Archive for the ‘NBC Universal’ Category

ShopNBC Seems Apprehensive About Comcast, Its New Big Stockholder

February 23, 2011

ShopNBC, looking to float a $75 million stock offering, sure sounds wary about its newest large shareholder Comcast.

In a filing with the Securities and Exchange Commission Wednesday, ValueVision Media i.e. ShopNBC said that Comcast could block some of its future plans and could opt not to renew a license deal that lets the home shopping network use “NBC” in its name.

Comcast inherited a 17 percent stake in ShopNBC when it acquired NBC Universal.

We have to run to our day job, but here are some of the comments in the S-3 filing:

NBCU, of which a controlling interest is now owned by Comcast, and GE Equity have the ability to exert significant influence over us and have the right to disapprove of certain actions by us.

As a result of their equity ownership in our company, NBCU, of which a controlling interest is now owned by Comcast, and GE Equity together are currently our largest shareholder and have the ability to exert significant influence over actions requiring shareholder approval, including the election of directors, adoption of equity-based compensation plans and approval of mergers or other significant corporate events.

Through the provisions in the shareholder agreement and certificate of designation for the preferred stock, NBCU and GE Equity also have the right to block us from taking certain actions. On June 9, 2010 we registered for sale all of the outstanding shares of common stock owned by NBCU, however, on June 24, 2010, NBCU decided not to sell the shares registered in that registration statement due to prevailing prices.

This registration statement has not been withdrawn and NBCU may decide to sell its shares pursuant to that registration statement in the future. The interests of NBCU and GE Equity may differ from the interests of our other shareholders, and they may block us from taking actions that might otherwise be in the interests of our other shareholders.

Our directors, executive officers and principal shareholders will continue to have substantial control over us and could delay or prevent a change in corporate control.

Our directors, executive officers and holders of more than 5 percent of our common stock, together with their affiliates, beneficially own, in the aggregate, over 38 percent of our outstanding common stock. As a result, these shareholders, acting together, would have the ability to control the outcome of matters submitted to our shareholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.

In addition, these shareholders, acting together, would have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by:

• delaying, deferring or preventing a change in corporate control;

• impeding a merger, consolidation, takeover or other business combination involving us; or

• discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

As to the NBC name, the SEC filing says:

Expiration of the NBCU branding license would require us to pursue a new branding strategy that may not be successful.

We have branded our television home shopping network and internet site as ShopNBC and ShopNBC.com, respectively, under an exclusive, worldwide licensing agreement with NBCU for the use of NBC trademarks, service marks and domain names that continues until May 2012 or May 2013 if a one-year extension is agreed to by both NBCU and us.

We do not have the right to automatic renewal at the end of the license term, and consequently may choose or be required to pursue a new branding strategy in the next 10 months which may not be as successful as the NBC brand with current or potential customers. NBCU also has the right to terminate the license prior to the end of the license term in certain circumstances, including without limitation in the event of a breach by us of the terms of the license agreement or upon certain changes of control.

ShopNBC, Meet Your New Biggest Shareholder: Comcast

November 18, 2010

Post its acquisition of NBC Universal, it looks like Comcast is going to wind up as the largest shareholder of ShopNBC.

This may or may not help the home shopping network plug the “one gaping hole” in its distribution: Comcast, which is the nation’s largest cable operator.

To get that tasty tidbit, we took the time to listen to ShopNBC’s third-quarter conference call Thursday, even though we nodded off at one point, dropped our princess phone and had to call to get reconnected to the replay (actually, we nodded off twice). We’re glad we hung in there.

ShopNBC CEO Keith Stewart went mum when an analyst asked why the network had decided not to rebrand itself — as it previously planned — and instead renewed its licensing deal with NBCU to use its current name. ShopNBC will issue additional shares next May valued at $4 million to NBCU as part of the licensing deal.

