February 2014 - WikiLeaks UK/Channel 5 Deal...– Expand SPT’s distribution and reach and cross...

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Channel 5 Deal Overview

February 2014

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Executive Summary

Sony Pictures Television (“SPT”) has an opportunity to acquire Channel 5 (a subsidiary of Northern & Shell), an FTA channel that is the only privately owned commercial public service broadcaster in the UK• Channel 5 is a multi-channel network with its channels (i.e., Channel 5, Multichannel 5*, Multichannel 5 USA,

and Demand 5) available on Freeview, satellite (e.g., Sky), cable (e.g., Virgin) and IPTV• Northern & Shell (“N&S”) has hired Barclays to run a sale process for the entire business with initial non-

binding indications of interest due by February 27, 2014

– We estimate a preliminary valuation for 100% of Channel 5 in the range of $825M – $945M (£516M –

£591M), representing a 10.3x to 11.7x CY13 Adj. EBITDA multiple and a 7.6x – 8.7x CY14 Adj.

EBITDA multiple

– This is a preliminary valuation estimate based on limited information and prior to due diligence • Channel 5 provides an opportunity for SPT to become a powerhouse in a key international free-to-air market

and to realize significant synergies across Sony Pictures Television networks, distribution, production, ad sales divisions as well as Sony One benefits

– Expand SPT’s distribution and reach and cross promote channels and drive viewership and ad sales

– Platform to launch new formats and co-productions in the UK

– Distribution outlet for SPE content (film and TV series, soaps, talk shows, children’s, library product)

– Immediate digital presence in the UK market with Demand 5’s catch-up and VOD service• SPT proposes to submit a preliminary and non-binding indication of interest, subject to due diligence, of

$850M (£531M) for Channel 5, representing a 10.6x CY2013 Adj. EBITDA multiple and 7.8x CY2014 Adj. EBITDA multiple

– SPT to form a JV and own 51% of the equity, which would allow for consolidation [TBD]

– Transaction assumes no leverage• With preliminary synergies, the Channel 5 acquisition has an NPV of $26M, IRR of 13.4%, DWM of ($434M),

and payback in FY23 based on an SPT equity investment of $434M for 51% of the equityNote: Assumes £ to $ exchange rate of 1.60.

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Situation Overview

• In July 2010, RTL Group, the leading European entertainment network, announced the sale of Channel 5 to the N&S company owned by British publisher Richard Desmond for a total cash consideration of $167M (£104M)

– The deal valued Channel 5 at LTM revenue multiple of 0.4x and LTM EBITDA multiple of 12.4x

– Channel 5 experienced significant revenue and profit decline relative to the market in 2008 and 2009; the company underwent a comprehensive restructuring process at the time of sale

– Rival bidders also included Channel 4, Time Warner and Endemol

• Northern & Shell has now appointed Barclays to advise on a potential sale of Channel 5

– Process expected to be a competitive auction and possibly a two-stage process

– Interest so far from a broad array of bidders, although private equity seen to be relatively reluctant

– Signing expected prior to the summer break

• Next Steps: Indicative non-binding proposals are due by 9:00am GMT on February 27, 2014 Note: Assumes £ to $ exchange rate of 1.60.

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Company Overview

Channel 5 is the UK’s only privately owned commercial Public Service Broadcaster (“PSB”)2, viewed by 80% of the UK population in a typical month and has a 9.6% UK Share of Commercial Impacts (“SOCI”)

• Channel 5 is a multi-channel network with channels available on Freeview, satellite (e.g. Sky), cable (e.g. Virgin) and IPTV

• 6.0% Channel 5 family Share of Viewing (“SOV”)1 in all of UK

• Launched in 1997 as the fifth and final national terrestrial UK network

• Acquired by Northern & Shell from RTL Group in 2010

• The Department for Culture, Media and Sport announced in November 2012 that Channel 5’s PSB license would be renewed until 2024. The final license renewal announcement was made by Ofcom on February 11th 2014 for the licensing period starting from January 2015 to end of 2024

Company Highlights

Key Brands

Channel 5

• UK’s fifth most popular channel, with 4.4% SOV1 and reached 48M viewers in December 2013

• Programming revolves around entertainment, documentaries, kids, news, films and sports

• Key Programming:

Multichannel 5

• 0.6% SOV1 in 2013

• Shows a mix of soaps, movies, dramas and documentaries with a focus on 16 – 34 year olds


Multichannel 5 USA

• 1.0% SOV1 in 2013

• Shows drama, films, sports, comedies and youth programming from the US


Demand 5

• Catch-up and VOD service

• Provides PC, tablet, mobile and connected TV access to Channel 5’s programming

• Achieves 12M views per month

• Partner in the YouView consortium, a next generation IPTV service

(1) Source: Broadcasters Audience Research Board. Refers to 2013 and Channel 5’s main channel, 5USA, 5* Multichannels and +1 channels.(2) PSB’s include Channel 5, BBC1, BBC2, ITV and Channel 4.

