Edgar Filing: USA NETWORKS INC

FILED PURSUANT TO RULE 424(B)(3)
REGISTRATION NO. 333-87226

PROSPECTUS

[USA NETWORKS, INC. LOGO]

1,616,061 SHARES OF USA COMMON STOCK

This prospectus relates to the resale of up to 1,616,061 shares of common
stock, par value $0.01 per share ("USA common stock"), of USA Networks, Inc.
("USA") that the selling stockholders named in this prospectus in the section
"SELLING STOCKHOLDERS", whom we refer to in this document as the "Selling
Stockholders", may offer from time to time. The USA common stock being offered
by this prospectus was issued to the Selling Stockholders in connection with
USA's acquisition of all of the issued ordinary share capital of TV Travel Group
Limited.

Other than as described in this prospectus under the section "SELLING
STOCKHOLDERS--USA'S RELATIONSHIPS WITH THE SELLING STOCKHOLDERS" on page 7, USA
will not receive any proceeds from the sale of USA common stock by the Selling
Stockholders.

Subject to the restrictions described in this prospectus, the Selling
Stockholders (directly, or through agents or dealers designated from time to
time) may sell the USA common stock being offered by this prospectus from time
to time on terms to be determined at the time of sale. The prices at which these
stockholders may sell the shares will be determined by the prevailing market
price for the shares or in negotiated transactions. This offering will not be
underwritten. To the extent required, the number of shares of USA common stock
to be sold, purchase price, public offering price, the names of any such agent
or dealer and any applicable commission or discount with respect to a particular
offering will be set forth in an accompanying prospectus supplement. The
aggregate proceeds to the Selling Stockholders from the sale of the USA common
stock being offered by this prospectus will be the purchase price thereof less
the aggregate agents' or dealers' commissions and discounts, if any, and other
expenses of distribution not borne by USA. The Selling Stockholders will pay all
applicable stock transfer taxes, brokerage commissions, discounts or commissions
and fees of the Selling Stockholders' counsel. USA has agreed to pay certain
expenses in connection with the filing of the registration statement, of which
this prospectus is a part, with the Securities and Exchange Commission, and to
indemnify the Selling Stockholders against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the registration and offering of the USA
common stock being offered by this prospectus. See "PLAN OF DISTRIBUTION" on
page 8.

The Selling Stockholders and any agents, dealers or broker-dealers that
participate with the Selling Stockholders in the distribution of the USA common
stock being offered by this prospectus may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commissions received by them and any
profit on the resale of the Securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.

USA common stock is quoted on The Nasdaq National Market under the symbol
"USAI." On May 3, 2002, the last reported sale price of USA common stock was
$30.05 per share.

SEE "RISK FACTORS" BEGINNING ON PAGE 5 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER IN CONNECTION WITH PURCHASING USA COMMON STOCK.
------------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION WHERE SUCH AN
OFFER OR SOLICITATION WOULD BE ILLEGAL.

The date of this prospectus is May 6, 2002

TABLE OF CONTENTS

PAGE
--------

ABOUT THIS PROSPECTUS....................................... 1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION............................................... 1
WHERE YOU CAN FIND MORE INFORMATION......................... 2
SUMMARY..................................................... 3
THE OFFERING................................................ 4
RISK FACTORS................................................ 5
USE OF PROCEEDS............................................. 6
SELLING STOCKHOLDERS........................................ 6
PLAN OF DISTRIBUTION........................................ 8
DESCRIPTION OF USA COMMON STOCK............................. 10
CERTAIN MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES..... 12
LEGAL MATTERS............................................... 16
EXPERTS..................................................... 16

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we are filing with
the Securities and Exchange Commission (the "SEC") on behalf of the Selling
Stockholders utilizing a "shelf" registration process. Under this shelf process,
the Selling Stockholders may, from time to time over approximately the next
year, sell the shares of USA common stock being offered under this prospectus in
one or more offerings (subject to the restrictions described in this
prospectus).

This prospectus provides you with a general description of the securities
that the Selling Stockholders may offer. To the extent required, the number of
shares of USA common stock to be sold, purchase price, public offering price,
the names of any such agent or dealer and any applicable commission or discount
with respect to a particular offering by any Selling Stockholder will be set
forth in an accompanying prospectus supplement. You should read both this
prospectus and any prospectus supplement together with the additional
information described in the section "WHERE YOU CAN FIND MORE INFORMATION" on
page 2.

