1. SPTI’s Unscripted Format Strategy Business Plan and Investment Requirements November 15, 2004

2. 2 Executive Summary Unscripted / Reality TV dominates the TV landscape and will be remain an important genre in the future To benefit from the opportunities in this space, SPTI plans to leverage its worldwide production infrastructure, build on the successful Starling acquisition in France and expand its Reality TV efforts in Germany Such an initiate will significantly close the gap to market leaders Endemol and Fremantle and keep SPTI ahead of the studio competition Under conservative assumptions, this initiative will require investment capital of $11MM and new SPTI headcount of 7 in FY 06 (10 eventually). Pre-tax returns are very attractive: NPV of $6MM, IRR 38%  We request approval of the strategy and permission to start implementation asap

3. 3 Agenda Unscripted/Reality TV Overview Proposed SPTI Strategy Financial and Organizational Analysis Next Steps

4. 4 Unscripted TV Is Here To Stay Reality TV covers 22% of U.S. network primetime schedules in 04/05, vs. 10% in 03/04 7 of Top 20 shows in 03/04 were Reality: –1. Idol, 4. Survivor All Stars, 6. The Apprentice, 19. Fear Factor 63 Reality shows in 04/05 across all U.S. cable & broadcast networks Launch of Reality-themed channels –Fox Reality Channel (2005) –Reality 24-7 (previously Reality Central) –‘Reality TV’ channel (35MM subscribers, 125 countries) Formats are being exported and exploited globally – Worldwide sales of The Apprentice, Queer Eye for the Straight Guy, The Bachelorette, Joe Millionaire, The Restaurant, The Simple Life, The Swan, Next Action Star, etc. Trista, Donald and Richard have established a bona-fide genre While the recent rush to Reality TV will abate, the unscripted genre will remain a key component of network schedules in the future

5. 5 Economics Of Reality TV Highly attractive returns provide a strong incentive for networks to keep commissioning Reality TV shows Source: Primetime Programming Cost Analysis, Morgan Stanley, March 2003 Higher profit margins for the networks due to lower production/commission expenses Reality TV show cost $500K-1MM per hour, compared to average scripted shows of $2-3MM Successful Reality TV hits generate the same or higher advertising rates as scripted shows Advertiser capitalize on new promotional opportunities, upside for producers and networks (e.g. GM/Viacom deal to make Saturn Ion the car of Survivor: The Amazon) Source: Variety, 4/25/2004

6. 6 Unscripted TV Hits SeasonSeries18-49 Rating Networks Gross Profit ($MM) Profit Margin 99/00 00/01 01/02 Millionaire (ABC) 7.9 4.4 2.5 $511.4 $648.4 $50.3 85% 81% 54% 00/01 01/03 02/03 The Mole (ABC) 5.0 2.7 5.4 $22.9 $16.0 $12.8 83% 69% 58% 01/02 02/03 The Bachelor (ABC) 4.6 7.9 $5.2 $80.0 55% 88% 99/00 00/01 01/02 02/03 Survivor (CBS) 2.5 12.2 8.4 8.5 ($1.3) $118.0 $161.9 $224.8 -7% 80% 78% 82% 00/01 01/02 Temptation Island (Fox) 7.8 3.8 $10.9 $0.5 76% 4% 00/01 01/02 02/03 Fear Factor (NBC) 7.1 6.8 6.9 $4.2 $49.6 $37.9 29% 74% 53% 00/01 01/02 Weakest Link (NBC) n/a 6.0 $26.4 $21.8 48% 47% The big performers have proven to be highly profitable endeavors for the networks Source: Primetime Programming Cost Analysis, Morgan Stanley, March 2003

7. 7 Origin Of Unscripted Formats International markets are a proven ground for developing successful formats with worldwide appeal Country of Origin YearOriginal Producer U.S. Debut U.S. Network Big BrotherNetherlands 1999Endemol2000CBS SurvivorSweden (‘Expedition Robinson’) 1997Strix / Planet 24 2000CBS Idol/PopstarsU.K. 200119 Televisions & Fremantle 2002FOX Who Wants To Be A Millionaire U.K. 1998Celador1999ABC Weakest LinkU.K. 2000BBC2001NBC The MoleBelgium 1998T.T.T.I.2001ABC Wife SwapU.K. 2003RDF Media2004ABC