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Strategic Acquisition Rationale

Networks

• Become a powerhouse in a key free-to-air international market by combining SPT and Channel 5’s networks

• Utilize unused digital spectrum to launch new channels

• Refocus strategic positioning of multichannels 5* and 5USA to target key demos and improve ratings

• Cross-promote channels to increase ratings and ad revenues

• Utilize Channel 5’s program library across SPT channels

• Potential to improve ad rates by bundling SPT channels ad inventory with ad inventory from new Channel 5 launches

• Revenues are highly concentrated on advertising

• Inter-company revenues (predominantly air time) amount to 9.4% of total sales. Channel 5’s contracts with N&S expected to be extended to CY16, thereafter N&S likely needs to be replaced

• Big Brother makes up a significant portion of total impacts (15%), which creates uncertainty in projected periods

• SPT recently signed a 7 year ad deal with Sky to sell the UK channels’ ad inventory ; ad synergies in the first 7 years may come from multichannel launches only

• TV ads and N&S publications ads appear to be sold in packages. The impact from selling TV ads on stand alone basis is unclear

• Ad sales team of 97 people appears to be shared across all N&S properties

Production

• Channel 5 predominantly outsources original production - opportunity to leverage SPT’s production capabilities in the UK

• Test and launch new formats in the UK - creates a larger opportunity to discover a hit format and capture international sales

• Channel 5 has an in-house production company which contributes relatively small revenue and has not generated flagship IP

Distribution• Incremental distribution of TV series, soaps, library product

• Distribute original shows produced by SPT and in-house productions in international markets

• Expiration of current distribution agreement with DRG is unknown

• Limited near-term upside given estimated small size of international revenue from original productions

Digital

• Immediate digital presence in UK market and ability to leverage the team and technology across SPT channels

• Ownership in YouView, a JV with 6 others, UK’s fastest growing connected TV platform

• Digital economics not provided at this time

• YouView is incurring significant losses and Channel 5 has funding commitments; may be diluted thereafter if it stops funding

Financial

• Improve ratings and diversify revenue streams (digital, production, retransmission)

• High upside from retransmission fees, if allowed

• Cut G&A and operating costs, such as transmission fees, when bundled with SPT channels

• The channel has had steady ratings and share over the last 4 years

• Certain factual Channel 5 productions are co-produced and co-financed by an agency (GroupM). Without the co-financing partner Channel 5 may need to increase its program spend although unlikely to be very significant

• Retransmission fees are uncertain,subject to regulatory approvals

• Channel 5 has a lean overhead operation

• Channel 5 and N&S expected to renew inter-company contracts at market rates through CY16

Opportunity Consideration

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Programming Overview($M)

• Acquisitions (licensed content) comprise $184M (56%) of 2013 total programming costs

– TV and film account for $141M and $43M, respectively

– SPT Distribution expected to sell ~$21M of content to Channel 5

• Original programming (commissions) comprise $144M (44%) of 2013 total programming costs

– Top 3 shows (Big Brother, Neighbours and Home and Away) comprise $111M or ~80% of original programming spend

– Remaining original shows cost $31M or ~20% of original programming spend

– SPT expected to produce 50% of original shows outside of top 3, which accounts for $15M or ~10% of original programming spend

• Channel 5 comprise 87% ($286M) of total programming spend in 2013

• Multichannels comprise 13% ($42M) of total programming spend, with over 90% on acquisitions (licensed content)

Overview

Note: Assumes £ to $ exchange rate of 1.60.

