UNIVERSAL SELLS SOME ASSETS TO HSN INC.

Byline: Sharon Edelson

NEW YORK — Continuing to expand beyond home shopping, HSN Inc. said Monday it had acquired several assets from Universal Studios, a subsidiary of the Seagram Co.
Barry Diller, chairman and chief executive officer of HSN, will hold those titles in the new company, which will be called USA Networks Inc.
The deal will transform HSN into a diversified company with interests in cable television, broadcasting, television programming and production, electronic retailing, ticketing and full-service fulfillment.
In exchange for the majority of Universal’s television assets, which include the USA Network, SciFi Network, Universal Television’s U.S. production and distribution operations, HSN will give Universal 45 percent of its outstanding common equity, valued at $4.075 billion, plus $1.2 billion in cash.
Since becoming involved with the TV home shopping industry, Diller has also been trying to return to the film and television industry, where he started his career. While the Universal deal does give Diller some respectable cable TV properties, it falls short of his earlier attempts to land a major studio or network role.
Prior to joining HSN, Diller was chairman of rival home shopping network QVC. During his year-long tenure at QVC, Diller tried twice, unsuccessfully, to leverage the shopping network to finance other deals.
His attempt to take over Paramount Communications in September 1993 led to a protracted battle with Sumner Redstone, chairman of Viacom, who ultimately won the Hollywood studio.
In June 1994, Diller tried to merge QVC with CBS, but was thwarted by Comcast Corp., which acquired QVC in July of that year.
The Universal merger will give Diller a broader canvas than home shopping could ever provide.
Already, since taking control of HSN, Diller has been diversifying. In July, he bought Ticketmaster, the ticket sales and fulfillment company.
“This is Barry making HSN a bigger company,” said Walter Loeb, president of Loeb Associates. “It is positive in that it gives them an operating base. It is my belief that today investors don’t like conglomerates, they like single-focus companies. The focus here is that the Home Shopping Network will be a unifying force by cross-marketing the Universal properties.”
Victor Miller, a Bear Stearns analyst, said HSN could use the Universal assets to increase its customer base for Home Shopping Network. “HSN is only distributed in 45 million cable households,” Miller said. “The USA Network is in 73.3 million households. If Diller could package USA, HSN and the SciFi Network together, he could increase the distribution base of home shopping.”
Since becoming chairman of HSN in November 1995, Diller has returned the shopping network to profitability,
“We’ve had record turnaround numbers in sales and profitability,” said James Held, president of HSN. “We continue to exceed our plans. We’re tracking very well to our third quarter.”
Held said TV shopping will remain a priority for the new entity, USA Networks.
“The agenda for electronic retailing has not changed,” he said.

load comments
blog comments powered by Disqus