GSN / FUN MergerAdditional Diligence Items

March 23, 2009

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Responses to Questions from March 22 / March 23 Phone Conversation

Legal Issues

• FUN currently offers skill-based game tournaments for fees to players playing within 34 states and does not offer such tournaments to players within 14 states, plus 2 additional states where players are prohibited from playing card games in such tournaments (although tournaments involving other games are allowed). FUN's and SPE's gaming counsel agree that the law in this area is in flux, is susceptible to political influences and should be monitored regularly for changes in the law and/or enforcement in all 50 states. Specifically, FUN and its gaming counsel currently are closely monitoring 9 states (out of the 34), where the law is ambiguous or there are activist governmental officials, looking for any changes that could impact whether tournaments for a fee continue to be offered in these states. FUN has not prepared a legal analysis of relevant law in any foreign jurisdiction, although less than 10% of FUN's business is outside the U.S. SPE legal has kept Nicole apprised of the gaming issues.

Liberty Guarantee

• Prior to the Liberty spin, Liberty Media Corporation ("LMC") owns 54% of DirecTV and this interest is held in Greenlady Corp. ("Greenlady"), a wholly owned subsidiary of LMC, and is included in Liberty Entertainment, one of LMC's tracking stocks. In connection with the GSN/FUN transactions, and prior to the Liberty spin, Greenlady will be guaranteeing all of Liberty's payment obligations to SPE in this deal, including under the put/call. After the Liberty spin, either Greenlady or Liberty Entertainment, Inc. ("LEI"), Greenlady's parent entity under the new post-spin structure, will be providing this guarantee. In either case, the direct owner of 54% of DirecTV (Greenlady), or its parent entity (LEI), will be guaranteeing all of Liberty's payment obligations to SPE in this deal, including under the put/call or buy/sell, as the case may be.

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E-mail Question 1 – Governance and Financial Obligations

• SPE will retain its 50% of key approval rights under the new GSN operating agreement (exactly the same as current arrangement), including approvals of:

– Budgets, business plans, and non-budgetary items

– Additional capital calls

– Acquisitions over $1MM

– Issuance of membership interests

• All financial obligations (excluding potential pre-close GSN MFN liabilities of $20-$25MM

1) will be shared 35% to SPE and 65% to Liberty

50/50 Governance

65/35 Financial

Obligations

1 Pre-close MFN liabilities will be split 50/50 between SPE and Liberty

• What kind of financial obligation do we have under the new 65:35 organization? If we have any obligation could we assume that this would be 65:35 and not 50:50? The 50:50 governance structure will be applied only to voting rights (board seats) and everything else will be on 65:35 is what I understand?

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E-mail Question 2 – Carve-out Balance SheetFUN Games Pro Forma Balance Sheet Estimate as of April 1, 2009

• April 1, 2009 Balance Sheet is management’s estimate as of the time Sony acquires 35%.

• Represents only the gaming segment that Sony will be investing in

Forecast as of April 1, 2009

ASSETS

Current AssetsCash and cash equivalents $1,000,000Restricted cash 1,156,226 Money market funds - Accounts receivable, net 377,529 Prepaid expenses 1,513,229 Other current assets 177,883 Total Current Assets 4,224,866

Property and equipment, at cost 1,558,568 Accumulated depreciation (456,345)

1,102,222

Intangibles, at cost 42,505,406 Accumulated amortization (27,269,792)

15,235,614

Notes receivable, intercompany - Goodwill 117,541,560 Other LT assets - Investments -

Total Assets $138,104,262

LIABILITIES AND STOCKHOLDERS EQUITY

Current LiabilitiesAccounts payable and accrued liabilities $4,281,301Customer deposits 1,481,412 Taxes payable 679,748 Deferred revenue - Current portion of long-term liabilities 100,000 Total Current Liabilities 6,542,461

Long Term LiabilitiesNotes payable, intercompany - Deferred income taxes 5,232,257 Other long term 1,130,263

6,362,521 Intercompany (28,879)

Shareholders EquityCapital stock:

Common stock 63,742,804 Additional paid-in capital 237,328,445 Capital redemption reserve 634,235 Foreign currency translation adjustment 1,999,447 Deferred stock-based compensation 9,099,666

312,804,598 Retained earnings

Opening (164,383,287) Current period/year (earnings) loss (23,193,152)

(187,576,439)

Total Shareholders' Equity 125,228,159

Total Liabilities and Shareholders' Equity $138,104,262

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E-mail Question 3 – Summary of Goodwill

GoodwillAcquisition Date (Net of Impairments)

FUN acquires SkillJam July 2004 $8,906,897

Liberty acquires FUN March 2006 $91,356,154

FUN acquires WorldWinner March 2006 $15,830,385

FUN acquires Teagames August 2006 $1,448,123

Ending Balance $117,541,559

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Questions 4, 6, and 7 – Earnings HistoryOverview of FUN Earnings History

