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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 20, 1997
THE SEAGRAM COMPANY LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Canada 1-2275 None
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1430 Peel Street, Montreal, Quebec, Canada H3A 1S9
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(514) 849-5271
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Item 5. Other Events.
In a series of transactions designed to create an enterprise of
sufficient size and focus capable of competing in today's
increasingly concentrated world, Universal Studios, Inc.
("Universal"), a subsidiary of The Seagram Company Ltd. (the
"Corporation"), and HSN, inc. ("HSNi") announced on October 20, 1997
the contribution of the majority of Universal's television assets to
HSNi in a transaction in which Universal will receive $4.075 billion
in value in the form of 45 percent of HSNi's outstanding common
equity equivalents plus approximately $1.2 billion in cash. In
addition, HSNi intends to change its corporate name to USA Networks,
Inc. This diversified company will have assets in cable,
broadcasting, television programming and production as well as
electronic commerce, including electronic retailing, ticketing,
teleservices and full service fulfillment. Barry Diller will continue
to be Chairman and Chief Executive Officer of the newly-named entity.
The Universal assets being contributed include all the domestic
operations and 50 percent of the international operations of USA
Network, and the Sci-Fi Network, and Universal Television's U.S.
production and distribution operations, which include such successful
shows as Law & Order, Hercules: The Legendary Journeys, Xena: Warrior
Princess and Sally Jesse Raphael. These assets will be combined with
HSNi's Home Shopping Network and its interest in Ticketmaster Group,
Inc. Universal will retain ownership of its television library, its
comedy production business and its international television
production and distribution operations. HSNi and Universal will each
own 50 percent of a newly-created international television joint
venture.
For regulatory reasons, Universal's 45 percent interest in HSNi will
be held in a subsidiary which will also own the non-broadcast assets
of HSNi. This 45 percent interest will be exchangeable in accordance
with Federal Communications Commission rules into an equivalent
percentage of the outstanding equity of HSNi. After giving effect to
these transactions, Liberty Media will own 15 percent of HSNi and
would have the right to increase its equity to up to 25 percent. This
right may be exercised by Liberty for assets agreed to by the parties
or cash. Barry Diller, Chairman and Chief Executive Officer of HSNi,
will be entitled to continue to exercise voting rights over all HSNi
securities owned by Liberty, and also will exercise voting rights
over all voting securities received by Universal. In addition,
Universal has agreed that, subject to certain exceptions, for a
four-year period, it will not increase its equity ownership interest
beyond 45 percent, transfer its equity interest or engage in certain
restricted conduct. It is expected that Edgar Bronfman, Jr., the
Corporation's President and Chief Executive Officer, and three other
Universal designees will join HSNi's Board of Directors.
Additionally, it is expected that Barry Diller, upon completion of
the transaction, will become a member of the Board of Directors of
the Corporation.
The transactions are subject to customary conditions, including HSNi
stockholder approval, which is expected to occur early in the first
quarter of 1998.
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A copy of the press release is attached hereto as an exhibit and is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
(99) Press Release.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SEAGRAM COMPANY LTD.
(Registrant)
Date: October 21, 1997
By: /s/ Daniel R. Paladino
-------------------------------------
Daniel R. Paladino
Executive Vice President -- Legal and
Environmental Affairs
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EXHIBIT INDEX
Exhibit Description of Exhibit Sequentially
Number Numbered Page
(99) Press Release. 6
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EXHIBIT 99
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FOR RELEASE: IMMEDIATELY
UNIVERSAL STUDIOS, INC. AND HSN, INC. ANNOUNCE THE COMBINATION OF
UNIVERSAL TELEVISION WITH HSN, INC.;
HSNI TO BE RENAMED USA NETWORKS, INC.
NEW YORK, October 20, 1997 -- In a series of transactions designed to create an
enterprise of sufficient size and focus capable of competing in today's
increasingly concentrated world, Universal Studios, Inc., a subsidiary of The
Seagram Company Ltd. (NYSE: VO), and HSN, inc. (NASDAQ: HSNI) announced today
the contribution of the majority of Universal's television assets to HSNi in a
transaction in which Universal will receive $4.075 billion in value in the form
of 45 percent of HSNi's outstanding common equity equivalents plus approximately
$1.2 billion in cash. In addition, HSNi intends to change its corporate name to
USA Networks, Inc. This diversified company will have assets in cable,
broadcasting, television programming and production as well as electronic
commerce, including electronic retailing, ticketing, teleservices and full
service fulfillment. Barry Diller will continue to be Chairman and Chief
Executive Officer of the newly-named entity.
