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EXHIBIT 1
[USA NETWORKS INC LOGO]
USA NETWORKS, INC. TO BE RENAMED USA INTERACTIVE
$4.3 BILLION IN PRO FORMA REVENUE AND $620 MILLION IN PRO FORMA EBITDA BUDGETED
FOR 2002 FOR OPERATING BUSINESSES
NEW YORK, NY, -- DECEMBER 17, 2001 -- As a result of the pending contribution of
its Entertainment Group to a joint venture with Vivendi Universal, USA Networks,
Inc. (NASDAQ:USAI) announced today that the Company will be renamed USA
Interactive, a leader in integrated interactivity. The Company's internet
commerce group - which includes HSN.com, ticketmaster.com, Match.com, Hotel
Reservations Network, and Expedia (pending) - are second only to eBay in terms
of profitability. Additionally, the Company's flagship properties are all in the
number one or number two positions in their respective categories of ticketing,
online dating, online travel and electronic retailing. These categories
represent approximately 50% of the total $52 billion interactive commerce
market.
The Company expects that the focus on integrated interactivity afforded by
today's announcement will expedite its march, both through internal growth and
through acquisition, from enabling 9% of all interactive commerce to 20% over
the next few years. This would make USA Interactive a clear leader in
interactive commerce and the only company focused on integrating interactive
assets across multiple lines of business. Additionally, Vivendi will no longer
have veto rights with respect to transactions valued in excess of 10% of USA's
market capitalization. As a result, USA will have corporate autonomy.
Barry Diller, Chairman and CEO of USA Networks, Inc. said:
"Here's what this transaction achieves for USAI shareholders:
1. The establishment of USA Interactive, a company with $4.3 billion in sales
and $620 million in EBITDA budgeted for operating businesses in 2002, truly
scale operations in multiple forms of electronic commerce and cash on hand at
closing of almost $3 billion.
2. A completely independent USA Interactive, which while having Board
representation from Liberty and Vivendi Universal, will have a Chief Executive
with voting control and no material veto rights from other parties.
3. A fair and full price for its Entertainment assets with a small but
significant carried interest in their future growth...and with the recognition
that their growth must be combined with other entertainment assets in order to
even get to the starting line of competition.
SEE IMPORTANT NOTES AT END OF RELEASE.
When Jean-Marie Messier and I started to discuss the possibilities between
Vivendi Universal and USA, we were mindful of two tasks - that the solution had
to be fair and balanced for both. Easily said, but incredibly difficult to
achieve given the multiple conflicts that existed. We have constructed a
transaction that while complex, has at its essence the realization of those
goals.
In addition to my role as the Chairman and CEO of USA Interactive, I have agreed
to serve as the Chairman and CEO of the newly constituted joint venture, Vivendi
Universal Entertainment. I recognize the drama and attention inherent in this
new responsibility, and I want it all to be as clear as I can make it:
I will serve at the pleasure of both Mr. Messier and myself. I will have no
employment contract. I will be paid no salary. For those who ask why I would do
this, here are the answers:
1. I have over the course of the last year gained enormous respect for what
Jean-Marie Messier is trying to accomplish in building a first tier media and
entertainment Company. The USA Entertainment Group joined with the worldwide
entertainment assets of Vivendi have the ability to further their goals of
becoming fully competitive in this fast moving media consolidation. I would
enjoy, mark that again, enjoy - helping Mr. Messier and his colleagues achieve
that - in whatever ways my experience can contribute. The executives of
Universal, and in particular, Ron Meyer and Stacey Snider are first rate, doing
first rate jobs and while I'm sure I'll have opinions I intend to join their
fine culture rather than imposing my own.
2. USA Interactive has a minority, but significant stake, in the joint venture,
which accretes in value.
3. I personally have a minority stake in the joint venture, which also can
accrete in value.
4. To those who ask why I would 'do this' after all I've said about corporate
life, let me, at the risk of boring everyone overly on the subject, set out here
what it is I did say almost exactly ten years ago when I left Fox:
2/24/92
I'VE ESSENTIALLY BEEN AN EMPLOYEE MY ENTIRE BUSINESS CAREER. I DON'T
WANT TO DENIGRATE THAT - FAR FROM IT. SINCE THE BEGINNING I HAVE HAD
GENUINELY AMAZING OPPORTUNITIES, GREAT GOOD LUCK AND REAL SATISFACTION
BEING JUST THAT. BUT, I HAVE ALSO YEARNED TO HAVE MY OWN COMPANY IN
WHATEVER SHAPE OR SIZE I AM COMFORTABLE OR CAPABLE OF CREATING OR
ACQUIRING.
I believe I have achieved the goals I set out then and I will continue to 'have
my own company' at USAI for as far into the future as I can see. Far too much
has been made of this issue about going to work for someone, etc...far too much
on the issue of how I will
divide my time. I will take leadership in Vivendi Universal Entertainment
happily under the direction of Jean-Marie Messier confident that I can bear
those responsibilities without any of these issues becoming a problem for any of
my colleagues at either company, or for the shareholders of USAI.
A great deal of my energy will, of course, remain inside USA Interactive. The
great good luck of being able to have a Company in all these interactive areas,
so well funded, so strong and independent, at just the time of so much
opportunity - gives us a great chance to dominate a business sector that will
undoubtedly become one of the most important in the world.
One final point I would like to address. Much has been written about Edgar
Bronfman and the transaction with USA some four years ago. Almost all of it is
hogwash. What Mr. Bronfman did was to sell his television assets to HSN, Inc.
for what then was a full and fair price with the hope, clearly stated at the
time, that they would grow in value better than they could inside Seagram...
and, with absolute certainty, be repatriated back to the Company. And, since
Seagram would own more than 40% of the upside, whatever price would eventually
be paid for the assets would be balanced by the gain in the securities they
held. He believed with all his ambitions for Seagrams directed at the movie and
music businesses, that putting these assets in our hands was their best prospect
for growth. What neither of us knew at the time was that the consolidation in
the media business would put special pressures on the convergence of these
assets...but his vision, and yes, he had incredible vision, has turned out spot
on: he took a liquor business with an investment in a chemical company and
turned it into a true force, with leadership in music and movies in just a
handful of years and then, in a sacrifice to his own personal position, merged
it with Vivendi because he felt it was in the best interest of his shareholders.
