Divisional details Media Networks 1
Media Networks Strategic Priorities • Continue to invest in programming, marketing, ad sales infrastructure, and technology infrastructure for Crackle U.S. Existing • Invest in programming and marketing for MSM and GSN Operation • Continue to invest in both local and global original programming for s international networks • Continue to maximize operational efficiencies • Launch a Hindi language rural channel, TV ON, in India • Launch a second Hindi movie channel in India, MAX2 New • Pursue opportunities to launch Crackle in additional international Operation territories s • Selectively launch channels in new and existing territories in order to build scale and remain competitive; seek earnings accretive opportunities where possible 2
Media Networks Strong and Consistent Earnings Growth • Revenue is expected to reach over $2 billion in FYE15, growing at a 21% CAGR over the four year period • Operating Income is expected to reach $336 million in FYE15, growing at a 15% CAGR over the four year period (excluding monetizations) OI Revenues Revenues One-Time Events/Monetizations $700 $2,500 Operating Income • Ad sales across the portfolio to $600 grow by 20%+ year on year $2,004 $565 $2,000 $500 • New investments (e.g., GEC $375 $1,500 and movie channel in India and $400 $336 Bash Games in the US) to drive $1 growth $300 $242 $335 $1,000 $17 $930 $200 $266 $225 $243 $500 $100 $190 $0 $0 FYE11 FYE12 FYE13 FYE14 FYE15 ($ In millions) Note: All years restated on a consistent basis to include U.S. channels and Networks HO Aspire; excludes 3net
Media Networks Operating Income by Region Projected FYE15 Operating Income of $336 million is diversified throughout the world, with MSM in India and GSN in North America continuing to lead the Networks portfolio Projected Operating Income FYE15 Asia / Australia; 9% North Ameri ia; 34% Europe; Latin America; 16% 4
Media Networks MSM India update ● Revenue and Operating Income are budgeted for double digit year-over-year growth − Revenue is expected to grow from $588 million to $695 million (+18%) driven mainly by recovery in domestic Indian ad sales performance and ongoing digitization efforts − Operating Income is expected to grow from $122 million to $151 million (+24%) (excluding new channel launches) driven primarily by improved performance of SET ● In spite of FX and economic headwinds, MSM expects to continue its strong growth trajectory in FYE15 and increase its offerings in India − TV On, a new Hindi GE channel targeting a female-centric, more rural audience, is expected to launch in June 2014 − MAX 2, a library Hindi movie channel is expected to launch in April 2014; this will help MSM mitigate recent legislation limiting ad minutes per broadcast hour ● Indian Premier League (IPL) Cricket − Season 7 projected Operating Income of $31.5 million is 4% lower than Season 6 due to unfavorable FX, one less team and 16 fewer matches than Season 6; however, the operating margin remains strong at 22% 5
Media Networks GSN Update ● Revenue and Operating Income are budgeted for double digit year-over-year growth − Revenue is expected to grow 15% from $345 million to $397 million largely driven by increased mobile games and ad sales revenue − Operating Income will grow 27% from $71 million to $90 million with the increase expected to come from growth in mobile gaming and lower PPA amortization ● Despite a decline in GSN’s number of Facebook players, GSN expects to grow the digital business in FYE15 − Casino Games -Build scale through increased investment in content and via acquisitions − Skill Games – Invest in technology and broaden the content offering into non-casino casual games and mobile web − Advertising – expand into mobile and monetize the 98% of users who do not pay ● GSN’s programming investment plan includes nine new series for FYE15 − Continued focus on building key audience constituencies − Faith-based, building on The American Bible Challenge − African American, building on Family Feud (Steve Harvey) − Experiment with non-linear digital video to extend brand to younger audiences 6