8. 8 SPTI Is Currently Not A Player SPTI’s unscripted format library (primarily game shows) has been exhausted and can no longer provide momentum for the format business Sales growth increasingly comes from titles acquired from 3 rd parties Limited funds for acquisitions provide access to B and C product only Biggest revenue drivers in the past were Dating Game and Russian Roulette, both of which have passed revenue peaks

9. 9 Agenda Unscripted/Reality TV Overview Proposed SPTI Strategy Financial and Organizational Analysis Next Steps

10. 10 Crossroads For SPTI’s Format Business In order to take advantage of the global TV format opportunities, SPTI needs a new strategic direction Maintain Status Quo Increase Acquisition Efforts Strategic Alliances with Producers Original Format Development Continue to exploit declining library Pursue low-cost acquisitions without significant investments Acquire formats and filmed episodes with guarantees Co-finance development efforts Form close associations to guarantee early access to fresh formats Establish capabilities to develop formats with global appeal Rapid worldwide implementation –Limited or no growth –SPTI marginalized as format player New Unscripted / Reality TV Initiative

11. 11 Strategic Goals  Become a relevant global creator and producer of Unscripted / Reality TV SPTI has set specific strategic goals for the Unscripted TV Format space  Close the gap to market leaders Endemol & Fremantle  Stay ahead of the studio competition & other emerging players  Contribute high profit margins to SPE after initial short period of investment Strategic Goals

12. 12 Format Development Focus Pure Game Shows Pure Reality Shows SPTI Format Focus To meet broadcaster’s shifting demands, SPTI will pursue the full range of unscripted programming Reality-based Competitions Distinctions between categories are increasingly blurred Demand from broadcasters is shifting across categories Diversification protects against risk of betting on single niche genre

13. 13 SPTI’s Leveragable Infrastructure SPTI’s worldwide production presence is a key competitive advantage for a new direction in Unscripted Formats Russia Latin America Spain Italy U.K. Germany France Worldwide Reach Ability to leverage staff and relationships with broadcasters in all key markets ‘Project 2004’ in Germany Enhance successful Reality TV project –9 months (thru 12/04) –6-person team 20 formats created so far, 3 considered marketable –1 being pitched to RTL, 1 to ZDF Low-budget experiment; total expenses of <$250K ‘Starling’ in France Capitalize on acquisition of 2 nd largest light entertainment production company in France Starling is actively developing and pitching new formats FY 05 revenue of Starling of $31MM, EBITDA $5.5MM

14. 14 Operational Strategy Key territories Develop original unscripted concepts Adapt 3 rd party formats from around the world Localize SPTI formats Align with proven production companies to develop formats Leverage expertise & relationships of local players Overcome barriers to entry Tactic 1: Establish Worldwide Development Teams Tactic 2: Enter into Strategic Alliances SPTI plans to enhance its existing infrastructure in key markets and establish partnerships with proven players everywhere else Dual Strategy Goal: Balance between solid presence in key markets and rapid global establishment

15. 15 Tactic 1: Development Teams Senior Format Executive (Los Angeles) Local Format Executive (one per territory) Head of International Production Development team 1 Senior Producer 4 Freelance Jr. Producers (per territory) Key executive in charge of unscripted/reality strategy Strategic guidance of local reality teams Management of Reality network Manage development and acquisition effort in territory Coordinate creative process with other territories Collaborate closely with local head of production to sell formats to local broadcasters Develop and test formats Tap into local trends at early stage Assess third party formats Roles & Responsibilities Dedicated development teams would be established in the key markets U.K., Germany and France (existing Starling operation)

16. 16 Tactic 2: Strategic Alliances  Forge close association with established local players – first-look deals, co-development efforts, etc.  Partners provide access to fresh formats and relationship to broadcasters  SPTI provides production infrastructure, library and international distribution  Potential equity investments in attractive local players  Relationship managed by local/regional SPTI production executive U.K. Germany France Major Markets Alliances will suplement SPTI’s dedicated development teams Non-Major Markets Strategic Alliances are SPTI’s main effort to establish presence Spain & Italy - core E.U. markets for SPTI production Benelux & Scandinavia - proven talent pool for successful formats Latin America - strong overall growth potential Alliances will expand SPTI ’ s reach into new territories and solidify the presence in the major markets