Instead of the easy shot and mostly mindless criticisms, it would be minimally
fair to look at the record of his accomplishments...
As to the future, I believe what we have all accomplished in being able to make
this announcement today is the best testament of its future workability...and
eventual success, for both Vivendi Universal and USAI."
TODAY'S TRANSACTION
ADDITIONAL INFORMATION ABOUT THE TRANSACTION CAN BE FOUND ON USA'S WEB SITE AT
WWW.USANETWORKS.COM.
DEAL SUMMARY
The transaction, with all its inherent complexity, is really quite simple:
1. USA and Vivendi will form a joint venture, which will own all USA's
entertainment assets and all Universal Studios' assets; Vivendi Universal will
own 93% of the joint
venture, with USA owning 5.4%. Barry Diller will also have an interest in the
joint venture;
2. In effect, USA will retire 377.5 million shares, or approximately 47% of
USA's outstanding shares. Therefore, USA will have 427.1 million shares
outstanding on a fully diluted treasury method basis;
3. USA will receive $1.62 billion in cash and $750 million full value preferred
interest;
4. USA will also own 5.4% of the joint venture, which USA values at
approximately $1 billion;
5. Vivendi will, on an economic basis, in effect no longer be a USA shareholder
(because the 56 million shares that they retain is committed to back a portion
of the preferred interest that USA will receive), except that Vivendi will
receive warrants to purchase 60 million shares of USA's Common Stock, and it
will retain the upside on the 56.6 million shares at prices above $41 per share;
6. If USA's shares trade at $40 per share, there will be approximately 3%
dilution relating to Vivendi's upside interests; at $75 per share, the dilution
is approximately 12%. This dilution is relatively modest because USA outstanding
stock base is relatively small;
7. If one assumes that USA has repurchased its own stock for $22 per share (a
relatively cheap price, in the context of this deal), the consideration received
by USA in the transaction is approximately $11.7 billion.
DETAILED DEAL DESCRIPTION
Through a series of transactions between Vivendi and USA Networks, and the
related transactions between Vivendi and Liberty Media, the following will
occur:
o USA will contribute to a newly-formed joint venture with Vivendi the
business of USA Entertainment, including the businesses acquired from
Universal in 1998. Vivendi will contribute the business of Universal
Studios Group.
o As a member of the joint venture, USA will receive various interests:
-- $1.62 billion cash distribution, subject to tax-deferred treatment
-- $2.5 billion face amount in two classes of preferred partnership
interests:
- $750 million in Class A preferred interests, with a 5% PIK
annual dividend, 20-year term, to be settled in cash
- $1.750 billion in Class B preferred interests, with a 3.6%
cash annual dividend and a 1.4% PIK annual dividend, 20-year
term, subject thereafter to a put/call arrangement with
Vivendi that can be settled with a maximum of 56.6 million
USA shares
-- A 5.4% common interest in the joint venture, with a current
notional value of $1 billion, callable by Vivendi after 5 years and
puttable by USA after 8 years, which may be settled in either Vivendi
stock or cash, at Vivendi's election.
o USA will issue to Vivendi 10-year warrants to acquire shares of USA common
stock, 24.2 million shares at $27.50; 24.2 million shares at $32.50 and
12.1 million shares at $37.50
o Mr. Diller will receive a 1.5% common participation interest in the joint
venture in connection with his agreeing to certain non-competition
provisions and agreeing to serve as the Chairman and CEO of the joint
venture.
o In connection with the transactions, USA will effectively retire 377.5
million USA common shares or common equivalents (including the 56.6 million
shares referred to above), including all of the exchangeable interests of
USANi LLC currently owned by Vivendi and Liberty
o USA and Mr. Diller have agreed that for a minimum of 18 months, they will
not compete with Vivendi Universal's television and filmed entertainment
businesses.
USA GOVERNANCE
The governance and shareholder arrangements among Mr. Diller, Vivendi and
Liberty have been substantially revised, with Mr. Diller having the ability to
exercise voting control over essentially all matters submitted to USA's
shareholders. Mr. Diller will continue to have a proxy with respect to all
shares of USA common and Class B stock owned by Vivendi and Liberty, which
voting power (together with shares owned by Mr. Diller) will represent
approximately 69% of the USA voting stock, after giving effect to the pending
transaction with Expedia. Vivendi and Liberty will each have the right to
appoint two members of the USA board.
SPECIAL COMMITTEE/APPROVAL PROCESS
In connection with the transaction, the Board of Directors appointed a special
committee of the USA Board to participate in the negotiation of the transaction,
evaluate the transaction on behalf of the company and its public stockholders
and make a recommendation to the USA Board regarding the transaction. The
special committee consisted of the independent directors of USA for these
purposes, consisting of William Savoy (who served as Chairman), Paul Allen,
General H. Norman Schwarzkopf, and Anne Busquet. The special committee retained
Bear, Stearns and Co., Inc. as financial advisors and also retained separate
legal counsel.
The special committee of the USA board, after receipt of a fairness opinion of
Bear, Stearns & Co., Inc., unanimously approved the transactions, recommended
that the USA board approve the transactions, which recommendation the USA board
adopted by unanimous vote (other than directors affiliated with Vivendi, who did
not participate). The USA board also received a fairness opinion from Allen &
Company, which, along
with JP Morgan Chase, advised USA on the transaction. The transaction is subject
to, among other conditions, approval of USA's unaffiliated shareholders. It is
expected that a USA shareholder meeting will be held in the second quarter of
2002.
USA INTERACTIVE: THE PROMISE OF INTEGRATED INTERACTIVITY
Integrated interactivity is the marketing of multiple products and services,
whether through dynamic packaging, richly merchandised offerings and deals, or
upselling of relevant goods and services to customers. User reviews and ratings,
directions, and relevant prompts from other USA Interactive companies are among
the interrelated offerings that can be pushed to consumers.
The businesses within USA Interactive have at least one very important shared
principle, that merchandising creates margins. With over 20 different products,
the Company combines the two decades of merchandising experience within HSN with
55 acquisitions of interactive businesses made since 1997. The businesses
comprising USA Interactive are as follows:
TICKETMASTER
TICKETMASTER.COM, LIVEDAILY.COM, ADMISSION.COM
Ticketmaster (NASDAQ: TMCS) is the world's leading ticketing and access company.
