1. PARIS for Participations & Entertainment Partners for Residuals Outsourcing Green light deck
February XX, 2013

2. Agenda
►Executive Summary ►Business Problem Statement ►Inception Phase Status Update ►PARIS for Participations - Assessment ►PARIS for Participations - Project Plan ►PARIS for Participations - Financials ►EP for Residuals Outsourcing - Assessment ►EP for Residuals Outsourcing - Project Plan ►EP for Residuals Outsourcing - Financials ►10-year Cost Benefit Analysis ►Project Funding Needs
Draft for discussion

3. Executive Summary
The Participations and Residuals systems are outdated, lack integrations with key enterprise systems and promote many manual, in-efficient and error prone processes increasing the risk of inaccurately paying the Participants and the Talents (Guilds).
The total estimated cost to convert Participations to NBCU PARIS and outsource Residuals to Entertainment Partners is estimated at approximately $14.9M.
Draft for discussion

4. Problem Statement – Participations
● Very manual, time-consuming and inefficient processes are employed for Data Sourcing, Payout Calculations, Paper copying and filing.
● The OPUS system is not enabled to model participant contracts, calculate payouts and to directly generate participant statements. A mix of manual procedures and excel manipulations are employed to prepare Talent Statements.
● The volume and type of products and the complexity of talent deals are ever increasing which results in keeping up with the statement generation schedule very difficult. Additional headcounts are required to keep up with the ever growing volume of work. To deal with the work load, for the deals which are forecasted to not pay do not have statements created (i.e. statements are “bugged”)
● Upstream data sources lacking governance and consistency in usage providing data in a form that lacks the appropriate level of granularity and attributes. Lack of complete understanding of the information flowing into and filtered out of the data feeds into the department.
● Unable to focus on value-add activities (e.g. breakout projections, proactive buyout assessments, ‘What-if’ analysis, impact assessment & feedback to Business Affairs across title, market & media types).
Draft for discussion

5. Problem Statement – Residuals
● Very manual, inefficient, and error-prone processes employed for data sourcing, payout calculations, guild reporting, paper copying/filing.
● Majority of the data sourcing and systems feeding is done manually by the clerks which is error-prone. Data reconciliation processes are not rigorous and error prone due to human involvement.
● The volume and type of Products, the complexity of guild rules along with expansion of the reuse markets and the manual departmental procedures results in keeping up with the workload very difficult. This in turn results in un-recoupable overpayments, late fees and penalties on the department.
● The increasing workload and the lack of a system results in the work being handled by the staff through overtimes and by outsourcing to third party providers. This has also resulted in temporary staff being used permanently.
● Unable to focus on value-add activities (e.g. projections, analysis for negotiations and ultimates).
● Recurring errors in payouts and the accompanying claims might strain relations with the Talents.
Draft for discussion

6. Current Challenges and Issues by Area
Difficult to manage the volume with time-consuming manual calculations
Changes to the guild agreements cannot be accommodated; system is not equipped to support current guild agreements
Unable to capture pension or pension ceilings so often overpaying or underpaying
Cannot adjust tax rates as the change will be applied retroactively and recalculate all previous statements/payments
Payments are manually tracked on a spreadsheet
Retrieve data from 12 different feeds/sources; input data manually from hard copy reports
Electronic reporting to the guilds and talents requires improvement
Residuals
Difficult to manage the volume with time-consuming manual calculations
Statement generation is manual and very cumbersome; OPUS does not produce “headsheets” or statements, only the data to support them
18-month limit on detailed monthly data in OPUS; difficult to calculate historical point-in-time data
Spends a significant amount of time responding to queries from other groups; lack any type of estimation/modeling tools for calculating “what-if” scenarios
No system support for payout calculations for the digital markets, and complex talent deals
Participations
Spends a significant amount of time researching data discrepancies, statement adjustments, etc.
System “tricks”, dummy numbers, and manual adjustments (“one-sided entries”) pose risks during audits
Lack of formal checks and balances
Audit
Residuals system is inflexible and has several system limitations (e.g. field sizes are limited to $99,999) as it was implemented in the 1960’s
IT support for the Residuals mainframe system is very limited due to aging technology. The team has recently lost one-half of the IT support team –resources who had been supporting the department for several years. Additional turnover events (like retirement) will poses serious risks to IT operations and the obsolete technology makes it harder to find suitable replacements. IT
Draft for discussion

7. NBCU PARIS Impact Assessment Residuals Outsourcing Assessment
Inception Phase
An Inception phase was funded with the primary objective of assessing the functional fit-gap of NBCU PARIS against SPE requirements and assessing the feasibility of Residuals BPO.
Phase Timeline: August 2011 to August Phase Cost: $949,600
Phase Scope and Deliverables:
Delivered selection of Software Platform and Operations Model using PARIS for Participations
Delivered Business Case Assessment and subsequent Due Diligence for BPO with Entertainment Partners
Gathered High Level Requirements through Focus interviews and Workshops with key stakeholders
Finalized Overall Project Scope
Developed High-level Project Budget, Schedule and Timeline, Resource Plan (including backfill requirements)
Developed Data Conversion & Migration Strategy and Plan
Developed Data Sourcing & Interface Strategy and Plan
Developed Greenlighting Material for full project funding
2011
2012
Jul – Sep
Oct – Dec
Jan – Mar
Apr - Jun
Jul - Sep
Data & Interface Assessment
NBCU PARIS Impact Assessment
PARIS Impact Assessment Report
Residuals Outsourcing Assessment
BPO Due Diligence
BPO Business Case
Comparative Review
Executive
Debrief
Draft for discussion 7

