DFAN14A

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934 (Amendment No. __)

Filed by the Registrant ¨

Filed by a Party other than the Registrant þ

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¨ Preliminary Proxy Statement

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

¨ Definitive Proxy Statement

þ Definitive Additional Materials

¨ Soliciting Material Under Rule 14a-12

ValueVision Media, Inc.

(Name of Registrant as Specified In Its Charter)

Clinton Magnolia Master Fund, Ltd.

Clinton Relational Opportunity Master Fund, L.P.

Clinton Relational Opportunity, LLC

Channel Commerce Partners, L.P.

GEH Capital, Inc.

Clinton Group, Inc.

George E. Hall

Thomas D. Beers

Mark Bozek

Ronald L. Frasch

Thomas D. Mottola

Robert Rosenblatt

Fred Siegel

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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¨ Fee paid previously with preliminary materials.

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
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On May 14, 2014, Clinton Group, Inc. and its affiliates (collectively, the “Clinton Group”) issued a press release (i) announcing the availability of its definitive proxy materials for the ValueVision Media, Inc. (the "Company") 2014 annual meeting (the “Annual Meeting”), (ii) announcing the launch of its proxy campaign website for the Annual Meeting, and (iii) containing a letter to shareholders of the Company that is being mailed to the Company’s shareholders. A copy of the press release (which includes the full text of the letter to shareholders) is filed herewith as Exhibit 1.

Also on May 14, 2014, the Clinton Group posted various soliciting materials to www.AddValueAndVision.com (the "Website"). On the Website, the Clinton Group included a video message to shareholders of the Company (the “Video”). Copies of the materials posted to the Website are filed herewith as Exhibit 2. A transcript of the Video is filed herewith as Exhibit 3. On the “Press” section of the Website, the Clinton Group included links to a Bloomberg TV interview about the Company and a Bloomberg article about the proxy campaign. A transcript of the Bloomberg TV interview and a copy of the Bloomberg article are filed herewith as Exhibit 4.

EX-99

Clinton Group Announces Availability of Definitive Proxy Materials
and Launch of Proxy Campaign Website for ValueVision Media Annual Meeting

NEW YORK, May 14, 2014 /PRNewswire/ --  Clinton Group, Inc. ("Clinton Group") announced today that its definitive proxy materials for the ValueVision Media, Inc. (Nasdaq: VVTV) June 18, 2014 annual meeting are available. Clinton Group has nominated six independent professionals for the Board of Directors of ValueVision and is soliciting votes from fellow ValueVision shareholders for the election of these individuals.

The Clinton Group also announced that it has produced a video featuring its ValueVision Board nominees and that the video is available on a new proxy campaign website it has launched today. The video and Clinton Group’s other proxy materials for the ValueVision annual meeting can be accessed at www.AddValueAndVision.com.

The Clinton Group nominees for the ValueVision Board of Directors are:

· Thom Beers, the CEO of FremantleMedia North America, the producer of “American Idol” and “America’s Got Talent” among other leading shows

· Mark Bozek, the former CEO of HSN

· Ron Frasch, the former President and Chief Merchandising Officer of Saks Fifth Avenue

· Tommy Mottola, the iconic former Chairman and CEO of Sony Music Entertainment

· Bob Rosenblatt, the former President of HSN and Tommy Hilfiger and CFO of Bloomingdale’s; and

· Fred Siegel, the former SVP of marketing at QVC

“We believe ValueVision can be a great and highly profitable business, and one that creates tremendous value for shareholders,” said Gregory P. Taxin, President of Clinton Group. “We encourage all ValueVision shareholders to read our materials and watch the video at www.AddValueAndVision.com.”

Along with the definitive proxy statement, the Clinton Group will soon be mailing a cover letter to shareholders of ValueVision, along with a gold proxy card. The text of the cover letter is included below:

May 13, 2014

To Our Fellow Stockholders of ValueVision:

We are investors alongside you in ValueVision Media Inc. (“ValueVision” or the “Company”). We believe the Company has a terrific collection of assets that can be operated in a way that creates significant shareholder value. We are seeking to replace a majority of the current directors of the Company to foster a new vision and strategy for ValueVision that we believe can help us all by generating sustained profits and share price appreciation.

