Fashion Channel (4) & (5) Exhibits Harvard Business School Publishing Brief Case 2075 Case Software

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Exhibit 4: Ad Revenue Calculator

Ad Revenue Calculator TV HH Average Rating Average Viewers (Thousand) Average CPM* Average Revenue/Ad Minute** Ad Minutes/Week Weeks/Year Ad Revenue/Year Incremental Programming Expense Current 110,000,000 1.0% 1100 $2.00 $2,200 2016 52 $230,630,400 2007 Base Scenario 1 Scenario 2 Scenario 3 110,000,000 110,000,000 110,000,000 110,000,000 Grey = student input area $0 2016 52 $0 $0 2016 52 $0 $0 2016 52 $0 $0 2016 52 $0

* Revenue/Thousand Viewers ** Calculated by multiplying Average Viewers by Average CPM

2006 Actual

2007 Base

Scenario 1

Scenario 2

Scenario 3

Assumptions

Exhibit 5: Financials
Revenue Ad Sales Affiliate Fees Total Revenue Expenses Cost of Operations Cost of Programming Ad Sales Commissions Marketing & Advertising SGA Total Expense Net Income Margin $230,630,400 $80,000,000 $310,630,400
Insert scenario results from revenue calculator

$81,600,000 $81,600,000

$81,600,000 $81,600,000

$81,600,000 $81,600,000

$81,600,000 Grows 2% per year with population $81,600,000

$70,000,000 $55,000,000 $6,918,912 $45,000,000 $40,000,000 $216,918,912 $93,711,488 30%

$72,100,000

$72,100,000

$72,100,000

$72,100,000 Grows 3% per year with inflation

Add incremental programming expense 3% of ad sales revenue Reflects increased spending of $15M

$41,200,000 $113,300,000 ($31,700,000) -39%

$41,200,000 $113,300,000 ($31,700,000) -39%

$41,200,000 $41,200,000 Growing with inflation 3% $113,300,000 $113,300,000 Spreadsheet calculates automatically ($31,700,000) ($31,700,000) Spreadsheet calculates automatically -39% -39% Spreadsheet calculates automatically

61977405.xls (Exhibits 4, 5)

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