Then another analyst noted that NBCU now owns 6.4 million shares of ShopNBC, or just under 19 percent of the company, and that the additional shares will put the merged Comcast-NBCU at more than 20 percent of the network, making it the biggest shareholder.

It’s a flash to the past for Comcast, which has a history in the home shopping business. It used to own QVC before selling it to John Malone’s Liberty Media Corp.

During the call, it was Stewart who said that Comcast homes were ShopNBC’s “gaping hole” in distribution. The home shopping network isn’t distributed in about 10 million of Comcast’s roughly 23 million homes.

“We generally use overbuilders to cover that distribution,” Stewart said.

But don’t take Comcast’s new ownership in ShopNBC as a guarantee that your carriage will be boosted, Keith.

About 25 percent of ShopNBC’s carriage deals expire at the end of this year, but the network’s pact with Comcast is not part of that 25 percent, according to Stewart.

ShopNBC Scraps Rebranding Plan, Inks One-Year Deal License Deal With NBCU

November 18, 2010

ShopNBC has shelved its plans to rebrand and rename the network.

The home shopping network said Thursday that it had reached a one-year extension of its license agreement with NBC Universal to use the ShopNBC brand related to its television shopping network and its e-commerce websites http://www.ShopNBC.com and http://www.ShopNBC.tv.

The license agreement, which was to expire in May 2011, has been extended to May 2012.

As consideration to NBCU for the license extension, ShopNBC will issue common stock in May of 2011 valued at $4 million. Additionally, the agreement allows for a 1-year extension to May 2013 upon the mutual agreement of both parties.

“We are pleased to have extended our use of the NBC trademark for another year,” ShopNBC CEO Keith Stewart said. “Our ability to continue leveraging this well-known brand will allow our experienced multi-channel team to remain focused on our company goals of consistent profitability and long-term sustained growth. We are grateful to our partner and shareholder, NBCU, for their ongoing support.”

Earlier in the year Stewart had said that the No. 3 home shopping channel would change its name after its licensing deal with NBCU expired.

Financially Ailing ShopNBC Looking To Raise Up To $75 Million In Stock Offering

July 26, 2010

Financially strapped ShopNBC is looking to potentially raise $75 million through a stock sale.

ValueVision Media, parent of the No. 3 home shopping network, filed a so-called “shelf registration,” or S-3 form, Monday with the Securities and Exchange Commission for the stock offering. ShopNBC declined to comment.

But in its filing the company said that if it doesn’t stem its losses, “We could reduce our operating cash resources to the point where we will not have sufficient liquidity to meet the ongoing cash commitments and obligations to continue operating.”

Through a shelf registration, a company can fulfill certain SEC-mandated registration-related procedures before offering shares to the public, which permits the company to go to market more quickly when they are ready to do the public offering. The company essentially puts stock shares “on a shelf” in case it needs to raise capital for any reason.
We have a history of losses and a high fixed cost operating base and may not be able to achieve or maintain profitable operations in the future.

In its filing, ShopNBC said it had operating losses of about $41.2 million, $88.5 million and $23.1 million in the years ended January 30, 2010 (“fiscal 2009”), January 31, 2009 (“fiscal 2008”) and February 2, 2008 (“fiscal 2007”), respectively.

It also reported a net loss of $42 in fiscal 2009 and a net loss in fiscal 2008 of $97.8 million.

“While we reported net income of $22.5 million in fiscal 2007, this was due to the $40.2 million pre-tax gain we recorded on the sale of our equity interest in Ralph Lauren Media, LLC, operator of the polo.com website,” the S-3 filing said. “There is no assurance that we will be able to achieve or maintain profitable operations in future fiscal years.”

ShopNBC said it has high fixed costs, primarily driven by fixed fees on the merchandise it sells to cable and satellite operators in exchange for distribution.

“In order to operate on a profitable basis, we must reach and maintain sufficient annual sales revenues to cover our high fixed cost base and/or negotiate a reduction in this cost structure,” the filing said. “If our sales levels are not sufficient to cover our operating expenses, our ability to reduce operating expenses in the near term will be limited by the fixed cost base. In that case, our earnings, cash balance and growth prospects could be materially and adversely affected.”

