confidential draft embassy row acquisition update june 2008

Confidential Draft

Embassy Row Acquisition Update

June 2008

2

Executive Summary

• We recommend escrowing roughly $10.5M of the closing price to protect against an earnings miss

• If Davies hits $3.4M of EBITDA this year, he receives the escrowed funds in full

• If not, he can still recapture the escrowed amount through the earn-out (still up to $75M in total consideration)

Embassy Row Performance • Embassy Row Jan–May earnings are $1.5M worse than last year

• Power of 10 is moving to GSN

• Several smaller shows are off the air (WSOPC, Grand Slam, Chain Reaction); entire slate has become much more speculative

Structuring Alternatives

LOI Status

• We have negotiated down to a handful of issues

– Non-compete language

– Recoup of our $1.8M

– Cap on earnings required for Davies to receive earn-out

– Davies NYC tax issue

3

Embassy Row’s Q1 Miss

-$0.4M vs. $1.1M = $1.5M shortfall-$0.4M vs. $1.1M = $1.5M shortfall

We recommend escrowing $10.5M$1.5M x 7 = $10.5M$1.5M x 7 = $10.5M

EBITDA Q1 Q2 First Half Total

CY07 (Actual) $0.4 $0.7 $1.1

CY08 ($0.9) $0.5 ($0.4)

Notes: (Actual)(Thru May, Assumes

B/E for June)(Forecast)

4

Summary of Potential Calendar Year 2008 Profit Shortfall

Forecast CY08 Loss w/o New ShowsLosses YTD May ($378)Forecast OH Expenses Jun-Dec ($2,712)Loss before New Shows ($3,090)

Profits if only a portion of shows hit

Gross Profits on New Shows:

Davies (All Shows Hit) Low Mid High

% of Best Case % of Best Case % of Best CaseIn production $200 100% $200 100% $200 100% $200Commissioned $887 100% $887 100% $887 100% $887In Negotiation $4,596 40% $1,838 50% $2,298 60% $2,757Pitched $592 10% $59 15% $89 20% $118In Development $295 0% $0 10% $30 15% $44Total Gross Profits $6,571 $2,985 $3,504 $4,008

Loss before New Shows ($3,090) ($3,090) ($3,090) ($3,090)Forecast CY08 EBITDA $3,481 ($105) $414 $918

Variance vs. $3.5M Forecast ($69) ($3,655) ($3,136) ($2,632)

5

FY09 EBIT Impact to SPE

Low Mid High Davies

Oct-Dec 08 Davies Standalone Gross Profit $2,985 $3,504 $4,008 $6,571

Oct-Dec 08 Davies Standalone Opex ($1,380) ($1,380) ($1,380) ($1,380)

Jan-Mar 09 Davies Standalone Gross Profit $1,073 $1,073 $1,073 $1,073

Jan-Mar 09 Davies Standalone Opex ($1,038) ($1,038) ($1,038) ($1,038)

Oct-Mar 08 Sony Investment ($1,905) ($1,905) ($1,905) ($1,905)

FY09 EBITDA Impact ($265) $254 $758 $3,321

Amortization Oct-Mar ($1,184) ($1,184) ($1,184) ($1,184)

FY09 EBIT ($1,449) ($930) ($426) $2,137

6

2007 EPS 2008 EPS 2009 EPS 2010 EPS 2011 EPS 2012 EPS

WSOPC 2 (CS1) 8 WSOPC (CS1) 8 WSOPC (CS1) 8 WSOPC (CS1) 8

Grand Slam (CS2) 8 Grand Slam (CS2) 8 Grand Slam (CS2) 8 Grand Slam (CS2) 8 Grand Slam (CS2) 8

Chain Reaction 2 (CSS1) 65 Chain Reaction (CSS1) 130 Chain Reaction (CSS1) 130

P10 (NS1) 18 P10 (NS1) 8 P10 (NS1) 8 P10 (NS1) 8 P10 (NS1) 8

Ellen Show 1

Cbl Series-Cpl Dating Cpl/Dating Gm (CS3) 8

Net Series-All Star (NS2) 8

Net Series-Pyramid/Take the Money (NS3) 8 Network Series (NS3) 13 Network Series (NS3) 13 Network Series (NS3) 13

Cbl Series-Empire/Eggheads (CS7) 20

Cbl Series - Power of 10 (CS5) 10 GSN Series (CS5) 65 GSN Series (CS5) 13

Cble Series - Newlywed Game (CS4) 40 GSN Guarantee Series (CS4) 65 GSN Guarantee Series (CS4) 65 GSN Series (CS4) 130

Cble Series - MMD/Martha/Bible (CS6) 8 Cable Series (CS6) 8 Cable Series (CS6) 8 Cable Series (CS6) 8

