1. Music Publishing Overview May 2010
CONFIDENTIAL

2. Executive Summary
SPE has been asked by Nick Oneda to identify non-strategic asset divestitures that would generate incremental EBIT in the current fiscal year
SPE believes the Music Publishing Catalog is non-core and is salable
Music publishing is a passive revenue stream
Catalog was sold twice previously (once in 1976 to EMI, once in 1988 to Filmtrax)
From SPE’s perspective, a deal would need to be carefully structured to ensure:
Buyer accurately accounts to SPE for participations
SPE retains access to key works at reasonable prices
Buyer and SPE do not have conflicts on future use of key works
A sale to a third-party would generate a gain at a Sony Group level, assuming a third-party sale is acceptable to SCA
Assumes sale would be to a financial investor (rather than a direct Sony/ATV competitor)
Financial investors are increasingly the drivers of music publishing acquisitions and may retain Sony/ATV as administer

3. SPE/SONY ATV Relationship
SPE Legal secures the copyright in newly commissioned / acquired works
SPE is responsible for paying and accounting to participants (and would continue to do so regardless of a transaction)
Sony ATV exclusively administers the SPE Music Publishing Catalog and is responsible for:
Registering songs and cues to ensure SPE receives payments
Collecting monies in all territories
Representing the catalog and identifying new revenue opportunities (market, promote, grant licenses)
Sony ATV pays SPE an advance annually and recoups out of its 10% fee
SPE’s relationship with Sony/ATV is governed by a year-to-year contract which has been consistently renewed [Confirming]
As of 2005, SPE’s contract with Sony/ATV did not prohibit sale to a 3rd party, although a buyer would be subject to a 10% Sony ATV administration fee through the remainder of any given year
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4. Acquisitions Landscape
Sony Pictures’ Music Publishing catalog could be valued between 9 to 11x; with an implied value of over $100MM
Although multiples were not disclosed on larger deals in 2009, Evergreen Publishing, claims to be paying 9x to 13x on smaller deals
Industry sources, quoted in 2009, claim to be paying multiples of 7x to 14x
Multiples have historically been lower for libraries that are not heavily song-based
Based on recent trends, it appears feasible to structure a sale with a financial investor that is not directly competitive with Sony/ATV
Financial investors have represented a significant and consistent percentage of music publishing acquisitions in the last 10 years
This percentage is relatively constant, with financial investors completing 29% of acquisitions over $50MM between 2000 and 2005 and 33% of such deals between 2006 and 2010

5. Acquisitions Landscape Continued
’00-’05
29%
Financial
Investors
’06-’10
33%

6. Deal Complexities Participation obligations
Sony will be liable to pay program participations after the deal, regardless of deal structure
SPE could require that the acquirer pay SPE annually for estimated participations
Lowers sale price but eliminates the obligation for SPE to book the liability at close
Requires an ongoing relationship with the buyer, who must accurately account to SPE
SPE could sell the cash flow before participations and fund the cash portion itself
Higher sales price
SPE required to pay participations going forward without the associated income
SPE may be required to book a liability at the time of close
Access to and management of certain songs post-sale could be problematic, but risks may be mitigated if Sony ATV is the buyer
Future Use – SPE will seek continued access to key songs for future works (e.g., Spider-Man theme) and will need to either pre-negotiate usage rights and cost or be subject to ongoing negotiations
Conflicts – Unless prohibited in advance, there is risk a buyer would license songs for promotional purposes at the same time Sony is using in new production
Reporting – Buyer must provide accurate accounting for SPE to pay participants (1976 sale to EMI resulted in multiple audits)
SPE must determine whether to sell the rights to future compositions, which it did as part of the 1988 sale to Filmtrax (newly acquired works were sold through Dec. 1992)

7. SPE Music Publishing Economics and Valuation
Description
Wholly owned music publishing entity with music rights to current and previous SPE television and film properties
Equity Ownership
100% SPE
FY07
FY08
FY09
FY10
Revenue (100%)
$17MM
$18MM
Less: Participations
($3MM)
SPE EBIT*
$14MM
Financials
Revenues are shown as “Net Publisher’s Share,” after Sony/ATV’s 10% administration fee
EBIT is after an assumed 20% participation expense
Valuation
Valuation is based on income after participations
Assumes buyer pays SPE estimated participation expenses on a go-forward basis
Estimated gain to SPE is after assuming 20-30% accelerated amortization due sale