We believe the Company and Board of Directors are not doing enough with the Company’s assets and that the current Board suffers from a lack of ambition. Reading the Board’s recent letters and proxy statement, we cannot help but conclude that the current directors are very content with the Company’s market position and financial performance. The Board touts, for example, that the Company is now losing less money each quarter than it once did. Color us unimpressed. The current Board has declared victory while the Company languishes as a declining, third-place market share player in a three-company market.

In our view, five years into the tenure of the Chief Executive Officer, Keith Stewart, the Board should only be satisfied by consistent profitability and sustained value creation for shareholders. Instead, doing slightly less bad is seemingly enough.

Not for us. We are disappointed by the performance of the Company and its leadership team.

ValueVision stock trades today at approximately one-third the average price for which it traded during the ten years prior to Mr. Stewart’s tenure. The Company is valued by the stock market at a mere tenth of HSN and a thirtieth of QVC. And, while ValueVision stock has moved sideways since January 2010, HSN and QVC have generated significant value for their stockholders, including substantial and growing profits.

The current Board seems to focus exclusively on the stock performance during the first eleven months of Mr. Stewart’s tenure, from the financial crisis low in January 2009 to a rebound in December 2009. While it is true that ValueVision’s stock price bounced off its bottom of mere pennies per share during the period of the financial crisis, so too did the stocks of scores of other companies. Since then, however, ValueVision’s stock price has been essentially flat. For how long will the Board allow Mr. Stewart to produce no returns for stockholders just because the stock recovered from its financial-crisis bottom in the back half of 2009?

With respect to the fundamental financial performance of the Company, the Board appears satisfied with declining losses, though we know that shareholders cannot survive on losses, no matter how small. And how disappointed must Mr. Stewart be? After all, Mr. Stewart himself declared confidently that he could grow the business into a $1.1 billion revenue generator, producing more than $12 of sales per year on average in each home in which the Company’s programming was available. Mr. Stewart repeatedly stated this goal in 2009, 2010 and 2011. And, frankly, by many measures this was a rather modest goal: HSN generates $24 of sales per year per home, and QVC substantially more. Even ValueVision itself generated more than $10 of sales per home in every fiscal year from 1999 to 2007.

But, alas, Mr. Stewart did not achieve his financial performance goals. Or come close. Last year, the Company generated just $640 million in revenue, or $7 in sales per home, 40% below his own target. Moreover, fully five years after Mr. Stewart was put in charge, and despite his repeated predictions of operating cash flow margins in double digits, the Company continues to lose money.

While HSN and QVC have increased revenue, sales per home, gross profit and EBITDA in the United States compared with their pre-recession levels, ValueVision is a diminished version of its former self; on all these critical metrics, ValueVision is performing worse than it did in 2006. It is no wonder, then, that the stock has not recovered to its 2006 year-end level of $13. Or even half that.

Yet, the Board says it is satisfied and that we (and you) should be too. Well, we are not.

We are, more precisely, gravely disappointed by the Company’s record of losing money in 20 out of the last 21 quarters. We do not equate losing less money with success and we are concerned about a stock price that has not recovered to even half of its pre-recession level. We are worried about the lack of a plan to reverse these trends or, seemingly, even a recognition of the need for change. And, we are disappointed in the Chief Executive, who has missed his own stated goals by a wide mark and has been lapped by the industry leaders, who continue to grow

their share through innovation. (We note that Mr. Stewart missed the Company’s target performance by such a wide mark in three of his five years as CEO that he failed to earn any annual incentive bonus in those years.) If Mr. Stewart and the Board have a vision for break-out performance and distinguishing the Company from its recent history or its competitors, we have not heard it.

