To the surprise of some Wall Street players, Comcast Corp. CEO Brian Roberts showed
the financial discipline he has pledged to investors and is letting Liberty
Media Corp. buy the MSO’s stake in home shopping giant QVC Inc.
Liberty put a fat $14.1 billion value on QVC, meaning that Comcast will
receive $7.9 billion for its 56% stake in the network.
That’s 5%-10% more than some analysts had been valuing QVC and a huge
$145-$150 per U.S. subscriber.
By comparison, entertainment cable networks sell for $20-$30 per subscriber.
With $4.4 billion in sales last year, QVC is not just the largest shopping
network, but the second-largest television network of any kind.
By expertly hawking the likes of Corvette 50th-anniversary commemorative
coins, Quacker Factory Sparkle and the Shine V-neck T-shirt, QVC generates more revenue than CBS, ABC or Fox and comes close to the ad-sales revenues of NBC.
And with $850 million in operating cash flow, QVC is more profitable than all
of the broadcast networks combined.
Liberty is simultaneously chasing Vivendi Universal Entertainment, which
would be an $11 billion commitment.
The mission is to transform the company from largely a mutual fund of partial
stakes in other companies (News Corp., Discovery Communications Inc., AOL Time
Warner Inc.) into something that owns and operates more assets.
The deal does not resolve a court dispute between Comcast and Liberty’s
Starz Encore Group LLC pay-movie networks, in which Comcast is trying to escape a hugely
expensive affiliation deal inherited when it bought AT&T Broadband.