Liberty, Comcast Ready to Shop QVC

Push is coming to shove at QVC, but the billion-dollar question -- Who will end up controlling the home shopping channel? -- is far from settled.

John Malone-led Liberty Media (L), which owns 42% of the shopping channel, said Monday it had started the clock for transforming the ownership structure of QVC, the balance of which is owned by cable colossus Comcast (CMCSA).

As the end of the process, QVC -- valued by Wall Street at north of $12 billion -- could end up in one of three new situations. The company could end up wholly owned by either Comcast or Liberty, or it could be sold off to a third party. In any case, a coming transaction stands to have a major impact on the media landscape. Liberty's sale of its QVC stake, for example, could strengthen a bid for direct broadcast satellite operator Hughes Electronics (GMH). On the other hand, a Liberty purchase of Comcast's stake would indicate a Hughes bid is unlikely.

In addition, any deal could have a major affect on Comcast's debt load -- which the company is attempting to reduce -- as well as on litigation between Liberty and Comcast related to certain programming costs.

On Monday, Liberty shares rose 36 cents to trade at $9.55, while Comcast's fell 51 cents to trade at $28.71. Shares in Hughes fell 7 cents to $10.12.

Fair and Balanced

Under the "exit process" or "exit rights process," as the relevant agreement between Comcast and Liberty is known, the two owners will attempt to agree on a fair market value for QVC by the end of March. If that process fails, they'll defer to a third-party valuation of the home shopping channel.

Once QVC's value is set, Comcast has 30 days to decide whether it wants to purchase Liberty's stake. If Comcast isn't interested in buying, Liberty has its own 30 days to decide whether it wants to buy Comcast's 58% stake. If Liberty isn't a buyer, either, the companies are required to use their "best efforts" to sell QVC, in which either company could again emerge as a buyer for the complete company.

Neither company has been forthcoming about whether it would rather be a buyer or seller -- Comcast chief Brian Roberts deflected a question about the issue on a conference call with analysts last week.