Network Series (NS4) 8

Syn Series 1 130

Cable Series (CS9) 65 Cable Series (CS9) 65 GSN Series (CS9) 130

Cable Series (CS7) 8 Cable Series (CS7) 13 Cable Series (CS7) 13


Cable Series (CS14) 8

Network Series (NS7) 8 Network Series (NS7) 13

GSN Guarantee Series (CS11) 65 GSN Guarantee Series (CS11) 65


Cable Series (CS 19) 65




P10 Pilot (NP1) 1 Net Pilot-Pyramid/Take the Money (NP3) 1 Network Pilot (NP5) 1 Network Pilot (NP6) 1 Network Pilot (NP8) 1 Network Pilot (NP10) 1

Balls of Steel (CP1) 1 Net Pilot-CELEB MR & MRS (NP4) 1 Cable Pilot (CP8) 1 Network Pilot (NP7) 1 Network Pilot (NP9) 1 Network Pilot (NP11) 1

Cable Pilot - MMD (Done) (CP6) 1 Cable Pilot (CP9) 1 Cable Pilot (CP12) 1 Cable Pilot (CP16) 1 Network Pilot (NP12) 1

Cable Pilot - NW/DG (Done) (CP4) 1 Cable Pilot (CP10) 1 Cable Pilot (CP13) 1 Cable Pilot (CP17) 1 Cable Pilot (CP19) 1

Cable Pilot-Bible/Martha (CP6a) 1 Cable Pilot (CP11) 1 Cable Pilot (CP14) 1 Cable Pilot (CP18) 1 Cable Pilot (CP20) 1

Cable Pilot - The Empire (CS7) 1 Cable Pilot (CP15) 1 Cable Pilot (CP21) 1

Embassy Row Slate Update

• Majority of shows on the 2007 slate are now off the air

• 2008 shows are identified – several have networks attached; with two pilots ordered

• Beyond 2008, shows are entirely speculative

Denotes not in previous slate.

Denotes struck from previous slate.

Pilot ordered.

In Development / Pitched to Network.

Early Development.

7

Model Assumptions

Base Case Davies Case

• Slate: Davies’ slate plus format or

syndicate successes; add acquired

product; eliminate CB on new shows;

standardize profits by show type

• Power of 10: Includes profits from Power

of 10 (format/syndication)

• Format Profits: Format profits are at

slightly below the industry average

($3.0M)

• Local Production: Local production in

the Germany +$3M (for Power of 10)

• Sports & Film: Eliminated

• Interactive Profit: Starts at $1.5M (in-

line with Davies) and increases 5%

annually (less than Davies)

• Factual Profits from ER: From ER’s

business plan

• Incremental Investment: Add 10-15 HC,

$1-2M in development/acquisition

budget, $500K+ in self-funded pilots

• Slate: Same but includes chargebacks

and Davies’ estimated profits by show

• Interactive Profits: Unchanged from

Davies’ forecast

• Sports and Film: Unchanged from

Davies’ forecast

• Other: All other assumptions same as

base case

Updates:

• Power of 10: Moves to GSN (not CBS); no first run versions; format declines; no local language production

• Eliminated canceled shows

• Update slate; better align base case cost per show with Davies’ assumptions

• Add one finance headcount

• Escrowed portion of purchase price - $10.5MM (see pg. 2)

• Revised FY09 forecast (see pg. 3)

8

Davies Case and Base Case Comparison

* See Page 4.

*

Embassy Row Base Case2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

"Enterainment & Factual" EP Fees 3.25 3.27 3.89 4.70 5.18 - 3.16 3.73 4.58 4.87 "Enterainment & Factual" Chargebacks 2.19 2.48 2.67 3.10 3.59 - 1.45 1.07 0.74 - "Enterainment & Factual" Ancillary 0.71 0.95 0.99 1.16 1.36 - - - - - Interactive 1.77 2.38 3.50 3.95 4.46 - 1.58 1.65 1.74 1.82 Sports 0.76 1.30 1.39 1.52 1.92 - - - - - Films 0.03 0.03 0.04 0.04 0.04 - - - - - Gross profits 8.71 10.41 12.47 14.47 16.54 - 6.18 6.46 7.05 6.69

Overhead (5.16) (4.07) (4.12) (4.19) (4.31) - (4.07) (4.12) (4.19) (4.31) Existing Business EBITDA 3.55 6.34 8.34 10.28 12.24 - 2.10 2.34 2.87 2.38

Additional SPT ProfitsPower of 10 Format 0.75 2.63 1.31 0.75 0.75 - 2.63 1.31 0.75 0.75 Other Formats - - - 1.51 6.05 - - - 1.51 6.05 Syndication Profits - - - - - - - - - -