In 2000, Ticketmaster sold 83 million tickets valued at more than 3.2 billion
dollars, through approximately 3,300 retail Ticket Center outlets; 20 worldwide
telephone call centers; and ticketmaster.com. Ticketmaster serves more than
6,200 clients worldwide and acts as the exclusive ticketing service for hundreds
of leading arenas, stadiums, performing arts venues, and theaters.
Ticketmaster's new Ticketfast technology, allowing customers to print tickets at
home, is currently in 40 venues, including Madison Square Garden and LA's Staple
Center, and is targeted to be in 140 major venues by 2002. Ticketmaster was
formed through the combination of the operations of Ticketmaster
Online-Citysearch and Ticketmaster Corporation in January 2001 and renamed
Ticketmaster.
MATCH AND EVITE
MATCH.COM, ALTMATCH.COM, ONEANDONLY.COM, EVITE.COM
Match.com, the Internet's premiere matchmaking service, offers adults a
convenient, fun, and private environment for meeting other singles. Match.com
estimates it is responsible for arranging relationships for over 520,000
members, and has confirmed more than 1,100 marriages. The integration of the One
& Only Network has provided the company with a 170,000-member affiliate program
and a low cost customer acquisition tool. In addition, Match.com is the premier
provider of online personals and matchmaking services on MSN, the Microsoft
Network and America Online.
Evite is an event communication network designed to give people all the tools
they need to plan, host or attend any type of group gathering. Whether it's an
activity for five people or five hundred, Evite helps individuals manage event
communication and access all the resources necessary for successful activity
planning. In April, 1.5 million invitations were sent using Evite. Last month,
5.5 million were sent.
CITYSEARCH
CITYSEARCH.COM
Citysearch is a leading local network enabling people to get the most out of
their city. Providing online city guides for 42,000 zip codes in 128 cities
worldwide, Citysearch.com helps people find and plan what they want to do and
then lets them take action, offering local transactions such as buying event
tickets and making hotel and restaurant reservations online. Citysearch
currently covers 11 million listings in 230 categories including local events,
organizations and businesses.
TICKETWEB, RESERVEAMERICA, TM VISTA, ACTIVE.COM
TICKETWEB.COM, RESERVEAMERICA.COM, MUSEUMTIX.COM, ACTIVE.COM
The Ticketmaster Access Group provides ticketing and access solutions worldwide
and is part of Ticketmaster, the world's leading ticketing and access company.
The Company estimates the access market is a $80 billion market opportunity.
TicketWeb and TM VISTA represent more than 800 top-tier clients and are leading
providers of ticketing solutions for small and medium size venues.
ReserveAmerica is North America's leading camping reservation and campground
management solutions provider representing 150,000 campsites in 44 states,
conducting 3 million transactions a year. The Active Network, Inc., represents
more than 20,000 events and leagues and is a leading provider of technology and
marketing solutions for the participatory sports and recreation industry.
TicketWeb, TM VISTA and ReserveAmerica are wholly-owned subsidiaries of
Ticketmaster and the Company holds an equity investment in The Active Network,
Inc. The combination of these companies comprise Ticketmaster's Access Group.
HSN
HSN.COM, ABCSHOWSTORE.COM, COOLCULTURE2GO.COM, HSE.IT,HSE.DE, HSE.NL, HSE.FR,
HSE24.CO.UK, IMPROVEMENTSCATALOG.COM, LIQUIDLASER.TV, SHOPCHANNEL.CO.JP,
USOPENSTORE.COM
HSN pioneered the electronic retailing industry in 1977 and has since grown into
a global multichannel retailer with worldwide consolidated sales of $1.9 billion
in 2000 and a growing customer base of over five million. Its 24-hour
programming reaches 160 million households worldwide. The Company holds
interests in international shopping channels broadcasting into 14 countries and
8 languages including China, Japan, Germany, Italy, France, Belgium and the
Netherlands and also owns and produces Home Shopping Espanol. Last year, HSN
received more than 75 million sales and customer service calls and shipped more
than 41 million packages around the world.
HSN.com launched in September 1999 and became profitable within three months by
giving consumers an incremental shopping platform to the already-existing TV and
direct mail channels. Users can simultaneously shop, chat and interact with
their favorite show hosts while watching HSN TV on one of the Internet's fastest
growing sites, creating a near-broadband experience. Hsn.com is quickly added to
HSN's customer base, as approximately 40% of HSN.com customers have never bought
on HSN TV, while customers who buy from both HSN TV and HSN.com buy
approximately 20% more than those who buy from HSN TV alone.
EXPEDIA (PENDING)
EXPEDIA.COM, EXPEDIA.CA, EXPEDIA.CO.UK, EXPEDIA.DE, EXPEDIA.IT, EXPEDIA.NL,
EXPEDIA.VOYAGES-SNCF.COM, VACATIONSPOT.COM
Expedia, Inc. (Nasdaq: EXPE) operates the Expedia.com(R), an independent leading
online travel service in the United States with localized versions for travelers
in Canada, Germany, the United Kingdom, France, Italy and the Netherlands. To
help customers travel right, Expedia provides the best combination of air, car,
hotel, vacation package and cruise offers along with destination information and
point-to-point mapping. Of the 50,000 hotels available through Expedia, more
than 3000 offer Expedia Special Rates. This extensive merchant inventory,
combined with its broad choice and control are the basis for which Expedia has
been recognized with several awards and is ranked the seventh largest travel
agency in the U.S. according to Travel Weekly Magazine.
HRN
180096HOTEL.COM, HOTELDISCOUNT.COM, CONDOSAVER.COM, ALLLUXURYHOTELS.COM,
TRAVELNOW.COM, ACENETHOTELS.COM
Hotel Reservations Network (NASDAQ: ROOM) is the number one consolidator of
discount hotel accommodations worldwide, providing service through its own Web
sites, more than 23,000 affiliated websites and leading portal partners, and
several toll-free call centers (1-800-96HOTEL). HRN provides travelers with a
one-stop shopping source for hotel pricing, amenities and availability. HRN also
specializes in providing travelers with accommodations for sold-out periods in
major cities.
