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Liberty Wants QVC Breakup

12/15/2002 07:00:00 PM Eastern

QVC might experience a different kind of shopping frenzy. Liberty Media may trigger the breakup of its partnership with Comcast in the top-ranked home shopping network.

Liberty Media President Dobb Bennett said at the UBS Warburg media conference last week that the partnership agreement gives Liberty the right to call for Comcast to buy out Liberty's stake, sell Liberty its majority stake, or join Liberty in selling the whole thing to someone else. Comcast owns 57% of the network; Liberty, 43%.

Bennett doesn't know if he'll end up a buyer or a seller. "I don't know what the price is."

The network should generate about $4.4 billion in sales this year and is worth about $20 billion. Bennett said the main reason for pulling the trigger is that he has only two more exit opportunities, February 2003 or February 2004. "It is probable that we will exercise one or the other."

Comcast CFO John Alchin acknowledged that the company prizes QVC and the fast-growing cash flow that has helped pay for cable-system rebuilds. But, he added, Comcast promised investors in acquiring AT&T Broadband that it won't load up more debt. "We are very protective of our investment-grade rating, and we will not use our stock at these prices."

He predicted that Liberty Chairman John Malone will more likely use the exit clause to negotiate another type of deal and stay in QVC for several more years.

Bennett also said he believes that Vivendi Universal will wind up selling off its entertainment assets, and he wants a shot at buying in. He thinks merging USA Network and Universal Studios with Liberty's Starz Encore pay movie network unit plus giving Vivendi some cash is the best starting point.

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