Key Program Spending

• Big Brother: $54M (£33.6M) of program spend in CY13

– Reality show produced by Endemol targeting ages 16-34 demo, Channel 5’s flagship commission

– Last contract extension was in July 2012

– Contract expires in December 2015

• Neighbours: $36M (£20M) of program spend in CY13

– Soap opera produced by FremantleMedia Australia

– Contract renegotiated in 2010 to reduce costs by $19M (£12M) annually

– Contract expires in 2017 and represents the biggest contract commitment - $128M (over 50% of total commitments)

• Home and Away: $24M (£15.3M) of program spend in CY13

– Soap opera produced by Red Heart Entertainment

– Contract expires in December 2016 and represents the 2nd largest acquired contract commitment - $69M (£43M)

Channel 5 CY13 Programming by GenreCY10 – CY13 Programming Breakdown

Original Scripted

Original Non-Scripted

Childrens

Drama

Documentary

Special Interest

Reality

Other Non-Scripted

Format

International

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Programming Overview (cont.)


• Channel 5’s ratings and impacts are strongly influenced by several shows (i.e. Big Brother, CIS, NCIS), which creates uncertainty in projected periods

• Big Brother contract is up for renewal after Dec 2015; a loss of this show may significantly impact financial performance

– Show viewed as not very attractive to competitors, expected to remain with Channel 5

– Content spend of $54M per year

– SPT projections assume a renewal at 5% increase ($2.7M increase per year)

• Home and Away expires in Dec 2016

– SPT projections assume a renewal at a significant increase of 20% or $4.8M increase per year

• Neighbours was renegotiated in 2010 at a $19M per year lower cost and expires in 2017

– SPT projections assume a renewal at similar terms

• SPT production companies in the UK expected to develop original shows for Channel 5

– Currently, Channel 5 spends ~$31M on original shows excluding its top 3 shows

– SPT projections assume that SPT can develop ~50% of the original shows outside of the top 3 shows

– Expected revenue contribution of $15M and EBIT contribution of $1.5M to SPT

– Original shows produced by SPT expected to increase international sales for SPT distribution

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Programming Overview (cont.)


• SPT distribution expected to sell incremental content to Channel 5 (e.g., film, series, talk shows, soaps, library, children’s)

– SPT projections assume $10M of incremental distribution revenue, ramping up to $20M before participations

– Participations projected at 25%

• Channel 5’s library can be utilized across SPT channels

– Projected programming savings ramping up from 5% to 10% related to a reduction of SPT UK Networks programming costs from airing Channel 5 library content on SPT’s UK channels

• Certain factual Channel 5 productions are co-produced and co-financed by an agency (GroupM). Without a co-financing partner, Channel 5 may need to increase its program spend although unlikely to be very significant

– GroupM provides deficit funding on top of the broadcaster’s fee to ensure the show can be made. In return, it takes a percentage of ancillary revenues, including international sales (effectively acting as co-producer)

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In-House Production

• In-house production launched in 2011 and expected to generate $13.6M (£8.5M) in CY14

– Formats generally developed for target Channel 5 demo with the ability to sell internationally and re-versions (e.g. British voiceovers for US shows)

• Channel 5 currently airs in-housed produced shows Criminals: Caught on Camera, Marco Pierre White’s Kitchen Wars, On Benefits & Proud and Go Hard or Go Home with numerous other shows in production

• Internationally, in-house produced shows are distributed through DRG

• CY14 pipeline includes recommissions (e.g., And Proud, Caught on Camera, Tesco Mum of the Year) and a new commission (i.e., Plantagenets)

Opportunities


• SPT expects to bring Channel 5’s in-house production team under the UK umbrella companies

• SPT could distribute Channel 5’s in-house produced content outside of the UK

– Expiration of current distribution agreement with DRG is unknown

– Limited near-term upside given estimated small size of international revenue

Overview

Criminals: Caught on

Camera

On Benefits & Proud

Jamie’s Got a Mountain to

Climb

Marco Pierre White’s Kitchen

Wars

Speidi: Scandal, Secrets & Surgery!

The Great Christmas Toy

Giveaway

John Barrowman’s Dallas

Go Hard or Go Home

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Ad Sales

• In-house ad sales operations comprised of 97 employees in 2013 which is shared with all N&S properties

– Airtime revenue generated 87% of Channel 5’s total revenue in CY13

• Inventory is priced at a premium to the broader UK TV market across all demographics but at a discount to ITV reflecting a potential upside

• Select advertisers include:

Opportunities• Potential to improve ad rates by bundling SPT channels ad inventory with ad inventory from new Channel 5 launches• Potential to utilize Channel 5’s in-house ad sales team to sell SPT’s channels ad inventory. However, given that SPT recently

signed a 7 year deal with Sky to sell the UK channel’s ad inventory, it is unlikely SPT is able to realize any immediate synergies from Channel 5’s ad sales team, unless SPT:

