shows like “Who Wants to be a Millionaire?” and “Wife Swap”

• Even as a modest success, Power of 10 has generated $3.6MM for Embassy Row and Sony (1)

• Now focusing on reinvigorating Sony brands (“Dating Game” and “Newlywed Game”) and launching new shows with global potential (“The Comedy Exchange”)

Footnotes:(1) Based on $1.4MM of format profits through April 25, 2008 participation statement plus

$2.2MM on EP fees and chargebacks from 1 pilot and 18 episodes produced.

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Key Terms: Deal Consideration

Current Deal Structure

• $25MM cash at close

• Up to $50MM of additional earn-outs tied to “Adjusted Company Profit” (ACP)

–ACP mimics the portion of profits ER would retain under the existing overall deal, tying earn-outs to profits that are truly incremental to SPE

–Value of earn-outs would be calculated in Year 6 as: 7x (Average of Years 5-6 ACP) minus $25MM advance

• Earn-out payments would be made between Year 6 and Year 10

–Subject to the creation of an incentive plan to be approved by the SCA Comp Committee, 10% of earn-out would be paid to employees in Year 6; 10% in Year 7

–80% of earn-out paid to Davies over Years 6-10 if Davies meets minimum Adjusted Company Profit (ACP) targets

–Earn-out payments can be accelerated if Davies exceeds ACP goals

Changes from April 2008 Deal Update

• Changed earn-out measurement period from years 3-5 to years 5-6 to improve tax impact to Davies and accounting impact to SPE

• Earn-out payments are no longer subject to Davies being employed by SPE; however, he is now under a 4 year non-compete, and if he leaves we will have legal recourse

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• FY09 EBIT impact to SPE will be better than budget, roughly in-line with Q2 forecast

– Q1 forecast for FY09 EBIT was ($3MM) with higher amortization and excluding P10

– Q2 forecast for FY09 EBIT was $0.4MM with lower amortization and including P10

– Current forecast for FY09 EBIT is $0.3MM, offsetting near-term earnings miss with decreased incremental investment in overhead and development

Financial Performance

Through3/31/09

• ER standalone profit for 15 months ending March 2009 is expected to be below forecast

– 15 month forecast was revised downward in October from $1.1MM to effectively breakeven

– December through March Forecast (period owned by Sony) was revised down from $2.4MM to $1.2MM

FY09

FY10 Forward

CY07• ER operating income was in-line with previous projections

– $3.3MM actual vs. $3.4MM budget

• We believe Michael Davies will continue to generate successful new shows and the deal will

generate a positive NPV of $8.0MM

– Although value of on-air shows (including Power of 10) has decreased, the ability to

leverage 2waytraffic and ER’s currently increased staff has decreased our required

incremental investment

– Model assumes that ER creates 2 format successes in the next 3 years

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Pilot & Series Orders

Show Network

Newlywed Game GSN

Make My Day TV Land

The Empire MTV

National Bible Championships

CMT

Pop Tub YouTube

America’s Strongest American

CBS

Hogs & Heifers Oxygen

Embassy Row’s Pipeline Remains Strong

Shows in Development

Show Network

The Comedy Exchange BBC / UKTV

Grand Masters of Pop Culture

Vh1

Hold on to Your Seat GSN

It’s A Knockout: U.S. vs. France

GSN / TBD

Honey Please GSN / TBD

Game Show Talk Show GSN

American Bandstand TBD

Dating Game N/A

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Financial Impact – Base Case

Notes: Difference between total EBITDA and Incremental EBITDA is the portion of shows we own under Davies’ current deal Old Cases assume ER is owned for all of FY09 while New Cases assume ER is owned as of December 1, 2008 Assumes a risk adjusted discount rate of 16.5% for all NPV calculations (1) If ER secures 5% chargebacks, EBIT in FY10 - FY13 would be ($0.1), $1.9, $3.6 and $6.1, NPV would be $18.1MM (2) Includes exit at 11x multiple (3) Includes $25MM up-front, incremental EBITDA less earn-outs, plus exit at 11x

