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Confidential Draft

[DRAFT]. Overview of Non-Scripted Television Strategy May 2008. Confidential Draft. Executive Summary. Non-scripted television represents a compelling growth opportunity for SPE Success requires global coordination and additional investments to achieve scale

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Confidential Draft

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  1. [DRAFT] Overview of Non-Scripted Television Strategy May 2008 Confidential Draft

  2. Executive Summary • Non-scripted television represents a compelling growth opportunity for SPE • Success requires global coordination and additional investments to achieve scale • 2waytraffic provides critical distribution capabilities internationally • Embassy Row will serve as the cornerstone of our domestic strategy and will provide content for 2waytraffic’s international pipeline • Additional investments in Executive Producer/Production Company deals will be necessary to provide supplemental capacity • Anticipate 1-3 U.S. producer deals plus a production company deal • In addition, we have an immediate opportunity to partner with Ryan Seacrest

  3. Demand for Non-scripted Content Continues to Grow Game / Reality as a % of Primetime Hours Game/reality shows make up 16 of the top 40 primetime programs among Adults 18-49 and represent 40% of the top 20 primetime programs among Adults 18-49 NOTE: A 6-year trend of reality/game shows as a percentage of primetime hours for the 5 major networks.

  4. Investment is Crucial in Order to be Competitive In addition to captive production arms, networks are investing in 3rd party relationships to expand their supply of non-scripted programming

  5. Non-scripted Content is an Attractive Segment and a Fit with our Resources Market Dynamic SPE Approach • Growth – Broadcasters increasingly relying on hit non-scripted formats • Lower cost – Non-scripted programs are usually less expensive to produce • Interactivity – Polling, voting and games increase viewer engagement and time spent with show brands • Global – International and domestic markets are linked (27% of scripted; 29% of reality broadcast pilots are adapted from international formats) • Cross-platform – Shows offer ancillary profits (mobile games, online games, SMS) • Coordinate global approach across SPT/SPTI resources • Capitalize on SPTI infrastructure • Exploit SPT strength in creative development, ad sales, distribution • Utilize worldwide talent pool and relationships • Expand international, original, and library shows into global brands • Meet growing demand for original programming • Retain full ownership of formats • Mitigate production costs while still yielding quality product

  6. SPT Global Game/Reality Operational Structure Expanding SPT into the global marketplace • Develop and produce new shows • Introduce international shows in the domestic marketplace • Re-introduce SPT library shows • Acquire and exploit new formats internationally • Sell U.S. based formats internationally Domestic International SPT Team SPTI Team Int’l formats brought to the U.S. 2waytraffic Embassy Row (Supported by Executive Producer deals and Production Company deals) U.S. formats sold int’l (including shows originally based on int’l formats) Ryan Seacrest Productions Embassy Row (3 Executives)

  7. Domestic Resources • Holly Jacobs & SPT create and exploit reality formats for all domestic outlets SPT Team • Led by Michael Davies, Embassy Row: • Creates new formats • Develops international formats • Manages a 3 person international acquisition team • Manages 1-3 3rd party producers and production company partners in conjunction with SPT management Embassy Row • SPT adds 1-3 Executive Producers / Creators to provide additional capacity; closely coordinate with Davies • Primarily focused on Network product Producers • SPT enters into an overall deal with a domestic production company to develop and produce cable and network shows Production Co. (Partners) • SPT enters into an overall production deal with Ryan Seacrest to create formats and revitalize library titles through radio, television, and digital outlets Ryan Seacrest

  8. International Resources • Hayley Babcock, Anthony Root, and SPTI acquire and exploit formats SPTI Team • Primary distribution vehicle for formats in international markets • Exploits its catalog of content (e.g., Millionaire) • Acquires and exploits new formats 2waytraffic • Adds 3 executives to acquire formats in international territories • South America • UK / Scandinavia • Australia Embassy Row • Continued development of new formats by wholly owned production companies (e.g. Tuvalu) and partners (e.g., Shine) Production Cos. (Owned)

  9. Potential Talent Pool In addition to our Embassy Row acquisition, SPT will strike deals with leading producer/ production companies to provide additional capacity Acquisition $25–75MM (one-time) Annual Spend $2–6MM $2MM $2-5MM $6–13MM (1) Recoupable as a cost of production in calculating profit participation. (2) SPT’s interest in created shows. (3) Includes Davies participation.

  10. Ryan Seacrest Productions • 3 year term • $1.5 - $2MM per year, fully recoupable • 50% crossed back-end Deal Structure • Seacrest is exclusive to SPT in all forms of television excluding existing commitments • Seacrest utilizes his brand and consumer reach (radio show and American Idol) to help reinvigorate our library properties and launch new shows • Option to bring him on as host of WOF (6 year deal, $10MM per year) Working Relationship / Scope of Projects • We believe Seacrest has received multiple partnership proposals • To remain competitive, we will need to [make a verbal indication of interest] Status and Next Steps

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