ShopNBC reported that it has limited unrestricted cash to fund its operations, $20.9 million as of May 1, 2010 (with an additional $4.9 million of cash that is restricted and used to secure letters of credit and similar arrangements).

“We expect to use our cash to fund any further operating losses, to finance our working capital requirements and to make necessary capital expenditures in order to operate our business,” the filing said. “We also have significant future commitments for our cash, primarily payments for our cable and satellite program distribution obligations and redemption of our Series B Preferred Stock. If our vendors or service providers were to demand a shift from our current payment terms to upfront prepayments or require cash reserves, this will have a significant adverse impact.”

It appears that ShopNBC’s shareholder GE Capital Equity will have to approve the offering, according to an 8-K that the network filed with the SEC in June.

“On June 10, 2010, our board of directors authorized the filing of a shelf registration statement on Form S-3 with the Securities and Exchange Commission covering the sale by our company of up to $75,000,000 of securities, including common stock, preferred stock, warrants, units and stock purchase contracts,” the company said in that filing. “Our shareholders agreement with GE Capital Equity Investments, Inc. (“GE Equity”) and NBC Universal, Inc. require the consent of GE Equity in order for our company to issue new equity securities and to incur indebtedness above certain thresholds, and there can be no assurance that we would receive such consent if we made a request.”

ShopNBC’s largest shareholder, NBC Universal, back on June 24 decided not to sell its 6,452,194 shares in the home shopping network “due to prevailing prices.”

Will NBCU’s Plans To Keep Its ShopNBC Stake Derail Any Sale Of The Home Shopping Network?

June 24, 2010

What's Keith Stewart got cooking at ShopNBC?

ShopNBC was put up for sale in 2008, and then was taken off the block a few months later. Well, we heard it’s for sale again.

ShopNBC declined to comment, by the way.

There’s been a lot of talk about possible home-shopping-network sales this week, so we’ll add this to the mix.

The ShopNBC-sale scenario we had heard about would potentially have been made easier because of NBC Universal’s plans, announced in May, to sell its 20 percent stake in the home shopping network. But on Thursday NBCU threw a monkey wrench into that possibility. Citing ShopNBC’s low stock price, NBCU announced that it wasn’t going to unload its share in the network.

Wall Street Journal blogger James Altucher was bullish on ValueVision Media, ShopNBC’s corporate parent, in a blog earlier this week. The home shopping network has 75 million subscribers, and Altucher values it at $270 million to $300 million in his blog.

He bases that price on payment of $3.92 per subscriber, which he says is “the cheapest price paid for any network on a subscriber by subscriber basis” in the past.

Altchuler, who says that Barry Diller unsucessfully bid on ShopNBC twice, has the inside dope on the initial attempt to sell ShopNBC. ValueVision shopped the network to more than 100 companies. It wound up with four serious suitors, two of them strategic buyers and two financial sponsors, according to Altuchuler. But a deal was never struck

“I think the clearing of the NBC Universal stake finally bring buyers into the loop here,” Altchuler wrote.

Well, that’s off the table now.

There’s been a lot of buzz on Wall Street about home shopping networks this week, following news that Liberyr Media Corp. was spinning off two companies to leave Liberty Interactive, which QVC is part of, as essentially a standalone company. That fueled speculation that this move by cable legend-cowboy-God John Malone was a prelude to merging QVC and HSN.

We’ll see about that one.

ShopNBC chief Keith Stewart has said that with NBCU selling its take in the home shopping network, ShopNBC will rebrand itself next year. The network has been working for months on coming up with a new name, according to Stewart.

Would you go through that trouble if you were selling your network? Or is it an attempt to dress up the property to attract suitors?

