AN Italian company says Barry Diller’s Home Shopping Network has lied to investors in a recent press release and that it’ll snitch unless the American firm speaks up.
At issue is the desire of the Italian company – which is oddly called Shopping America – to take control of the Rete Mia broadcast network, which reaches about 14 million of the 20 million homes in Italy.
Back in June Diller’s company announced that it and the Scandinavian Broadcasting System S.A. had formed a joint venture to operate a service in Italy using the Rete Mia station.
“We have great expectations about the international opportunities for television shopping,” said Michael Mullen, president of HSN’s international division back on June 9 when announcing the Italian venture.
Right now the Reta Mia network pipes an array of “pornography, fortune tellers and the sale of get-rich-quick systems to win the Italian national lottery” according to the Italian government in a recent report.
So, anything – even the sale of cheap figurines and tacky jewelry would be an improvement.
The trouble is that Shopping America – the Italian company – says only it and not Home Shopping Network – a foreign company – is allowed under Italian law to own and operate a broadcast station.
“On June 9, 1998 HSN issued a press release to the market which, in my opinion, shamelessly pumped the business potential of HSN’s proposed venture with SBS in Italy,” wrote Shopping America head Nando DiFilippo Jr. on Dec. 30 to HSN President Michael McMullen. “This press release is patently and grossly misleading in that it fails to disclose material facts about HSN’s proposed investment opportunity in Italy.”
DiFilippo, who holds both Italian and American citizenship, went on to inform Home Shopping that the joint venture with Scandanavian Broadcasting “is illegal under Italian law.” And he says Scandanavian Broadcasting was warned twice by the Italian government that any move to run a station in that country was illegal.
DiFilippo says that Home Shopping Network, which is owned by USA Network, was probably unaware of all this at the time it first announced the venture. But now that it knows, the Italian company says HSN should tell investors.
Home Shopping Network says, “The process of launching a shopping network in Italy is a complex one. Contingent on addressing a variety of issues and requirements, including regulatory ones. We are in the midst of working through these issues and anticipate continuing to do so in the coming months.”
“We remain confident and hopeful that our previously announced joint venture with SBS will ultimately be successful. We believe the resulting shopping channel will offer Italy a unique and compelling shopping alternative,” it added.
Is it too late for Barry Diller to apply for Italian citizenship? How’s Barry Dillero sound?
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The papers are blaming the stock market’s troubles mainly on Brazil.
Yes, Brazil was a big problem, but the trouble really began when at least one Wall Street clearing firm suddenly raised the so-called maintenance margin requirements for the speculation-crazed Internet stocks.
The Internet-heavy Nasdaq index first collapsed on Monday after Ernst & Co. notified its clients – the brokerage firms it clears trades for – that they’d have to put up at least half the money to buy Internet stocks and have to risk more of their own cash to maintain the 50 percent leverage if the stocks decline in value.
Ouch! said traders, especially when the Internet stocks started heading downward and they had to immediately come up with the dough.
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Crises are good.
That’s Wall Street’s warped view of worldwide panics like the one started by Brazil this week. Why?
Because the fear has been that Alan Greenspan will finally do his job and calm the crazed financial markets by nudging interest rates higher.
The thinking on Wall Street is that if Brazil’s economy is about to collapse, then Greenspan not only won’t be able to raise rates but he’ll have to keep pumping more liquidity into the market bubble.
But remember, someday the Federal Reserve will have to bail out the sinking dollar and fight off the bond market’s desire for higher (not lower) rates by tightening credit.