PRECISION RESPONSE CORPORATION
PRCNET.COM
Precision Response Corporation is a proven, experienced and global leader in
Customer Relationship Management (CRM) and outsourced customer care. Using the
most advanced CRM technologies, PRC provides a fully integrated mix of
traditional call center and e commerce customer care services. PRC designed PRC
Netpro, a proactive online customer acquisition tool and was the first to
provide real-time live customer support over the Internet via the
"click-to-talk," "click-to-email," and "click-to-chat" functions. The Company
provides its customers, who include American Express, AT&T, British Airways, and
DIRECTV, with better pre- and post-sales customer relationships.
Headquartered in Fort Lauderdale, Florida, PRC currently employs over 12,000 CRM
professionals worldwide.
ELECTRONIC COMMERCE SOLUTIONS AND STYLECLICK
MVP.SPORTSLINE.COM, NBA.COM, CBS SPORTSLINE.COM, STORE.NASCAR.COM,
PGATOURSTOP.COM, SHOP.NHL.COM, SIGNUP.JEFFGORDON.COM
USA's Electronic Commerce Solutions (ECS) provides commerce and marketing
solutions for third party clients. ECS offers clients access to the resources of
USA Interactive companies and uses proprietary database direct marketing
technology to deliver targeted sales for clients. By delivering the context,
distribution verticals, merchandising, database marketing, teleservicing and
CRM, ECS creates highly scalable, multi-channel, commerce-driven solutions to
expand sales for clients across any industry. With more than 20 years of
experience in electronic retailing and media, ECS manages commerce on four of
the Internet's top sports sites; NBA.com, CBS SportsLine.com, NASCAR.com and
PGATOUR.COM. The Company's database includes 65 million names, 30 million email
addresses, sending over 20 million emails a month.
Styleclick, Inc. (NASDAQ: IBUY) provides e-commerce services and technology
enabling companies to sell online. Styleclick integrates its online storefront
application and merchandising and inventory management technology with detailed
reporting systems and back-end fulfillment and customer care to create
feature-rich commerce-driven offerings to help clients expand sales to customers
across the Web. Styleclick's technology platform has proven scalability and
leverages a central CRM-driven database for comprehensive consumer profiling and
direct marketing capabilities. Included among Styleclick's roster of clients is
an alliance with Electronic Commerce Solutions (ECS) to which Styleclick
provides e-commerce enabling technology for select ECS third-party clients.
NOTE: EXCEPT WHERE INDICATED, ALL RELEVANT NUMBERS IN THIS RELEASE ASSUME
CLOSING OF THE EXPEDIA TRANSACTION, WHICH IS PENDING.
CERTAIN OF THE URLS LISTED IN THIS PRESS RELEASE ARE OWNED BY PARTNERS OF HSN
AND ECS.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS IN
THIS PRESS RELEASE INCLUDE INFORMATION RELATING TO POSSIBLE OR ASSUMED FUTURE
RESULTS OF OPERATIONS OF USA AFTER GIVING EFFECT TO THE TRANSACTION DISCUSSED
HEREIN. THESE FORWARD-LOOKING STATEMENTS ARE NECESSARILY ESTIMATES REFLECTING
THE BEST JUDGMENT OF THE SENIOR MANAGEMENT OF USA AND INVOLVE A NUMBER OF RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE SUGGESTED BY THE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS SHOULD, THEREFORE, BE CONSIDERED IN LIGHT OF VARIOUS IMPORTANT
FACTORS, INCLUDING THOSE SET FORTH HEREIN AND IN THE DOCUMENTS USA FILES WITH
THE SECURITIES AND EXCHANGE COMMISSION. IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM ESTIMATES OR PROJECTIONS CONTAINED IN
THE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION: MATERIAL ADVERSE
CHANGES IN ECONOMIC CONDITIONS GENERALLY OR IN THE MARKETS SERVED BY USA,
MATERIAL CHANGES IN INFLATION, FUTURE REGULATORY AND LEGISLATIVE ACTIONS
AFFECTING USA'S OPERATING AREAS, COMPETITION FROM OTHERS, PRODUCT DEMAND AND
MARKET ACCEPTANCE, THE ABILITY TO PROTECT PROPRIETARY INFORMATION AND TECHNOLOGY
OR TO OBTAIN NECESSARY LICENSES ON COMMERCIALLY REASONABLE TERMS, THE ABILITY TO
EXPAND INTO AND SUCCESSFULLY OPERATE IN FOREIGN MARKETS, AND OBTAINING AND
RETAINING SKILLED WORKERS AND KEY EXECUTIVES. THE WORDS "ESTIMATE," "PROJECT,"
"INTEND," "EXPECT," "BELIEVE"
AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. USA DOES NOT UNDERTAKE ANY
OBLIGATION TO UPDATE OR REVISE THESE FORWARD-LOOKING STATEMENTS, WHETHER AS A
RESULT OF NEW INFORMATION, FUTURE EVENTS OR ANY OTHER REASON.
USA NETWORKS, INC. ("USA") AND EXPEDIA, INC. ("EXPEDIA") HAVE FILED A JOINT
PROSPECTUS/PROXY STATEMENT AND WILL FILE OTHER RELEVANT DOCUMENTS CONCERNING
USA'S ACQUISITION OF EXPEDIA WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC"). INVESTORS ARE URGED TO READ THE JOINT PROSPECTUS/PROXY STATEMENT AND
ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED IN THE FUTURE WITH THE SEC
BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT INFORMATION. INVESTORS WILL BE ABLE TO
OBTAIN SUCH DOCUMENTS FREE OF CHARGE AT THE SEC'S WEBSITE AT WWW.SEC.GOV. IN
ADDITION, SUCH DOCUMENTS MAY ALSO BE OBTAINED FREE OF CHARGE BY CONTACTING USA
NETWORKS, INC., 152 WEST 57TH STREET, NEW YORK, NEW YORK, 10019, ATTENTION:
INVESTOR RELATIONS, OR EXPEDIA, INC., 13810 SE EASTGATE WAY, SUITE 400,
BELLEVUE, WA 98005, ATTENTION: INVESTOR RELATIONS.