8. PARIS for Participations - Impact Assessment
Participations module of NBCU-PARIS has a good level of functional fit relative to SPE’s requirements.
● The Business Process automations delivered by PARIS far exceeds the current automation levels at SPE.
● PARIS capabilities and feature-set for Participations & Audit scored at over 86% and 81% respectively by SPE stakeholders.
● PARIS provides a strong coverage for most of the requirements.
● The Participations, Data Staging and Audit modules are quite robust, flexible and more mature than the Residuals module.
● PARIS architected on the latest Microsoft technologies including the .NET framework.
NBCU facilitated 4 sessions with SPE:
PARIS overview and orientation
Admin features (Data staging and Administration) demo
Residuals demo
Participations demo
The NBCU demonstrations of PARIS were based on scripted demo scenarios :
These scenarios were based on SPE’s high-level functional requirements.
The scenarios represented a selection of high- and medium priority processing requirements.
Demos were attended by SPE stakeholders across Participations, Residuals, Input Consolidation, Audit, Finance and IT groups.
Draft for discussion 8

9. PARIS for Participations - Project Phases
Planning
Implementation
Conversion
Impact Assessment
Hands-on Evaluation
Conversion planning
Installation and Configuration
Development and Integration
System & Parallel Testing
Training and Change management
Participations Conversion
Parallel Operations
IT Support
Impact assessment
Requirements
Functional fit
Estimates
Hands-on evaluation
Early design
Support model decision
Refined estimates
Conversion planning
Approach and priorities
Resources and backfill
Controls and Acceptance
Planning for Parallel Ops.
Installation and Configuration
Data loads (migration)
Lookups/mappings
Templates and hierarchies
Development and Integration
Interfaces
Reports
Testing
Functional tests
Parallel tests
Training and Change management
Org and process design
Participations conversion
Parallel operations
Data refreshes
Porting converted titles
IT support
Hypercare
Systems maintenance
User support
Draft for discussion

10. Key Estimation Drivers and Project Considerations
PARIS for Participations - Project Timeline
Years
Quarters 1 2 3 4 5
Program management/planning
Hands-on evaluation
Implementation
Hypercare
Participations Conversion
Parallel operations
IT Support
Implementation model decision
Go Live
Planning
Conversion
Decommission legacy systems
Conversion Complete
Key Estimation Drivers and Project Considerations
● The PARIS Configuration within the Implementation phase is the key design activity to prepare the system for Participations usage.
● The detail- and research-oriented nature of Conversion makes it the most intensive phase in time and effort. Issues unearthed demand strong decision making skills and Standard Exception Handling procedures need to be instituted.
● Resource planning and Department alignment is critical to the success of the project. Determining backfill, ratio of SPE-to-contractor resources and regular training will help mitigate the risk of PARIS knowledge being confined to contractors.
● There exists a steep learning curve to PARIS, and the departmental functions will become more analytical and less data entry / processing type.
Draft for discussion

11. PARIS for Participations - Project Costs & Benefits Summary
Cost Categories
Costs- $
Cost Description
PARIS License cost
$3,500,000
Licensing cost for one module
Planning
$116,706
Includes initial allocation for planning, management
Implementation
$2,539,459
Includes costs for Evaluation, Installation, Configuration, Development, Testing & Go-Live
Conversion
$2,550,161
Includes costs for Contract conversion, Parallel Operations
Equipment Costs
$411,000
Includes costs for Hardware, App/Web Servers, Storage, SW Licenses
Total
$9,117,326
Benefit Categories
Benefits - $
Benefits Description
$ - Detail
Cost Savings
$200,000
Savings in Temporary Help Staffing
Cost Avoidance
Avoidance of SCA Hosting Cost
$230,535
$523,035
Headcount Avoidance due to Staff Efficiency Improvements
$292,500
Risk Mitigation and Improved Controls
$5,000,000
Prevention of Over Payments (calculated at 0.5% error rate)
Total
$5,723,035
Draft for discussion

12. EP for Residuals Outsourcing - Assessment
Entertainment Partners selected as the leading vendor from a Business Process Outsourcing RFQ concluded in 2012.
A detailed due diligence assessment of the EP proposal was conducted. The assessment included review of - Organization & Transition approach, Conversion approach, IT Systems, Timeline and Level of Effort. The goal of the due diligence was to craft the future state organization for SPE and EP, create the BPO Business Case and confirm the Pricing.
● EP proposes to completely take over certain functions, including product and cast setup, residuals calculations and payment processing.
● SPE would retain ownership over interpreting agreements, determining triggers, supporting audits, forecasting and reporting,
● Improved Data Staging is the key to Productivity gains. Options include – building in-house, leveraging PARIS, using EP proposed new feeder system (implementation expected in 2013).
● There is a potential to offshore 2 FTEs in the retained organization.
Draft for discussion 12