We haven't seen too much of Suzanne Somers on ShopNBC

Meanwhile, people familiar with the situation say that ShopNBC’s infrastructure, like its call centers, are not big enough to support the network.

As one sign of the times, ShopNBC is ordering a just a fraction of the amount of merchandise a month from vendor Suzanne Somers that HSN used to order, according to sources. In fact, although Somers initially said she would be on ShopNBC once a month, her visits have been much less frequent.

And we’re told some apparel vendors have to carry orders, meaning if their merchandise doesn’t sell ShopNBC can return it to them.

We wonder if they can only return it within 30 days?

NBC Universal Shelves Plan To Sell Stake In ShopNBC

June 24, 2010

NBC Universal, citing the low price of the stock, has dropped its plan to sell its 20 percent stake in ShopNBC, the home shopping network said Thursday.

In May NBCU, one of ShopNBC’s largest shareholders, said it planned to sell its 20 percent stake in the the network.

In a press release Thursday, ShopNBC said that NBCU “has decided not to pursue its offering of 6,452,194 common shares in the company at this time due to prevailing prices.”

The stock of ValueVision Media, ShopNBC’s parent, was trading at about $1.95 Thursday morning, with the company’s 52-week high being $5.27.

NBCU is one of the company’s largest shareholders.

NBC Universal Chief Jeff Zucker, His PR Folks And His Talent Host Holiday Party For Media At 30 Rock

December 9, 2009

We just got back to Jersey after attending NBC Universal’s party for the press. The soiree Tuesday night, held on the 52nd floor of 30 Rock in Manhattan, was officially off-the-record. But we can certainly tell you who we saw there.

As we were checking our coat, Kathie Lee Gifford was putting on her’s and leaving. Her NBC morning-TV partner, Hoda Kotb, was still inside at the shindig.

The event, sponsored by NBCU chief Jeff Zucker and his communications team, came on the heels of news that the nation’s largest cable operator, Comcast, was buying the home of the Peacock Network along with its stable of cable channels, which includes USA Network, SyFy, Bravo, Oxygen, CNBC and MSNBC. The seller is General Electric.

A shirt-sleeved Zucker briefly addressed the gathered media, and made some funny jokes about the coming merger (we can’t say what, it was off the record, remember?)

There were both NBCU talent and suits at the holiday party. NBC News anchor Brian Williams, a Jersey guy, stopped by, as did Lester Holt, Ann Curry and Amy Robach from “The Today Show.” Jimmy Fallon popped by when the party was ending.

As for execs, in addition to Zucker there was NBC Cable Entertainment chief Bonnie Hammer, Bravo honcho Frances Berwick, NBCU’s women’s and lifestyle chieftain Lauren Zalaznick, CNBC president Mark Hoffman and “Saturday Night Live” creator and producer Lorne Michaels.

We have written about Bravo’s “The Real Housewives of New Jersey” for NewJerseyNewsroom.com, and NBC has big home shopping connections and affiliations.

First of all, GE/NBC currently owns about 32.5 percent of ShopNBC on a fully diluted basis of 37.6 million shares. NBC’s 6.4 million shares represent 16.8 percent ownership and GE’s 6 million common stock purchase warrants represent 15.7 percent.

Secondly, the stars of several of NBCU’s cable show have home shopping lines, including: Tori Spelling, who is in Oxygen’s “Tori & Dean: Home Sweet Hollywood,” on HSN; Rachel Zoe, from Bravo’s “The Rachel Zoe Report,” on QVC; Isaac Mizrahi, who hosts Bravo’s “The Fashion Show,” on QVC; Padma Lakshmi, from Bravo’s “Top Chef,” on HSN; and Ramona Singer from Bravo's "The Real Housewives of New York City." on HSN.

The party gift was a DVD of the third season of NBC’s “30 Rock,” appropriately.

ShopNBC May Partner With Bravo, Whose Reality TV Stars Like Rachel Zoe And Isaac Mizrahi Already Have Deals With QVC And HSN

November 18, 2009

ShopNBC apparently has something cooking with the cable network Bravo, but we couldn’t find out many details Wednesday.