USA will file a proxy statement and other relevant documents concerning USA's
contribution of its Entertainment Group to a joint venture with Vivendi
Universal with the Securities and Exchange Commission ("SEC"). INVESTORS ARE
URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO
BE FILED IN THE FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain such documents free of charge at
the SEC's website at www.sec.gov. In addition, such documents may also be
obtained free of charge by contacting USA Networks, Inc., 152 West 57th Street,
New York, New York, 10019, Attention: Investor Relations.
USA and its directors and officers may be deemed to be participants in the
solicitation of proxies from USA shareholders to adopt the agreement providing
for USA's contribution of its Entertainment Group to a joint venture with
Vivendi Universal. A detailed list of the names and interests of USA's directors
and executive officers is contained in the definitive proxy statement on
Schedule 14A filed by USA with the SEC on April 9, 2001. Copies of USA filings
may be obtained free of charge at the SEC's website at www.sec.gov.
CONTACTS: USA COMMUNICATIONS: USA INVESTOR RELATIONS:
Ron Sato/Adrienne Becker Lauren Rosenfield/Roger Clark
212-314-7254 212-314-7400
USA PRESS CONFERENCE:
Immediately following the press conference announcing the joint venture formed
by Vivendi Universal and USA Networks, Inc., USA Chairman and CEO Barry Diller
will hold a press conference to discuss USA Networks' name change and plans for
interactive leadership going forward.
WHERE: St. Regis Hotel, Versailles Room, 2 East 55th Street, New York
WHEN: 11:30 am EST
AUDIOCAST: 1-888-390-0872 (DOMESTIC)
(712) 271-0581 (INTERNATIONAL)
PASS CODE: USA
EXHIBIT 2
SUPPLEMENTAL FINANCIAL INFORMATION
USA INTERACTIVE
REVENUE - OPERATING BUDGET
(PRO FORMA $ IN MILLIONS)
Growth
----------------------------
2001 2002 2003 '01 - '02 '02 - '03
------------ ------------ ------------ ------------ ------------
OPERATING BUSINESSES
HSN - US $ 1,555 $ 1,843 $ 2,070 19% 12%
HSN - Germany 294 374 450 27% 20%
Ticketing 578 620 680 7% 10%
Hotel Reservations 510 700 980 37% 40%
Expedia (a) 280 360 470 29% 31%
Precision Response 303 352 440 16% 25%
Match.com 45 60 80 33% 33%
------------ ------------ ------------ ------------ ------------
SUBTOTAL 3,565 4,309 5,170 21% 20%
EMERGING BUSINESSES
Citysearch & related 47 50 70 6% 40%
HSN - Other International 27 45 60 67% 33%
ECS/ Styleclick 45 74 117 64% 58%
------------ ------------ ------------ ------------ ------------
SUBTOTAL 119 169 247 42% 46%
Non-recurring items (d) 0 0 0
Foreign exchange conversion (b) (58) (91) (110)
Disengaged HSN homes (c) 108 0 0
Intersegment elimination (5) (10) (10)
------------ ------------ ------------ ------------ ------------
TOTAL $ 3,729 $ 4,377 $ 5,297 17% 21%
============ ============ ============ ============ ============
BY GROUP -- Operating Businesses
Electronic Retailing $ 1,849 $ 2,217 $ 2,520 20% 14%
Information & Services 1,716 2,092 2,650 22% 27%
------------ ------------ ------------ ------------ ------------
$ 3,565 $ 4,309 $ 5,170 21% 20%
============ ============ ============ ============ ============
USA INTERACTIVE
EBITDA - OPERATING BUDGET
(PRO FORMA $ IN MILLIONS)
Growth
----------------------------
2001 2002 2003 '01 - '02 '02 - '03
------------ ------------ ------------ ------------ ------------
OPERATING BUSINESSES
HSN - US $ 216 $ 285 $ 350 32% 23%
HSN - Germany 12 38 47 230% 24%
Ticketing 105 125 145 19% 16%
Hotel Reservations 73 87 120 19% 38%
Expedia (a) 42 60 85 43% 42%
Precision Response 37 41 61 9% 50%
Match.com 14 20 30 43% 50%
Corporate and other (33) (34) (36) -3% -6%
------------ ------------ ------------ ------------ ------------
SUBTOTAL 466 622 802 32% 29%
EMERGING BUSINESSES
Citysearch & related (45) (30) (13)
HSN - Other International (26) (20) (20)
READ IMPORTANT FOOTNOTES AND DISCLAIMER.
As furnished to the Securities and Exchange Commission on December 17, 2001. 1
ECS/ Styleclick (49) (19) (6)
------------ ------------ ------------
SUBTOTAL (120) (69) (39)
Non-recurring items (d) (17) 0 0
Foreign exchange conversion (b) (4) (9) (11)
Disengaged HSN homes (c) 15 0 0
------------ ------------ ------------ ------------ ------------
TOTAL $ 340 $ 544 $ 752 60% 38%
============ ============ ============ ============ ============
BY GROUP -- Operating Businesses
Electronic Retailing $ 228 $ 323 $ 397 42% 23%
Information & Services 272 333 441 22% 33%
Corporate and other (33) (34) (36) -2% -6%
------------ ------------ ------------ ------------ ------------
$ 467 $ 622 $ 802 33% 29%
============ ============ ============ ============ ============
(a) EXPEDIA ESTIMATES ARE PRO FORMA FOR USA'S ACQUISITION OF EXPEDIA.
(b) TO PRESENT COMPARABLE RESULTS FOR HSN GERMANY, THE RESULTS HAVE BEEN
TRANSLATED FROM EUROS TO U.S. DOLLARS AT A CONSTANT EXCHANGE RATE.
(c) REFLECTS RESULTS GENERATED BY HOMES LOST BY HSN FOLLOWING DISENGAGEMENT OF
USA BROADCASTING TO UNIVISION.