We think losing money every quarter while the stock price moves sideways calls for a hands-on, energetic management team with a detailed turnaround plan. Instead, the Company’s Board permits no fewer than nine of the senior officers (including the President, the Chief Operating Officer, the Chief Financial Officer and the Chief Merchandising Officer) to literally “phone it in” one or two days per week while they “work” from their homes, many more than 1000 miles from the Company’s headquarters. Since when do million-dollar-per-year executives only have to show up for work a few days a week? Is it possible that the Company has not achieved Mr. Stewart’s own goals or stemmed the loss of market share because the executive team is not in Minneapolis, working with their direct reports, vendors, on-air talent and the finance team consistently, Monday through Friday?

We fear this lackadaisical approach to corporate management is, sadly, just part of the problem. The bigger issue is that the Board and executive team do not have a strategy to break the pattern of underperformance.

We do. We believe this situation calls for new directors with deep industry experience and judgment.

The Clinton Group has therefore nominated six independent professionals to serve on the Board of ValueVision. None of these nominees is an employee of the Clinton Group, nor does any have any other tie to our firm. They each do have notable and relevant backgrounds and together can form the backbone of a fresh new Board, implementing what we believe is a plan for success. We trust that these nominees will serve the interests of all shareholders.

Our nominees for the Board are:

· Thom Beers, the CEO of FremantleMedia North America, the producer of “American Idol” and “America’s Got Talent” among other leading shows;

· Mark Bozek, the former CEO of HSN;

· Ron Frasch, the former President and Chief Merchandising Officer of Saks Fifth Avenue;

· Tommy Mottola, the iconic former Chairman and CEO of Sony Music Entertainment;

· Bob Rosenblatt, the former President of HSN and Tommy Hilfiger and CFO of Bloomingdale’s; and

· Fred Siegel, the former SVP of marketing at QVC.

In the enclosed proxy statement, you can read about the backgrounds of our nominees. We have also produced a video and posted it to our proxy campaign website,

www.AddValueAndVision.com, in which our nominees speak about the opportunity for ValueVision to be an innovative leader and a profit engine. We encourage you to review both, and to review the other materials we have posted to our campaign website. You can also sign up there for regular updates on our campaign.

Our nominees have an interest in improving the business results and the stock price for all shareholders and they intend, if elected, to move swiftly. No longer will senior executives be permitted to fly in midday Monday, be chauffeured to the office and their posh hotels and fly out Thursday afternoon – and certainly not at shareholder expense! If elected, the nominees intend to move decisively to hire executives that can dedicate the necessary time in the Company’s offices and studios to ensure the successful implementation of a winning strategy.

Without radical or halting change, we believe the Company can be transformed into a leader of multi-channel retailing, with live and engaging programming, celebrity- and personality-backed, proprietary brands, and high margin merchandise from a variety of categories. We have in mind a Company that creates “retail theater” in which carefully selected products are marketed over television, social media and eCommerce sites in new, engaging and entertaining ways. Think “American Idol” meets Amazon on the set of the “Good Morning America.”

The nominees are prepared to work hard to help create shareholder value. Their interest is not in modest or incremental improvements. Instead, they believe ValueVision possesses the assets necessary to create an enterprise that could challenge HSN and QVC for thought leadership and market share. We understand from the nominees that they intend to examine carefully various steps to move the Company in this direction, including:

· replacing the Chief Executive Officer;

· changing the mix of merchandise offered to customers, reducing the percentage of merchandise in the jewelry, watch and electronics segments (which have historically been characterized by high selling prices and high return rates), and creating additional vendor relationships with brands and manufacturers in other categories such as beauty, health, fitness, fashion, accessories and home;

· establishing a New York City merchandising presence, enabling greater access to proprietary product from celebrities, musicians, personalities and well-known brands;

· broadcasting some live selling events from locations throughout the world, including New York City and Los Angeles, to facilitate the acquisition and development of high margin, proprietary brands and notable on-air talent;

· marketing the SHOP HQ brand and service through public relations, off-asset marketing and through live events, promotions and innovative use of multi-channel, social media; and

· innovating new programming approaches to distinguish the SHOP HQ brand from those of rivals HSN and QVC (as well as other eCommerce companies), including by adding programming that involves integrated social commerce and cost-effective, shopping-centric entertainment across multiple platforms

ValueVision does not need to be a market-share losing, distant third-place player in home shopping. It does not need to lower its goals or accept a shrinking role in the industry. And shareholders certainly do not need to accept mediocre performance, even if the current Board is willing to do so. We and our nominees believe that ValueVision can be an industry leader, exploiting its presence in 87 million American homes to innovate and create a great return for shareholders.

