spt business overview november 13, 2012 draft – for discussion only

SPT Business Overview

November 13, 2012

DRAFT – FOR DISCUSSION ONLY

Sony Pictures Television

Sony Pictures TelevisionSony Pictures Television

ProductionProduction NetworksNetworksDistributionDistribution

• Development, acquisition, and production of television programs for broadcast, basic cable, and premium cable networks

• Program genres include scripted comedies and dramas and non-scripted reality, talk, and game shows

• Sale of SPE’s film and television content to television and digital customers

• Customers include U.S. and international broadcast and cable networks, U.S. local television stations, and digital services, e.g., Netflix

• Management and distribution of branded networks and channels worldwide

• International brands include AXN, SET, and Animax

Business Overview

Television Business is Growing

Se-ries1

0

100

200

300

400

500

600

700

800

900

11

Monetization$MM

FY13Frcst

FY14Current

FY15 Current

FY16 Current

3

SPT Consolidated EBIT

15% CAGR

• Networks – Networks has an EBIT CAGR of 23% across the plan, breaking earnings records in each and every year. The growth comes from all regions across the world as newer channels mature to profitability and more mature channels grow or maintain their margins

• U.S. Production & Ad Sales – EBIT grows 21% over the plan from $290MM to $351MM driven by a steady pipeline of programming sold to SVOD and Off-net syndication: Last Resort, Happy Endings, Justified

• International Production – International Production has an EBIT CAGR of 78% across the plan. Moderate organic growth from existing operating companies is supplemented by EBIT contributions from recent acquisitions Left Bank and Silver River as well as the inclusion of a hit format starting in FY15

$564

$625

$765

$859

553

SPT EBIT continues to grow at a rate of 15% year-over-year


Today and TomorrowRevenue EBIT

($MM) FYE13 FYE16 FYE13 FYE16U.S. Distribution 48 40 34 25 Int'l Distribution 9 5 (45) (54) Int'l Production 294 573 6 34 U.S. Production & Ad Sales 1,761 2,191 290 351 Networks 1,536 2,580 268 503 Total 3,648$ 5,389$ 553$ 859$

FYE13 FYE16 $-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$3,648

$5,389

FYE13 FYE16 $-

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

$553

$859

Revenue EBIT($MM) ($MM)


Market Update

● Growth opportunities exist across the television industry

− The global number of television households continues to grow

− There are a greater number of distribution customers in the marketplace

− Affiliate fees are generally stable; ad sales have rebounded since the 2008 downturn, although economic conditions in some territories have slowed growth

− International consumption of U.S. TV dramas continues to be strong

− SVOD customers are creating greater demand for studio content

● The television industry also faces a number of challenges

− European economic issues have slowed the growth of the ad sales market in many territories

− Studio programming prices are expected to rise creating margin pressure on networks

− Volatility of foreign currencies creates uncertainty for predicting financial results in U.S. dollars

− Competition across the global TV industry remains strong

U.S. Distribution

U.S. Distribution Presence

Pending graphics/narrative

U.S. Distribution: Forecast

• Increase feature library sales despite the ‘flat’ market

• Leverage SVOD licensing and strategic product planning for U.S. channel carriage

MRP AssumptionsU.S. Distribution Revenue and EBIT

($MM)

FY13 FY14 FY15 FY16 -

100

200

300

400

500

600

700

800

900

-

5

10

15

20

25

30

35

40

$778 $778 $671 $632

$34 $36

$28

$25


• Revenue and corresponding profit contribution volatility is largely driven by release timing, size of theatrical slate and timing of off-net syndication avails (e.g., Rules of Engagement, Community, Happy Endings)

U.S. Distribution: Organization Overview

• TBD

U.S. Distribution: Strategy

FYE13

•Narrative TBD

FYE16

•Narrative TBD

U.S. Distribution: Big Ideas for Change

•Question 1•Question 2•Question 3

•Answer 1•Answer 2•Answer 3

Hard Questions to Ask Answers

U.S. Distribution: Alignment

• TBD

How do we align organizational structure and how do we measure success?