Total SPT Profits 0.75 2.63 1.31 2.26 6.80 - 2.63 1.31 2.26 6.80

Total EBITDA b/f Investments 4.30 8.96 9.66 12.54 19.04 - 4.73 3.65 5.13 9.18

Incremental SPT InvestmentsSelf-Funded Pilot Costs (0.45) (0.45) (0.53) (0.56) (0.09) - (0.45) (0.53) (0.56) (0.09) Development/Acq Budget (0.75) (0.81) (1.06) (1.31) (1.56) - (0.81) (1.06) (1.31) (1.56) Increased Cost of ER Staff (0.30) (0.61) (0.61) (0.61) (0.61) - (0.61) (0.61) (0.61) (0.61) SPT Headcount & G&A (0.40) (0.99) (1.42) (1.93) (2.03) - (0.99) (1.42) (1.93) (2.03)

Total Incremental Investments (1.90) (2.86) (3.62) (4.41) (4.29) - (2.86) (3.62) (4.41) (4.29)

Total EBITDA 2.40 6.10 6.03 8.13 14.75 0.25 1.87 0.02 0.71 4.89 Sony current share of P10 (0.41) (1.44) (0.72) (0.41) (0.41) - (1.44) (0.72) (0.41) (0.41)

Incremental EBITDA 1.98 4.65 5.31 7.72 14.33 0.25 0.42 (0.70) 0.30 4.48

9

Incremental SPT Investments

HeadcountYear 1 Year 2 Year 3 Year 4 Year 5

Acquisition 2 2 3 3 3Development 1 2 3 3 3Administration 1 2 3 3 3Finance 1 1 1 1 1SPE Total Additional Headcount 5 7 10 10 10Additional ER Headcount 3 3 3 3 3

Total InvestmentIncremental SPT Investments FY09 FY10 FY11 FY12 FY13

Self-Funded Pilot Costs ($0.5) ($0.5) ($0.5) ($0.6) ($0.1)Development/Acq Budget ($0.8) ($0.8) ($1.1) ($1.3) ($1.6)Increased Cost of ER Staff ($0.3) ($0.6) ($0.6) ($0.6) ($0.6)SPT Headcount & G&A ($0.4) ($1.0) ($1.4) ($1.9) ($2.0)

Total Incremental Investments ($1.9) ($2.9) ($3.6) ($4.4) ($4.3)

10

Updated Valuations

Old Base Case NPV (w/$25M purchase price): $12.2M

Case

Base w/ Investments ($5.2M)

Base w/o Investment $17.8M

Davies (including adjustments

on assumptions page) w/ Investments

$60.7M

New NPV (Pay $14.5M @ close)

$5.3M

$28.3M

$60.7M

New NPV (Pay $25M @ close)

Davies (including adjustments on assumptions page) w/o

Investments

$96.1M $96.1M

11

• An acquisition only appears feasible if a portion of the purchase price is escrowed

• Confirm our willingness/ability to hold the line on escrowing the up-front payment

– Revisit feasibility of escrow with Davies given that he has previously indicated that a deal

with less than $25M in initial consideration is unacceptable

• Finalize recommendation to senior management

– Either acquire with escrow, or

– Renew

$1.0M a year for 3 years; non-recoupable; any 3rd party backend participants will

be taken off the top and not directly from Davies’ share pending SPT approval

Consider use of budgeted $3.0M Embassy Row loss to cover other deals

• Schedule meeting with Lynton/Hendler/Calkins for the week of 7/7/08

Conclusions/Next Steps

12

APPENDIX

13

Embassy Row Reconciliation – Base Case

• Payment at Close: $14.5

• Escrow Paid: $0

Structure:

*

• Earn-outs Paid: $0

• Total Consideration: $14.5

• Amortizable Assets: $14.5

* See Page 4.

BaseFY09 FY10 FY11 FY12 FY13

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

P10 (Decrease in Davies Share) ($2.3) ($3.6) ($6.4) ($4.0)

Eliminated Cancelled Shows ($1.3) ($0.7) ($0.2) $0.0

Updated Slate Going Forward $2.6 ($0.1) $1.1 $1.7

w/ InvestmentsUpdated EBITDA $0.3 $0.4 ($0.7) $0.3 $4.5Updated Amortization ($1.2) ($2.6) ($2.6) ($2.6) ($0.7)Updated EBIT ($0.9) ($2.2) ($3.3) ($2.3) $3.8

w/o InvestmentsExclude Investments $1.9 $2.9 $3.6 $4.4 $4.3Updated EBITDA $2.2 $3.3 $2.9 $4.7 $8.8Updated Amortization ($1.2) ($2.6) ($2.6) ($2.6) ($0.7)Updated EBIT $1.0 $0.7 $0.3 $2.1 $8.1

w/ InvestmentsOld EBITDA $1.4 $1.4 $3.7 $5.8 $6.7Old Amortization ($5.3) ($5.3) ($5.3) ($5.3) $0.0Old EBIT ($3.9) ($3.9) ($1.6) $0.5 $6.7

w/o InvestmentsOld EBITDA $3.3 $4.3 $7.3 $10.3 $11.0Old Amortization ($5.3) ($7.1) ($7.7) ($8.4) ($3.2)Old EBIT ($2.0) ($2.8) ($0.4) $1.9 $7.8