(d) 2001 AND 2000 NON-RECURRING ITEMS REFLECT ONE-TIME INCOME AND EXPENSE
ITEMS. FOR 2001, $17 MILLION OF EXPENSE WAS RECORDED FOR NON-RECURRING
COSTS RELATED TO RESTRUCTURING OPERATIONS, EMPLOYEE TERMINATIONS, AND
BENEFITS. FOR 2000, $6 MILLION OF EXPENSE RELATES TO ONE-TIME EXPENSES OF
THE TICKETMASTER AND TMCS MERGER, AN EXECUTIVE CONSULTING ARRANGEMENT AS
PART OF A RESIGNATION AGREEMENT, OFFSET BY A ONE-TIME CREDIT RECOGNIZED BY
HSN IN CONNECTION WITH A FAVORABLE SETTLEMENT.
USA INTERACTIVE
IMPLIED VALUE OF HSN, PRC, ECS
(ALL FIGURES ASSUME COMPLETION OF THE EXPEDIA TRANSACTION)
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
------------ ------------ ------------
PRO FORMA SHARE PRICE $ 24.00 $ 28.00 $ 30.00
------------ ------------ ------------
Pro Forma shares outstanding calculation (using treasury dilution method)
Shares outstanding prior to transaction 804.6 808.4 810.3
Shares retired (320.9) (320.9) (320.9)
Shares underlying Partnership Series B Preferred (56.6) (56.6) (56.6)
Dilution from new warrants issued to VU -- 0.4 2.0
------------ ------------ ------------
PRO FORMA SHARES OUTSTANDING 427.1 430.9 434.9
Market Capitalization $ 10,251 $ 12,065 $ 13,046
Net debt prior to transaction (a) 56 56 56
------------ ------------ ------------
ENTERPRISE VALUE $ 10,307 $ 12,121 $ 13,102
PUBLIC COMPANY VALUES PRICE (b) SHARES VALUE
------------ ------------ ------------
Ticketmaster $ 16.16 95.5 1,543
HRN $ 38.23 39.0 1,491
Expedia $ 36.76 37.5 1,379
------------ ------------ ------------
$ 4,413 $ 4,413 $ 4,413
SECURITIES RECEIVED IN TRANSACTION:
Cash from partnership distribution 1,619
Series A Preferred 750
5.4% Partnership Interest (c) 1,000
------------ ------------ ------------
$ 3,369 $ 3,369 $ 3,369
VALUE OF PUBLIC SUBSIDIARIES AND SECURITIES $ 7,781 $ 7,781 $ 7,781
IMPLIED VALUE OF HSN, PRC AND ECS $ 2,526 $ 4,339 $ 5,320
2
2002 EBITDA Multiple (d) $ 364 6.9 x 11.9 x 14.6 x
(a) INCLUDES FACE VALUE OF PREFERRED STOCK TO BE ISSUED AS PART OF EXPEDIA
TRANSACTION.
(b) CLOSING PRICES AS OF 12/14/01.
(c) THE VALUE OF USAI'S INTEREST IN THE PARTNERSHIP IS BASED ON AN ASSUMED $22
BILLION PRIVATE MARKET VALUE FOR THE ASSETS.
(d) INCLUDES CONSOLIDATED EBITDA FROM HSN GERMANY. DOES NOT INCLUDE EMERGING
BUSINESSES.
USA INTERACTIVE
TRANSACTION VALUE BUILDUP
(ALL FIGURES ASSUME COMPLETION OF THE EXPEDIA TRANSACTION)
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
TRANSACTION VALUE SHARES PRICE VALUE
--------------------------------------------- ------------ ------------ ------------
Shares retired 320.9 $ 22.00 $ 7,059
Shares underlying preferred (a) 56.6 22.00 1,245
------------ ------------ ------------
TOTAL SHARES RETIRED 377.5 $ 22.00 8,304
Cash from partnership distribution 1,619
Series A Preferred 750
5.4% Partnership Interest (b) 1,000
------------
$ 3,369
------------
TOTAL VALUE RECEIVED $ 11,673
============
EXERCISE
WARRANTS ISSUED TO VU WARRANTS PRICE
----------------------------------------------- ------------ ------------
24.2 $ 27.50
24.2 32.50
12.1 37.50
56.6 (a) 40.82
------------ ------------
117.1 $ 36.01
DILUTION AT VARIOUS SHARE PRICES (c) SHARES DILUTION
----------------------------------------------- ------------ ------------
$ 30.00 0.5%
40.00 2.9%
50.00 7.1%
75.00 12.5%
100.00 14.9%
(a) THE $1.75 BILLION FACE VALUE SERIES B PREFERRED IS CONVERTIBLE INTO A
MAXIMUM OF 56.6 USAI SHARES AT MATURITY. WE BELIEVE THAT THE BEST WAY TO
LOOK AT THE STOCK PORTION OF THIS SECURITY IS TO TREAT 56.6 SHARES AS
RETIRED AND CREDIT VU WITH AN ADDITIONAL 56.6 WARRANTS WITH A $40.82
EXERCISE PRICE.
(b) THE VALUE OF USAI'S INTEREST IN THE PARTNERSHIP IS BASED ON AN ASSUMED $22
BILLION PRIVATE MARKET VALUE FOR THE ASSETS.
(c) REPRESENTS ADDITIONAL DILUTION OF USAI SHAREHOLDERS AS A RESULT OF THE
WARRANTS ISSUED TO VU AT VARIOUS USAI SHARE PRICES.
USA INTERACTIVE
IMPLIED SHARE PRICE
(ALL FIGURES ASSUME COMPLETION OF THE EXPEDIA TRANSACTION)
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Pro Forma 2003 EBITDA - Operating Businesses $ 802 $ 802 $ 802
EBITDA Multiple 9.2 x 12.1 x 15.0 x
------------ ------------ ------------
3
ENTERPRISE VALUE $ 7,370 $ 9,732 $ 12,030
Net debt (a) (56) (56) (56)
Cash from partnership distribution 1,619 1,619 1,619
Series A Preferred 750 750 750
5.4% Partnership Interest (b) 1,000 1,000 1,000
------------ ------------ ------------
IMPLIED MARKET CAPITALIZATION $ 10,683 $ 13,045 $ 15,343
Pro Forma shares outstanding (treasury method) 427.4 434.9 443.0
IMPLIED PRICE PER SHARE $ 25.00 $ 30.00 $ 34.64
============ ============ ============
(a) INCLUDES FACE VALUE OF PREFERRED STOCK TO BE ISSUED AS PART OF EXPEDIA
TRANSACTION.
