CSC Media Group

acquisition update AUGUST [ ], 2012 2

CSC Deal Update

• SPT believes that an acquisition of the and Entertainment business is very attractive and complements its existing UK networks business and provide incremental EBIT and Cashflow from day 1

• VSS have indicated they wish to dispose of 100% of the CSC Media Group business • SPT have expressed interest in only the Movie and Entertainment channels • Rubis Media are advising 2 other parties who would acquire the Music and Kids channels • Music – Box TV (Bauer Media/ JV) who would fund a bid through internal financing • Kids – Switchover Media (independent Italian channels business) who would need to secure external financing to fund a bid; concerns exist about Switchover’s ability to secure financing • In order to minimise execution risk SPT has initiated discussions with NBC Universal as a backup to Switchover in the event they are unable to secure funding (NBC have expressed interest in the Kids Channels) • In addition Viacom is rumored to be one of the other bidder(s) and may be willing to sell the Movie and Entertainment channels to [meeting with Viacom scheduled for 14th August]

• SPT proposes a 2nd round bid valuation for True Movies and Entertainment of $40M (~£25.7M) – Assuming $10MM paid at close (FYE13), DWM of $36.2MM, payback by Year 9, NPV of $13.7M and IRR of 22% – Acquisition multiple of 7.4x 2012F EBITDA and 13.7x 2011A EBITDA – Assumed asset value of [$7MM] for EPG slots and programming – SPT’s first round indicative valuation for 100% was $140M–$157M (~$47M implied valuation for True Movies/Ent)

• SPT’s final bid including completion of due diligence due by the end of August – SPT to determine size and means of FYE13 commitment as part of ITN equity swap – SPT to select partners to move forward with consortium bid for the entire Company of $120M–$140M or submit a bid for only the True Movies channels 3

Strategic Rationale for True channels business

• Market position: ● Increases Adults reach to 8 million individuals per month (27% increase) ● Sony becomes the #2 movie provider on the Sky platform

● Brand fit: ● True Movies – clear brand positioning with international appeal and understanding, complements existing Sony portfolio ● True Movies/Entertainment’s audience skews female, cross promotion opportunities with SMC and SET ● Complements male-skewing ’s audience for advertising sales ● [Gary to insert brand positioning chart for SMC, SET, M4M, True Movies and ]

● Financial impact: ● Low cost programming model delivers high EBIT margins (35%-40%) ● Delivers shelf space to increase efficiencies and sweat program assets across portfolio bringing down program cost/hour across the group ● Delivers incremental scale and leverage for future ad sales representation negotiations – no short term upside for Dolphin though ● Leverages existing UK channel infrastructureFY13 FY14 FY15 FY16 ● Contributes positive EBITUK andCHANNELS: cash flow EXISTING from Day 1 BUSINESS Revenues 11,080 17,532 22,365 26,523 EBIT (incl PPA) -7,821 -3,661 504 3,561 Margin -71% -21% 2% 13% UK CHANNELS: CSC Revenues 3,253 13,210 13,925 14,492 EBIT (incl PPA) 262 1,883 2,923 4,105 Margin 8% 14% 21% 28% UK CHANNELS: EXISTING BUSINESS AND CSC Revenues 14,333 30,741 36,290 41,015 EBIT (incl PPA) -7,558 -1,778 3,427 7,665 Margin -53% -6% 9% 19% 4

Financial overview – True Movies & Entertainment • Proposed purchase price of $40M (7.4x multiple of FYE12 EBITDA) • Projections per SPE and assume that True Movies channels are integrated with SPE’s existing UK channels FYE 12/ 31 Projected FYE Dec 31, (USD '000s) 2012 2013 2014 2015 2016 2017 REVENUE Net Advertising Revenue 10,624 11,419 11,990 12,465 13,088 13,742 Other Revenue (Int'l/Teleshopping) 940 1,596 1,803 1,857 1,913 1,970 TOTAL TRUE CHANNELS REVENUE $11,564 $13,015 $13,793 $14,322 $15,001 $15,713 Programming 2,263 2,586 2,930 3,135 3,291 3,456 % Growth 35% 14% 13% 7% 5% 5% % of Gross Revenue 19% 20% 21% 22% 22% 22% Other Expenses 3,868 4,958 5,018 5,179 5,334 5,496 Total Operating Expenses 6,131 7,544 7,948 8,314 8,625 8,952