14

Embassy Row Reconciliation – Davies Case

• Payment at Close: $14.5

• Escrow Paid: $10.5

Structure:

• Earn-outs Paid: $50

• Total Consideration: $75

• Amortizable Assets: $40

Davies CaseFY09 FY10 FY11 FY12 FY13

Davies Existing Business EBITDA $3.6 $6.3 $8.3 $10.3 $12.2+ Power of 10 Profits (Davies Share) $0.3 $1.2 $0.6 $0.3 $0.3+ Format Profits $0.0 $0.0 $0.0 $1.5 $6.1+ 1st Run Profits $0.0 $0.0 $0.0 $0.0 $0.0+ Total Incremental Investments ($1.9) ($2.9) ($3.6) ($4.4) ($4.3)

w/ InvestmentsUpdated EBITDA $2.0 $4.7 $5.3 $7.7 $14.3Updated Amortization ($2.8) ($5.9) ($5.9) ($5.9) ($2.7)Updated EBIT ($0.8) ($1.3) ($0.6) $1.8 $11.6

w/o InvestmentsExclude Investments $1.9 $2.9 $3.6 $4.4 $4.3Updated EBITDA $3.9 $7.5 $8.9 $12.1 $18.6Updated Amortization ($2.8) ($5.9) ($5.9) ($5.9) ($2.7)Updated EBIT $1.1 $1.6 $3.0 $6.2 $15.9

w/ InvestmentsOld EBITDA $1.6 $3.5 $4.7 $5.9 $7.9Old Amortization ($5.3) ($7.6) ($8.4) ($8.9) ($4.4)Old EBIT ($3.7) ($4.1) ($3.7) ($3.0) $3.5

w/o InvestmentsOld EBITDA $3.6 $6.3 $8.3 $10.3 $12.2Old Amortization ($5.3) ($9.2) ($10.8) ($11.6) ($7.1)Old EBIT ($1.8) ($2.9) ($2.4) ($1.3) $5.2

15

Amortization Detail

Amortization is modeled as follows:

• Identify ER’s asset value at time of close

• Amortize over expected lives (some up to 10 years)

IF…

• Asset value is less than total consideration, amortization is based on asset value

• Asset value is greater than total consideration, amortization is capped at consideration

Case

Base w/ Investment

Base w/o Investment

Davies w/ Investment

Closing

Payment

$14.5

$14.5

$14.5

Paid From Escrow

-

-

$10.5

Earnout

-

-

$50.0

Total

Consideration

$14.5

$14.5

$75

Amortizable Assets

$14.5

$14.5

$40

Note: Values in $MM

Davies w/o Investment

$14.5 $10.5 $50.0 $75 $40

16

YearsAssets Total 1 2 3 4 5 6 7 8 9 10Contract Fair Market Value 14.2$ 2.4 2.4 2.4 2.4 0.8 0.8 0.8 0.8 0.8 0.8 Existing Shows w/allocation 6.5$ 1.6 1.6 1.6 1.6 New Shows w/allocation -$ Participation -$ Developed/In-development/Budget 3.8$ 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Additional Development 15.0$ 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Fair Market Value 39.5$ 5.5 5.9 5.9 5.9 2.7 2.7 2.7 2.7 2.7 2.7

Amortization Cont’d

YearsAssets Total 1 2 3 4 5 6 7 8 9 10Contract Fair Market Value 14.2$ 2.4 2.4 2.4 2.4 0.8 0.8 0.8 0.8 0.8 0.8 Existing Shows w/allocation 6.5$ 1.6 1.6 1.6 1.6 New Shows w/allocation -$ Participation -$ Developed/In-development/Budget 3.8$ 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Fair Market Value 24.5$ 4.0 4.4 4.4 4.4 1.2 1.2 1.2 1.2 1.2 1.2

$25MM Fair Market Value

$40MM Fair Market Value (Assuming High Consideration)

$14.5MM (If capped at total consideration)Years

Assets Total 1 2 3 4 5 6 7 8 9 10Contract Fair Market Value 8.4$ 1.4 1.4 1.4 1.4 0.5 0.5 0.5 0.5 0.5 0.5 Existing Shows w/allocation 3.9$ 1.0 1.0 1.0 1.0 New Shows w/allocation -$ Participation -$ Developed/In-development/Budget 2.2$ 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Fair Market Value 14.5$ 2.4 2.6 2.6 2.6 0.7 0.7 0.7 0.7 0.7 0.7