Of one thing we are certain: We cannot reasonably expect that the current CEO (five years into his tenure) or his executive team, operating as they do from various far-away places during parts of the week, to produce a substantially new and improved ValueVision. At best, we believe we might see small improvements on the margin. And maybe, sometime, a modestly higher stock price.

To be great and fresh and new, we are convinced that ValueVision needs new leadership and a break with its past. As proven executives and legends of the entertainment industry, our nominees can bring unrivaled expertise (in home shopping, retailing, eCommerce, merchandising, social media and television programming) and key connections to the Company, for the benefit of all shareholders. Most importantly, they can bring creativity and innovation that is the hallmark of successful enterprises. We believe they can help create a fantastic new business without upsetting the existing business or alienating the Company’s loyal customers. I encourage you to watch the video at www.AddValueAndVision.com to learn more about our plans directly from our nominees.

Now is not the time for timid incrementalism. ValueVision needs a bold approach to achieve great results for shareholders. We encourage you, too, to expect more from ValueVision.

Please vote for our nominees.

If you have any questions or require any assistance in delivering your proxy, please contact Okapi Partners LLC at VVTV@OkapiPartners.com or (212) 297-0720 or Toll-Free (855) 305-0857. You can also contact the Clinton Group at VVTV@Clinton.com.

Thank you for your consideration,

Gregory P. Taxin

About Clinton Group, Inc.

Clinton Group, Inc. is a Registered Investment Advisor based in New York City. The firm has been investing in global markets since its inception in 1991 with expertise that spans a wide range of investment styles and asset classes.

Important Additional Information

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P., CLINTON MAGNOLIA MASTER FUND, LTD., CLINTON RELATIONAL OPPORTUNITY, LLC, GEH CAPITAL, INC., CHANNEL COMMERCE PARTNERS, L.P., CLINTON GROUP, INC., GEORGE E. HALL (COLLECTIVELY, "CLINTON") THOMAS D. BEERS, MARK BOZEK, RONALD L. FRASCH, THOMAS D. MOTTOLA, ROBERT ROSENBLATT AND FRED SIEGEL (TOGETHER WITH CLINTON, THE "PARTICIPANTS") HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") A DEFINITIVE PROXY STATEMENT AND ACCOMPANYING FORM OF PROXY CARD TO BE USED IN CONNECTION WITH THE PARTICIPANTS' SOLICITATION OF PROXIES FROM THE STOCKHOLDERS OF VALUEVISION MEDIA, INC. (THE "COMPANY") FOR USE AT THE COMPANY'S 2014 ANNUAL MEETING OF STOCKHOLDERS (THE "PROXY SOLICITATION"). ALL STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE PROXY SOLICITATION BY THE PARTICIPANTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS. THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD HAVE BEEN FURNISHED TO SOME OR ALL OF THE COMPANY'S STOCKHOLDERS AND ARE, ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV/. IN ADDITION, OKAPI PARTNERS LLC, CLINTON'S PROXY SOLICITOR, WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD WITHOUT CHARGE UPON REQUEST BY CALLING (212) 297-0720 OR TOLL FREE AT (855) 305-0857.

INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT OR INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN THE DEFINITIVE PROXY STATEMENT ON SCHEDULE 14A FILED BY CLINTON. THIS DOCUMENT CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCES INDICATED ABOVE.

CONTACT: N. Lennox, +1-212-825-0400.

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EXHIBIT 3

Transcript of Video Message to Shareholders of ValueVision

GREG TAXIN

I’m Greg Taxin with the Clinton Group.

