1. Animation Channel Strategic Evaluation

2. 1 I.Executive Summary II.Animation Market Overview III.Potential Financials Agenda

3. 2 I. Executive Summary

4. 3 Executive Summary Strategy  Fox Animation Channel would serve core 18-34 audience base and allow Fox to further participate in general growth of adult animation over the past decade  Keeping rights in-house would allow Fox to leverage assets across more platforms Programming  Between 2010 & 2012, nearly 1000 episodes of Fox animated shows become available  The Simpsons (400 episodes), Family Guy (158), American Dad (158), King of the Hill (222), Futurama (88)  Shows are blue-chip assets that continue to maintain high value despite ratings declines  In order to determine highest and best use of programming, license fees held at market rate for new channel business plan analysis Preliminary Thoughts  Due to high cost of programming and limited distribution/lower fees inherent in launch, new animation channel not profitable  Based on Affiliate and Ad Sales estimates, no programming scenario results in positive DCF  Would be difficult for any one channel to purchase all of Fox’s animated programming rights and create viable business plan due to expense of programming  Break-even scenario assumes much higher affiliate fees, ad sales and/or sub fees  Increasing subs (+85% to 95M), aggressive ad sales (+75% to $74M) or increased affiliate fees (over 2X to $0.24) for a full channel to reach profitability  Even conservative case with only 1/3 Fox content not profitable (DCF of -$346M) Potential opportunity exists for Fox to launch a cartoon-based cable network in 2011 to further exploit its slate of popular adult animated shows

5. 4 Fox Adult Animation Availability Fox’s available adult animation could nearly fill the entire channel 2010201120122013 May 2010 158 new episodes $700K/deal 2 $32M/year Sept 2010 +103 new episodes =261 total episodes $400K/deal 2 $8M/year Jan 2011 +400 new episodes =661 total episodes $1M/deal 2 $80M/year Oct 2011 +222 new episodes =883 total episodes $300K/deal 2 $13M/year Jan 2013 +88 new episodes =971 total episodes $300K/deal 2 $5M/year 1) Each episode is a half-hour in length, and assumes 12x repeat factor on 24hr. network w/ 4 hours paid programming 2) License fee estimates contain factor of ±25% and assume deal lifespan of five years 3) Does not account for potential barter revenues that could be generated on programs or monetization of digital rights When Available # Episodes 1 Potential Share of Schedule 2 Est. Lic. Fee Per Ep. Total Est. Lic. Fee

6. 5 Animation Channel – Strategic Options Partial Lineup (Mix of Fox & Acquired Programming) Identity Strong Fox content but with distinctive identity  4-5 hr. block on FX featuring Fox animated properties Full Lineup (All Fox Animated Content Available) “Adult Swim” Model (Block on FX)  Destination for high-quality familiar Fox animated shows Animation Channel Programming Options DCF Valuation ($712M) ($346M) 25M/51M $0.10/$0.15 $30M/$130M $110M/$141M ($93M)/($33M) 25M/51M $0.07/$0.12 $22M/$110M $71M/$92M ($62M)/($4M) Content Mix: Yr1/Yr10 Assump. - Carriage - Affiliate Fees Yr1/Yr10 Results - Revenue - Programming Budget - OBDA 1) Assumes 12x repeat factor on 24hr. network w/ 4 hours paid programming  FX Programming and Affiliate Sales not currently able to determine if animation block will be attractive option in 2011  Not possible to assess incremental value of animation block to FX

7. 6 Risk Factors  Adult animation market may already be crowded and competitive  There are two cable network blocks and numerous adult cartoons in the space  Recent high-profile failures include Spike TV’s adult animation block and NBC/DreamWorks collaboration Father of the Pride  Due to high cost of programming, limited distribution and low fees inherent in new channel, concept may never achieve profitability  Other opportunity costs may not be quantified in this analysis  Use of distribution leverage in 2011 to launch new channel vs. other potential channels  Ratings on Fox Animation channel may not be sufficient to provide boost for Fox barter  Although established and historically successful, Fox programming may not provide sufficient base for launch of new channel  Difficulty in generating/obtaining additional content to meet programming needs  Long lead times necessary to produce additional content  Ramping up internal production may be high-risk proposition  Negotiations to source external content from other studios could be capital-intensive

