Embassy Row Acquisition Overview January 18 2008 Confidential

Embassy Row Acquisition Overview January 18, 2008 Confidential Draft

Original Deal Structure • $20. 0 MM up-front payment • Up to $14. 5 MM in earn-outs tied to EBITDA on all ER shows • 100% of earn-out paid if EBITDA target is met • 0% of earn-out paid if EBITDA is below a floor • Pro-rated if EBITDA is between floor and target • 5 year contract and an additional 2 year non-compete Max Total Consideration: $34. 5 MM PV(1) of Max Total Consideration: $28. 2 MM Note: (1) PV of up-front payment and maximum earn-outs at 16. 5% discount rate 1

Revised Earn-outs to Address Davies Asks While Better Aligning Incentives with SPE Goals Davies Asks • Roughly the same earn-out as original proposal if original EBITDA targets are hit • Upside if original targets are significantly exceeded SPE Considerations • Earn-outs provide an incentive for Davies to drive profits from successful formats (rather than from EP fees and overhead chargebacks) • Minimum EBITDA required to qualify for earn-outs is greater than EBITDA SPE already expects to achieve from Power of 10 • Earn-out paid is less than “incremental EBITDA” (i. e. , EBITDA from new shows) • Beginning in Year 2 (FY 10), SPE remains EBIT positive after Davies earn-out and deal amortization • There is no EBITDA value range in which 100% (or more) of incremental EBITDA goes to Davies 2

Revised Deal Structure • $20. 0 MM up-front payment • Up to $28. 0 MM of potential earn-outs tied to exceeding EBITDA thresholds – Earn-out = (EBITDA Above Threshold) x 66% x (Format Revenues as a % of Total Adjusted Rev 2) – Earn-outs are subject to defined dollar caps • 5 year contract; Sony has the option to extend Davies’ employment by 2 years at pre-negotiated “President-level” compensation Max Total Consideration: $48. 0 MM PV(1) of Max Total Consideration: $35. 7 MM Note: (1) PV of up-front payment and maximum earn-outs at 16. 5% discount rate (2) (Syndication Profits + Int’l Format Fees) / (Syn. Profits + Int’l Format Fees + EP Fees + Chargebacks + Other Revenue) 3

Overall Assumptions for Analysis • Slate assumptions: – Includes Davies’ estimates for existing shows on-air / currently under contracts – Builds on Davies slate to include acquired cable/network product, 1 st run syndication; extends new programs into syndication and formats sold abroad – Adjusts pilots to align more closely with industry pilot-to-pickup ratios • Includes 5% growth on ER overhead • Includes interactive profits (e. g. Yahoo shows) at $1. 5 MM growing at 0%, 5% or 10% (Embassy Row forecast profit at $1. 5 MM in FY 08 growing at 11% CAGR) • Excludes Embassy Row Films and TV Documentaries (Embassy Row business plan forecast these profits at $269 K in FY 08 growing to $2. 2 MM in FY 11) • Varies chargebacks (0% in low and mid case; 5% in high case) • Format successful shows in 17 territories at $5 K in 2 nd season • Successful shows sold into syndication in 3 rd year • EP Fees remain at 10%, including covered pilots • New headcount costs included • Acquisition Budget of $750 K in CY 09 growing at $250 K per year 4

Key Assumptions -- New Deal Structure Low Case Mid Case High Case Model Assumptions • Chargeback: 0% • Interactive Growth: 0% • Chargeback: 0% • Interactive Growth: 5% • Chargeback: 5% • Interactive Growth: 10% EBIT % of Adjusted Revenue Net Present Value (1): Acquired EBITDA $5. 3 (2) Value of Exit : $18. 2 Total Consideration: ($21. 5) Net Present Value: $1. 9 Consideration / 2007 EBITDA (3): 6. 2 x Net Present Value (1): Acquired EBITDA $5. 7 (2) Value of Exit : $19. 7 Total Consideration: ($21. 7) Net Present Value: $3. 8 Consideration / 2007 EBITDA (3): 6. 2 x Net Present Value Acquired EBITDA (1): $9. 1 Value of Exit (2): $29. 3 Total Consideration: ($22. 4) Net Present Value: $16. 0 Consideration / 2007 EBITDA (3): 6. 4 x Notes: Assumes a risk adjusted discount rate of 16. 5% for all NPV calculations (1) Includes value of new shows and excludes value of shows created under current contract (i. e. , excludes P 10 from incremental value calculation) 5 (2) Includes exit at 10 x multiple in 2013 (3) Assumes $3. 5 M in EBITDA for 2007

New Deal Structure: Value at Full Earn-out 100% Format Model Assumptions • EBITDA fixed at Format target levels EBIT % of Adjusted Revenue Net Present Value Acquired EBITDA (1): $26. 4 Value of Exit (2): $71. 1 Total Consideration: ($35. 7) Net Present Value: $61. 8 Consideration / 2007 EBITDA (3): 10. 2 x Notes: Assumes a risk adjusted discount rate of 16. 5% for all NPV calculations (1) Includes value of new shows and excludes value of shows created under current contract (i. e. , excludes P 10 from incremental value calculation) 6 (2) Includes exit at 10 x multiple in 2013 (3) Assumes $3. 5 M in EBITDA for 2007

Appendix 7

Slate Assumptions Pilot / Pick-up Ratio (1) Network Pick-ups / Pilots 33% Cable Pick-ups / Pilots 31% Industry Unscripted Pick-ups / Pilots 35% Series Success Rates (1) Model Industry Year 1 to 2 42% Year 1 to 2 27% Year 2 to 3 50% Year 2 to 3 61% Year 3 to 4 50% Year 3 to 4 67% Year 1 to 4 11% 8

Summary Slate (Calendar Year Basis) 9

Low-Case: 0% Chargeback and 0% Interactive Growth Notes: (1) “F” Included in % of revenue from format calculation of format revenue. (2) “N” Included in % of revenue from format calculation of non-format revenue. 10

Mid-Case: 0% Chargeback and 5% Interactive Growth Notes: (1) “F” Included in % of revenue from format calculation of format revenue. (2) “N” Included in % of revenue from format calculation of non-format revenue. 11

High-Case: 5% Chargeback and 10% Interactive Growth Notes: (1) “F” Included in % of revenue from format calculation of format revenue. (2) “N” Included in % of revenue from format calculation of non-format revenue. 12

Headcount Assumptions 13

2 Way Traffic Valuation • 7 x multiple on 2007 Net Profit, plus • 7 x multiple on difference between average of 2009 – 2011 Net Profit and 2007 Net Profit • Approximate value = $54. 0 M 14