– 1) Shuts down Channel 5’s ad sales group and move Channel 5’s inventory to Sky or,– 2) Exits the contract with Sky (without penalty) and move SPT Network’s existing UK channels ad inventory to be

represented by Channel 5’s ad sales team• As the upside for ad sales synergies are longer term, such opportunities are not included in the business plan• As Channel 5’s ad sales team appears to be shared with N&S, it is currently unclear how it could be separated and impact on

ad revenue• TV ads and N&S publications ads are sometimes sold in packages which can improve rates. Channel 5 and N&S expected to

renew inter-company contracts at market rates through CY16. SPT projections assume 5% decrease in ad revenue due to the inter-company impact, partially offset by a 3% ad market growth

Overview Channel 5 Pricing Premium/(Discount) to Comps

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Inter-Company Revenue and Cross-Promotion($M)

• Channel 5 inter-company revenue comprises of airtime and online advertising for The Health Lottery and other N&S’s titles, in-house production of these and other ads, and sublet fees for DTT bandwidth

– CY13 inter-company revenue of $55.5M (£34.7M) represented 9.4% of total revenue

• Inter-company costs include marketing costs estimated to remain at $3.4M (£2.1M) over the next few years

• Volume of cross-media deals between Channel 5 and N&S print titles have been limited, with most of the campaign value in TV advertising

– CY13 cross-media deals amounted to $14.1M (£8.8M) with 17% of the total allocated to N&S print

• N&S anticipates that the existing commercial agreements between Channel 5 and N&S will continue on an arm’s length basis in the business plan period after transaction close


Inter-Company Revenue CY10 – CY16 Inter-Company Revenue

Considerations• Inter-company revenue represents ~8% of total revenue going forward. Inter-company agreements are expected to be

extended at market terms through CY16. Thereafter, Channel 5 will likely need to replace N&S as a client. SPT projections assume that 50% of the inter-company revenue will not be recovered past CY16

• The Financial Times estimates that the free coverage of Channel 5 content on N&S publications is valued at approximately $32M (£20M). However, N&S contends that Channel 5 content would receive N&S coverage regardless of ownership due to the overlap in viewer and consumer demographics. SPT projections assume $15M of incremental annual marketing after CY16

• Adjusted EBITDA, as provided by the Company, includes additional overhead costs Channel 5 would incur on a standalone basis including inter-company rent and other central services currently provided by N&S. SPT projections assume that Company estimates of $3.6M to $4.6M per year accurately reflect any stand-alone adjustments

CY13 Inter-Company Revenue ($56M) Breakdown

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Summary Financials: SPT Case

Note: Assumes £ to $ exchange rate of 1.60. (1) Other adjustments provided by Company Management, including stand alone costs, redundancy costs, transmission costs adjustments, and Top Up TV

bandwidth buy back.

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Synergies and Other Adjustments to Business Plan($M)


We made the following expense adjustments to the Management Case in order to derive Pro-forma Standalone EBIT:

We made the following assumptions in order to derive SPT EBIT with Synergies:

(1) Increase in Programming Spend

• 5% increase in Big Brother program costs once current licensing deal expires at end of CY15• 20% increase in Home and Away program costs once current licensing deal expires at end of CY16

(2) Additional Marketing

• Expected increase in marketing due to the loss of free publicity of Channel 5 on N&S publications past CY16

(3) Incremental Distribution Proceeds

• Proceeds of $10-$20M (less participations) from selling incremental available content. SPT Distribution expected to sell only $6M of content to Channel 5 in FY15. Amount expected to increase to include additional sales of TV film and series, talk shows, soaps, library that are not currently sold in the UK

(4) Programming Savings

• Programming savings ramping up from 5% to 10% related to a reduction of SPT UK Networks programming costs from airing Channel 5 library content on SPT’s UK channels

(5) Production Fees• Additional production fees to SPT for producing ~50% of Channel 5’s original shows (excluding top 3

shows)• Assumes $15M of annual revenue at 10% EBIT margin to SPT

(6) Cross Promotion • Increase of ad revenue to UK SPT networks of 10% due to promotion on Channel 5

SPT projections assume no changes to Management Case revenues through CY16. Post CY16, we extended the Management Case forecast to CY19 to include the following revenue adjustments starting in CY17:

Ad Rates Decrease• 5% decrease in ad rates/revenue in CY17 when Channel 5 ads discontinue to be sold in packages

with N&S ads and when inter-company contracts expire. Impact is partially offset by 3% ad market growth