17

Revised Slate

2007 EPS 2008 EPS 2009 EPS 2010 EPS 2011 EPS 2012 EPS 2013 EPS

WSOPC 2 (CS1) 8 WSOPC (CS1) 8 WSOPC (CS1) 8 WSOPC (CS1) 8

Grand Slam (CS2) 8 Grand Slam (CS2) 8 Grand Slam (CS2) 8 Grand Slam (CS2) 8 Grand Slam (CS2) 8

Chain Reaction 2 (CSS1) 65 Chain Reaction (CSS1) 130 Chain Reaction (CSS1) 130

P10 (NS1) 18 P10 (NS1) 8 P10 (NS1) 8 P10 (NS1) 8 P10 (NS1) 8

Ellen Show 1

Cbl Series-Cpl Dating Cpl/Dating Gm (CS3) 8

Net Series-All Star (NS2) 8

Net Series-Pyramid/Take the Money (NS3) 8 Network Series (NS3) 13 Network Series (NS3) 13 Network Series (NS3) 13

Cbl Series-Empire/Eggheads (CS7) 20

Cbl Series - Power of 10 (CS5) 10 GSN Series (CS5) 65 GSN Series (CS5) 13

Cble Series - Newlywed Game (CS4) 40 GSN Guarantee Series (CS4) 65 GSN Guarantee Series (CS4) 65 GSN Series (CS4) 130

Cble Series - MMD/Martha/Bible (CS6) 8 Cable Series (CS6) 8 Cable Series (CS6) 8 Cable Series (CS6) 8


Syn Series 1 130

Cable Series (CS9) 65 Cable Series (CS9) 65 GSN Series (CS9) 130 GSN Series (CS9) 130

GSN Series (CS9) Format 50 GSN Series (CS9) Format 50

Cable Series (CS7) 8 Cable Series (CS7) 13 Cable Series (CS7) 13 Cable Series (CS7) 13

Cable Series (CS7) Format 50 Cable Series (CS7) Format 50


Acquired Cable Series (ACS1) 8


Network Series (NS7) 8 Network Series (NS7) 13 Network Series (NS7) 13

GSN Guarantee Series (CS11) 65 GSN Guarantee Series (CS11) 65 GSN Guarantee Series (CS11) 65

Acquired Network Series (ANS1) 8






Acquired Cable Series (ACS2) 8 Acquired Cable Series (ACS2) 8





Acquired Network Series (ANS2) 8

P10 Pilot (NP1) 1 Net Pilot-Pyramid/Take the Money (NP3) 1 Network Pilot (NP5) 1 Network Pilot (NP6) 1 Network Pilot (NP8) 1 Network Pilot (NP10) 1 Network Pilot (NP13) 1

Balls of Steel (CP1) 1 Net Pilot-CELEB MR & MRS (NP4) 1 Cable Pilot (CP8) 1 Network Pilot (NP7) 1 Network Pilot (NP9) 1 Network Pilot (NP11) 1 Network Pilot (NP14) 1

Cable Pilot - MMD (Done) (CP6) 1 Cable Pilot (CP9) 1 Cable Pilot (CP12) 1 Cable Pilot (CP16) 1 Network Pilot (NP12) 1 Network Pilot (NP15) 1

Cable Pilot - NW/DG (Done) (CP4) 1 Cable Pilot (CP10) 1 Cable Pilot (CP13) 1 Cable Pilot (CP17) 1 Cable Pilot (CP19) 1 Cable Pilot (CP22) 1

Cable Pilot-Bible/Martha (CP6a) 1 Cable Pilot (CP11) 1 Cable Pilot (CP14) 1 Cable Pilot (CP18) 1 Cable Pilot (CP20) 1 Cable Pilot (CP23) 1

Cable Pilot - The Empire (CS7) 1 Acquired Cable Pilot (ACP1) 1 Cable Pilot (CP15) 1 Acquired Cable Pilot (ACP1) 1 Cable Pilot (CP21) 1 Cable Pilot (CP24) 1

Spec Net Pilot 1 (SNP1) 1 Spec Net Pilot 2 (SNP2) 1 Spec Net Pilot 3 (SNP3) 1 Acquired Net Pilot (ACP1) 1 Acquired Cable Pilot (ACP1) 1