P&L Profits

• Fun Games (exclusive of FUN Sports) generated $6.5MM of EBITDA in 2008. On a consolidated basis, FUN (including FUN Games and FUN Sports) generated $6.6MM of EBITDA in 2008

• FUN has not been net income positive on a consolidated basis or a FUN Games divisional basis, largely due to deal amortization and write-offs. However, FUN Games is expected to generate $13.2MM of EBITDA and $7.9MM of Net Income in 2009

Balance Sheet Detail

• FUN’s retained earnings were reset in 2006 when Liberty acquired a controlling stake in FUN. From that time through December 31, 2008, $154MM of FUN’s total accumulated deficit was attributable to FUN Games in the carve-out balance sheet. However, only $21MM related to operating losses from continuing operations.

• The $23MM identified as “current period losses” on the carve-out balance sheet is due to pre-close adjustments between 12/31/2008 and 4/1/2009. These adjustments primarily relate to the write-off of inter-company receivables prior to close

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Questions 4, 6, and 7 – Earnings HistoryHistorical P&L for FUN Games Segment

NOTE: The above “carve-out” P&L required various assumptions and allocations to reflect the P&L for FUN Games and associated corporate allocations only. Variance to prior historical P&L provided primarily relates to the inclusion of corporate allocations that will be included with FUN Games after the transaction.

(Values in $000s) 2006 2007 2008

Revenue $22,334 $42,269 $56,111

COGS (13,591) (20,569) (28,794) Operating Expenses (20,846) (20,212) (20,863)

EBITDA ($12,103) $1,488 $6,454

D&A (6,354) (5,984) (11,297) Interest Expense (312) 85 (12) Tax Expense 1,370 1,648 3,983

Net Income Before Other Items ($17,399) ($2,763) ($872)

Other Items (Write-downs, Impairments, etc.) (59,940) (7,705) (33,233)

Net Income From Continuing FUN Businesses (77,339) (10,467) (34,105)

Loss from Entities Sold in 2008 - (28,538) (3,881)

Net Income ($77,339) ($39,005) ($37,986)

FUN Games Retained Earnings 12/31/08 ($154,331)

Dividends to Liberty in March 2009 ($10,053)

FUN Games Retained Earnings 4/1/09 ($164,383)

Settlement of Intercompany Receivables and Other Pre-Close Adjustments 4/1/09 ($23,193)

Retained Earnings as of Sony's Investment ($187,576)

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Questions 4, 6, and 7 – Earnings HistoryFUN Technologies P&L (Consolidated, Including FUN Sports and FUN Games)

(Values in $000s) 2006 2007 2008

Revenue $41,648 $69,103 $69,738

COGS (17,240) (29,477) (34,235) Operating Expenses (34,381) (33,439) (28,881)

EBITDA ($9,973) $6,187 $6,622

D&A (15,853) (12,928) (19,145)

Interest Expense 14 (695) (172)

Tax Expense 5,519 3,963 5,626

Net Income Before Other Items ($20,294) ($3,473) ($7,068)

Other Items (Write-downs, Impairments, etc.) (88,392) (40,144) (27,872)

Net Income ($108,686) ($43,617) ($34,939)

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E-mail Question 5 – ValuationSummary of Preliminary FUN Valuation Analysis

Based on internal projections; in the process of reviewing with EY; subject to further review by PWC

(1) DCF analysis based on free cash flow incorporating charge for corporate overhead

(2) Enterprise Value includes $1MM of cash and no debt

(3) WACC based on all companies listed for Market Trading Comps

WACC 3

13.7%

Market Trading Comps

Median Multiples

Company Metric LTM Forward 1 Yr Forward 2 Yr

Electronic Arts, Inc. Revenue 2.2x 2.1x N/AActivision BlizzardMicrosoft EBITDA 15.0x 13.9x N/AYahoo! Inc.Time WarnerAmazon.com, Inc.eBay, Inc.Blue Nile, Inc.

