Barry Diller agreed yesterday to acquire Seagram
Corp.'s Universal TV operations, which includes USA Network,
for $4.1B in cash and stock, according to Geraldine
Fabrikant of the N.Y. TIMES. Diller's HSN Inc., parent
company to Home Shopping Network, will pay $1.2B in cash and
$2.9B in stock to Universal, which will get a 45% stake in
the new company. With the deal, Diller, who becomes Chair &
CEO of the venture, will have "the opportunity to establish
a broadcast network that might hope to compete with ABC,
CBS, NBC and Fox -- or at least to fare better than two
other network upstarts, the Warner Brothers Network and the
United Paramount Network" (N.Y. TIMES, 10/21). In N.Y.,
Shapiro & Owen report the venture will "instantly become a
significant player in the rapidly changing TV market."
Diller "is expected to overhaul USA Network's programming
and use it as a springboard to expand." Shapiro & Orwall
write that one possibility "is creating a national hybrid
cable and broadcasting network that will be able to offer
advertisers an audience competitive with the Big Three
networks." Some in the media industry also speculate Diller
might also "take another run at CBS" (WALL STREET JOURNAL,
10/21). Diller, on making more acquisitions: "You'll see
us being opportunistic. We are underleveraged in this
transaction" (HOLLYWOOD REPORTER, 10/21). USA Network "is
expected to go through an overhaul, including new shows and
possibly a new management team" (N.Y. DAILY NEWS, 10/21).
DISTRIBUTION: The HOLLYWOOD REPORTER's Collier &
Battaglio write that an "added advantage" to the deal is
that Liberty Media will own 15% of HSN and have the right to
increase its stake to 25%. That gives it access to the
cable systems owned by TCI (HOLLYWOOD REPORTER, 10/21).
CNBC's Jim Paymar: "Now that Diller has a distribution
system with his stations and the cable USA Networks and
content with the programming of Universal, he has the
synergy to create a media powerhouse that could one day
rival the other networks" ("Business Center," CNBC, 10/20).