Acquired Net Pilot (ACP1) 1

18

Detailed Embassy Row Pipeline – Entertainment

Type Network Risk

Budget Reforecast Delivery Total Fees

SPTV OH Contribution Chargebacks Ancillary

Gross Profit

MMD Pilot MMD Pilot Pilot TVL 1 Apr-08 27,375 - 74,479 - 101,854 Sony Sony Ancillary NA 1 Full Year - 600,000 - - 600,000 Keith Barry Int. Keith Barry Int. Ancillary NA 3 Aug-08 - - - 31,736 31,736 Dating/NewWed Newlywed Game Series GSN 4 Oct-08 228,365 - 163,000 - 391,365 All Star / Toothbrush Celeb Mr & Mrs Series Series CBS 4 Feb-09 390,000 - 306,000 - 696,000 Pyramid / Take the Money Pyramid / Take the Money Series TBD 4 Sep-08 640,000 - 320,000 - 960,000 Couples / Dating Couples / Dating Game Series GSN 4 Aug-08 179,234 - 161,092 - 340,326 Empire / Eggheads Empire / Eggheads Series TBD 4 Aug-08 300,000 - 255,000 - 555,000 Pyramid / Take the Money Pyramid / Take the Money Pilot TBD 5 Oct-08 56,250 - 45,000 - 101,250 Toothbrush / Pheonix Celeb Mr & Mrs Pilot Pilot CBS 4 Nov-08 60,000 - 85,000 - 145,000 Dating-NewWed Dating-NewWed Pilot GSN 2 Jul-08 49,396 - 83,600 - 132,996 Bible / Martha Bible / Martha Pilot CMT 4 Dec-08 32,500 - 30,000 - 62,500 Empire Empire Pilot MTV 4 Dec-08 37,500 - 30,000 - 67,500 P10 Ancillary P10 Ancillary Ancillary NA 3 Dec-08 - - - 450,000 450,000 Power of 10 Power of 10 Series GSN 4 Jul-08 300,000 - 185,000 - 485,000 MMD / Martha / Bible MMD / Martha / Bible Series TVL/CMT 4 Dec-08 161,861 - 201,577 - 363,438 TBD 3 TBD 3 - - 0 - - - - - TBD 4 TBD 4 - - 0 - - - - - TBD 5 TBD 5 - - 0 - - - - - TBD 6 TBD 6 - - 0 - - - - - TBD 7 TBD 7 - - 0 - - - - - TBD 8 TBD 8 - - 0 - - - - - TBD 9 GSN Guarantee 2007 - - 1 Jun-08 - - - 150,000 150,000 2007 Closed Show 2007 Closed Show - - 1 Apr-08 33,456 - - - 33,456

- 2,495,937 600,000 1,939,749 631,736 5,667,421.93

$ % Cum %1 Delivered, booked on ER Books. 885,311 15.62% 15.62%2 In production 132,996 2.35% 17.97%3 Commissioned 481,736 8.50% 26.47%4 In Negotiation 4,066,129 71.75% 98.21%5 Pitched 101,250 1.79% 100.00%6 In Development - 0.00% 100.00%7 Other - 0.00% 100.00%

5,667,422

Risk Summary

2008 Forecast

19

Detailed Embassy Row Pipeline – Digital

Type Network Risk

Budget Reforecast Delivery Total Fees SPTV OH

Contribution Chargebacks Ancillary Gross Profit

The 9 The 9 Series Yahoo 1 Mar-08 198,146 - 182,342 - 380,488 Google/You Tube Google/You Tube 1 Series Google 3 Oct-08 266,666 - 131,429 83,334 481,429 Time Warner 1 TWC Whac-A-Charge (16) Other Time Warner 2 Mar-08 - - - - - MWW AMEX-Fashion Week (18) MWW AMEX-Fashion Week (18) Series AMEX 2 Mar-08 20,653 - 31,950 - 52,603 Momentum Project1 Momentum Project1 Other - 1 Sep-08 55,415 - 75,000 - 130,415 Tub Model Business Tub Model Business Interactive Series - 6 Feb-09 125,000 - 125,000 46,875 296,875 TBD 1 Stringer Message (19) Special Sony 2 Mar-08 383 - - - 383 TBD 2 MWW AEFN Recap (20) Special - 2 Apr-08 3,538 - - - 3,538 TBD 3 TWC TP The Cause (13) Special Time Warner 2 Jan-08 734 - - - 734 TBD 4 TWC 4th Cycle LA (15) Special Time Warner 2 Apr-08 1,929 - - - 1,929 TBD 5 TWC 4th Cycle Holding (15a) Special Time Warner 3 Mar-08 - - - - - TBD 6 TWC Print (9) Special Time Warner 3 Jan-08 420 - - - 420 TBD 7 MWW AMEX TFF(22) Special AMEX 2 Jun-08 - - - - - TBD 8 Sir Howard Stringer (17) Special Sony 2 Mar-08 313 - - - 313 TBD 9 Sir Charge - Buffalo (21) Special Time Warner 3 Jun-08 - - - - - TBD 10 TWC Whac-A-Charge (16) Other Time Warner 2 Mar-08 10,500 - 3,000 - 13,500 TBD 11 Google/You Tube 2 Series Google 4 Mar-08 114,285 - 98,571 83,333 296,189 TBD 12 AMEX US Open Golf Special AMEX 3 Aug-08 - - - - - TBD 13 - - - 0 - - - - - TBD 14 - - - 0 - - - - - TBD 15 - - - 0 - - - - - TBD 16 - - - 0 - - - - - TBD 17 - - - 0 - - - - - 2007 Closed Show 2007 Closed Show Interactive Series - 1 Jun-08 340,891 - - - 340,891

