Activist investor groups takes aim at home shopping channel operator ValueVision; Several Philadelphia connections (QVC, Comcast)

Tom Paine

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Activist investor group Clinton Group is challenging home shopping channel operator ValueVision Media in an effort to replace its CEO and appoint some new board members.

Eden Prarie, Minnesota-based ValueVision, which I like to call QVC West as it is managed by so many QVC veterans, is 14.4% owned by Comcast, a stake inherited though its NBCU acquisition. It has operated under the ShopNBC brand, but decided to rebrand as ShopHQ and discontinue its license fee payments to NBC. Comcast has a representative on ValueVision's board.

ValueVision is not profitable and only has a tiny fraction of QVC's or HSN Corp's revenues, even though its distribution is almost as broad. Although Clinton Group credits current CEO Keith Stewart with stabilizing an even worse situation he inherited at ValueVision in 2009, it says the progress made since then has not been substantial enough. Stewart previously had spent 15 years as an executive at QVC.

Another specific shot Clinton took at ValueVision management was aimed at a number of top execs said to be living in East Coast cities 1,000 or more miles from the company’s Minnesota headquarters, the New York Post reported (Eden Prarie is almost 1200 miles away from Philadelphia, Google Maps tells me). Clinton singled out COO Carol Steinberg, a former QVC and David's Bridal exec, citing a Facebook post by Steinberg last month saying she’s in her hometown of Philadelphia on Mondays and Fridays, according to a presentation to the ValueVision board, a copy of which was obtained by the Post.

Clinton Group and another challenger, Cannell Capital, own a combined 10% stake in the company, which would allow them to call for a vote. It hasn't at this point recommended its own candidates for board seats, although its expected to do so shortly. Clinton has had discussions with ValueVision's board for a while.

ValueVision shares have almost tripled this year and its current market value is $255 million, but revenue of $587 million for its fiscal year ending in February is down from $782 million in 2008 when the company last reported a full year profit.

Its hard to tell what Comcast's interests will be in this; it once owned QVC but hasn't shown an interest in getting directly involved in the home shopping space since then. I would watch QVC owner Liberty Interactive though; its openly talked about possibly consolidating the home shopping industry by acquiring the 62% of HSN it doesn't already own and ValueVision might also be something it would look at.

But a basic conclusion in looking at ValueVision would be that a channel with that much reach is being underutilized and not sufficiently monetized.

Update: ValueVision asks for delay; Clinton responds

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Comcast owns 14.4% of ValueVision through NBC Universal. ValueVision formerly operated under the ShopNBC brand name under license from NBC until this year, when it dropped the license arrangement and changed the channel's name to ShopHQ.

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