(b) THE VALUE OF USAI'S INTEREST IN THE PARTNERSHIP IS BASED ON AN ASSUMED $22
BILLION PRIVATE MARKET VALUE FOR THE ASSETS.
USA INTERACTIVE
TOTAL CAPACITY AND LIQUIDITY
(ALL FIGURES ASSUME COMPLETION OF THE EXPEDIA TRANSACTION)
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
DEBT CAPACITY FROM OPERATIONS $ 1,200 (a)
Cash and cash equivalents on balance sheet:
Cash on balance sheet, net of debt outstanding (b) 600
Cash from partnership distribution 1,619
Series A Preferred (c) 750
------------
TOTAL CASH EQUIVALENTS ON BALANCE SHEET $ 2,969
------------
TOTAL LIQUIDITY $ 4,169
============
(a) BORROWING CAPACITY BASED ON NOT HAVING DEBT EXCEED 2 TIMES OPERATING
EBITDA.
(b) DOES NOT INCLUDE EXPEDIA PREFERRED, WHICH IS CONVERTIBLE EQUITY INSTRUMENT.
(c) USA INTERACTIVE BELIEVES IT WILL BE ABLE TO MONETIZE THE PREFERRED AT FULL
FACE VALUE.
IMPORTANT
This presentation contains forward looking statements relating to possible or
assumed future results of USAi. It reflects the current views of USAi with
respect to future events, and is subject to risks that could cause future
results to materially differ. These risks are described in USAi's Securities and
Exchange Commission filings. Information contained herein about entities other
than USAi has been obtained from sources believed to be reliable, but no
independent verification has been made and no representation is made as to its
accuracy or completeness. Any statements non-factual in nature constitute
current opinions, which are subject to change without notice. The forward
looking statements and opinions in this presentation are made as of the date of
this presentation, and USAi undertakes no obligation to update or revise them
for any reason. These statements do not include the potential impact of any
mergers, acquisitions or other business combinations that may be completed in
the future other than previously announced pending acquisitions. This
presentation reflects estimates that USAi is comfortable releasing to
analysts and the public as of the date hereof.
USA Networks, Inc. ("USA") and Expedia, Inc. ("Expedia") have filed a joint
prospectus/proxy statement and will file other relevant documents concerning
USA's acquisition of Expedia with the Securities and Exchange Commission
("SEC"). INVESTORS ARE URGED TO READ THE JOINT PROSPECTUS/PROXY AND INFORMATION
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED IN THE FUTURE
WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT INFORMATION. Investors
will be able to obtain such documents free of charge at the SEC's website at
www.sec.gov. In addition, such documents may also be obtained free of charge by
contacting USA Networks, Inc., 152 West 57th Street, New York, New York, 10019,
Attention: Investor Relations, or Expedia, Inc., 13810 SE Eastgate Way, Suite
400, Bellevue, WA 98005, Attention: Investor Relations.
USA will file a proxy statement and other relevant documents concerning USA's
contribution of its Entertainment Group to a joint venture with Vivendi
Universal with the Securities and Exchange Commission ("SEC"). INVESTORS ARE
URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO
BE FILED IN THE FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain such documents free of charge at
the SEC's website at www.sec.gov. In addition, such documents may also be
obtained free of charge by contacting USA Networks, Inc., 152 West 57th Street,
New York, New York, 10019, Attention: Investor Relations.
USA and its directors and officers may be deemed to be participants in the
solicitation of proxies from USA shareholders to adopt the agreement providing
for USA's contribution of its Entertainment Group to a joint venture with
Vivendi Universal. A detailed list of the names and interests of USA's directors
and executive officers is contained in the definitive proxy statement on
Schedule 14A filed by USA with the SEC on April 9, 2001. Copies of USA filings
may be obtained free of charge at the SEC's website at www.sec.gov.
4
EXHIBIT 3
Slide 1: Integrated Interactivity
Electronic Retailing
(logos) HSN, America's Store, Home Shopping Espanol, Shop Channel, HSN.com,
TVSN, Home Shopping Europe
Information & Services
(logos) Ticketmaster, Match.com, Citysearch, HRN, USA ECS, Styleclick, PRC,
Expedia, Inc. (transaction pending)
Pro forma for pending Expedia transaction. Includes some companies majority or
partially owned by USA.
Prepared 12/17/01 - Read important disclaimer.
Slide 2: Revenue Growth - Operating Businesses
$ in millions
20% Average Annual Growth
CAGR 2000 - 2003
2000 $3,005
2001E $3,565
2002E $4,309
2003E $5,170
Source: USA operating budget as furnished to the SEC on October 24, 2001. Pro
forma for pending Expedia transaction.
Prepared 12/17/01 - Read important disclaimer.
Slide 3: EBITDA Growth - Operating Businesses
$ in millions
29% Average Annual Growth
CAGR 2000 - 2003
2000 $374
2001E $466
2002E $622
2003E $802
Source: USA operating budget as furnished to the SEC on October 24, 2001. Pro
forma for pending Expedia transaction.
Prepared 12/17/01 - Read important disclaimer.
Slide 4: Margin Expansion - Operating Businesses
2000 12.4%
2001E 13.1%
2002E 14.4%
2003E 15.5%
Source: USA operating budget as furnished to the SEC on October 24, 2001. Pro
forma for pending Expedia transaction.
Prepared 12/17/01 - Read important disclaimer.
Slide 5: Diverse Business Mix
Electronic Retailing 51%
Ticketing 16%
Online Hotel Reservations 14%
Online Travel 8%
Cityguides 1%
Personals 1%
Commerce Services 9%
Source: USA operating budget as furnished to the SEC on October 24, 2001. Pro
forma for pending Expedia transaction.
Prepared 12/17/01 - Read important disclaimer.
Slide 6: Where the World is Going
Revenue Through the Screen
Television and Internet Consumer-related Revenues (U.S.)
Subscriptions
Advertising Transactions / Fees Total
2000 80% 11% 9% $47 B
2005 45% 39% 16% $134 B
2010 25% 61% 15% $275 B
Compiled estimates per MSDW, Jupiter, Shop.org, McCann Erickson, Zenith Media,
Paul Kagan, Prudential, Furman Selz, PaineWebber, SSB, and Forrester.