During a third-quarter conference call ShopNBC CEO Keith Stewart said that the network is looking to partner with Bravo to sell some of Bravo’s “content” also have a presence on the channel.

“I can’t speak for NBC, but I do talk to them quite frequently, and we are in active conversations to work with some of their properties, like Bravo,” Stewart said. “To the extent that we can sell some of the Bravo content and also be on some of their channels, that will be a cost-effective way to do it.”

Bravo is a unit of NBC Universal, which is expected to be purchased by cable giant Comcast. NBC has a minority stake in ShopNBC.

A raft of the stars of Bravo’s many reality TV stars have lines on home shopping networks. Celebrity stylist Rachel Zoe of “The Rachel Zoe Project” sells clothes and accessories on QVC, and Heidi Klum of Bravo’s former hit, now Lifetime’s “Project Runway,” had a jewelry line on QVC until a suit agains her by Van Cleef & Arpel put the kibosh on that.

Fashion designer Isaac Mizrahi, of Bravo’s “The Fashion Show,” is doing a line of apparel, accessories and home goods that will debut next month on QVC.

On HSN, Ramona Singer of Bravo’s “The Real Housewives of New York City” has a fine jewelry line, while Padman Lakshmi of Bravo’s “Top Chef” is hawking teas and herbs.

On the conference call, Stewart only made one more comment about the potential Bravo arrangement, and ShopNBC wasn’t “adding any color,” as Wall Street analysts say, after the call.

“Now all that said, NBC is a stand-alone unit and they need to make money,” Stewart said. “And we unquestionably need to make money. So to the extent it compromises our margins to you, it would not be a good business decision. But to the extent it does work for both of us, we’ll launch some of the content that NBC will offer.”

General Electric and NBC currently own about 32.5 percent of ShopNBC on a fully diluted basis of 37.6 million shares. NBC’s 6.4 million shares represent 16.8 percent ownership and GE’s 6 million common stock purchase warrants represent 15.7 percent.

Post Comcast-NBCU Deal, ShopNBC Says To Ask General Electric What It Plans To Do With Its Stake In The Network

November 18, 2009

Keith Stewart

ShopNBC officials don’t know how Comcast’s expected purchase of NBC Universal will affect the network, where NBCU and its parent General Electric hold a 32.5 percent stake.

“You have to call GE and ask them,” ShopNBC CEO Keith Stewart said Wednesday. “It’s difficult to speculate what GE is going to do.”

During a third-quarter conference call, ShopNBC was asked twice about the expected Comcast-NBCU deal and its potential impact on the network, and Stewart danced around it.

GE/NBC currently owns about 32.5 percent of ShopNBC on a fully diluted basis of 37.6 million shares. NBC’s 6.4 million shares represent 16.8 percent ownership and GE’s 6 million common stock purchase warrants represent 15.7 percent.

First, one investor said he was concerned that if GE was looking to get out of the media business, why would it keep its stake in ShopNBC.

“As for changing the landscape, I really don’t see much of a change in the landscape,” Stewart said. “They are a minority holder, albeit around 30 percent.”

That same caller expressed concern that ShopNBC would lose leverage in negotiating carriage deals if it no longer had NBCU
as a shareholder.

“I really couldn’t possibly say that impacts us negatively or positively,” Stewart said. “We have a very good relationship with Comcast as it is, and what we pay them for distribution, last time I checked they still need a revenue stream.”

A second investor later noted that GE and NBCU have three seats on ShopNBC’s board, and what would be GE’s incentive to keep its stock.

“I don’t know really how to answer that question,” Stewart said, adding that he looks at GE and NBCU as passive investors.

Chief financial officer Frank Elsenbast chimed in, “In the event there was an NBC transaction with Comcast, we still would have a very significant investor in GE owning 13 percent of the company.”