USA Networks Plans to Sell or Join Its Stations

USA Networks Inc. plans to sell or form a joint venture for its 13 TV stations by Jan. 1, ending speculation USA might acquire other companies to bolster the station group, which some financial analysts consider untenable on its own.

USA Chief Executive Barry Diller told reporters and investors about his intentions for the group of mostly UHF stations during an investor conference Monday in New York, said USA Networks spokeswoman Adrienne Becker.

Nine of the stations carry USA’s Home Shopping Network and the other four carry local programming.

Speculation that Diller planned to combine the stations with another company’s or sell them is not new, but his Monday comments for the first time ruled out the possibility that USA would try to buy another station owner.

Diller had previously tried to buy NBC network, also the owner of a number of local television stations, from its parent General Electric Co. But that deal was reportedly stopped by Universal Inc., which owns roughly 45% of USA Networks, because the price was too high.

If the USA Networks stations are sold outright, they could fetch $500 million to $1.5 billion, said Myles Davis, an analyst at Morgan Stanley Dean Witter.

“Most of these are UHF stations,” Davis said. “They’re valuable as a complement to someone that has a lot of stations, but less valuable if you don’t have a lot of stations yourself. They have been a cash drain on the company for a couple of years.”

The stations, which operate in markets such as New York, Los Angeles and Chicago, have lost about $60 million a year, analysts said.

Analysts have speculated that one of the leading suitors for the stations would be ABC, a subsidiary of Walt Disney Co. Other possible suitors or joint venture partners include NBC, Spanish-language network Univision Communications Inc. and newspaper giant Tribune Co., which owns The Times.

On Tuesday, shares of USA Networks closed up $1.13 at $18.13 on Nasdaq, a 6.6% gain that partially reversed a one-month downtrend.