You should rely only on the information provided in this prospectus and in
any prospectus supplement, including the information incorporated by reference.
We have not authorized anyone to provide you with different information. The
Selling Stockholders are not offering the USA common stock being offered under
this prospectus in any state where the offer is not permitted. You should not
assume that the information in this prospectus, or any supplement to this
prospectus, is accurate at any date other than the date indicated on the cover
page of these documents.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This prospectus and the SEC filings that are incorporated by reference into
this prospectus contain "forward-looking statements" within the meaning of the
securities laws. These forward-looking statements include, but are not limited
to, statements relating to our anticipated financial performance, business
prospects, new developments, new merchandising strategies and similar matters,
and/or statements preceded by, followed by or that include the words "believes,"
"could," "expects," "anticipates," "estimates," "intend," "plans," "projects,"
"seeks," or similar expressions. We have based these forward-looking statements
on our current expectations and projections about future events, based on the
information currently available to us. For those statements, we claim the
protection of the safe harbors for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks, uncertainties and assumptions, including those
described in the section "RISK FACTORS," that may affect the operations,
performance, development and results of our business. You are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date stated, or if no date is stated, as of the date of this prospectus.

You should understand that the following important factors, in addition to
those discussed in the documents incorporated in this prospectus by reference,
could affect our future results and could cause those results to differ
materially from those expressed in such forward-looking statements:

- material adverse changes in economic conditions generally or in our
markets;

- future regulatory and legislative actions and conditions affecting our
operating areas;

- competition from others;

- successful integration of our divisions' management structures;

- 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;

- obtaining and retaining key executives and employees; and

- other risks and uncertainties as may be detailed from time to time in our
public announcements and filings with the SEC.

We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or any other
reason. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus may not occur.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the SEC under the Exchange Act. You may read and copy this
information at the SEC's public reference room at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our SEC filings are also available to
you free of charge at the SEC's website at www.sec.gov.

As allowed by SEC rules, this prospectus does not contain all the
information you can find in the registration statement or the exhibits to the
registration statement. The SEC allows us to "incorporate by reference"
information into this prospectus, which means that we can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
prospectus, except for any information superseded by information contained
directly in this prospectus. Information that we subsequently file with the SEC
will automatically update this prospectus. This prospectus incorporates by
reference the documents set forth below that we have previously filed with the
SEC. These documents contain important information about our company and its
financial condition.

1. Annual Report on Form 10-K for the year ended December 31, 2001, filed on
April 1, 2002.

2. Definitive proxy statement filed on April 30, 2002.

3. Definitive proxy statement filed on March 25, 2001.

4. Current Reports on Form 8-K and amendments thereto filed on January 8, 2002;
two filed on January 29, 2002; January 30, 2002; February 12, 2002;
February 26, 2002; March 1, 2002; March 4, 2002; March 15, 2002; March 27,
2002; and April 24, 2002.

All documents filed by USA with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus and prior to
the termination of the offering are incorporated by reference into this
prospectus.

You may request free copies of any or all of these filings by writing or
telephoning us at the following address:

USA Networks, Inc.
152 West 57th Street
New York, New York 10019
(212) 314-7300
Attention: Corporate Secretary

Information contained on our website is not part of this prospectus. You
should rely only on the information contained in this prospectus. We have not
authorized anyone to provide you with information different from that contained
in this prospectus. The information contained in this prospectus is accurate
only as of the date of this prospectus and, with respect to material
incorporated herein by reference, the dates of such referenced material.

SUMMARY

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND MAY
NOT CONTAIN ALL THE INFORMATION THAT MAY BE IMPORTANT TO YOU. TO UNDERSTAND THE
TERMS OF THE USA COMMON STOCK BEING OFFERED BY THIS PROSPECTUS, YOU SHOULD READ
THIS ENTIRE PROSPECTUS AND THE DOCUMENTS IDENTIFIED UNDER THE CAPTION "WHERE YOU
CAN FIND MORE INFORMATION." IN THIS PROSPECTUS, THE TERMS "USA", "WE" AND "OUR"
REFER TO USA NETWORKS, INC. AND OUR SUBSIDIARIES, EXCEPT WHERE IT IS CLEAR THAT
SUCH TERMS MEAN ONLY USA NETWORKS, INC.