Decline in Inter-company Revenue

• 50% decline in inter-company revenue starting in CY17. Contracts with N&S expected to be extended through CY16, thereafter 50% of N&S business expected to be replaced

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Upside Potential – Not Included in Business Plan

New Channels

• Utilize unused digital spectrum to launch new channels (increasing impacts for key 16 – 34 demographics)

• Refocus strategic positioning of multichannels 5* and 5USA to target key demos and improve ratings

Ad Sales• Potential to improve ad rates by bundling SPT channels ad inventory with ad inventory

from new multichannel launches

Retransmission Fee Upside

• Channel 5 may benefit from retransmission fees coming from pay TV platforms - represents a significant future revenue opportunity, all of which should flow to EBITDA

• Equity research analysts quantify the retransmission opportunity for ITV at $160M (£100M) annually, although ITV has significantly larger scale (~6x revenue size of Channel 5)

Hit Show Format • $50M to $75M over 5 years potential upside from creating a hit show

Distribution Fees• Incremental fee potential from the distribution of original shows produced by SPT and

Channel 5 in-house production in international markets

Digital

• Targeted marketing and advertising using customer data• Next generation VOD features including downloadable content and second screen apps• Expansion of companion apps• Further growth of next generation IPTV platform, YouView

There are a number of opportunities that are not included in the business plan:


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Preliminary Valuation($M)

• SPT estimates a preliminary enterprise value range of $825M – $945M (£516M – £591M) before synergies based on Channel 5 financial projections and by equally weighting the DCF, trading multiples, and comparable transaction valuation methodologies

– The valuation implies 10.3x – 11.7x CY13 Adj. EBITDA and 7.6x – 8.7x CY14 Adj. EBITDA

– The valuation is pre-diligence and gives full credit to Channel 5’s projections

– Includes NOLs valuation of $35.2M

• Analysis assume a purchase price for 100% of $850M (£531M) for Channel 5, representing 10.6x CY13 EBITDA and 7.8x CY14 EBITDA

Note: Assumes £ to $ exchange rate of 1.60. (1) Implied enterprise values include NOL valuation of $35.2M.

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Returns Analysis (w/ SPT Synergies) ($M)

• Analysis assumes purchase price of $850M with SPT contributing $434M for a 51.0% equity stake

Note: Assumes £ to $ exchange rate of 1.60. NOLs of $200M included to offset Channel 5 taxes.

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Next Steps

• Internal structuring discussion with executives

• Get Sony Corp acknowledgement to proceed with first round auction

• Hire an investment bank

• Prepare internal analysis

• Assess potential financing scenarios

• Submit a non-binding proposal by February 27th

• Due diligence

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Appendix A: Company and Industry Information

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Company Revenue Breakdown

Sources of Revenue Descriptions

AirtimeRevenue

• Sale of TV advertising inventory to advertisers, largely done via media agencies and direct sales

• Competes with other UK commercial TV channels for share of UK TV NAR

• Core revenue component of Channel 5

Commercial Partnerships

• Select partnerships: Mark Brown, Super Casino

• Telephony revenue from phone-in competitions on the Channel 5 family

• Teleshopping in non-peak hours, back-end licensing of 3rd party programming, live events ticket sales and merchandising, licensing of music rights

DigitalMediaGroup

• Comprehensive online content offering with years’ worth of programming content across all major platforms

• Advertising inventory sold on CPM basis to monetize rapidly increasing volume of long form video views

Sponsorship• Sponsorship deals on select programs typically sources via media agencies

• Incremental opportunity above airtime sales

Other • Other revenue includes HD carriage fees from Sky and Virgin Media, cross-media production deals, and inter-company production

CY13 Revenue Breakdown

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Channel 5 (Main Channel) Programming Slot Analysis

Note: Slot analysis includes only Channel 5.

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Programming Impact Analysis

• Big Brother makes up a significant portion of total impacts

• Big Brother, CSI, and NCIS combined make up 27% of CY13 total impacts

Note: Impact analysis includes Channel 5, Multichannel 5*, and Multichannel 5 USA. (1) Impact defined as a viewer watching one 60 second commercial.

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Comparable Analysis($M)

Channel 5 still has room for margin growth compared to its main competitors

Source: Capital IQ and company filings.Note: Comparable public company LTM financial data as of February 5, 2014.(1) Comparable public company programming spend based on latest annual filing.

