GSN/FUN Update June 2008

1 Status and Alternatives Prior to David Goldhill’s arrival, SPE was considering an exit of GSN GSN’s core business was languishing Governance issues associated with a 50/50 venture limited flexibility Our interest in GSN increased and governance concerns receded when: David Goldhill arrived, began to reinvigorate GSN, and significantly improved earnings GSN/FUN merger appeared to offer further expansion for the business on economically compelling terms, with limited risk, and no negative impact on governance Diligence on FUN implies a deal may be feasible, but is not clearly compelling 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 asking price is at best “fully valued,” potentially overvalued by $30-40MM A GSN/FUN partnership (rather than merger) can be structured to protect our financial interests, but is unattractive as it will make management more cumbersome Given these facts, we have 3 alternatives Acquire ½ of FUN at Liberty’s asking price, assuming significant financial risk and some legal risk Negotiate FUN’s price to $150 (much more likely if FUN misses aggressive Q2 forecast) Revisit an exit of GSN and potential redeployment of capital

2 FUN Forecasts An Aggressive Revenue CAGR of 47% From FUN projects revenue to increase at a 47% CAGR from , outperforming casual games industry growth by ~30% 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’s 2008 Revenue Targets Represent a ~3x Increase Over 2007 Performance FUN forecasts 24% quarterly revenue growth over the remainder of 2008 compared to 9% in the preceding quarters FUN projects a 41% quarterly revenue increase in Q2 2008, ~4X the growth rate achieved in Q FUN achieved revenue targets for Q1 2008, but projects significantly higher growth over the next three quarters Revenue$13.2$13.8 ActualBudget Q Revenue Q/Q (millions) 24% 9% $9 $10 $11 $12 $13 $19 $22 $25 Revenue Growth % Q/Q

4 We Believe Liberty’s Expectations are Above Reasonable Value for FUN Valuation: 11/22/2007 Proxy/Acquisition Effective Pre-tax Discount Rate: 18.4% After-tax Discount Rate: 17.0% Exit Multiple: 8X Liberty Expectation (1) Most Conservative Negotiating Case (2) SPT Internal Case (2) Valuation: “Proxy Methodology” Effective Pre-tax Discount Rate: 18.4% After-tax Discount Rate: 17.0% Exit Multiple: 8X (3) Valuation: “SPT Internal Hurdle Rate” Effective Pre-tax Discount Rate: 16.5% After-tax Discount Rate: 15.1% Exit Multiple: 8X Total Value: $220MM FUN Sports: ~ ($40MM) FUN Games Value: ~ $180MM FUN Forecast: $204MM SPT Aggressive: $164MM SPT Conservative: $114MM Market Growth: $66MM $140MM Average FUN Forecast: $214MM SPT Aggressive: $173MM SPT Conservative: $122MM Market Growth: $74MM $148MM Average Liberty values FUN Games at roughly $180MM Aggressive forecasting implies a $165 - $180MM valuation is feasible However, $140 - $150MM appears to be more reasonable (1) Based on a 5 year forecast (2) Based on a 3 year forecast (3) Assumes no tax on exit value if below basis

5 APPENDIX

6 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 WW has demonstrated experience with 3 rd party network customer acquisition, projecting similar performance 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

7 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, difficult for FUN to win them back Low All unnamed distribution deals Other large expected partners have yet to be identified and thus have execution risk Low

8 Summary of Revenue Growth by Driver

9 Comparative Valuation Analysis (1) Note: Excludes acquired free games revenue of $4.3MM, $10.7MM, and $14.8MM in 2008, 2009, and 2010 respectively (2) SG&A calculated as the greater of 75% of FUN Management projections or ~ 20% of total revenue; Marketing expense calculated as the greater of 75% of FUN Management projections or ~ 1.9X the registration rate per annum (3) FCF adjustments based on Proxy; to be updated