SPT Networks Business Development Overview January 2013 Deal Summary ($ in MM) Est. FY14 Valuation Cash # Deal Description of Opportunity Description of Potential Transaction (1) Outlay Asia Pacific / India Acquisition of Maa TV gives SPE an instant foothold in Southern Acquire 53% stake in Maa TV for 1 Maa TV India and provides a platform to launch local language versions of $205 $107.4 $113M MSM channels in the region Dori Media Group’s Acquisition of the Indonesian channels would increase SPT’s Acquire 25-50% stake in DMG’s $6.8 - 2 Indonesian $27 - $31 presence in Indonesia Indonesian channels for $6.8 - $15.5M $15.5 Channels Asia Dramatic Channel (ADC) would be an attractive channel to Asia Dramatic add to the portfolio in Japan: 1) increase distribution of ADC, 2) Transfer 100% of ADC from So-net 3 Channel (ADC) / $2 - $4 $2 - $4 Entertainment So-net complement SET ONE and 3) strengthen ties with Korean programming partners Launch channel in Late Summer/ Fall 4 SET Australia Launch first fully owned channel in Australia TBD $9 2013 EMEA Acquisition allows SPT to establish a European beachhead for Acquire 51% of Vidzone for $5.6M 5 Vidzone Digital Networks and Crackle and gain distribution scale and (SPT also assumes $3M in net debt; a $14 $8.6 leverage with platform partners cash outflow) GNAM / Space Investment would allow SPT to establish an immediate market Invest $2.0 - $4.8M for 25-51% stake $2.0 - 6 $6 - $8 Power presence in the Middle East in Space Power $4.8 Acquisition would allow SPT to establish an immediate market e2 (SET Turkey) presence in Turkey and provides SPT with a platform to Acquire 100% of e2 channel from 7 $7.5 $7.5 (2) Channel launch/acquire additional advertiser supported and pay Dogus Media Group cable/satellite channels over the next three years 8 SMC Norway Launch SMC channel in Scandinavia Launch channel in 2013 TBD $5 AXN Movies 9 Launch library movie channel off Central Europe’s infrastructure Launch channel in 2013 TBD $5 Central Europe Acquisition of the True Movies/Entertainment assets makes SPT Acquire 100% of True Movies and True True Movies and the #2 movie provider on the Sky platform, complements Entertainment from CSC with 100% of 10 $30 $20 - $30 True Entertainment Movies4Men and provides cross-promotion opportunities with SPT’s stake in ITN valued at $10M and SMC/SET and helps Dolphin’s ad sales business $20M in cash SPT UK secured 6 month trial to test ad potential of a movie 11 Freeview channel feed on a premium EPG slot on Freeview. If successful, Acquire premium EPG slot TBD TBD opportunity to acquire this premium EPG slot (1) Estimated valuation assumes the total EV value of the asset, not the share only owned by SPT. (2) e2/SET Turkey has a $1M cash outlay in FY13 and $6.5M in FY14. 2 Deal Summary (Cont’d) ($ in MM) Est. FY14 Valuation Cash # Deal Description of Opportunity Description of Potential Transaction (1) Outlay United States Acquisition allows GSN to accelerate growth in the crucial mobile GSN to acquire 100% stake in Game 12 Game Circus games sector with successful products and a meaningful sized Circus for $15M upfront with up to a $15 - $35 $15 (2) audience $20M earn-out component Acquisition of TV Asia will add to MSM’s already strong US presence in the South Asian TV market (SET Asia, SET Max, Sony 13 TV Asia Acquire 100% stake in TV Asia $26 $26 Sub and Sony AATH) and provide an opportunity to exploit MSM’s content library Expand our US networks footprint and leverage SMC/Cine channel Acquire 65.5% of FEARnet from 14 FEARnet Buy-up infrastructure and expertise to obtain cost savings and synergies Comcast/Lionsgate for $23.7M; the $36 $11.9 for FEARnet share SPT doesn’t already own Latin America Opportunity to acquire local channels in Peru along with carriage Acquire 100% of Pisco’s channel 15 Pisco $10 - $15 $10 commitment and content rights business (1) Estimated valuation assumes the total EV value of the asset, not the share only owned by SPT. (2) Game Circus has a $15M cash outlay in FY13. 