TV and Web operations will end on June 22. Scripps is looking for new programming for its five stations that are on the block.
The E. W. Scripps Co., citing ongoing operating losses and the absence of a suitable buyer for the business, announced today that it is ceasing all operations of its Shop At Home television and online retailing subsidiary.
Broadcasts of Shop At Home television programming and operation of the network’s Web site—ShopAtHomeTV.com—will be discontinued on June 22.
Shop At Home will remain in business through June 30 to allow time for the delivery of retail products purchased by consumers during the final days of broadcast and online sales.
Scripps is exploring programming alternatives for the five Shop At Home-affiliated television stations that it acquired in 2004. The company, which intends to sell the stations, will keep them on the air after the Shop At Home broadcasts are discontinued. The Shop At Home-affiliated television stations, which are located in San Francisco, Boston, Cleveland, Raleigh-Durham, N.C. and Bridgeport, Conn., reach about 5 million television households.
“This is not the outcome we had hoped for when we acquired Shop At Home nearly four years ago,” said Kenneth W. Lowe, president and chief executive officer for Scripps. “Despite the best efforts and fine work of many dedicated people, Shop At Home was unable to surmount some fundamental weaknesses that have blocked its path to profitability. I’d like to extend my deepest thanks to all of those who did their best to make this idea work.”
Scripps anticipates that it will record an after-tax loss in the second quarter of up to $60 million, reflecting operating results, cash expenses related to closing the business and a partial write-down in the value of Shop At Home’s assets.
In the first quarter 2006, the Scripps board of directors authorized management to pursue a sale of Shop At Home. As a result, Shop At Home’s first quarter financial results were classified under discontinued operations as required under generally accepted accounting principles.
Scripps acquired Shop At Home in two transactions with a total value of about $285 million. The company acquired controlling interest of the television network in October 2002 and in April 2004 acquired the remaining minority interest and five Shop At Home-affiliated broadcast television stations. Shop At Home, which was not profitable when it was acquired by Scripps, has incurred $84 million in losses over the four-year period as the company worked to execute its television retailing strategy.
Shop At Home’s employees were notified of the intended closing today under the Worker Adjustment and Retraining Notification (WARN) Act. In addition to being paid during the 60-day WARN period, Shop At Home employees will be receiving severance packages and a range of career transition services from Scripps. Shop At Home has 660 full-time employees.
Scripps said that letters of notification also will be sent to vendors and suppliers who do business with Shop At Home, as well as cable and satellite television services that carry the network’s programming. The company said: “Shop At Home intends to honor all of its contractual commitments to vendors and suppliers.”