Englewood, Colo. -- Unable to settle on a
programming asset to add to the deal, Liberty Media Group Tuesday paid USA Networks Inc.
$300 million to boost its stake in Barry Diller's company.
Liberty's 32 percent share of Home Shopping Network
Inc. was watered down after Diller's HSN paid $4 billion in cash and stock for USA
Networks and other television assets from Seagram Co. Seagram got 45 percent of HSN's
stock, diluting shareholders like Liberty, the programming arm of Tele-Communications Inc.
Liberty agreed to pay $300 million by June 30 to retain 21
percent of the renamed USA Networks. Liberty also had an option to get up to 25 percent --
at a prohibitive cost of $1 billion, because of Seagram's anti-dilutive rights. Or
TCI/Liberty could have contributed an asset to trim Liberty's cash commitment.
TCI officials, including president and chief operating
officer Leo J. Hindery Jr., were eager to boost TCI's USA stake because of their
faith in Diller's ability to build asset value. But Hindery, Diller and Liberty
president Robert Bennett apparently couldn't agree on the right asset mix.
Rumored candidates included TCI Music, which is 85
percent-owned by Liberty. But Liberty ended up just paying the $300 million, officials at
both companies said.
Because of other USA transactions, like buying out
Ticketmaster Group Inc., Liberty now has to pay $552 million to get 21 percent. Liberty
spokeswoman Vivian Carr said some of that additional cash has been paid, and Liberty has
time to decide whether to pay the rest.
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