We’re enthusiastic owners of ValueVision Media and believe the company has an incredibly valuable, uncommon asset in its ubiquitous distribution over cable and satellite systems in the United States. We also believe that the company hasn’t exploited that asset as best as it can.

We’ve recruited some fantastic nominees that we think will make a great new board of directors and we believe together they have the vision and strategy to make this company much more valuable.

JANET VARNEY

Imagine access to 87 million homes, 24 hours a day, 7 days a week.

Imagine a vast assortment of relevant, exciting personality and lifestyle brands developed by a world class team of merchants.

Imagine shopping centric entertainment and live selling events that create a truly engaging customer experience that is fun, exciting retail theatre.

With your support, the true convergence of media, e-commerce, entertainment and retail is no longer something to simply be imagined.

Shareholders have a choice. You can stick with the Company’s current directors or you can choose:

A former Chief Executive Officer of HSN.

A Former President and Chief Merchandising Officer of Saks Fifth Avenue.

The CEO of Fremantle Media North America which produces “American Idol” and “America’s Got Talent” among other shows.

The former Chairman and CEO of Sony Music.

A former President of Tommy Hilfiger and CFO of Bloomingdale’s.

And a former Senior Vice President of QVC with extensive e-commerce experience.

MARK BOZEK

As the former CEO of HSN, I understand how a “dollars per minute” business works and I appreciate the tremendous growth opportunities at ValueVision.

Let’s put ValueVision in perspective. During my 4 years at the helm of HSN, we generated over $6 billion in revenues and nearly $1 billion in profits. And, at the time, we were in only 70 million homes. That’s 17 million homes LESS than ValueVision is in today.

As someone who has experience building proprietary brands of $100 million plus…I understand how a relevant merchandising strategy is key to success in any form of retail.

RON FRASCH

We have a great board that is being developed and I think this can be something very unique in our industry. The opportunity to have a presence in New York will be a very significant competitive advantage.

THOM BEERS

To have an audience of 87 million viewers right there…right there in front of you… and to not take full advantage of that, not create the most entertaining, the most interesting transactional experiences in the world…it’s just a loss.

TOMMY MOTTOLA

That excitement that is infused when you watch “The Voice” and you see those celebrities and they’re driving home the current new star. Imagine coupling that with product. That’s what’s missing.

FRED SIEGEL

Early on when Mark Bozek and Barry Diller were at QVC, it was all about innovation and creativity. Those early years were the ones we were figuring out just what made e-commerce work and the coolest thing is that their ideas are grounded and they’re grounded in the collective team’s hard earned lessons from being in the trenches and having had real accountability in e-commerce and related businesses over the years.

THOM BEERS

What excites me about this network is potential to apply many of the same live interactive elements that we use at the big talent shows.

BOB ROSENBLATT

It’s important for shareholders to know that we’re mindful of the dangers of big noisy transformations of retail companies. JC Penney is the perfect example of how NOT to reinvigorate a company.

RON FRASCH

To be clear, this is not about picking up the company and moving it, relocating it to New York City. In terms of top of mind, having a presence here keeps it top of mind to the industry and to the creative and designers, creative teams in our industry.

TOMMY MOTTOLA

I can’t think of anything more exciting than the opportunity to kick some new life into TV and to online shopping.

MARK BOZEK

Together with the Company’s team in Minnesota, we can work toward a measured, shared goal of creating a company where…People want to work…Vendors want to do business…Customers want to shop… Investors want to invest…and above all, where we can grow shareholder value.

JANET VARNEY

We’ve assembled the team. It’s now up to you to decide who’s better equipped to unleash the true power of ValueVision’s assets and grow shareholder value.

The clock is ticking. The choice is clear. Act now. Together, we can make 360 degrees of revolutionary, forward thinking retail a reality at ValueVision.

I’m Janet Varney for the Clinton Group.

GREG TAXIN

We encourage you to read our proxy materials thoroughly and read those of the company as well. When you do, we think you will conclude, as we have, that our nominees are better suited to create value and vision for ValueVision Media.

