Confidential Draft Embassy Row Acquisition Update June 2008

1 Executive Summary We recommend escrowing roughly $10.5M of the closing price to protect against an earnings miss If Davies hits $3.4M of EBITDA this year, he receives the escrowed funds in full If not, he can still recapture the escrowed amount through the earn-out (still up to $75M in total consideration) Embassy Row Performance Embassy Row Jan–May earnings are $1.5M worse than last year Power of 10 is moving to GSN Several smaller shows are off the air (WSOPC, Grand Slam, Chain Reaction); entire slate has become much more speculative Structuring Alternatives LOI Status We have negotiated down to a handful of issues –Non-compete language –Recoup of our $1.8M –Cap on earnings required for Davies to receive earn-out –Davies NYC tax issue

2 Embassy Row’s Q1 Miss -$0.4M vs. $1.1M = $1.5M shortfall We recommend escrowing $10.5M $1.5M x 7 = $10.5M

3 Summary of Potential Calendar Year 2008 Profit Shortfall

4 FY09 EBIT Impact to SPE

5 Embassy Row Slate Update Majority of shows on the 2007 slate are now off the air 2008 shows are identified – several have networks attached; with two pilots ordered Beyond 2008, shows are entirely speculative Denotes not in previous slate. Denotes struck from previous slate. Pilot ordered. In Development / Pitched to Network. Early Development.

6 Model Assumptions Base CaseDavies Case Slate: Davies’ slate plus format or syndicate successes; add acquired product; eliminate CB on new shows; standardize profits by show type Power of 10: Includes profits from Power of 10 (format/syndication) Format Profits: Format profits are at slightly below the industry average ($3.0M) Local Production: Local production in the Germany +$3M (for Power of 10) Sports & Film: Eliminated Interactive Profit: Starts at $1.5M (in- line with Davies) and increases 5% annually (less than Davies) Factual Profits from ER: From ER’s business plan Incremental Investment: Add HC, $1-2M in development/acquisition budget, $500K+ in self-funded pilots Slate: Same but includes chargebacks and Davies’ estimated profits by show Interactive Profits: Unchanged from Davies’ forecast Sports and Film: Unchanged from Davies’ forecast Other: All other assumptions same as base case Updates: Power of 10: Moves to GSN (not CBS); no first run versions; format declines; no local language production Eliminated canceled shows Update slate; better align base case cost per show with Davies’ assumptions Add one finance headcount Escrowed portion of purchase price - $10.5MM (see pg. 2) Revised FY09 forecast (see pg. 3)

7 Davies Case and Base Case Comparison * See Page 4. *

8 Incremental SPT Investments

9 Updated Valuations Old Base Case NPV (w/$25M purchase price): $12.2M Case Base w/ Investments ($5.2M) Base w/o Investment $17.8M Davies (including adjustments on assumptions page) w/ Investments $60.7M New NPV (Pay close) $5.3M $28.3M $60.7M New NPV (Pay close) Davies (including adjustments on assumptions page) w/o Investments $96.1M

10 An acquisition only appears feasible if a portion of the purchase price is escrowed Confirm our willingness/ability to hold the line on escrowing the up-front payment –Revisit feasibility of escrow with Davies given that he has previously indicated that a deal with less than $25M in initial consideration is unacceptable Finalize recommendation to senior management –Either acquire with escrow, or –Renew  $1.0M a year for 3 years; non-recoupable; any 3 rd party backend participants will be taken off the top and not directly from Davies’ share pending SPT approval  Consider use of budgeted $3.0M Embassy Row loss to cover other deals Schedule meeting with Lynton/Hendler/Calkins for the week of 7/7/08 Conclusions/Next Steps

11 APPENDIX

12 Embassy Row Reconciliation – Base Case Payment at Close: $14.5 Escrow Paid: $0 Structure: * Earn-outs Paid: $0 Total Consideration: $14.5 Amortizable Assets: $14.5 * See Page 4.

13 Embassy Row Reconciliation – Davies Case Payment at Close: $14.5 Escrow Paid: $10.5 Structure: Earn-outs Paid: $50 Total Consideration: $75 Amortizable Assets: $40

14 Amortization Detail Amortization is modeled as follows: Identify ER’s asset value at time of close Amortize over expected lives (some up to 10 years) IF… Asset value is less than total consideration, amortization is based on asset value Asset value is greater than total consideration, amortization is capped at consideration Case Base w/ Investment Base w/o Investment Davies w/ Investment Closing Payment $14.5 Paid From Escrow - - $10.5 Earnout - - $50.0 Total Consideration $14.5 $75 Amortizable Assets $14.5 $40 Note: Values in $MM Davies w/o Investment $14.5$10.5$50.0$75$40

15 Amortization Cont’d $25MM Fair Market Value $40MM Fair Market Value (Assuming High Consideration) $14.5MM (If capped at total consideration)

16 Revised Slate

17 Detailed Embassy Row Pipeline – Entertainment

18 Detailed Embassy Row Pipeline – Digital

19 Detailed Embassy Row Pipeline – Sports

20 Detailed Embassy Row Pipeline – Factual

21 Detailed Embassy Row Pipeline – Film

22 Embassy Row Headcount – CY2008