[DRAFT]
SPE Worldwide Format Business
May 2008
Confidential Draft
Executive Summary
• Non-scripted television represents a compelling growth opportunity for SPE
• Success requires global coordination and further investment to reach scale
• We need to manage our investments as a unified global business, including:
– Expanded portfolio of content producers
 Embassy Row will serve as the cornerstone of domestic development;
complemented by investments in third-party EP and production company deals
 2waytraffic and our equity stakes in smaller production companies will provide
international development capabilities
– Global acquisitions team, including executives from Embassy Row and 2waytraffic
– Dedicated staff to manage global ad integration
– International distribution led by 2waytraffic
1
Demand for Game and Reality Formats Continues to Grow
Game / Reality as a % of Primetime Hours
25%
22%
23%
19%
20%
Percentage %
17%
14%
15%
10%
8%
5%
0%
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
Game/reality shows make up 14 of the top 40 primetime programs among Adults 18-49
and represent 30% of the top 20 primetime programs among Adults 18-49
NOTE: A 6-year trend of reality/game shows as a percentage of primetime hours for the 5 major networks.
2
Business Dynamics are Attractive
Global
Growth
Lower Cost
Interactivity
Cross-Platform
• International and domestic markets are closely linked (27% of scripted;
29% of reality broadcast pilots are adapted from international formats)
• Format business continues to grow as broadcasters increasingly rely on
hit non-scripted formats
• Non-scripted programs are usually less expensive to produce
• Polling, voting and games increase viewer engagement and time spent
with show brands
• Shows offer ancillary profits (mobile games, online games, SMS)
3
Competitors are Investing Beyond Captive Production Arms
Network
Production/Term Deals
Est.
Production /
Term Deal
Budget
% primetime hours
dedicated to
reality/game shows
(08-09 Season)
Notable Series on Primetime
Lineup (08-09 Season)
N/A
30%
Dancing With the Stars, Wife
Swap, Extreme Makeover:
Home Edition
$10M (approx.
over 2 years)
16%
Biggest Loser, Deal or No Deal
N/A
40%
Idol, Moment of Truth, Are You
Smarter Than a 5th Grader?
Tom Forman, Jay Bienstock, Laurie
Girion, Allison Grodner, Scot
Einziger
$12.85M (approx.
over 2 years and
including Forman's
deal over 3 yrs.)
9%
Survivor, Amazing Race
Jay Bienstock and Laurie Girion
(broken out from CBS’ overall term
deals data)
$3.6M (approx.
over 2 years)
31%
America's Next Top Model
None. Partners with Warner
Horizon, BBC, Fremantle and
Endemol)
Magical Elves
None. Partners with Warner
Horizon, BBC, Fremantle and
Endemol)
4
SPE Will Continue to Expand its Network of Domestic Producer Partnerships
Domestic
Category
Embassy Row
Acquisition
Potential
Partners
Embassy Row
(Michael Davies)
Term
(Yrs.)
Acquire
Cost /
Year
(MM)
$25-75
Genre
Game Show/
Reality
Notes
Acquisition
• Acquire Embassy Row
• New York based global format and digital production
company
• Created “Who Wants to be a Millionaire” & “Power of 10”
$25–75MM
(one-time)
Annual Spend
Executive
Producers
(1-3 of these
partners)
Scott St. John
2
$3
Game Show
• Executive Producer of Deal or No Deal
Tom Foreman
2
$2.25
Reality/
Competition
• US based producer
• Created “Kid Nation” & EP on “Extreme Makeover Home
Edition”
• Executive Producer of “Big Brother”
$2–6MM
Allison Grodner
2
$2
Reality/
Competition
Lisa Levenson
2
$1.5
Reality/
Competition
• Executive Producer of “The Bachelor” and “The
Bachelorette”
• Hosts the morning show on 102.7 KIIS FM in LA, host of
“American Idol”, “E! News” co-host and host of American
Top 40
• Overall deal similar to “Old Reveille Deal”
• Creator of “Temptation Island”, “Joe Millionaire”, “My Big
Fat Obnoxious Fiancé”
• Overall deal
Production
Company
Ryan Seacrest
3
$2
Reality/
Competition
Production
Company
Rocket Science
Laboratories
1
$2-5
Reality/
Competition
$2MM
$2-5MM
$6–13MM
5
SPE Global Game/Reality Operational Structure
Manage all assets as a single business with a dedicated P&L
Development
Embassy
Row
Game/Reality
Domestic
Dev. Execs
Cross-genre
Domestic EP
Partners
Reality/
Competition
Domestic
Pdtn Cos.
(Partners)
Cross-genre
2waytraffic
Game Focus
International
Dev. Execs
Cross-genre
International
Pdtn Cos. (1)
(Investments)
Cross-genre
Content
International Acquisitions
Embassy Row
3 new hires (UK/Scandinavia; Australia; South America)
2waytraffic
Ad
Integration
Dedicated Staff (New hires)
International
Distribution
2waytraffic
(1)
SPTI’s worldwide production and distribution offices are complemented by investments in international production companies including: Starling, France, 75%;
Lean-M, Russia, 51%; Shine, UK, 20%; Tuvalu, Netherlands, 51%; Huaso, China, JV
6