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EXHIBIT 4

TRANSCRIPT OF BLOOMBERG TV INTERVIEW (November 4, 2013)

Erik Schatzker (Bloomberg TV Anchor): What could bring the producer of American Idol, the ex-CEO of Sony Music and the former chief of the Home Shopping Network together? That would be activist investor, Greg Taxin, President of the Clinton Group. He’s taking on the ValueVision Media, asking shareholders to dump most of the current board and appoint his nominees as Directors. Greg’s back on Market Makers this morning. Greg what’s wrong with ValueVision?

Greg Taxin: Well ValueVision is very much a third place market share player in what really is a two horse dominant race between QVC and HSN. And yet ValueVision has all the distribution into homes that HSN and QVC has. They have every entitlement and right to be incredibly successful and to generate revenue and profit for shareholders. They just haven’t done it.

Stephanie Ruhle (Bloomberg TV Anchor): Then what?

Greg Taxin: So. . ..

Stephanie Ruhle (Bloomberg TV Anchor): Then what’s wrong with current board members and who do you have that you think can fix this?

Greg Taxin: Well, you know, nothing personal against the current board members. They’ve tried hard, I’m sure they’re dedicated to the effort. We don’t think they’ve got all the experience and, and, and skill sets necessary to, to really exploit the asset that you’ve got at ValueVision. So we’ve recruited a group of people have not only home shopping experience -- executive positions as President and CEO and CFO of the major home shopping networks, SVP of Marketing of, of QVC – but also some really iconic media and entertainment leaders who we think can make shopping retail theater and, and make it fun and interesting again, socially connected and, and modern.

Erik Schatzker (Bloomberg TV Anchor): Greg you really mean it though when you say not personal, because in the statement that you put out this morning, you say that (uh), you know, profit generated in those six months for shareholders is the equivalent to just one quarter of the compensation paid to directors last year; the Company should be run for shareholders, not Directors. That sounds kind of personal to me.

Stephanie Ruhle (Bloomberg TV Anchor): Personal (Hahaha)

Greg Taxin: (Haha) well we don’t think it. I, I don’t think of it as personal in a sense that, that.

Erik Schatzker (Bloomberg TV Anchor): Well yes it is – “you guys are overpaying yourselves” – that’s what you’re saying.

Greg Taxin: Well, we, we do think that compensation has been high. We also think it has been (um) way too much weighted toward cash -- some of those directors got 94% of their pay last year in cash. We’d like to see them aligned with shareholders by getting it in stock.

Stephanie Ruhle (Bloomberg TV Anchor): Okay just walk us through that. Because if, if you are getting paid in cash, that’s great, you can walk away and do anything with the money. You don’t have vested stake in the company. Is that right?

Greg Taxin: That’s part of our concern. In fact, some of those Directors that got paid so much in cash don’t own very much stock. So, if the stock were to decline by say, 20%, which should be a horrific day for our...

Stephanie Ruhle (Bloomberg TV Anchor): What do they care?

Greg Taxin: …for our fund, you know they make it up in six weeks in, in cash compensation.

Stephanie Ruhle (Bloomberg TV Anchor): Alright, has ValueVision responded to you?

Greg Taxin: Well you know we’ve been trying to have a constructive dialog with ValueVision over that last couple of months. We sat down with some directors, we’ve, we’ve sort of laid out our case and our, our arguments. And, and, and what we believe the company could do. (um) They haven’t yet responded, (uh) certainly in a constructive way. They told us they back their CEO and believe he’s the right man for the job. We think shareholders should, you know, have a say in that and (uh) and decide: Who’s the best board and who’s the best CEO?

Erik Schatzker (Bloomberg TV Anchor): So the ValueVision directors currently make hundreds of thousands of dollars a year?

Greg Taxin: Some of them as much as, as $320,000 a year.

2

Erik Schatzker (Bloomberg TV Anchor): How much is? How much would you?

