Scripps Shuts Shop At Home


The demise of the Shop At Home network might wind up giving a lift to ShopNBC, the country's third-largest home-shopping channel.

Last week E.W. Scripps Co., unable to find a buyer for the money-loser, said it was shutting down its Nashville-based Shop At Home channel and Web site, effective June 22. The electronic retailer's 660 full-time employees will lose their jobs.

Shop At Home, which lost $84 million during the past four years, was a fourth-place also-ran in the competitive home-shopping business, lagging behind QVC, HSN and ShopNBC.


Shop At Home was generating more than $300 million in annual revenue, and Jefferies & Co. analyst Robert Routh figures ShopNBC will get some of those sales. “The home-shopping pie hasn't shrunk,” Routh said. “The only thing that's different is now there are only three players instead of four.”

William Lansing, president of ShopNBC's parent, ValueVision Media Inc., also sees the shutdown of Shop At Home as an opportunity. He expects a large share of Shop At Home's revenue “to get redistributed amongst the existing TV home-shopping players.”

Lansing said ShopNBC could get a disproportionate portion of Shop At Home's sales — more than its 10% overall share of the home-shopping market — because both networks have the same demographic: More affluent customers.

ShopNBC, which had $692 million in revenue last year and is 29% owned by NBC Universal, might wind up hiring some of Shop At Home's executives, according to Lansing.

“There are some very talented individuals at the company,” he said. “If we can find a home for some of them, we're certainly going to try to do that.”

Scripps had tried to use Shop At Home, in part, as a commerce platform to sell products hawked by talent from its cable networks. For example, Food Network's Emeril Lagasse sold cookware, salsa and other merchandise on Shop At Home and hosted specials on the channel. But that strategy didn't stem the losses at the electronic-retailing outlet, which has 55 million full-time equivalent subscribers.

The writing may have been on the wall when Scripps moved programming whiz Judy Girard out as president of Shop At Home late last year, putting her in charge of Home & Garden Television. Girard was replaced at Shop At Home by home-shopping veteran Jim Held.

Shop At Home never had access to enough of the high-quality channel positions, in at least 75 million homes, it needed on cable to succeed, E.W. Scripps spokesman Tim Stautberg said. It either was carried part-time overnight; was offered by UHF stations; didn't have desirable low-channel slots on cable; or wasn't grouped with the home-shopping giants on cable line-ups, he said.

Scripps bought Shop At Home in two transactions for a total of $285 million, gaining the controlling interest in the network in October 2002 and acquiring the remaining minority stake in the channel (as well as five Shop at Home affiliated TV stations) in April 2004. Scripps plans to sell those stations.

Scripps expects to register an after-tax loss in the second quarter of up to $60 million, reflecting operating results, cash expenses related to closing the business and a partial write-down in the value of Shop At Home's assets.

ShopNBC has struggled for years competing against giant QVC, which has roughly $4.5 billion in annual revenue, and HSN, with about $2 billion in sales.


But during the past several quarters ShopNBC has seen its numbers show some improvement and its distribution increase to 63 million homes, getting leverage on the carriage front via its partner NBC.

ValueVision's preliminary results for the first quarter included revenue of $173 million to $176 million, a 14% gain over last year. Its net loss of $3 million to $4 million was an improvement over a $10.8 million net loss in the year-ago period.

“They're suddenly hitting their targets,” Routh said.

Last year, published reports said that Barry Diller and his IAC/InterActive Corp., HSN's parent, had sought to acquire ValueVision. Lansing declined to comment specifically on Diller but said “if a strategic partner has brand, a product or can drive customers our way, we're always interested in that.”