International Distribution

International Distribution Presence


International Distribution: Forecast

Strong and consistent growth

• Leverage slate of network dramas

• Capitalize on new market entrants to help build future revenue pipeline

• Develop organization• Build stronger relationships in

key markets

MRP AssumptionsInt’l Distribution Revenue and Profit

Contribution ($MM)

FY13 FY14 FY15 FY16 1,400

1,500

1,600

1,700

1,800

1,900

2,000

600

620

640

660

680

700

$1,630 $1,712

$1,772

$1,895 $634

$653

$662

$685


Int’l Distribution: Organization Overview

• TBD

International Distribution: Strategy

FYE13

•Narrative TBD

FYE16

•Narrative TBD

International Distribution: Big Ideas for Change




International Distribution: Alignment

• TBD


International Production

International Production Presence

Miami (Latin America/USH)

Bogota

Sao Paolo

Rome

Cologne MoscowBeijing

Hong KongDubai

BeirutCairo

Paris

London

Amsterdam

Americas

EMEA (Europe, Middle East, Africa)

AsiaCulver City

International Production: Forecast

• Continue investment into companies which create IP with focus on UK; review opportunities in Scandinavia, Israel, Australia and other content rich countries

• Strategically deploy central development fund

• Launch competitive incentive plan to foster creation of global IP and multi-territory format exploitation and to attract/retain talent

• Streamline daily administrative/operational processes allowing managing directors to focus on content creation

• Increase collaboration between operating companies

• Establish culture that fosters creativity centrally and across operating companies

MRP AssumptionsInt’l Production Revenue and EBIT

($MM)

FY13 FY14 FY15 FY16 -

100

200

300

400

500

600

700

-

5

10

15

20

25

30

35

40

$294

$433 $530 $573

$6

$13

$28

$34


• EBIT excludes FY13 monetization of $11MM

Int’l Production: Organization Overview

• TBD

International Production: Strategy

FYE13

•Narrative TBD

FYE16

•Narrative TBD

International Production: Big Ideas for Change




International Production: Alignment

• TBD


U.S. Production & Ad Sales

U.S. Production & Ad Sales Presence


U.S. Production & Ad Sales: Forecast

Strong and Consistent Earnings Growth

• Leverage slate of network dramas

• Capitalize on new market entrants to help build future revenue pipeline

• Develop organization

• Build stronger relationships in key markets

MRP AssumptionsU.S. Production & Ad Sales Revenue and EBIT ($MM)

FY13 FY14 FY15 FY16 -

500

1,000

1,500

2,000

150

200

250

300

350

400

$1,761 $1,911 $2,011 $2,191

$290 $298

$351 $351


U.S. Production & Ad Sales: Organization Overview

• TBD

U.S. Production & Ad Sales: Strategy

FYE13

•Narrative TBD

FYE16

•Narrative TBD

U.S. Production & Ad Sales: Big Ideas for Change




U.S. Production & Ad Sales: Alignment

• TBD


Networks

Networks: Brands

SET GENERAL ENTERTAINMENT

AXN GENERAL ENTERTAINMENT

ANIME/YOUTH LIFESTYLE/MUSI

CDIGITAL MOVIES

PARTNER NETWORKS

Highly successful network brands benefiting from global infrastructure

Networks: Forecast

Strong and Consistent Earnings Growth

FYE13 FYE14 FYE15 FYE160

500

1,000

1,500

2,000

2,500

3,000

0

100

200

300

400

500

600

$1,536 $1,961

$2,258

$2,580

$268

$328

$410

$503

Revenue EBIT

• Focus next 18 months on maximizing efficiencies in existing operations

• Continue to selectively launch channels in new and existing territories

• Increase investment in Crackle U.S. advertising and technical infrastructure

• Volatility of foreign currencies has had a particularly harsh impact on Networks earnings

EBIT reaches over $500 million in FYE16, growing at a 23% CAGR over the MRP period

MRP Assumptions

EBIT Margin:

17.4% 16.7% 18.2% 19.5%

Networks Revenue and EBIT ($ in Millions)

Networks: Organization Overview

• TBD

Networks: Strategy

FYE13

•Narrative TBD

FYE16

•Narrative TBD

Networks: Big Ideas for Change




Networks: Alignment

• TBD


spt business overview november 13, 2012 draft – for discussion only

Documents