Precedent Transactions

Acquisition Median Multiples

Buyer Target Metric LTM

Real Networks, Inc. WiderThan Co. Ltd Revenue 3.7xFUN Technologies Inc CDM Fantasy SportsPartyGaming Plc Gamebookers EBITDA 7.4xFUN Technologies Inc WorldWinner.comElectronic Arts Inc. Digital Illusions CE ABBET and WIN.com Ongame e-solutions ABElectronic Arts Inc. JAMDAT Mobile IncLiberty Freedom Inc. Fun Technologies Plc (51%)Fox Interactive Media IGN Entertainment, Inc.Fox Interactive Media Intermix Media, Inc.FUN Technologies Plc Fanball Interactive, LLCFUN Technologies Plc Don Best

Valuation Overview ($MM)

Valuation Indicated EffectiveMethod Fair Value Weighting Value

Discounted Cash Flow 1 $219 50% $109

Market Trading Comps $141 25% $35

Precedent Transaction Comps $171 25% $43

Enterprise Value 2 $187

% Share Acquired 35%

Value Acquired $66

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E-mail Question 5 – ValuationFUN P&L Used for Valuation Analysis

Changes from

Financial Appendix Page

Previously Sent

• Previous P&L provided was for FUN Games only; current version (left) includes FUN Games plus corporate allocations, including overhead of $1.9MM in 2008 and $700K from 2009 – 2013. Based on recent diligence calls with FUN management.

• Current tax calculation in CY2011 increased on the assumption that NOLs will be fully utilized earlier in the year

Values in $000s ACTUALS BUDGET FORECAST

Calendar Years 2008 2009 2010 2011 2012 2013

REVENUEAdvertising 1,300 2,467 3,701 4,811 5,533 5,948 Standard Tournament 40,814 52,274 68,562 83,760 96,796 108,298 Jackpot / FPUE Tournament 11,956 16,917 21,651 25,909 29,942 33,500 Partner Fees 1,292 2,512 3,768 4,899 5,634 6,056 All Other 749 820 877 921 967 1,016 TOTAL REVENUE $56,111 $74,990 $98,560 $120,301 $138,872 $154,818

Y/Y Growth 33.65% 31.43% 22.06% 15.44% 11.48%

Cost of Sales (28,794) (40,627) (52,749) (63,900) (73,846) (82,620)

GROSS PROFIT $27,316 $34,364 $45,811 $56,400 $65,026 $72,197Gross Profit % 48.68% 45.82% 46.48% 46.88% 46.82% 46.63%

SG&A (20,863) (21,139) (24,549) (27,705) (29,838) (31,609)

EBITDA $6,454 $13,225 $21,262 $28,695 $35,189 $40,588EBITDA % 11.5% 17.6% 21.6% 23.9% 25.3% 26.2%

D&A (11,297) (6,544) (3,964) (3,503) (2,435) (400)

EBIT ($4,844) $6,680 $17,299 $25,192 $32,753 $40,188

Other (32,519) - - - - - LTIP (715) (528) (1,233) (804) (969) (969) Interest (12) (36) (36) (36) (36) (36)

Income (Loss) before Taxes ($38,090) $6,116 $16,029 $24,352 $31,748 $39,184

Deferred Tax 4,159 2,164 1,227 1,103 551 - Current Tax (176) (306) (801) (6,582) (10,794) (13,322)

NET INCOME (LOSS) ($34,106) $7,974 $16,455 $18,873 $21,505 $25,861

NOTE: The above “carve-out” P&L required various assumptions and allocations to reflect the P&L for FUN Games and associated corporate allocations only. Variance to prior historical P&L provided primarily relates to the inclusion of corporate allocations that will be included with FUN Games after the transaction.

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E-mail Question 5 – ValuationFUN Valuation Based on Market and Precedent Transaction Comps

Metric FUN Multiple Implied Value Weight Weighted Value

(Values in $000s)

MARKET TRADING COMPS

LTM Revenue $56,111 2.2x $124,479 25% $31,120

LTM EBITDA $6,454 15.0x $96,565 25% $24,141

Forward 1 Yr Revenue $74,990 2.1x $156,301 25% $39,075

Forward 1 Yr EBITDA $13,225 13.9x $183,562 25% $45,890

Total Value $140,227

Add Cash ($1MM) $141,227

PRECEDENT TRANSACTION COMPS

LTM Revenue $56,111 3.7x $210,135 75% $157,601

LTM EBITDA $6,454 7.4x $47,885 25% $11,971

Total Value $169,573

Add Cash ($1MM) $170,573

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E-mail Question 5 – ValuationFUN Valuation Based on Discounted Cash Flow Analysis

• Free cash flow projections based on the P&L on page 9 (Net Income adjusted for non-cash items such as depreciation, amortization, deferred taxes, and CAPEX)

• Detailed forecast extends through 2013; 2014 – 2017 projections based on declining growth method

• Terminal value based on 4% perpetuity growth

• Cash flows are discounted at a 13.7% WACC

BUDGET FORECAST DECLINING GROWTH

2009 2010 2011 2012 2013 2014 2015 2016 2017

Free Cash Flow $11.7 $20.0 $19.3 $23.4 $25.8 $27.8 $29.1 $30.4 $31.67.8% 4.7% 4.3% 4.2%

Terminal Value - - - - - - - - $337.6

Total $11.7 $20.0 $19.3 $23.4 $25.8 $27.9 $29.1 $30.4 $369.3

NPV $217.7