HSN shareholders approve acquisition
Barry Diller’s HSN Inc. cleared the last major hurdle to taking control of Universal’s domestic TV operations, winning HSN shareholders’ approval of the $4.075 billion acquisition Wednesday at the company’s annual stockholders’ meeting.
Speaking to reporters after the meeting, Diller confirmed that HSN is still in the process of buying and selling more TV stations. He also flatly denied persistent rumors that he will eventually take charge of the rest of Universal Studios’ operations, including the feature film biz.
“We can’t kill it with a stick,” Diller said of speculation that he is headed for a larger role at U or Seagram. “It’s not true. It’s never been true.”
HSN shareholders had been expected to bless the complex transaction, which will put USA Networks and U’s TV produc-tion/distribution operations under the same roof as HSN’s Home Shopping Network cabler and Silver King Broadcasting TV station group.
The deal between HSN and U parent Seagram Co. is set to close by the end of this week, after which HSN will be rechris-tened USA Networks Inc. HSN’s stock price closed down 75¢ Wednesday at $51.63. In mid-October, the week before the U TV acquisition was unveiled, HSN stock was trading in the $38 range.
On Wednesday, Diller confirmed that Silver King (to be renamed USA Broadcasting) is closing in on deals to acquire two top-25 market TV stations. Diller wouldn’t elaborate, but sources say Silver King is negotiating a station-swap deal with fast-growing Paxson Communications that would result in Silver King’s acquiring Paxson outlets in Atlanta and Orlando, Fla.
At the same time, HSN is talking to station buyers about selling its half-interest in SF Broadcasting, which owns four mid-sized market Fox affiliates in a joint venture with Fox. Although talks are still in the early stages, sources say Baltimore-based Sinclair Communications is among the leading contenders to buy out HSN’s stake in SF Broadcasting.
In a Q&A session with HSN shareholders, Diller said the company is committed to replacing the Home Shopping Network programming on the Silver King stations with the much talked-about “CityVision” local programming format. The launch date for Silver King’s first switch market, Miami, has been pushed back from April to June of this year to avoid the competitive frenzy of the May sweep.
Diller said the Miami station would have a “soft launch” with little promotion for the first few weeks, in an attempt to work out the bugs under the radar screen. “It’s foolish to open a TV station like you open a movie or a show,” he said. Later, the station aims to mount a promo blitz while the established stations are airing summer repeats.
After the meeting, Diller also confirmed that the company plans to put programming from the USA Network cabler on the Silver King stations for a block of time each day. However, “it’s not going to happen in the next breath,” he said.
Diller discounted speculation that the new USA Networks would shift its focus away from electronic retailing once Universal’s cable, production and distribution assets were under Diller’s control.
“By no account should anyone discount our interest in electronic commerce or electronic retailing,” he said. “Our feeling is that electronic commerce will relate more and more to systems, like TV, that depend on advertising as a revenue stream. The direction we’re going will enable us to build a company that is, by its organization and by its conception, bound and tethered to the whole system of electronic commerce.”
Diller told the shareholders that it had been “no small difficulty to meld the disparate cultures” of Universal and HSN Inc., but that most of the employee contracts had been worked out. He also addressed speculation that it would be tough for Universal to operate as a studio without TV.
“People who say you can’t operate this way or that way just haven’t done it,” he said. “I’ve yet to see very many examples of the cross nature of movies and TV in any part of my experience. (Steven) Spielberg was under a long allegiance to Universal when he created the most remunerative TV series for Warner,” namely, “ER.”