Stephanie Ruhle (Bloomberg TV Anchor): For how much they would commit?

Erik Schatzker (Bloomberg TV Anchor): How much? I’m just curious to know. How much would, how much would you pay your nominees?

Greg Taxin: Well, I mean it’s not really up to us. The boards…

Erik Schatzker (Bloomberg TV Anchor): No, but what, what should they get?

Greg Taxin: We, we, by the way, being on a board is a great job. The only job in world that I think where you set your own pay. But I, I would expect that (um) our Directors would, would (uh) you know heed more to the average pay that (uh) Directors of companies these size earn which is about $120,000 a year. But it’s really up to them. I’m more concerned frankly that they be aligned with shareholders and focused on creating shareholder value. And I can tell you that none of the people on our slate of Directors are doing this for a job or for the money. They’re all very well-heeled and successful.

Erik Schatzker (Bloomberg TV Anchor): And no side.

Stephanie Ruhle (Bloomberg TV Anchor): But come on, then why would they be?

Erik Schatzker (Bloomberg TV Anchor): No side deals here, right?

Greg Taxin: No side deals. They’re in this because they want to create the next generation, ecommerce player using this unique distribution on TV together with e-commerce.

Stephanie Ruhle (Bloomberg TV Anchor): Hold on, though. Of course it’s for the money. Like, like just when you say they’re not in it for the money, I mean they are in it for the money, but they’re not in it to get paid cash today.

Greg Taxin: Right, I, they’re in it to create value for shareholders. They themselves will be shareholders. I think they’re in it for reputation and the ability to create something new and different which will inure to their benefit surely (uh) in their careers overtime. But they’re not in it for the, the cash pay in the way that I fear, some of the current Directors have been earning.

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Erik Schatzker (Bloomberg TV Anchor): Let’s talk about the money then. ValueVision currently has a market cap of about two hundred and sixty billion dollars. (uh)

Greg Taxin: Two hundred sixty million dollars.

Erik Schatzker (Bloomberg TV Anchor): Excuse me, million. And it has an annual; It’s on a run way for about six hundred million dollars a year in revenue. Right?

Greg Taxin: That’s right.

Erik Schatzker (Bloomberg TV Anchor): So if it traded closer to where QVC trades on a multiple basis, what should it be worth?

Greg Taxin: Well look we, we think the business can be dramatically improved. Remember it’s, it’s not generating any profit. Since this CEO got (uh) to, to ValueVision they’ve had one quarter of profitability. So if you can get this business growing again and with profit again it’s market cap of two hundred and sixty five million pales in comparison to HSN which has a three billion dollar market cap or QVC, which you know depending on how you sort of slice the, slice that onion a little bit, is nine billion dollars. So there’s a lots of room for growth in the stock price if you can get the business back to making money and growing again, which this management team or board had failed to do.

Stephanie Ruhle (Bloomberg TV Anchor): How, how hard will it be though to turn it around? Like compare the problems this company has to other activist investments you made. How broken are they?

Greg Taxin: Well, I don’t actually think this business is all that broken frankly. This is a business that’s doing okay. It’s stabilized. It, it at one point was in very difficult shape. I think now it’s stabilized. It’s breaking even and it made money, you know, two quarters ago, lost money this quarter. But this isn’t sort of a desperate situation. What we think interesting about the opportunity is: it’s got a very unique asset that can be exploited in a totally different way. I mean imagine being in an 87 – imagine -- being in an 87 million homes, every day, and not really using that to great profit. We think the combination of people we put together, the media and entertainment types.

Stephanie Ruhle (Bloomberg TV Anchor): There are a lot of junky clothes you could sell.

Greg Taxin: (Hehehe)

4

Erik Schatzker (Bloomberg TV Anchor): You pointed out though that, that ValueVision is a distant third behind QVC and HSN.

Greg Taxin: Right.

Erik Schatzker (Bloomberg TV Anchor): So, how much upside is there potentially? You’d think that could be valued on the same basis as say, HSN, or is it going to be a distant third regardless?