EBITDA $5,433 $5,471 $5,845 $6,008 $6,376 $6,761 EBIT (less PPA) 5,139 1,616 2,720 3,788 5,054 6,169 % Gross Revenue 39% 11% 18% 24% 30% 35%

Operating Cash Flow $3,811 $4,134 $4,250 $4,459 $4,791

Purchase Price ($10,000) ($30,000) Net Cash Flow to SPE ($10,000) ($26,189) $4,134 $4,250 $4,459 $4,791 Cumulative Cash Flow to SPE ($10,000) ($36,189) ($32,055) ($27,805) ($23,346) ($18,556) PV (of Cash Flows & TV) @ 12% $50,499 PV (of Cash Flows) @ 12% $15,275 Purchase Price $35MM $40MM $45MM IRR to Sony 27% 22% 19% NPV to Sony $18.2MM $13.7MM $9.2MM Payback Year 8 Year 9 Year 10 Note: Assumes 9.2x EBITDA for terminal value in Year 5 or a 1% implied perpetuity growth rate. 5

Current BID status • Execution risk is increased by: total aggregated bid <[$125]MM, reliance on external financing, number of bid parties, deferral of purchase price payments, lack of ability to assume existing operations TRUE KIDS MUSIC TOTAL MOVIES SCENARIO 1: SPE RUBIS (Switchover) RUBIS (Box) 4 PARTIES  Valuation  $35M - $40M  $40M-$50M  $30M-$40M  $100M-$130M  Existing Operations  With SPE  With CSC  With C4  NA  Execution Risk  MEDIUM  HIGH **  LOW  LOW/MEDIUM •Switchover must obtain financing for purch price >€20M •Low initial bid from Rubis (£58M) •4 parties (SPE, Switchover, Bauer, Channel 4) •Deferred purchase price by SPE

SCENARIO 2: SPE NBCU RUBIS (Box) 4 PARTIES  Valuation  $35M - $40M  NA  $30M - $40M  $100M+  Existing Operations  With SPE  NA  With C4  NA  Execution Risk  MEDIUM  LOW  LOW  LOW/MEDIUM • 4 parties (SPE, Switchover, Bauer, Channel 4) • Deferred purchase price by SPE

SCENARIO 3: [TBC] SPE VIACOM VIACOM 2 PARTIES  Valuation  $35M - $40M  NA  NA  $100M+  Existing Operations  With SPE  NA  NA  NA  Execution Risk  MEDIUM  LOW  LOW  LOW • Deferred purchase price by SPE 6

TIMELINE

DATE ACTION Now – 14th August All parties finalise separate valuations of respective business assets and operations 15th August Box TV request approval from Channel 4 and Bauer Media boards to proceed with bid SPT request approval from senior management to proceed with bid Switchover confirm approval to proceed with bid and confirmation of financing • In the event Switchover is unable to secure financing, SPT formally engage with Viacom and/or NBC

31 August All parties submit 2nd round bids 7

appendix 8

Viewing analysis

Profile: True readdresses the gender balanceSony Chans Adults Reach: True increases reach by 21% TRUE 73% 8,249,000 Combined

27% 61% 6,491,000 53% 47% 39%

27%

SET, SMC, M4M, M&M Plus True Movies Group Men Women

% of Sky Impacts by movie group: True doubles Sony’s share of movie impacts on the Sky platform 35%

100% 24%

16% 12% 12% 9% 6%

0%

SMC, M4M TRUE Combined Sky Movies Film4 Movies 24 MGM HD Horror Channel