GSN/FUN Update June 16, 2008

1 Status and Alternatives Prior to David Goldhill’s arrival, SPE was strongly considering an exit from GSN GSN’s core business was languishing Governance issues associated with a 50/50 venture limited flexibility Competitive environment had consolidated around large owners with multiple networks Our interest in GSN increased when: David Goldhill arrived, began to reinvigorate GSN and improve earnings GSN/FUN merger appeared to offer further expansion for the business Diligence on merger with FUN suggests several challenges Legal risks of skill games can be managed but not eliminated We do not yet have an indication that Tokyo is comfortable with skill games Although not obstructing the deal, IGT would not be enthusiastic Liberty’s $180MM valuation for all of FUN is likely over valued by $45MM A GSN/FUN partnership, while technically feasible, does not appear to be an attractive course Ensuring equal allocation of joint-management resources will be difficult Potential to de-motivate and possibly lose current management Translating current GSN/FUN relationships into formal agreements will be legally and operationally complicated Given these facts, we have 2 alternatives Acquire ½ of FUN assuming some financial risk (if paying Liberty’s asking value) and some legal risk –Consider waiting and negotiating a lower value (Liberty’s asking value likely to decrease given that Q revenue is trending 24% below budget) –Clarify Tokyo’s position on skill gaming prior to negotiating Revisit exit of GSN and potential redeployment of capital

2 FUN Forecasts An Aggressive Revenue CAGR of 47% From With Dramatic Growth of 85% in CY2008 FUN’s projected 47% CAGR from outperforms the casual games industry average of roughly 20% 2008 Forecast growth of 85% would be more than 30% greater than historical growth Revenue (1) (millions) $18 $25 $43 $79 $110 $137 47% 85% 53% (1) Note: Acquired free games revenue of $4.3MM, $10.7MM, and $14.8MM excluded from the analysis in 2008, 2009, and 2010 respectively. If included, total revenues equal $83MM, $120MM, and $151MM

3 FUN Forecasts Acceleration in 2008; With 41% Growth in Q2 Alone 9% Q/Q growth is roughly in line with recent historical performance but significantly below the 42% Q/Q projected by FUN management Although April actuals provide limited information for adjusting forecast, the data provides an early indication that Q2 actuals may be significantly below budget April 2008 actuals are off budget by 24% Revenue$4.4MM$5.8MM ActualBudget April 2008 Revenue Q/Q (millions) 24% 9% $9 $10 $11 $12 $13 $19 $22 $25 Revenue Growth % Q/Q If this April trend continues, Q2 revenue will be $14.4MM and Q1/Q2 growth will be 9%

4 We Believe Liberty’s Expectations are Above Reasonable Value for FUN Liberty ExpectationSPT Internal Case (2) Total Value: $220MM FUN Sports: ~ ($40MM) FUN Games Value: ~ $180MM FUN Forecast: $210MM SPT Aggressive (3) : $155MM SPT Conservative (3) : $115MM Market Growth (4) : $85MM $135MM Average Liberty values FUN Games at roughly $180MM (1) SPT analysis suggests that Liberty’s numbers are challenging $135MM may be a reasonable valuation (1) Based on Zeisser communications (2) Based on a 3 year forecast. Assumes 16.5% pre-tax discount rate and 8X terminal value. Excludes revenue from acquisitions of Free Games companies (3) See appendix for adjustments to FUN revenue forecasts (4) 20% revenue growth, inline with rough estimate for casual games industry growth Liberty acquired FUN at an average valuation of $298MM –Acquired 53% at a $367MM valuation in March 2006 –Acquired the remainder of FUN at roughly $220MM valuation in December 2007 –Liberty assumes that $180MM of the $220MM valuation is associated with assets to be merged with GSN Key downward revisions to FUN forecast include: –Reduced impact of player value initiatives (cash / player, retention campaigns, etc) –Weaker pipeline of new 3 rd party distribution deals –Inability to derive incremental value from existing distribution partners

5 Risks Associated with Skill-Based Gaming Can be Mitigated but not Eliminated An Investment in FUN Could Expose SPE to Legal Risk and Impact Our Relationship with IGT Regulations for skill based games vary by state and are subject to interpretation IGT Compliance Requirements IGT agreement describes SPE’s obligation to assist IGT in maintaining “a high level of integrity in [IGT’s] business and business relationships” SPE also must “use reasonable efforts to ensure that all business practices of [SPE] shall be pursued in accordance with all laws, regulations, and statutes” As a result, risks cannot be entirely eliminated FUN has implemented procedures to comply with advice from U.S. gaming counsel; however FUN has not analyzed relevant gaming laws outside the U.S. (roughly 10% of revenue)