17. 17 Possible Alliance Targets

18. 18 Targeted Format Infrastructure SPTI ’ s Unscripted Format network will have critical mass and be able to compete with format players on a global level  Large and culturally diverse creative pool  Immediate assessment of worldwide appeal for new formats  Tap into local trends early  Rapid and coordinated implementation of formats across many markets  Synergies during production efforts in different markets Dedicated Development Teams and potentially strategic alliances Strategic Alliances only

19. 19 Agenda Unscripted/Reality TV Overview Proposed SPTI Strategy Financial and Organizational Analysis Next Steps

20. 20 Business Volume SPTI will focus on fewer, but higher quality and higher margin formats than in the past MEGAABC Format revenues of $20-30MM over 5 years Produced in 6 of top 10 world markets Steady sales of $2MM per year over 10 years $7 - $10MM in format revenues over 3 years Sales in 4 of top 10 markets, or to over 20 markets worldwide $1.5 - 3MM in revenue over 3 years, or Sales to more than 10 markets, including 2 of the top 10 Less than $500K revenues per year, or Sales in less than 10 markets Idol Millionaire Wheel of Fortune Big Brother The Apprentice Survivor Jeopardy Popstars Fear Factor Fort Boyard The Mole Wife Swap The Farm The Vault Airline Faking It FY 02FY 03FY 04FY 05 MEGA0000 A0000 B1000 C1537 TOTAL2537 FY 06FY 07FY 08FY 09FY 10 MEGA00010 A00101 B12133 C10000 TOTAL22244 Historic Product Volume/Mix (Number of Acquisitions) Planned Product Volume/Mix (Number of Acquisitions & Original Productions)

21. 21 Estimated Production Slate FY 06FY 07FY 08FY 09FY 10TOTAL Developed ProductMega A11 A112 B1113 C11 111227 Acquired ProductMega A0 A1 B111227 C0 111228 TOTAL2224415 Number of New Formats Brought To Market (Conservative Base Case) Long-term focus on original development and higher-quality acquisitions Move towards higher quality acquisitions will require increased investment in upfront guarantees Business plan assumes $2MM upfront budget per year Acquisitions assume revenue split of 40% to original creator

22. 22 Focus On Original Development Originally developed shows will be the main long-term driver for revenues and profitability Revenue in US$MM

23. 23 Proposed Organization New headcount of 10 required (5 per chart + 5 support admin staff) 8 Jr Producers in development teams are freelance and not part of SPTI overhead Personnel & freelance expenses starting at $2.2MM per year ($4.3MM in FY 10) Local Format Execs closely cooperate with Head of Production in their respective territory Head of International Production Sr. Format Exec Los Angeles (existing headcount) U.K. Format Exec (existing) Sr. Producer (new, FY 06) Germany Format Exec (existing) Sr. Producer (new, FY 06) France (Starling) Spain Format Exec (new, FY 07) Italy Format Exec (new, FY 07) Lat Am Format Exec (new, FY 07) Strategic Alliance Potential Strategic Alliance Potential Strategic Alliance Potential Strategic Alliance 4 Jr Producers (freelance)

24. 24 Financial Summary Significant upside opportunities if production slate performs better than assumed in conservative financial base case model The financial base case applies very conservative revenue assumptions and provides attractive financial returns

25. 25 Additional Upside Opportunities TV Distribution / Syndication Home Entertainment Product Merchandising Self-contained shows have high syndication potential FX paid $30 million over 4 years for Fear Factor. AXN networks worldwide have paid $4.8MM for U.S. Versions of Amazing Race, Survivor and Fear Factor Survivor: Higher volume of sales in English speaking markets than format sales Launch of multiple reality cable channels provides another outlet for prints derived from int’l formats Celebrity reality formats have significant Home Entertainment potential Sequential shows have more upside Simple Life sold 40K units on DVD Survivor and The Apprentice also released on DVD American Idol: Sold over $50M at retail (May 2004) Merchandising includes music, fashion, beauty, lifestyle and fan products; reaches a wide-spread audience loyal to the TV show and Idol brand

26. 26 Next Steps Approve strategy Hire Sr. Format Exec Set up development teams in key territories – U.K., Germany, France

27. 27 Appendix

28. 28 Detailed Financials