Matt Cherniss President WGN America and Tribune Studios. WGN America and Tribune Studios

Matt Cherniss

President WGN America and

Tribune Studios

WGN America and

Tribune Studios

Scale & Diversification

2013

TODAY

Superstation

Full-Fledged

Cable Network

No Original Programming

or Brand

A Destination Network Featuring

Distinctive Original Content

Non-Exclusive Syndicated

Shows

Cable Destination for Exclusive

Syndicated Programming

Matt Cherniss

President / General Manager

WGNA & Tribune Studios

 Senior VP/Production for Warner

Bros: 300 – Rise of An Empire  EVP/Programming for Fox

Broadcasting Company: Glee,

Bob’s Burgers, Raising Hope

Pr ior Experi en c e

David Rotem

Executive Vice President

Sales and Marketing

 SVP/ Multimedia Sales for ESPN

 VP/News Sales for Disney / ABC Television

Alan Saxe

Executive Vice President Business & Legal Affairs

GC for The Oprah Winfrey Company

EVP, Business Affairs for Warner Bros.

Brian Dollenmayer

Executive Vice President

Marketing and Promotions

EVP/On-Air Promotion & Marketing Operations for Fox Network

Tom Huffman

Senior Vice President Unscripted Programming

 VP/Production and Development for VH1

 VP/Development for Shed Media

Rita Cooper Lee

Senior Vice President

Communications

VP/Communications for

Disney Channels Worldwide

Director/Worldwide Public Relations for Warner Bros.

Jon Wax

Senior Vice President Scripted Programming

VP/Drama Development at 20th Century Fox TV

Robin Thomas

Senior Vice President

Research

SVP/Strategic Research for

Disney / ABC Television

VP/Entertainment Programming Research for Turner Broadcasting

Pr

ior en

c

e

WGN America Strategy

M a x i m i z i n g C o n t e n t T h r o u g h D i s t r i b u t i o n

Converting signal from a

superstation to a cable network

in Dec. 2014 will be a driver of

additional households

New, original content with goal to

grow to 52 weeks of original

programming and home to exclusive

syndicated content

Capitalize on upside in shows with

equity ownership through Tribune

Studios

Attract new advertisers

at higher ad rates

Grow affiliate fees

Establish foundation of

long-term value proposition with

compelling programming

Why We Are Becoming A Cable Network…

WGN America

as a Superstation

Typical Programming



Below market carriage fees



Significant dollars lost to copyright

royalties



Distant signal issues



Only allows one national feed, diluting

primetime audience

NE W S

Typical Programming

WGN America

as a Cable Network



Increasing subscriber fees



Nationwide distribution



Ability to have a dual feed with national

primetime audience



“Win-win” for Tribune and MVPDs

—

Reenergized investment in content

—

MVPDs able to sell share of ad

inventory

Our Programming Transformation

B e f o r e

– P r i m e T i m e P r o g r a m m i n g i n A p r i l 2 0 1 3

No original programming | No exclusive syndicated programming

MON

TUE

WED

THU

FRI

SAT

SUN

08:00P

08:30P

09:00P

09:30P

10:00P

10:30P

Sunday Movie

10:40

Instant Replay

Our Programming Transformation

T h e F u t u r e : I l l u s t r a t i v e P r i m e T i m e i n S e p t . 2 0 1 5

MON

TUE

WED

THU

FRI

SAT

SUN

08:00P

08:30P

09:00P

09:30P

10:00P

10:30P

TUESDAY

NIGHT

MOVIE

SUNDAY

NIGHT

MOVIE

SATURDAY

NIGHT

MOVIE

Original Content

Exclusive Syndicated Content

ORIGINAL

CONTENT

ORIGINAL

CONTENT

ORIGINAL

CONTENT

Proven Formula Programming

for Success

EXCLUSIVE

Unscripted Series

ORIGINAL

Scripted Programming

EXCLUSIVE

Syndicated Programming

Brand Building for Long-Term Value

“WGN has scored an unusual

success with its first original drama,

‘Salem,’ generating strong reviews

and positive word of mouth.”

“‘Manhattan’ instantly qualifies

WGN America as a significant

new player in the increasingly

crowded arena of top-tier

content producers.”

“’Manhattan’ is a big improvement

for the network… promising

enough to make it worth finding

out what channel WGN is on in

your cable lineup.”

“WGN America has

charmed viewers with

Critical Acclaim

“‘Manhattan’ is in another class

entirely, the kind of series that is so

good, it lifts a network into a whole

new tier.

What ’Mad Men’ did for AMC,

‘Manhattan’ could do for WGN.”

We Have Proven That We Can

Attract Mass Audiences

3.4M

2.4M

+935%

+312%

Total Premiere

Viewers

Increase over time period

average among total viewers

Total Premiere

Viewers

Launching a Hit Series

0.41

0.47

0.76

1.03

1.34

1.68

1.60

0.15

0.41

0.43

0.41

0.42

0.46

0.52

Season 1

Season 1

Season 2

Season 3

Season 4

Season 5

Season 6

P2+ CVG

Ra

ting

(L+

7)

Season Average vs. Net. Prime Avg. – P2+ (L+7) Cvg Rating

Manhattan

WGN Prime Avg.

Mad Men

AMC Prime Avg.

+173%

+15%

Increase Over Time Period

For Season Premiere

The Long Term Opportunity For WGN America

Then (2007)

Now

Then (2002)

Now

Future Opportunity

Distribution (M)

90

97

65

97

Revenue

EBITDA

Original Shows

Mad Men

Mad Men

Hell on Wheels

Walking Dead

Turn: Washington's

Spies

Halt and Catch Fire

Talking Dead

Comic Book Men

Better Call Saul

The Shield

Sons of Anarchy

Justified

American Horror Story

The American

Fargo

Tyrant

The Strain

Anger Management

Louie

Archer Vice

Source: SNL Kagan

2.8x

2.4x

3.3x

2.7x

Our Advertising Strategy

o

New audiences attract new

advertisers to the network

o

Secure significant premiums for

original programming

o

Monetize rating increases with

premium CPMs for new off-network

acquisitions

o

2x Primetime CPMs for Originals vs

Regular Primetime in 2014

Why We Are Investing in Owning Our Content

Illustrative Cost / Episode

$3M

$3M

Tribune Funding of Show

Budget

70%

(License Fee)

85%

(License Fee + Investment)

Illustrative Per Episode

Tribune Funding

$2.1m

$2.5m

Ownership Stake in Upside

0%

50%

Traditional

Licensing Model

WGN America

Ownership Model

L i c e n s i n g v s . C o - o w n e r s h i p o f a S e r i e s

Why We Are Investing in Owning Our Content

L e v e r a g i n g O u r S c a l e f o r A d v a n t a g e d E c o n o m i c s i n

S y n d i c a t e d B r o a d c a s t P r o g r a m m i n g

Traditional

Licensing Model

Benefits of our Scale

and Studio’s Operation

Licensing Fee

$50K / Week +

Barter Inventory

$50K / Week +

Barter Inventory

Ownership Interest

None

15% - 50%

Station Advertising Sales





Participation in Licensing

Fees





Participation in Licensor

Programming is the Key to

Our Transformation

○

MON

TUE

WED

THU

FRI

SAT

SUN

08:00P

08:30P

09:00P

09:30P

10:00P

10:30P

TUESDAY

NIGHT

MOVIE

SUNDAY

NIGHT

MOVIE

SATURDAY

NIGHT

MOVIE

Original Content

Exclusive Syndicated Content

ORIGINAL

CONTENT

ORIGINAL

CONTENT

ORIGINAL

CONTENT