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CONFIDENTIAL

Spider-Man Merchandising Business Update

April 2010

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• Strategic Considerations

• Deal Structure

• Valuation

• Negotiating Strategy

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• A sale would have significant financial benefits but only makes sense at an attractive valuation

– A full valuation would allow SPE to capture full upside value today and avoid risks associated with the franchise aging or reboot underperforming

– Addresses near-term cash and profit challenges

• Spider-Man merchandising provides promotional value to the film franchise that would need to be protected

• Our ability to secure a full value and ongoing promotional benefits depends in large part on Disney’s motivations for the property

Strategic Considerations

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• Disney needs a Boys Franchise—Disney’s consumer products portfolio is dominated by girls or younger properties. Disney has had little success in building, let alone sustaining, Boys franchises. Disney’s new girl oriented properties are more likely to cannibalize existing franchises than provide Disney with sustainable incremental economics. Building a boys business has been a stated objective for Consumer Products for some time and is the best avenue for growth.

• Owning a licensing annuity—Spiderman is in the rarefied world of being a classic character. Meaning that it is capable of maintaining consumer relevancy year after year. There are very few properties that have this kind of staying power and can command annual retail shelf space year. Owning an annuity represents consistent earnings, better profitability, retail and licensee leverage.

• Paying for the Marvel Acquisition—No doubt, that a substantial part of the Performa to justify the acquisition of Marvel, rested on the existing and assumed cash flow from licensing under Disney management. As the movie and Theme Park rights to Spiderman are tied up and the development of new Characters is unknown, the vast majority of value needs to come from the exploitation of Spiderman, particularly in the early years of Disney’s ownership.

• Disney brings a lot to the table—They have the best retail relationships and can leverage their scale. They have the best international licensing infrastructure and can exploit the opportunity faster and better than anyone. They are well represented in all classifications of merchandise and food, and can use their relationships to better capitalize on those opportunities.

Disney’s Likely View of the Property

We believe Disney has significant incentives and wherewithal to drive value in Spider-Man merchandising, both “Classic” and “Film”

• Like the points, will need to streamline

• Agree with but took out the “75% or what” point as I think only applies if we don’t sell?

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Disney Has a Strong Financial Incentive to Manage Spider-Man Well as it Represented Roughly 50% of the Marvel Profit They Paid $4.1BN to Acquire

$253.4

$330.4

$192.3

$258.7

$110.7$116.4 $117.6$98.0

$130.0

$154.4

$109.0$131.1

$0

$50

$100

$150

$200

$250

$300

$350

$400

2007 2008 2009E 07-'09 Avg.

EB

ITD

A (

$M

)

Source: SEC filings and SPE CorpDev analysis.Note: (1) MVL total EBITDA calculated as EBITDA less minority interest. Sony Pictures' share of royalty income is reflected as minority interest expense rather than SG&A,

whereas other studios' shares of license royalty income is recorded within SG&A expense.(2) S-M Merchandising implied from SPE merchandising figures received from SPE CP based on a 75%/25% split.

2007-2009 Marvel EBITDA Performance (1)2007-2009 Marvel EBITDA Performance (1)

S-M Merch. After Audit as a % of TotalS-M Merch. After Audit as a % of Total

51.3%51.3% 46.7%46.7% 56.7%56.7% 50.7%50.7%

Total EBITDATotal EBITDA

S-M Merch. After AuditS-M Merch. After Audit

S-M Merch. Before AuditS-M Merch.

Before Audit

S-M Merch. Before Audit as a % of TotalS-M Merch. Before Audit as a % of Total

45.9%45.9% 35.6%35.6% 51.0%51.0% 42.8%42.8%

LegendLegend

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• Disney has early success with other Marvel Characters• Discuss – takes quite a while to build correct? And we’ll see how much of a

push they make on Iron Man before we discuss a sale• There may be times that a Sony release date conflicts with another property and

Disney tries to manage the market  (licensee and retailer) to their economic and or long term benefit Is there a way to protect? Minimum sq footage?

• Other Disney entertainment, e.g. Television product, diminishes the value of the theatrical or video release Can’t protect can we? And shouldn’t it generally be additive to upcoming interest in the film?

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SPE Must Also Reach Internal Consensus on Approach to Other Risks

Below is a preliminary recommendation for how best to address potential risks

Risks That Cannot or Need Not be Mitigated

That Need to be Addressed Structurally• Disney develops a new look for Spiderman that conflicts with the movie art

direction • Disney abuses the blackout periods

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• Strategic Considerations

• Deal Structure

• Valuation

• Negotiating Strategy

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Disney is Likely to Seek Sources of value Beyond SPE’s share of merchandising revenue

Potential Source of Value

Potential Source of Value

• Disney leads retail sales

• Uncertain• Creates drafting

opportunities for other Disney properties

• Limited as long as characters are properly represented

• Incremental food categories

• Increases• Bring existing partners

to bear• Risk to film promotion

partnerships

• Black-out lifted on Classic

• Increases• Increased flexibility at

retail and consistency with partners

• Risks emphasis on Classic over Film, may dilute promotional value

• Disney as international sales agent

• Increases revenue, eliminates 3rd party fees

• Leverage existing infrastructure, financial benefits

• Conflicts if Disney has a competing title

Risks to Sony

Risks to Sony

Importance to Disney

Importance to Disney

Impact on RevenuesImpact on Revenues

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Deal Can be Structured to Provide Key Value Drivers While Protecting Sony

• % of Sony Stake Sold • 100% sale is required to drive full valuation

• Disney leads retail sales

• Allow Disney to lead but maintain tight control over use of film related characters

• [Can we seek minimum shelf space dedicated to Film properties?]