TBU

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3,680

3,8553,955

4,1144,219

2013 2014 2015 2016 2017

23

UK Television Market Snapshot

Largest European Advertising Markets: 2011-2014

CAGR: 3.5%

UK Advertising Breakdown: 2013-2017

Source: Company information, Zentih OptiMedia, Screen Digest, and Informa 2013.(1) Other includes radio, newspapers, magazines, outdoor, cinema, and mobile.

(1)

UK TV Advertising Revenue: 2013-2017

15.7

12.2

8.5

5.2 4.7

15.5

12.4

8.3

4.8 3.9

15.3

13.1

8.0

4.2 3.5

15.6 14.0

8.1

4.0 3.6

Germany UK France Italy Spain

2011 2012 2013E 2014E

(£ in M)

(£ in BN)

CAGR: 4.8%

CAGR: (1.6%)

CAGR: (8.2%)

CAGR: (8.5%)

CAGR: (0.3%)

28% 28% 25% 25% 25%

38% 39% 40% 41% 42%

36% 36% 35% 34% 34%

2013 2014 2015 2016 2017

Television Internet Other

2011 2012 2013E2014E

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3.8 3.8 3.9 3.9 3.9

20.9 21.1 21.4 21.6 21.8

1.2 1.5 1.9 2.2 2.4 11.4 11.7 11.9 12.0 12.2

2013 2014 2015 2016 2017

Cable DTT IPTV DTH

27.9 28.2 28.5 28.8 29.1

2013 2014 2015 2016 2017

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UK Television Market Snapshot (Cont.)

TV Households (HHs) Multichannel TV HHs by Platform(1)

Source: Informa 2013.(1) Includes both primary and secondary sets.

(M)

Penetration:

97.8% 97.8% 97.9% 97.9% 98.1%

Competitive Landscape

• State-owned

• 2 PSBs (BBC1, BBC2)

• 6 multichannels

• Selected brands:

• Public

• 1PSB (main channel)

• 4 multichannels

• 4 +1 time-shift channels


• State-owned

• 1 PSB (main channel)

• 5 multichannels

• 4 +1 time-shift channels


• Public

• DTH operator

• Owns channels including sky1, Sky Sports, Sky Movies


(M)

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Company Performance

Viewing Share of Multichannel Homes Share of TV Advertising

4.9% 4.6% 4.7% 4.6% 4.5% 4.4% 4.5% 4.4%

0.1% 0.4% 0.5% 0.6% 0.5% 0.5% 0.5% 0.5% 0.1% 0.6% 0.7% 0.8% 0.9% 1.0% 1.0% 1.0% 5.1%

5.6% 5.9% 6.0% 5.9% 5.9% 6.0% 5.9%

2006 2007 2008 2009 2010 2011 2012 2013 YTD

Channel 5 5* 5 USA

40% 38% 37% 38% 36% 36%

19% 18% 17% 17% 16% 15%

33% 37% 40% 39% 40% 42%

8% 8% 7% 6% 8% 7%

2007 2008 2009 2010 2011 2012

ITV Channel 4 Other Channel 5

2012 Programming Investment vs. Competitors

2012 UK Viewing Share(1) by Broadcaster(2)

BBC; 24%

ITV; 18%

Channel 4; 13%Channel 5; 5%

Others; 39%

Source: OfCom, Company information, and Informa 2013.(1) Viewing Share is defined as the total percentage of televisions tuned into a specific channel.(2) Includes all channels in family.

215

492

1390

814

Channel 5 Channel 4 BBC ITV

(£ in M)

66%% Rev.: 53% 27% 32%

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Appendix B: Valuation Schedules

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Comparable Company Analysis($M)

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• SPT assumes trading multiples based off CY13 and CY14 Adj. EBITDA that are within the range of comparable public companies. SPT applied:

— CY13 Adj. EBITDA: 9.5x – 10.5x

— CY14 Adj. EBITDA: 8.5x – 9.5x

Note: Western European Comparables’ multiples do not include a control premium.

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Comparable Transaction Analysis($M)

28

• SPT assumes transaction multiples based off CY13 Adjusted EBITDA that are within the range of observed comparable recent transaction multiples

— SPT applied a CY13 Adj. EBITDA multiple range of 10.5x – 11.5x

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WACC Analysis($M)

29 Note: Market data as of February 5, 2013.

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WACC Analysis (Cont’d)

30 Note: Market data as of February 5, 2013.

February 2014 - WikiLeaks UK/Channel 5 Deal...– Expand SPT’s distribution and reach and cross...

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