- 1,138,873 - 647,292 213,542 1,999,706

$ % Cum %1 Delivered, booked on ER Books. 851,794 42.60% 42.60%2 In production 73,000 3.65% 46.25%3 Commissioned 481,849 24.10% 70.34%4 In Negotiation 296,189 14.81% 85.15%5 Pitched - 0.00% 85.15%6 In Development 296,875 14.85% 100.00%7 Other - 0.00% 100.00%

1,999,706

2008

Risk Summary

Forecast

20

Detailed Embassy Row Pipeline – Sports

Type Network RiskBudget Reforecast Delivery Total Fees SPTV OH Contribution Chargebacks Ancillary Gross Profit PC Darts Weekend PC Darts Weekend Series TBD 2 May-08 (25,000) - - - (25,000) Strongest Celeb Strongest Celeb Series CBS 4 Dec-08 165,000 - 130,000 - 295,000 Fox Game Show Pilot Fox Game Show Pilot Pilot Fox 4 Sep-08 19,875 - 13,250 - 33,125 Fox Game Show Series Fox Game Show Series Series Fox 5 Mar-09 90,000 - 90,000 - 180,000 Cable Pilot 1 Cable Pilot 1 Pilot TBD 5 Jan-09 20,000 - 10,000 - 30,000 Andy Rodick Andy Rodick Series MoJo 5 Nov-08 150,000 - 75,000 - 225,000 I Scored A Goal I Scored A Goal Pilot TBD 4 Dec-08 12,500 - 12,500 - 25,000

- - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - -

2007 Closed Show 2007 Closed Show Other - 1 May-08 1,527 - - - 1,527 -

433,902 - 330,750 - 764,651.75

$ % Cum %1 Delivered, booked on ER Books. 1,527 0.20% 0.20%2 In production (25,000) -3.27% -3.07%3 Commissioned - 0.00% -3.07%4 In Negotiation 353,125 46.18% 43.11%5 Pitched 435,000 56.89% 100.00%6 In Development - 0.00% 100.00%7 Other - 0.00% 100.00%

764,652

2008

Risk Summary

Forecast

21

Detailed Embassy Row Pipeline – Factual

Type Network Risk

Budget Reforecast Delivery Total Fees SPTV OH

Contribution Chargebacks Ancillary Gross Profit

Throwdown 4/5 Throwdown 4/5 Series Food 2 Jun-08 - - - - - Grill It Grill It Series Food 2 Aug-08 - - - - - SOBE Special SOBE Special Special Food 2 Apr-08 6,000 - 7,550 - 13,550 Real Food Real Food Series Yahoo 2 Jun-08 - - 18,000 - 18,000 Hoggs & Heifers Hoggs & Heifers Series Oxygen 4 Nov-08 80,000 - 160,000 - 240,000 My Mail My Mail Interactive Series Food 2 Apr-08 2,500 - 5,150 - 7,650 Whisk & Laidle Whisk & Laidle Interactive Series f2.tv 4 Nov-08 5,000 - 12,500 15,000 32,500 Lick Lick Interactive Series f2.tv 4 Oct-08 5,000 - 12,500 15,000 32,500 Food Freaks Food Freaks Interactive Series f2.tv 4 Mar-09 5,000 - 12,500 15,000 32,500 Food Freaks Food Freaks Pilot TBD 5 Jan-09 5,000 - 12,500 - 17,500 Life Scene Investigations Life Scene Investigations Pilot TLC 5 Dec-08 5,000 - 12,500 - 17,500 Hairapist Hairapist Pilot TBD 5 Dec-08 20,000 - 7,500 - 27,500 Little Shop of Flowers Little Shop of Flowers Pilot TBD 5 Dec-08 20,000 - 7,500 - 27,500 Phil Varone - Rock Star Recepie Phil Varone - Rock Star Recepie Pilot TBD 6 Dec-08 20,000 - 7,500 - 27,500 TBD1 Kohl's Vignettes Special Food 2 Jun-08 - - - - - TBD2 Summer Essentials Websode Interactive Series FN.com 2 Nov-08 - - - - - DNF1 DNF1 Series FN 3 Dec-08 - - 6,000 - 6,000