8. II. Animation Market Overview

9. 8 Adult Animation Cable Players Network/ BlockLaunchedTop Show(s)Days/ Time Target Demo Network Subs Avg. Households Primary 10/92 Jetsons Scooby-Doo Tom & Jerry MTWThFSSu 24/7 P 2+90.3M969K 9/01 Family Guy Futurama MTWThSSu 10:00PM- 6:00AM P 18-3490.3M884K 6/03 (canceled 8/03) Ren & Stimpy Gary the Rat Stripperella Th 10:00 PM- 11:30PM M 18-3491.7M554K Secondary 8/97South Park MTWThF 9:30PM- 10:00PM P 18-3488.9M854K 11/03King of the Hill MTWThF 6:00PM- 7:00PM P 18-3487.5M501K 2/03 (canceled 3/06) Anime Unleashed (early) Anime Unleashed (late) F 12:00AM- 1:00AM M 18-3423M25K Several adult-oriented animation blocks exist in an increasingly competitive market (G4) (Cartoon Network)

10. 9 Ratings - Competitors Although ratings for top animation properties are not growing, they have sustained high rating levels 2005 Rating 2005 HH (M) Comedy Central 1.72%1.5M Cartoon Network 1.17%1.0 Adult Swim1.09%1.0 1 G40.05%0.0 1 1) Data segmented from 2003 for Adult Swim and from 2005 for G4: Anime Unleashed block

11. 10 Affiliate Fees - Competitors Existing networks offering adult animation generate affiliate fees between $0.10 to $0.18 per sub 2005 Rate CAGR% (’00-’05) Nickelodeon$0.396% Spike$0.185% Cartoon$0.1513% Comedy Central$0.117% G4$0.1026% 1 1) G4 launched in 2002, CAGR is from 2002 – 20005

12. 11 Overview Overview Key Facts  Launched in October 1992  Draws on large library of over 14,000 series/shorts  Airs 18 original prime-time half-hour series  Adult Swim programming block established 9/01  Airs animation geared primarily towards adults  Split from Cartoon Network as separate channel for ratings purposes on 3/28/05 Time Warner’s 24-hour animated cable network would be Fox Animation Channel’s primary competitor 1) Source: Kagan Research

13. 12 Programming Grid Programming Grid Cartoon Network has very little blue-chip acquired programming – rest of schedule is predominantly low-cost acquisitions and original programming

14. 13 Core Animation Slate Ratings Despite its blue-chip shows, Fox animated programs have declined in popularity and may not have sufficient viewership to serve as base for a new channel Rating 1 CAGR% (since launch) Family Guy 2 5.7%(5%) The Simpsons5.0%(6%) American Dad3.7%(5%) King of the Hill3.0%(13%) Adult 13-34 Ratings for Fox Sunday Animated Programs 1) Adult 13-34 Ratings 2) Family Guy on hiatus during 2003-2004

15. 14 Proposed network concept would compete directly with Cartoon Network’s Adult Swim Target Audience Platform General Ent. Cable Broadcast Cartoon- Based Cable Youth Adult 1) Circle size represents relative measurement of ratings 2) Ratings are for Adults 18-34 unless otherwise indicated Competitive Landscape

16. III. Potential Financials

17. 16 Financial Driver Assumptions

18. 17 Summary P&L – Full Lineup An animation channel with all Fox’s content would lose $33M in Year 10 (2020)

19. 18 Summary P&L – Partial Lineup Even an animation channel with a mix of Fox content and lower-cost programming would lose $4M in 2010

20. 19 Preliminary DCF Valuation Comparison Value of business significantly impacted by shifts in affiliate and programming 1) Assumes limited Fox content, 3% terminal value growth rate and 9.4% discount rate 2) Highlighted portions are Affiliate Sales estimates

21. 20 Break-even Case Scenarios Aggressive assumptions are necessary for an animation channel to break even by Year 10 Year 10 ($141M Programming Budget Yr.10)($92M Programming Budget Yr.10)