NBC To Sell Stake In ShopNBC5/20/2010 1:33 PM Eastern
ShopNBC is seeking out a new name after stakeholder NBC Universal notified the company it would sell its 19.8% interest in the channel, severing a relationship that began more than a decade ago.
NBCU parent General Electric, in filings with the Securities and Exchange Commission May 19, said it had registered about 6.5 million shares of the shopping channel for sale on the open market. GE financial arm General Electric Capital will continue to own about 6 million shares of the network, officially known as ValueVision Media.
"They [NBC] said that TV retailing is no longer part of their long-term strategy and as a result decided to sell the stake in our business," ShopNBC CEO Keith Stewart said on a conference call to discuss first quarter results. He added that although the network's licensing agreement with NBC does not expire until May 1, 2011, it will drop the NBC name and rebrand the network.
"We have a short-list of names," Stewart said.
Stewart said that ShopNBC has been working with a consultant on finding a new name for about 8 months and will "subtly" transition to the new moniker this summer. He added that the process will start online, move to social media and conclude with the TV channel. He expected the rebranding to be completed by February 2011, well ahead of the expiration of the NBC licensing agreement.
ValueVision shares dipped 24% (63 cents each) on May 19 to $1.97 per share. The stock was trading at $1.92 each (down 5 cents) in afternoon trading May 20.
GE agreed in December to forge a new joint venture with Comcast that would give the nation's largest cable operator a controlling stake in NBC Universal, which includes the NBC broadcast network and cable channels like Bravo, USA Network and SyFy. That transaction is expected to pass regulatory muster by the end of the year.
NBC first became involved with ValueVision in 1999 but the relationship has been a rocky one.
ShopNBC tried looking for a buyer in late 2008, but called off the auction in January 2009 when no final bids were made for the channel.
For the quarter, revenue dipped 6.6% in the period to $125 million, due mainly to lower than expected consumer electronics sales. The channel managed to improve its cash flow deficit in the period to negative $4.3 million from negative $6.8 million in the previous year.