- DFN2 - FN 3 Jan-09 - - 6,000 - 6,000 - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - -

- 173,500 - 287,700 45,000 506,200

$ % Cum %1 Delivered, booked on ER Books. - 0.00% 0.00%2 In production 39,200 7.74% 7.74%3 Commissioned 12,000 2.37% 10.11%4 In Negotiation 337,500 66.67% 76.79%5 Pitched 90,000 17.78% 94.57%6 In Development 27,500 5.43% 100.00%7 Other - 0.00% 100.00%

506,200

2008

Risk Summary

Forecast

22

Detailed Embassy Row Pipeline – Film

Type Network RiskBudget Reforecast Delivery Total Fees SPTV OH ContributionChargebacks Ancillary Gross Profit Tilman (Co-Pro) Tilman (Co-Pro) Film A&E 2 Sep-08 - - - - - ESPN Films ESPN Films Film ESPN 5 Dec-08 25,000 - - - 25,000 Tennis Movie Tennis Movie Film ESPN 6 Dec-08 - - - - - TBD 2 - - - 0 - - - - -

- - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - - - - - - 0 - - - - -

- 25,000 - - - 25,000.00

$ % Cum %1 Delivered, booked on ER Books. - 0.00% 0.00%2 In production - 0.00% 0.00%3 Commissioned - 0.00% 0.00%4 In Negotiation - 0.00% 0.00%5 Pitched 25,000 100.00% 100.00%6 In Development - 0.00% 100.00%7 Other - 0.00% 100.00%

25,000

2008

Risk Summary

Forecast

23

Embassy Row Headcount – CY2008

Embassy Row Staff Jan-08 Feb-08 Mar-08 Apt-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 TotalMichael Davies - CEO 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 33,333 499,995Jen Kelly - SVP, Development 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 9,667 145,005Tammy Johnston - SVP, Production 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 37,500Michael Erlinger, VP Legal 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 231,255Madelene Hannson - VP, Interntational Sales 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 12,833 192,495Ian Pine - VP, Finance 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 11,167 167,505Kim Martin - SVP, ER Factual 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Stephanie Masarsky - VP, Digital 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 187,500Dave O'Connor - VP, Programming ER Sports 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Claude Davies - Director, Films 0 0 0 0 0 0 0 0 0 0 0 0 4,167 4,167 4,167 12,501Director, Development 0 0 0 0 0 0 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 112,500Jennifer Simons - Producer 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 93,750Carolyn Louth - Graphic Design 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 5,850 87,750Tracey Bowen - Manager, Publicity 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 0 0 0 57,000Nicola Davies - Manager, Talent Relations 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 4,750 0 0 0 57,000Maggie Field - Manager, Production 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 6,666 99,990Dan Volpe - Production Manager 4,792 4,792 4,792 4,792 4,792 4,792 4,792 4,792 4,792 4,792 4,792 4,792 0 0 0 57,504Jordan Johnson - Operations Manager 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 4,583 68,745A.C. Caraballo - Manager, Production Finance 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 5,417 81,255Colleen Corcoran - Manager, International & Bus Deveop 4,333 4,333 4,333 4,333 4,333 4,333 4,333 4,333 4,333 4,333 4,333 4,333 0 0 0 51,996Kristina Maximenko - Manager, HR 5,208 5,208 5,208 5,208 5,208 5,208 5,208 5,208 5,208 5,208 5,208 5,208 0 0 0 62,496Paralegal 0 0 0 0 0 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 41,670Fran Alswang - Supervising Producer, ER Factual 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Eve Schenk - Director, Production ER Factual 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Erica Walsh - Producer 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 9,583 143,745Megan Miguez - Sr Casting Producer 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 112,500Susan Warner - Manager, Development 6,450 6,450 6,450 6,450 6,450 6,450 6,450 6,450 6,450 6,450 6,450 6,450 0 0 0 77,400Kate Susman - Producer 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 112,500Dan Bannett - Editor 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Christian Lesperance - Editor/Assoc Prod 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Maureen Traynor - Associate Producer, Digital 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 62,505Ana Mijich - Exec Assistant 208 208 208 208 208 208 208 208 208 208 208 208 208 208 208 3,120Samantha Repp - Exec Assistant 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Chris Dunn - Production Assistant 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0MONTHLY SALARY EXPENSE 185,424 185,424 185,424 185,424 185,424 189,591 202,091 202,091 202,091 202,091 202,091 202,091 175,975 175,975 175,975 2,857,182Monthly Payroll Taxes 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 11,442 279,079

confidential draft embassy row acquisition update june 2008

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