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Section I: Background Information

Section I: Background Information. How was this transaction initiated? [Likely to be addressed verbally; see comments in RW presentation] Please discuss Sony Pictures Entertainment’s (Sony) strategic rationale for pursuing this transaction.

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Section I: Background Information

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  1. Section I: Background Information • How was this transaction initiated? • [Likely to be addressed verbally; see comments in RW presentation] • Please discuss Sony Pictures Entertainment’s (Sony) strategic rationale for pursuing this transaction. • [Likely to be addressed verbally; see comments in RW presentation] • 3. In Sony’s view, what is/are the most valuable “asset(s)” of GSN? • See slide • Please provide any board presentations or analyses performed which form the basis of the purchase price. • No such board presentations have been created

  2. CORE ASSETS • GROWTH AREAS Section I – 3a: GSN’s Most Valuable Assets Management • New team (as of late 2007) led by David Goldhill and Steve Brunell Carriage Agreements • 57MM households Advertisers • Traditional strength in DR • Increasing several rate advertisers including 2008 / 2009 upfront additions of P&G, Kraft, Walmart, Pet Smart, and Dish Network Brand • Known as the major multimedia provider of casual games entertainment Content Licensing / Programming • Sony library licenses including Wheel of Fortune, Jeopardy, and the Newlywed Game • Third party titles including WWTBAM, Family Feud, World Poker Tour, Weakest Link, and the Freemantle Library Original Programming • Catch 21, Bingo America GSN “Live” Concept • 3 hour block with live interstitials (including product placement) Free Games / GSN.com • 1.5MM uniques

  3. Section I – 3b: GSN’s Most Valuable Assets - Affiliate Agreements

  4. Section II : Industry and Competitive Data 1. Descriptive summary of GSN’s competitive position in the market and their strengths, weaknesses, opportunities, and threats 2. A list and description of competitors (both public and private companies) and those companies considered to be “most similar” to GSN 3. A list and description of any known merger and acquisition transactions involving target companies with operations considered “similar” to GSN • See slide • See slide • See slide

  5. Section II – 1a: GSN Key Statistics • Subs: 68.5MM • Median Age: 63 • Cable Prime Rank (A25-54): • ‘07-08: 56 (out of 74) • ‘06-07: 52 (out of 73) • C3 Retention (HH): 96% • Cable Avg = 92% • Top Five Programs (A25-54): • 1. Family Feud 0.19 • 2. Let’s Make a Deal 0.17 • 3. Bingo America 0.17 • 4. Who Wants to Be a Millionaire? 0.17 • 5. Chain Reaction 0.15 • Originals In Development • CATCH 21 (GAME SHOW) • THE DATING GAME (GAME SHOW) • THE NEWLYWED GAME (GAME SHOW DAYPART RATINGS TRENDS ‘08 ‘07 ‘06 ‘08 ‘07 ‘06 ‘08 ‘06 ‘06 ‘08 ‘07 ‘07 12PM-5PM Card Sharks, Family Feud, Jeopardy!, Lingo, Weakest Link, Wheel of Fortune 5PM-8PM Bingo America, Catch 21, Chain Reaction, Family Feud, Pyramid ‘08 ‘08 ‘06 ‘07 ‘07 ‘06 ‘07 ‘08 ‘08 ‘07 ACQUIRED VS. ORIGINAL PROGRAMMING ‘06 ‘06 8PM-11PM Catch 21, Family Feud, Pyramid, WhoWants to Be a Millionaire? 11PM-1AM Lingo, Who Wants to Be a Millionaire? 2007 - 2008 2008 - 2009

  6. Section II – 1b: SWOT Analysis • With 57MM subscribers, GSN’s reach is well above industry average of 39MM • New executive management team in place (recently hired new head of programming) • Close coordination with FUN Games has transformed GSN Digital into a profitable growth platform for the channel • Launched network re-brand, targeting core female audience • Used interaction and participation (e.g., GSN Live, Bingo America) to improve viewer engagement and provide differentiated product for advertisers Strengths • HH ratings with new management are relatively small, but have been on the rise • Need to strengthen programming with the introduction of shows to drive ratings and better control IP • Must continue to add more general rate advertisers (shifting away from reliance on DR) Weaknesses • Continue coordination with FUN Games; build properties that support a cross-platform business model (networks, online, radio) • Continue investment in original programming • Refresh aging fringe and prime strips with contemporary acquired programming to increase ratings and support original series launches • Drive scale into online advertising sales via creation of a vertical ad games network (via acquisition and/or rep deals) • Increase affiliate distribution and minimize migrations through pricing and marketing initiatives Opportunities • Competes with a continually increasing field of cable channels for viewership • Potential impact of the economy on DR advertisers (partially offset by shift of GSN to premium GR) Threats

  7. Section II – 2: Summary of GSN Competitors Cable Channels with Older, Female Skewing Demographic NOTE: All subscriber data per Kagan; For GSN, SPT internal documentation show 56MM subscribers

  8. Section II – 3: GSN Comparable Transactions Analysis • Based on comparable transactions GSN is worth at least $650MM (before cash)

  9. Section III: Historical Financial Data • Audited, reviewed, or compiled financial statements and corresponding notes for the most recent three fiscal years (or inception-to-date), including balance sheets, income statements, and statement of cash flows • Interim financial statements for the 12-month period immediately prior to the date of valuation, including balance sheets, income statements, and statement of cash flows, in as much detail as possible • 3. Revenue detail (e.g., by price and volume, product line, or line of business, as applicable) in absolute dollar amounts and as a percentage of total revenue for the most recent three fiscal years (or inception-to-date) and the interim period 12-month period referenced above • See slide • Same as item 1 Information being requested from Company

  10. Section III – 1: GSN Statement of Income 2006 – Q3 2008

  11. Section III – 1: GSN Consolidated Balance Sheet 2006 – Q3 2008

  12. Section III – 1: GSN Consolidated Statement of Cash Flows 2006 – Q3 2008

  13. Section IV: Prospective Data 1. Projected financial data (income statements, balance sheets, and statements of cash flow) for the next five fiscal years (or through the next full business cycle) 2. Revenue detail estimated in a manner similar to the historical presentation of data (i.e., in a format similar to the detail provided in Section III, Item #3 above) 3. What will capital expenditures and net working capital requirements be on a go-forward basis? Are these items viewed as a function of revenue, or are they viewed on an absolute dollar basis? 4. Discussion of the major assumptions which were utilized to develop the projected financial data, including: a. sources of revenue b. general and administrative expenses c. marketing and sales expenses d. net working capital requirements e. capital expenditures 5. With respect to the net fixed assets, what is the estimated remaining life of the current net fixed assets balance, and what is the estimated life of future asset additions? • See slide; Note: forecasts from September 2008 and are being updated • Being requested from management • Being requested from management • Being requested from management • Being requested from management

  14. Section IV – 1: GSN P&L Projections 2008 - 2012

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