USA NETWORKS, INC.

USA (Nasdaq: USAI) is organized into two groups, the Interactive Group and
the Entertainment Group. The Interactive Group consists of Home Shopping Network
(including HSN International and HSN Interactive); Ticketmaster (Nasdaq: TMCS),
which operates Ticketmaster, Ticketmaster.com, Citysearch and Match.com;
Expedia, Inc. (Nasdaq: EXPE); Hotels.com (Nasdaq: ROOM); TV Travel Group
Limited; Electronic Commerce Solutions; Precision Response Corporation; and
Styleclick. The Entertainment Group consists of USA Cable, including USA
Network, SCI FI Channel, TRIO, Newsworld International, and Crime; Studios USA,
which produces and distributes television programming; and USA Films, which
produces and distributes films.

On December 17, 2001, USA and Vivendi Universal, S.A. ("Vivendi") announced
a transaction in which USA's Entertainment Group would be contributed to Vivendi
Universal Entertainment LLLP, a new joint venture to be controlled by Vivendi
("VUE"). Upon the closing of the VUE transaction, USA will be renamed USA
Interactive and will be focused on integrating interactive assets across
multiple lines of business. We believe USA Interactive will be a leader in
integrated interactivity, including ticketing, online travel, online dating,
electronic retailing, teleservices and other interactive commerce services.
USA's businesses will consist of Home Shopping Network (including HSN
International and HSN Interactive); Ticketmaster, which operates Ticketmaster,
Ticketmaster.com, Citysearch and Match.com; Expedia, Inc.; Hotels.com; TV Travel
Group Limited; Electronic Commerce Solutions; Precision Response Corporation;
and Styleclick.

On April 23, 2002, USA's shareholders approved the VUE transaction. After
the completion of the VUE transaction (which is expected to close in May of
2002), USA will no longer be engaged in the general entertainment businesses,
and the transaction agreements include a noncompetition provision, for a
specified period, regarding USA's participation in businesses similar to those
to be conducted by the joint venture. USA's business will be primarily focused
on its electronic commerce and interactive/information service businesses, and
USA expects that it will actively seek to grow those businesses, including
through acquisitions. Any such acquisitions could involve the issuance of
additional USA securities or cash or a combination of securities and cash. In
addition, following the completion of the VUE transaction, USA generally will no
longer be required to obtain the consent of Vivendi, Liberty Media Corporation
("Liberty") or Mr. Diller as USA stockholders for any such acquisitions
regardless of the size of such acquisitions. However, in the event that USA is
highly leveraged, each of Mr. Diller and Liberty will have the right to consent
to specified fundamental changes involving USA. USA is continually reviewing,
and often in discussions with third parties regarding, such possible growth
opportunities, including transactions in the online and offline travel services
and commerce-related areas.

USA is incorporated under the laws of the State of Delaware. USA's executive
offices are located at 152 West 57th Street, New York, New York 10019 and our
telephone number is (212) 314-7300.

THE OFFERING

USA SECURITIES BEING OFFERED.............. USA common stock, par value $0.01 per share

NUMBER OF SHARES OF USA COMMON STOCK BEING
OFFERED................................. 1,616,061

USA COMMON STOCK AUTHORIZED AND
OUTSTANDING............................. As of the date of this prospectus, we are authorized to
issue up to 1,600,000,000 shares of USA common stock. As
of April 25, 2002, there were 348,611,228 shares of USA
common stock outstanding.

USE OF PROCEEDS........................... Other than as described in this prospectus under the
section "SELLING STOCKHOLDERS--USA'S RELATIONSHIPS WITH
THE SELLING STOCKHOLDERS", USA will not receive any
proceeds from the sale of USA common stock by the
Selling Stockholders.

TRANSFER AGENT............................ The Bank of New York

NASDAQ NATIONAL MARKET SYMBOL............. USAI

RISK FACTORS

AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER THE FOLLOWING FACTORS CAREFULLY BEFORE DECIDING TO PURCHASE OUR
SECURITIES. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM
IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.

WE DEPEND ON OUR KEY PERSONNEL

We are dependent upon the continued contributions of our senior corporate
management, particularly Mr. Diller, and certain key employees for our future
success. Mr. Diller is our Chairman of the Board and Chief Executive Officer.
Mr. Diller does not have an employment agreement with us, although he has been
granted options to purchase a substantial number of shares of USA common stock.