13. EP for Residuals Outsourcing - Project Phases
Implementation
Conversion
Operations
Transition
Future State
Implement Organization, Processes & Infrastructure
Import historic data and recreate balances between SPE & EP
Business-as-usual interaction between SPE and EP
Finalize Contracts, SLAs, and KPIs
Define Processes & Controls
Build Data Enrichment Platform
Build Interfaces for triggers & payments
Design Organization and Change Management
Conduct recruitment for Backfill and retained Organization
Build the SPE system sunset roadmap
Title/cast setups for 1,442 features and 52,714(*) episodes
Revenue and air date history import
Reconciliation of historic SPE payments with EP system results
Document collection for new setups
Review/approval of setups, triggers and payments
Audit & forecast support
New acquisitions processing
Residual payment processing
Infrastructure maintenance
* = library size as of August 2012
Draft for discussion

14. Contract Negotiations
EP for Residuals Outsourcing - Project Timeline
Months 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Contract Negotiations
Process Transition
EP Client
On-Boarding
Data Conversion
Confirm final process design
Future process documentation & desktop procedures
Basic Cable
Game Shows
Pay Cable / Video
Network / Soaps
Fox
Syndications
Other Non Networks
Foreign
Employee Masters
Finalize KPI/SLA
Review and finalize MSA
Finalize new Air Date vendor
Vendor introductions
Account setups
Finalize EP client profile
User access rights (hosted environment, VPO)
Signed Contract with EP
Planning and Administration
Cutover Plan
Finalize transition plan
Confirm transition team
Obtain resources
Develop and approve cutover approach (business and IT)
Decommission transition backfill
Data Staging / Enrichment
Confirm Data Enrichment requirements
Configure Data Enrichment requirements
Develop Data Enrichment rules
Test enrichment rules
Deploy enrichment rules to production
Organizational Transition
Features
Roles & responsibilities
Identify skillsets for retained organization
Identify key process owners
Coordination with HR (compensation, termination, recruitment)
Interview potential hires
Identify resource transition plan and timeline
Data Enrichment / Staging Complete
Initial Cutover
Data Conversion Complete
IT Design & Development
Build interface for revenue /run data
GL interface from EP
Reports development
Reconciliation reports
IT Design & Development Complete
Training
Hosted environment
VPO
Conduct future state process training
EP work shadow and knowledge transfer
Transition Complete
Integration Testing
Project Closure
Revenue triggers
Run triggers
GL feed to SAP
Integration Testing Complete
Project completion planning
Implement retained organization
Archive historic data
Decommission conversion backfill
Decommission RP00
Data Reconciliation
Review and finalize communication requirements
Draft communication to internal organization
Draft communication to external organizations (talent, guilds, etc.)
Communication

15. EP for Residuals Outsourcing - Project Costs & Benefits Summary
Category $
Description
Planning
$300,000
Includes initial allocation for planning, management
Implementation
$776,024
Includes costs for Transition
Conversion
$1,499,414
Includes costs for Conversion
Equipment Costs
$68,000
Includes costs for Hardware, App/Web Servers, Storage, SW Licenses
Severance/
Retention
$230,929
Includes costs for
Duplicate Payroll Tax
$306,436
Duplicate Payroll Tax costs
Data Enrichment Platform
$550,000
Includes costs for building Staging & Enrichment platform
Data Reconciliation
$1,209,820
Includes costs for reconciling Revenue & Guild / Talent calculations
Residual SME
$780,000
Costs for Residuals Subject Matter Expertise
Total
$5,720,623
Category
Benefits - $
Description
$ - Detail
Recoupments & Reduction in Overpayments
$2,463,079
Reduction in Overpayments
1,138,838
Recoupable Overpayments
415,241
Over-reported Foreign Remittance taxes
909,000
Cost Savings
$656,901
Reduction in Late Fees / Handling Fees
590,910
Print Savings
42,296
DGA Pension Employee Contributions
23,695
Cost Avoidance
$57,634
SCA Mainframes Hosting
57,634
$3,177,614
Draft for discussion

16. Summary of Costs & Benefits projected over 10 years
Draft for discussion

17. PARIS for Participations EP for Residuals Outsourcing
Project Funding Needs Over 10 years
PARIS for Participations
EP for Residuals Outsourcing
Total
Year 1
$6,229,466
$4,355,418
$10,584,884
Year 2
$942,839
$1,209,205
$2,152,044
Year 3
$864,454
$156,000
$1,020,454
Year 4 - 
Year 5
$216,113
Year 6
Year 7
Year 8
Year 9
Year 10
Draft for discussion 17

18. Questions ?
Draft for discussion 18