Current Base CasePrior Base Case (4/08)

NPV (10-year)

Incremental EBITDA: $21.0

Value of Exit (2): $16.1

Total Consideration: ($25.0)

Net Present Value (3): $12.2

Nominal (10-Year)

Incremental EBITDA: $52.8

Terminal Value: $74.2

Total Consideration: ($25.0)

Consideration / EBITDA: 47%

NPV (10-year)

Incremental EBITDA: $18.3

Value of Exit (2): $14.7

Total Consideration: ($25.0)

Net Present Value (3): $8.0

Nominal (10-Year)

Incremental EBITDA: $47.0

Terminal Value: $67.8

Total Consideration: ($25.0)

Consideration / EBITDA: 53%

P&L FY09 FY10 FY11 FY12 FY13

EBITDA $1.9 $4.3 $9.6 $15.5 $21.6

Amortization ($4.4) ($4.4) ($4.4) ($4.4) ($4.4)

EBIT ($2.5) ($0.1) $5.2 $11.1 $17.3

Incremental EBITDA $1.4 $1.4 $3.7 $5.8 $6.7

Amortization ($4.4) ($4.4) ($4.4) ($4.4) ($4.4)

Incremental EBIT ($3.0) ($3.0) ($0.7) $1.5 $2.4

P&L FY09 FY10 FY11 FY12 FY13

EBITDA $1.6 $0.7 $3.3 $5.5 $6.2

Amortization ($1.3) ($3.1) ($3.1) ($3.1) ($1.8)

EBIT $0.3 ($2.4) $0.1 $2.4 $4.3

Incremental EBITDA $0.9 $0.5 $3.2 $5.4 $6.2

Amortization ($1.3) ($3.1) ($3.1) ($3.1) ($1.8)

Incremental EBIT ($0.4) ($2.6) $0.1 $2.3 $4.3

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Cumulative Incremental EBITDA/NPV: Current Base Case vs. Prior Base Case

• Value associated with properties currently on-air has decreased

– Partially offset by decrease in required investment in overhead and development as a result of the ability to leverage 2waytraffic and ER’s currently increased staff

• Value of properties in development is higher because ER network contracts include chargebacks (1)

Prior Base Case (SCA Preview 04/08) CurrentNPV NPV Base Case (Prior)

Estimates for Properties On-air

10-yr EBITDA Impact Cash Flow Terminal Total

10-yr EBITDA Impact Cash Flow Terminal Total

Power of 10 (2) $36.5 $15.0 $10.4 $25.4 $0.3 $0.3 $0.0 $0.3Other TV $13.0 $9.1 $0.0 $9.1 $0.0 $0.0 $0.0 $0.0Interactive $13.9 $6.4 $3.5 $9.9 $12.9 $5.8 $3.3 $9.1

Sub-Total $63.4 $30.5 $13.9 $44.4 $13.2 $6.1 $3.3 $9.4

Estimates for Properties In-DevelopmentTV $81.4 $31.6 $26.2 $57.8 $97.6 $40.0 $28.4 $68.4Interactive $3.5 $1.6 $0.9 $2.5 $7.9 $3.7 $1.9 $5.7

Sub-Total $84.9 $33.2 $27.1 $60.3 $105.5 $43.7 $30.3 $74.0

ExpensesER Overhead ($40.8) ($18.4) ($10.5) ($28.9) ($53.1) ($22.8) ($14.3) ($37.1)Incremental Investment ($54.7) ($24.2) ($14.4) ($38.6) ($18.6) ($8.7) ($4.6) ($13.3)

Sub-Total ($95.5) ($42.6) ($24.9) ($67.5) ($71.7) ($31.5) ($18.9) ($50.4)

Deal Consideration N/A ($25.0) N/A ($25.0) N/A ($25.0) N/A ($25.0)

Total Acquired EBITDA $52.8 ($4.0) $16.1 $12.2 $47.0 ($6.7) $14.7 $8.0

Footnotes:(1) Includes chargebacks of 5% of budget on new shows.(2) Includes only portion of P10 acquired from Davies.