Greg Taxin: I don’t think it’s a distant third regardless. I think the current team is pretty satisfied being a distant third with declining market share. We’re not satisfied with that. We think this can be as big as, or better than, HSN and QVC. It can be different, is really the most important thing. Rather than just being, you know, yet another also-ran shopping network that looks roughly like it looked it 1995. This can be, instead, retail, entertainment and theater much more engaging – imagine, sort of, game show combined with, you know, shopping and, and live events and celebrities.

Stephanie Ruhle (Bloomberg TV Anchor): Why would you wanna be Sprint of home shopping when you could be the AT & T?

Greg Taxin: That’s exactly it! That’s exactly.

Stephanie Ruhle (Bloomberg TV Anchor): There you go.

Greg Taxin: But it takes the right people and the right business plan and frankly the ambition and the vision and we think that comes with great board members. It doesn’t come with board members who are, sort of, earning cash pay and, and seemingly happy to be third.

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BLOOMBERG ARTICLE (October 30, 2013)

ValueVision CEO Targeted by Activist Investor Clinton Group

By Beth Jinks - Oct 30, 2013

Activist shareholder Clinton Group Inc. is targeting television and Internet home shopping company ValueVision Media Inc. (VVTV) with a campaign to replace its chief executive officer and appoint board members.

Clinton Group’s funds own more than 5 percent of ValueVision, which operates the ShopNBC network and ShopHQ, according to a letter to the company’s Chairman Randy Ronning. A copy of the letter, which was written by the New York-based investor’s President Greg Taxin and dated today, was filed with the Securities and Exchange Commission.

ValueVision CEO Keith Stewart has missed targets and the company is underperforming competitors, according to the letter. Clinton Group offered to invest at least another $25 million at “a substantial premium to the stock price” if Stewart is replaced and new board members are appointed. The fund manager isn’t seeking a board seat, though the letter refers to unnamed candidates the fund will recommend.

Taxin referred to meetings and phone calls he held with Ronning and company director Sean Orr in the letter.

ValueVision defended the turnaround under Stewart’s leadership in a statement today, and said it had been in discussions with Clinton since early September. Jefferies Group LLC is serving as financial adviser to ValueVision, while Simpson Thacher & Bartlett LLP and Barnes & Thornburg LLP are providing legal counsel.

Evaluating Options

“We will take the time necessary to thoroughly evaluate the Clinton letter while continuing to focus on the successful execution of ValueVision’s business plan to enhance our operating and financial performance,” ValueVision said in the statement.

ValueVision fell 5 percent to $5.15 in New York today, giving the company a market value of $255 million. The shares have almost tripled this year, compared with a more than 3 percent decline for larger competitor HSN Inc. (HSNI), and a nearly 38 percent gain for Liberty Interactive Corp., owner of QVC Inc.

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Eden Prairie, Minnesota-based ValueVision, which sells jewelry, clothing, home appliances and other products direct to consumers via television programming, is worth about one-tenth of HSN, despite similar cable and satellite distribution, Taxin says in the letter.

‘Bad Shape’

“The company was in bad shape when Mr. Stewart arrived and he rightly gets credit for keeping ValueVision afloat,” Taxin wrote. “But he has not hit his own targets, optimized the operations or maximized the returns to shareholders. And now, he has no discernible strategy to lift the Company from its distant, third-place (and shrinking) market position.”

The company’s shares are up nearly 1,700 percent since Stewart was named CEO in January 2009. Still, sales of $587 million for the year ending in February, are down from a high of $782 million in 2008, the last year that the company reported an annual net profit, data compiled by Bloomberg show.

Activist funds generally acquire equity stakes in companies and try to force corporate management and directors to make changes that boost share prices and investor returns. Clinton Group has recently sought changes at weight-loss companies Nutrisystem Inc. (NTRI) and Vivus Inc. (VVUS), and XenoPort Inc. (XNPT), the maker of the drug Horizant to treat restless-legs syndrome.

To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net

®2014 BLOOMBERG L.P. ALL RIGHTS RESERVED.

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