The Universal assets being contributed include all the domestic operations and
50 percent of the international operations of USA Network, and the Sci-Fi
Network, and Universal Television's U.S. production and distribution operations,
which include such successful shows as Law & Order, Hercules: The Legendary
Journeys, Xena: Warrior Princess and Sally Jesse Raphael. These assets will be
combined with HSNi's Home Shopping Network and its interest in Ticketmaster
Group, Inc. Universal will retain ownership of its television library, its
comedy production business and its international television production and
distribution operations. HSNi and Universal will each own 50 percent of a
newly-created international television joint venture.
For regulatory reasons, Universal Studios' 45 percent interest in HSNi will be
held in a subsidiary which will also own the non-broadcast assets of HSNi. This
45 percent interest will be exchangeable in accordance with Federal
Communications Commission rules into an equivalent percentage of the outstanding
equity of HSNi. After giving effect to these transactions, Liberty Media will
own 15 percent of HSNi and would have the right to increase its equity to up to
25 percent. This right may be exercised by Liberty for assets agreed to by the
parties or cash. Barry Diller, Chairman and Chief Executive Officer of HSNi,
will be entitled to continue to exercise voting rights over all HSNi securities
owned by Liberty, and also will exercise voting rights over all voting
securities received by Universal. In addition, Universal has
-more-
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agreed that, subject to certain exceptions, for a four-year period, it will not
increase its equity ownership interest beyond 45 percent, transfer its equity
interest or engage in certain restricted conduct. It is expected that Edgar
Bronfman, Jr., Seagram's President and Chief Executive Officer, and three other
Universal designees will join HSNi's Board of Directors. Additionally, it is
expected that Barry Diller, upon completion of the transaction, will become a
member of the Board of Directors of The Seagram Company Ltd.
The transactions are subject to customary conditions, including HSNi stockholder
approval, which is expected to occur early in the first quarter of 1998.
Edgar Bronfman, Jr., Seagram's President and Chief Executive Officer, stated,
"This merger provides an extraordinary opportunity for Universal to further
enhance the value of its television assets, including our cable networks, under
Barry Diller's leadership. Clearly, Barry is one of the entertainment industry's
most admired and effective talents and a long-time friend. His partnership with
us will unquestionably serve to accelerate the increase in shareholder value
which we at Seagram are committed to achieve."
Barry Diller, Chairman and Chief Executive Officer of HSNi, said, "The value of
this transaction lies in two areas: assets and partnership. The assets
commingled: three cable networks, 25 broadcast stations, Ticketmaster, Universal
Television Production and Distribution and the Internet Shopping Networks give
us great ability to manage and grow ourselves into a major enterprise. As for
partnership, it is neither fast nor loose to say that I have been the
beneficiary of a first rate relationship over the last five years with John
Malone and Liberty Media, and more recently with Leo Hindery and Dob Bennett, as
they have taken responsibility for TCI and Liberty's respective businesses. As
Universal and Seagram become the significant partner in this Company I couldn't
be more pleased, for I have known, trusted and respected Edgar Bronfman, Jr. for
more than 20 years. The balance of partners in this transaction,
Seagram-Universal and TCI, will help us to navigate our way through the
aggressive growth our goals mandate."
In commenting on this announcement, Frank J. Biondi, Jr., Chairman and Chief
Executive Officer of Universal Studios, stated, "This new arrangement, which
combines Universal's strong television assets and management team with a set of
complimentary businesses, provides a much broader platform for our future
growth. We at Universal look upon this new development as highly supportive of
our overall plans for expanding all of our entertainment businesses."
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Ron Meyer, President and Chief Operating Officer of Universal Studios, added,
"Universal Studios is delighted at the opportunity to become associated with
Barry Diller. Barry is a close personal friend and executive who enjoys the
deepest respect of the entire entertainment industry."
It is expected that The Chase Manhattan Bank will provide the bank financing for
this transaction.
Universal Studios, Inc. is a diversified entertainment company and a worldwide
leader in motion pictures, television, music, home and location-based
entertainment. Universal Studios is a unit of The Seagram Company Ltd., a global
beverage and entertainment company.
HSN, inc. is the parent company of Home Shopping Network, Silver King
Broadcasting and SF Broadcasting. The Company also owns a controlling interest
in Ticketmaster Group, Inc., the world's leading computerized ticketing service.
###
SEAGRAM HSN, INC.
MEDIA: MEDIA:
Ray Boyce Jennifer Goebel
212/572-7172 212/247-5823
Amy Goldberger INVESTOR RELATIONS:
212/572-1118
Roger Clark
INVESTOR RELATIONS: 212/247-0226
Joseph Fitzgerald
212/572-7282
Maureen Hannan
212/572-1397