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Economic Impact of Acquiring Embassy Row

$47.0

$52.8

$0

$10

$20

$30

$40

$50

$60

Base Case

($ in MM)

Current Prior

Cumulative 10 Yr. EBITDA (1) Cumulative 10 Yr. EBIT(2) NPV

Footnotes:(1) Based on incremental EBITDA (e.g., only includes portion of Power of 10 SPE did not already own). In all cases, assumes incremental EBITDA

is flat in years 6-10 for purposes of calculating any earn-out acceleration.(2) EBIT after Earn-out.

$34.5

$30.9

$0

$10

$20

$30

$40

Base Case

($ in MM)

Current Prior

$8.0

$12.2

$0

$2

$4

$6

$8

$10

$12

$14

Base Case

($ in MM)

Current Prior

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Embassy Row Deal Timing

Date Item

Week of

11/24

• SPT and Embassy Row meeting to close final open

issues in long-form agreement

• Update meetings with SPE senior management

(Lynton, Hendler, Calkins)

11/25• Contract is agreed by both parties but remains

unsigned

Week of

12/1• Update briefing with SCA senior management

12/4

• Sony Approval process complete (RAD signed, by all

necessary parties at SPE and SCA)

• Purchase Agreement “dated as of the closing date”

signed and put into “lawyer escrow”

12/5 • Funds wired and deal closes

S M T W T F S1

2 3 4 5 6 7 89 10 11 12 13 14 15

16 17 18 19 20 21 2223 24 25 26 27 28 2930

S M T W T F S1 2 3 4 5 6

7 8 9 10 11 12 1314 15 16 17 18 19 2021 22 23 24 25 26 2728 29 30 31

December

November

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Appendix

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Embassy Row Slate Comparison

Footnotes:(1) Original forecast: Approximately $600K Sony guarantee, $150K GSN guarantee, $600K addtl. entertainment

programs, $800K addtl. digital, $500K addtl. sports and the remaining in factual and films.(2) Current forecast: Approximately $600K sonny guarantee, $150K GSN guarantee, $300K addtl. entertainment

programs, $800K addtl. digital and the remaining in sports, factual and films.

($ in 000) Original Forecast for 15 Months ending 3/31/09 Current Forecast for 15 Months ending 3/31/09

Programs Status as of 4/08Expected Delivery Gross Profit Current Status

Expected Delivery Gross Profit

Make My Day Pilot Order Apr-08 $465 Series Ordered Apr-08 $471Newlywed Game In-dvlpmt Oct-08 $483 Series Ordered Mar-09 $547The Tub Series Ordered Oct-08 $663 Series Ordered Nov-08 $716Bible In-dvlpmt Dec-08 $63 Pilot Ordered Feb-09 $37Empire In-dvlpmt Dec-08 $623 Pilot Ordered Feb-09 $68America's Strongest American In-dvlpmt Oct-08 $295 Pilot Ordered Mar-09 $113Hoggs & Heifers In-dvlpmt Nov-08 $240 Pilot Ordered Mar-09 $44Power of 10 On-air Jul-08 $485 Off-air N/A -The 9 On-air Mar-08 $304 Off-air N/A $380Celebrity Mr. and Mrs In-dvlpmt Oct-08 $145 In-dvlpmt Feb-09 $145American Bandstand N/A N/A - In-dvlpmt Mar-09 $75Toothbrush In-dvlpmt Sep-08 $696 In-dvlpmt N/A -Pyramid / Take the Money In-dvlpmt Sep-08 $1,061 In-dvlpmt N/A -Couples Dating Couples In-dvlpmt Aug-08 $340 In-dvlpmt N/A -

All Other Programs $2,852 (1) $2,022 (2)

Sub Total $8,715 $4,616

Standalone Expense $(5,341) $(4,779)Total $3,374 $(163)