• Incremental food categories

• [Discuss – what do we need to keep sufficient promotion on Films]

• Black-out lifted on Classic

• [Discuss – Does the lift in revenues from consistent in-store presence outweigh the risk to a shift away from film properties? Or do we argue there isn’t real risk, Classic and Film presence is equally powerful for promotion?]

• Disney as international sales agent

• Allow. Be clear that waiver of 3rd party agent fees is only available on Sony’s share in conjunction with a deal and must be factored into valuation

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• Strategic Considerations

• Deal Structure

• Valuation

• Negotiating Strategy

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Valuation Overview

[All to be confirmed]:

• $500 to $700 – Value based on price Disney paid for Marvel -- multiple may exceed DCFs and be highest possible value / best opening “anchoring” point

• $450 to $600 --- Value based on Marvel’s value prior to Sony acquisition; implies value to Disney if they view our piece purely economically without a control premium

• $XXX to $XXX – DCF after Disney increases it’s control / adds value

• $XXX to $XXX – DCF “as is” before Disney increases it’s control / adds value

• $XXX to $XXX – DCF if revenues decline X% (there is no sale and upcoming Spider-Man films underperform, merchandising declines)

Reasonable Value is Between “As is” Value and Capturing a Portion of the Potential Upside from Disney

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Proposed Value: Upside

Value Assume Disney Takes Increased Control and Spider-Man Films Perform WellValue Assume Disney Takes Increased Control and Spider-Man Films Perform Well

$0

$100

$200

$300

$400

$500

$600

$700

$800

SPE 25% Shareof S-M Merch.

Rev.

100% Control ofRetail Sales

IncrementalFood Categories

Black-out Lift Consent to ShiftInt'l Sales to DIS

Total Value

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Proposed Value: Downside

Value Assume Disney Takes Increased Control but Spider-Man Films Perform PoorlyValue Assume Disney Takes Increased Control but Spider-Man Films Perform Poorly

$0

$100

$200

$300

$400

$500

$600

$700

$800

SPE 25% Shareof S-M Merch.

Rev.

100% Control ofRetail Sales

IncrementalFood Categories

Black-out Lift Consent to ShiftInt'l Sales to DIS

Total Value

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$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Pre-Announcement (8/28/09) Closing (12/31/09)

Sp

ide

r-M

an

EV

($

M)

Disney’s acquisition valuation would require significant growth targets to meet typical return expectations

Marvel Acquisition ValuationsMarvel Acquisition Valuations

EV/EBITDA Multiple (1)

EV/EBITDA Multiple (1) 11.4x11.4x 16.1x16.1x

$2,953.0$2,953.0

$4,153.0$4,153.0

Source: SEC filings and SPE CorpDev analysis.Note: (1) All multiples calculated using a trailing 3-year average Marvel EBITDA of $258.7MM (see previous page)

Requires 6.2%

growth in perpetuity to achieve 15% IRR

Requires 8.8% growth in

perpetuity to achieve 15%

IRR

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Valuation of SPE Share of Merchandising Business

Pre-Announcement (11.4x multiple)

Closing (16.1x multiple)

SPE Share of Merch. Business Before Audit

$421.0MM $498.9MM

SPE Share of Merch. Business

After Audit

$592.1MM $701.6MM

Source: SEC filings and SPE CorpDev analysis.

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Valuation of SPE Share of Merchandising Business (cont.)

Pre-Announcement (11.4x multiple)

Closing (16.1x multiple)

Before Audit After Audit Before Audit After Audit

Marvel's S-M Merch. EBITDA As a % of Total Marvel EBITDA

42.8% 50.7% 42.8% 50.7%

Enterprise Value $2,953.0 $2,953.0 $4,153.0 $4,153.0

Marvel's Implied 75% S-M Value

$1,263.0 $1,496.6 $1,776.3 $2,104.8

Implied Full S-M Value $1,684.0 $1,995.5 $2,368.3 $2,806.4

Sony’s Share of S-M Merch. (25%)

$421.0 $498.9 $592.1 $701.6

Source: SEC filings and SPE CorpDev analysis.

($ in millions except where otherwise indicated)($ in millions except where otherwise indicated)

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• Strategic Considerations

• Deal Structure

• Valuation

• Negotiating Strategy

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Negotiating Strategy and Next Steps

• Paul – Let’s discuss

– Initial discussion

• When (post Iron Man on the assumption sell through is so-so)

• Who approaches whom initially (Michael with Bob)

• Stated rationale (“your actions imply you want us out”)

• Headline terms

– 100% exit (implies we’ll give up key controls; but don’t state which early)

– Some ongoing upside participation

– Key inputs into retail promotions but not retail control

– “Full” valuation (unlikely to quote number initially, but likely anchor with “at least” the value implied in the Marvel deal)

– Resolve open Audit issues

– Ongoing discussions

• Expect Disney will have whom lead (Ike problematic)