6 Steps Required to Formalize Partnership The Actions Required and Potential Risks Associated with Partnership Suggest it is Not an Ideal Option for SPE Move from casual partnership to structured arms- length agreements for all coordinated activities Construct marketing spend agreement across the two business to achieve purchasing scale Sub-lease GSN office space to FUN at market rates as needed Develop new governance model (e.g., board level reviews) Recruit additional management to ensure proper corporate governance of the separate entities (e.g., second general counsel to support/manage GSN/FUN joint deals and/or GSN stand-alone deals) Potential Risks Associated with Partnership Reduced communication may limit value creation opportunities for both businesses Potential to de-motivate and possibly lose current management Translating current GSN/FUN relationships into formal agreements will be legally and operationally complicated Difficulty ensuring equal allocation of joint- management resources across business Structuring a partnership that mitigates SPE’s potential legal and financial risk is feasible….. ….However the implications of partnership arrangement suggest it would be cumbersome

7 Next Steps Discuss interest in acquiring half of FUN in light of latest diligence Clarify motivation for acquisition – Attractiveness of the skill games market – Importance to emerging GSN business model Assess if the business remains attractive given the identified risks Determine the price at which we would be interested If we remain interested in acquiring, next steps include: Confirm feasibility of acquisition with SCA and Tokyo Begin to negotiate a lower price If we are not interested in acquiring, we should assess the feasibility of an exit Explicitly address implications for D. Goldhill employment contract Determine Liberty desire to acquire our interest in GSN or jointly sell to a third party If selling to a third party, analyze structure (e.g., sale of GSN only, sale of both GSN and FUN) Determine optimal deal timing and outline expedited deal process If we are not interested in acquisition, and a sale is not feasible, a partnership would become the required course of action

8 APPENDIX

9 SPT Case Adjustments and Rationale (1/2) Driver % Credit Rationale Annualized Q Revenue Improved Q actual enabled FUN management to reset 2008 projections to a higher base High Baseline Tournament Revenue Marketing/ Player Value Initiatives Optimizing Current Distribution Partners Direct to Consumer Advertising (Offline) Management projects a 20-25% increase in DTC performance over historical levels Med 3 rd Party Ad Networks FUN has demonstrated experience with 3 rd party network customer acquisition, projections include greater spend with similar return on investment High Player Value Impact Concerns that spend per player per year can expand from $350 to $385 Uncertain of FUN’s ability to increase retention as it was not a previous focus area Low MyPoints Concerns that MyPoints can improve player conversion rates by FUN’s 20% projection given history Low CotterWeb Same as aboveLow GSN.com FUN’s control over GSN.com operations will enable it to optimize player yields although not as aggressively as projected Med

10 SPT Case Adjustments and Rationale (2/2) Driver % Credit Rationale Wheel of Fortune/Jeopardy! SPT will likely license WOF/Jeopardy skill-game rights to FUN in 2008 High New Content Acquisition New Businesses Online Ad Sales Free Games: Acquired Sites Management is shifting focus to 3 rd party rep deals Although they may acquire, targets not yet identified None Free Games: Ad Rep Deals FUN has achieved some initial success with ad rep deals but business is too new to accurately predict Med GSN Digital Historical performance and management’s operational knowledge of GSN.com suggest targets will likely be achieved High Increase in premium sales CPM rates Multiplatform sponsorships are beginning to take place and should yield some lift to online CPMs Med All other new titles (e.g. The Price is Right, Hasbro, Spider Solitaire) FUN management will secure titles although limited track-record with branded board games increases risk of projected revenues Med New Distribution Deals Yahoo Yahoo is former partner under contract with King.com and is unlikely to enter another exclusive relationship Low All unnamed distribution deals Other large expected partners have yet to be identified and thus have execution risk Low

11 Summary of Revenue Growth by Driver

12 Q/Q Growth Required to Hit 28% CAGR Declining Q/Q; In-line with CY ’07 Trend SPT Cases Were Based on Adjustments to FUN’s “By Type” Revenue Build However, Similar CAGRs Could Be Achieved With Quarterly Growth Trends Q/Q Growth Required to Hit 38% CAGR Consistent 8% Q/Q; In-line with Q1 ‘07

13 Comparative Valuation Analysis (1) Excludes acquired Free Games revenue of $4.3MM, $10.7MM, and $14.8MM in 2008, 2009, and 2010 respectively (2) Free Games SG&A comprises all operating expenses (salaries, marketing, etc.) associated with the new venture. Total Marketing (excludes Free Games marketing expense) is calculated as the greater of 10% of revenue (excluding Free Games) or ~ 1.9X the registration rate per annum (3) FCF adjustments based on Proxy; to be updated

14 SG&A Build Assumptions “Base” Employee Pool Growth: Assumes 2007 salaries expense represents a “base” set of current employees to grow at 5% per annum in all cases. Assumes no “base” employees are fired and that any incremental salaries expense above the “base” amount is linked to new hires New Hire $ / Revenue $ Growth Y/Y: Represents the new hire expense per $1 increase in revenue year-to-year. Market Growth case assumes no new hires Other Costs Growth: Includes all other expenses excluding salaries and benefits, LTIP, and marketing