3 Other Discussion Topics • AMC • GSN • Starz • WGN America • Hallmark 4 Maa TV Overview – India Key Considerations • SPT is in the process of acquiring 53% of Maa TV from Nimmagadda Prasad, who currently owns 64% of the company, and other minority and employee shareholders • Total 53% acquisition is expected to occur in two transactions, 51% at close (in FYE14) for $98M plus assumption of $9M in debt, and $5.4M in FYE15 for an additional 2% stake • Maa TV was launched in 2002 and has a well-distributed bouquet of 4 channels in Southern India • Acquisition of Maa TV will give SPE an instant, strong presence in Southern India, provide a platform to launch local language versions of the other MSM channels and give SPE a foothold in Southern India, which is faster growing than the Hindi-speaking region • Transaction is pending outcome of proceedings between the Indian Tax Authority and Mr. Prasad, tax clearance for shares SPE will purchase, and Indian regulatory board approvals Valuation Basis • $205MM enterprise value for 100% Maa TV • Third party valuation firm (D&T) determined this Description Acquire maJority stake in Maa TV purchase price is at the low end of the value that SPE Post Close 53% SPT, 47% Mr. Prasad / other minority shareholders or another strategic buyer would expect to derive from Equity Ownership acquisition of Maa TV ($ in MM) FY13E FY14E FY15E FY16E • Total cash layout of $113M for 53% stake in Maa TV: FYE 3/31 ‒ $107.4M at close of initial transaction ($98.4MM Revenue(100%) $39.2 $47.5 $57.8 $71.0 for 51% of shares plus assumption of $9M in debt) EBIT (100%) $9.3 $13.7 $19.3 $27.8 ‒ $5.4M in FYE15 to acquire additional 2% stake SPE EBIT NA ($2.2M) $5.9M $16.4M • ProJected NPV of $23M, IRR of 17% and payback of 11 years US$ values based on exchange rate of 55INR:US$ 5 Dori Media Group Indonesian Channels Overview – Indonesia Key Considerations • SPT is exploring options to increase its presence in Indonesia – Indonesia is an attractive market with attractive demographics and strong economic growth – There are limited opportunities to acquire channels in Indonesia • SPT has been approached with an opportunity to acquire a stake in Dori Media Group’s (DMG) Indonesian channels business • DMG currently operates three channels in Indonesia with an exclusive deal with the leading pay-TV platform MNC Skyvision – Televiva – Telenovela channel with DMG owning 100% – GINX - Video game channel with DMG owning 75% and 25% owned by UK based Ginx TV – Baby – Baby and toddler channel with DMG owning 37.5% with the remainder owned by Fox controlled Baby TV Valuation• Potential Basisexpansion opportunities include Poland, Africa and within Indonesia DMG Indonesian Channels (1) • SPT is currently completing its valuation of Description Acquire 25-50% stake in DMG’s Indonesian channels DMG’s Indonesian channels. Using the Equity 25-50% SPT (proposed) Company’s business plan, SPT has calculated a Ownership preliminary EV of $27M - $31M ($ in MM) CY13E CY14E CY15E CY16E • DMG has provided its initial estimated EV of Revenue(100%) $6.5 $7.3 $8.3 $9.6 $33M - $49M EBIT (100%) $2.4 $2.9 $3.5 $4.4 Net Income • SPT is assuming it would acquire a 25-50% $2.1 $2.6 $3.2 $4.0 (100%) stake in this business but discussions with DMG are at a preliminary stage (1) Based on DMG management estimates. 6 Asia Dramatic Channel (ADC) / So-net Overview – Japan Key Considerations • SPT has an opportunity to transfer So-net’s Japan based Asia Dramatic Channel (ADC) into SPT’s Japan portfolio – ADC is a basic tier channel with programming from Korea, Taiwan and China – Launched in July 2003 and currently has 2M subscribers • SPT remains interested in transferring So-net’s media assets and believes ADC would be an attractive channel to add to the portfolio in Japan – SPT will leverage its infrastructure and relationships for its existing three Japan channels to increase distribution of ADC – Complements our successful Asian-Korean drama channel, SET ONE – Strengthens relationships with Korean programming partners Valuation Basis ADC Description Transfer 100% of ADC from So-net Entertainment • So-net has indicated they may be willing to Equity 100% SPT transfer ADC at its book value of $2 - $4M Ownership • Using SPT’s business plan for expanding ($ in MM) FY14E FY15E FY16E FY17E distribution, the NPV would be $14.3M and IRR Revenue(100%) $8.6 $10.1 $10.4 $11.2 of 58% (1) EBIT (100%) $0.0 $0.5 $2.0 $2.6 Net Income $0.0 $0.3 $1.2 $1.5 (100%) (1) Based on perpetuity growth rate of 1% and 10.5% discount rate. 7 SET Australia Channel Launch Overview – Australia Key Considerations • SPT is evaluating an opportunity to launch an SET channel in Australia on Foxtel’s satellite and cable platforms • The business plan has the channel receiving dual revenue streams from ad sales and affiliate fees (sub fees are still being negotiated with Foxtel) • The programming is expected to consist of a variety of general entertainment programs (i.e., dramas, comedies, soaps, talk shows and library shows), however, a finalized programming grid is still being worked out • Outlet for 1st run SPT series including Mob Doctor, The Client List, David Shore series, Michael J.