Media Networks GSN update – Bash Gaming ● In February 2014, GSN agreed to acquire Bash Gaming, the creator of breakout hit Bingo Bash, the leading social bingo game in the world with more than 4.8 million monthly active users (MAUs) playing across Facebook, iOS, Android and Kindle devices. − The acquisition supports GSN’s digital strategy to expand its mobile gaming business where it currently has a small presence, providing immediate scale and content with Bash Gaming’s users and #1 bingo app − The investment will generate synergies including: − GSN optimizing Bash Gaming’s customer acquisition spending − Cross pollinating GSN and Bash Gaming content into GSN’s apps and website − Cross promoting users to increase customer lifetime value − Leveraging Bash Gaming’s scalable offshore development team in India ● The Share Purchase Agreement has been signed and the deal is expected to close in March 2014 − Upon closing, $80 million plus closing net working capital to be paid out − Two year earn out based on EBITDA growth, capped at $70M − GSN’s FYE15 Budget includes $10 million operating income for Bash Gaming 7
Media Networks Regional Update ● Europe − Operating Income is expected to grow by close to 60% year on year, reaching $50 million for the region − The UK operation will benefit from a full year on Freeview − Strong growth is expected in the emerging markets of Russia and Central Europe where we already have several profitable channels ● Latin America − Operating Income is expected to grow approximately 60% year on year to $59 million − Bottom line growth driven by revenue growth of over 20% (from both ad sales and subscribers), cost containment and a new joint venture opportunity for the SPIN channels ● Asia (excluding India) − Operating Income is expected to grow a more modest 10% year on year − Renewed growth in the Pan Asia operation is expected − In Japan, subscriber growth continues to be challenged ● US (excluding GSN) − The US portfolio outside of GSN is projected to break even in FYE15 − Crackle is poised for a breakeven year and the recently launched GET TV is expected to be profitable in its first full year 8
Divisional details Television Productions 9
Television Productions Strategic Priorities • Drama – Maximize value of worldwide appetite for quality drama across all outlets with continued emphasis on broadcast and cable and additional focus on new platform opportunities U.S. TV Productio • Comedy – Maintain and support a strong comedy strategy as part of our overall portfolio n business as comedy continues to maintain strong value in the syndicated marketplace • First Run Syndication – Stabilize and grow the Queen Latifah daytime series for the 14/15 broadcast season and look to expanding the business into new lower cost opportunities • Create IP that travels (e.g. The Patch , Fan Band , Popheads , Beat Shazaam ) • Develop and sell The Crown including an integrated sales, marketing and publicity campaign • Rebuild SPT Russia’s capacity to produce enduring sitcoms and dramas that travel Int’l TV • Support and strengthen existing production companies Productio n • Support SPT Latin America/Teleset to execute 5 year plan to build high quality, sustainable library of Spanish language programming for the region • Explore expansion opportunities for network of production companies in key strategic markets (e.g. Scandinavia, Turkey, Netherlands, Australia, N. Ireland) 10
U.S. Production Current Programs SPT’s portfolio of current programs is diversified across all genres to balance risk vs. reward Scripted Non-Scripted Other Drama Comedy Game Show Reality/Talk MOWs / Mini • Battle Creek (CBS) • Goldbergs (ABC) • Shark Tank (ABC) Network • Blacklist (NBC) • Sing Off (NBC) • Days of our Lives (NBC) • Unforgettable (CBS) • The Young & the Restless (CBS) • Before Crack • Men at Work (TBS) • Mom’s Got Game • The Dorm (MTV) Cable (OWN) • Fallout Asylum (SyFy) (Netflix) • Outlaw Prophet (Lifetime) • Better Call • Red Tent (Lifetime) Saul (AMC) • Drop Dead Diva (Lifetime) • Helix (SyFy) • Justified (FX) • Masters of Sex (Showtime) • Outlander (Starz) • Untitled KZK Project 11 (Netflix) Note: Current Programs reflect named programs projected for the 14/15 broadcast season. TBD series are not reflected. • Jeopardy! • The Dr. Oz Show First Run
U.S. Production To refine Breaking Bad commentary Current Series, Pilots & Development Significant contribution from current series Operating Income from Current Series, Pilots & Development: $140 $120 • Breaking Bad contributes $150 $100 million in operating income in FYE14 $80 and achieves $300275 million in $126 series ultimate profit $60 $92 $40 • $46 million of the Operating $57 $20 Income pertains to Netflix $0 $0 SVOD sale previously expected in FYE15 ($20) ($52) ($40) • The Blacklist is ordered for a second ($60) season and becomes available in ($80) syndication in FYE15 FYE11 FYE12 FYE13 FYE14 FYE15 • Decrease in new series investment New series investment ($82) ($95) ($93) ($134) ($77) from FYE14 to FYE15 is due to fewer & development deficit series in FYE15 All other current series $30 $95 $150 $260 $169 Total current series ($52) $0 $57 $126 $92 12 ($ In millions)
Recommend
More recommend