Prepared 12/17/01 - Read important disclaimer.
Slide 7: Leading in Growth Categories
(pie chart - largest to smallest slices):
USA businesses: Travel, Computer Hardware Software & Electronics, TV Elec.
Retailing, Other Commerce, Mass Merch., Apparel, Home / Office, Event Tickets,
Personals
Other businesses: Financial Services, Auctions, Books, Music & Video, Flowers &
Cards, Jobs Classifieds, Automobile, Real Estate Classifieds
Source: Shop.org, Jupiter, MSDW , Prudential, Furman Selz, Painewebber, SSB, SEC
filings and Match.com and other internal estimates.
Prepared 12/17/01 - Read important disclaimer.
Slide 8: 9% of Transactions through Screen
USA's Share of Interactive Commerce
Gross value of transactions
(bar chart):
Today = 9%
Goal = 20%
Compiled estimates per MSDW, Jupiter, Shop.org, McCann Erickson, Zenith Media,
Paul Kagan, Prudential, Furman Selz, PaineWebber, SSB, and Forrester. Pro forma
for pending Expedia transaction.
Prepared 12/17/01 - Read important disclaimer.
Slide 9: 2nd Most Profitable in Online Commerce
5 Profitable Internet Businesses
Estimated 2002E EBITDA ($ in millions)
eBay - $368
USA - $250
TMP Inter. - $182
iQVC - $123
Amazon - $93
Yahoo - $69
Travelocity - $41
1800Flowers - $25
Priceline - $12
Homestore - $10
CNET - ($19)
Terra-Lycos - ($75)
(logos) Expedia, Inc. (transaction pending), Match.com, HSN.com,
Ticketmaster.com, Hotel Reservations Network
USA Internet Commerce Group consists of HSN.com, Hotel Reservations Network,
Ticketmaster.com, Match.com and Expedia (transaction pending). Unaudited
estimates for other companies based on various analyst reports.
Prepared 12/17/01 - Read important disclaimer.
Slide 10: Massive Infrastructure
Retail value of transactions $8 billion
Inbound phone minutes 1 billion
Orders processed 83 million
Credit card transactions 68 million
Items shipped 40 million
Customer service centers 30
Fulfillment centers square feet 2.5 million
Customer database 65 million
Unaudited estimates and pro forma for pending Expedia transaction. Includes data
for companies majority owned by USA. Operating estimates for the next twelve
months.
Prepared 12/17/01 - Read important disclaimer.
Slide 11: Leading Consumer Brands
(logo) HSN - On-air / online retail
(logo) Ticketmaster - Online ticketing
(logo) Citysearch.com - Online city guides
(logo) Match.com - Online paid personals
(logo) Hotel Reservations Network - Online hotels
(logo) Expedia, Inc. (transaction pending) - Online travel agent / packaged
vacations
Prepared 12/17/01 - Read important disclaimer.
Slide 12: Direct Marketing = Huge Upside
Customer Database = 65 mm Names
- (logo) Expedia, Inc. (transaction pending)
- (logo) USA ECS
- (logo) Home Shopping Network
- (logo) HSN.com
- (logo) Match.com
- (logo) ReserveAmerica
- (logo) Ticketmaster
- (logo) Citysearch.com
Prepared 12/17/01 - Read important disclaimer.
Slide 13: Important
This presentation contains forward looking statements relating to possible or
assumed future results of USAi. It reflects the current views of USAi with
respect to future events, and is subject to risks that could cause future
results to materially differ. These risks are described in USAi's Securities
and Exchange Commission filings. Information contained herein about entities
other than USAi has been obtained from sources believed to be reliable, but
no independent verification has been made and no representation is made as to
its accuracy or completeness. Any statements non-factual in nature constitute
current opinions, which are subject to change without notice. The forward
looking statements and opinions in this presentation are made as of the date
of this presentation, and USAi undertakes no obligation to update or revise
them for any reason. These statements do not include the potential impact of
any mergers, acquisitions or other business combinations that may be
completed in the future other than previously announced pending acquisitions.
This presentation reflects estimates that USAi is comfortable releasing to
analysts and the public as of the date hereof.
Prepared 12/17/01 - Read important disclaimer.
Slide 14: Important
USA Networks, Inc. ("USA") and Expedia, Inc. ("Expedia") have filed a joint
prospectus/proxy statement and will file other relevant documents concerning
USA's acquisition of Expedia with the Securities and Exchange Commission
("SEC"). INVESTORS ARE URGED TO READ THE JOINT PROSPECTUS/PROXY AND
INFORMATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED
IN THE FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain such documents free of charge
at the SEC's website at www.sec.gov. In addition, such documents may also be
obtained free of charge by contacting USA Networks, Inc., 152 West 57th
Street, New York, New York, 10019, Attention: Investor Relations, or Expedia,
Inc., 13810 SE Eastgate Way, Suite 400, Bellevue, WA 98005, Attention:
Investor Relations.
Prepared 12/17/01 - Read important disclaimer.
Slide 15: Important
USA will file a proxy statement and other relevant documents concerning
USA's contribution of its Entertainment Group to a joint venture with
Vivendi Universal with the Securities and Exchange Commission ("SEC").
INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS FILED OR TO BE FILED IN THE FUTURE WITH THE SEC BECAUSE THOSE
DOCUMENTS CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain
such documents free of charge at the SEC's website at www.sec.gov. In
addition, such documents may also be obtained free of charge by contacting
USA Networks, Inc., 152 West 57th Street, New York, New York, 10019,
Attention: Investor Relations.
USA and its directors and officers may be deemed to be participants in the
solicitation of proxies from USA shareholders to adopt the agreement
providing for USA's contribution of its Entertainment Group to a joint
venture with Vivendi Universal. A detailed list of the names and interests
of USA's directors and executive officers is contained in the definitive
proxy statement on Schedule 14A filed by USA with the SEC on April 9, 2001.
Copies of USA filings may be obtained free of charge at the SEC's website at
www.sec.gov.
Prepared 12/17/01--Read important disclaimer.