If Mr. Diller no longer serves in his positions at USA, our business, as
well as the market price of USA common stock, could be substantially adversely
affected. In addition, under the terms of a governance agreement, dated as of
October 19, 1997, among Universal Studios, Inc., USA (formerly, HSN, Inc.),
Mr. Diller and Liberty, if Mr. Diller no longer serves as Chief Executive
Officer of USA, then certain restrictions on Universal Studios' conduct will be
eliminated, and the ability of Universal Studios (which is controlled by
Vivendi) to increase its equity interest in USA will be accelerated. We cannot
assure you that we will be able to retain the services of Mr. Diller or any
other of our members of senior management or key employees.

WE ARE CONTROLLED BY MR. DILLER AND IN HIS ABSENCE, WILL BE CONTROLLED BY
VIVENDI AND/OR LIBERTY

Mr. Diller, through entities he controls, currently beneficially owns or has
the right to vote 100% of the shares of our Class B common stock, par value $.01
per share, which is sufficient to control the outcome of any matter submitted to
a vote or for the consent of our shareholders with respect to which holders of
USA common stock, USA Class B common stock and USA preferred stock vote together
as a single class. Mr. Diller, subject to the terms of a stockholders agreement,
dated as of October 19, 1997 (the "Current Stockholders Agreement"), among
Universal Studios, Liberty, Mr. Diller, USA and The Seagram Company Ltd. (now
controlled by Vivendi), effectively controls the outcome of all matters
submitted to a vote or for the consent of our stockholders (other than with
respect to the election by the holders of USA common stock of 25% of the members
of our board of directors (rounded up to the nearest whole number) and certain
matters as to which a separate class vote of the holders of USA common stock or
USA preferred stock is required under Delaware law).

Under the Current Stockholders Agreement, Mr. Diller, Universal Studios and
Liberty have agreed that USA securities owned by any of Mr. Diller, Universal
Studios, Liberty and certain of their affiliates will not be voted in favor of
the taking of any action with respect to certain fundamental changes relating to
USA (including an acquisition of USA), except with the consent of each of
Mr. Diller, Universal Studios and Liberty. Accordingly, in respect of these
matters, each of Mr. Diller, Universal Studios and Liberty currently has the
ability to veto, in his or its sole discretion, the taking of any action with
respect to these matters. Following completion of the VUE transaction, each of
Mr. Diller and Liberty will have the right to consent to the fundamental changes
in the event that USA is highly leveraged. We cannot assure you that Mr. Diller
and Liberty, and prior to completion of the VUE transaction, Universal Studios,
will agree in the future on any such transaction or action, in which case we
would not be able to engage in such transaction or take such action.

Upon Mr. Diller's permanent departure from USA, we may change in various
fundamental respects. For example, prior to the completion of the VUE
transaction, generally, Vivendi, through Universal Studios, would be able to
control USANi LLC, through which a significant portion of our businesses are
currently owned, and also would have the ability to seek to directly control us.
Following

completion of the VUE transaction, generally, Liberty would be able to control
USA through its ownership of its USA Class B common stock.

USE OF PROCEEDS

All of the USA common stock being offered under this prospectus is being
sold by the Selling Stockholders. Other than as described in this prospectus
under the section "SELLING STOCKHOLDERS--USA'S RELATIONSHIPS WITH THE SELLING
STOCKHOLDERS", USA will not receive any proceeds from the sale of USA common
stock by the Selling Stockholders.

SELLING STOCKHOLDERS

The following table sets forth each Selling Stockholder, together with
certain information regarding the USA common stock held by such Selling
Stockholder as of May 1, 2002. The USA common stock being offered under this
prospectus is being offered for the account of the Selling Stockholders.

SHARES OF SHARES OF
USA COMMON STOCK USA COMMON STOCK
BENEFICIALLY OWNED PRIOR TO SHARES OF USA COMMON STOCK BENEFICIALLY OWNED AFTER
SELLING STOCKHOLDER THE OFFERING BEING OFFERED THE OFFERING
------------------- --------------------------- -------------------------- ------------------------

Harry Goodman............. 26,633 26,633 *

Peter Atkin............... 2,806 2,806 *

Dr. Urs Dietrich.......... 39,334 39,334 *

McJill Corporation........ 2,806 2,806 *

Kuoni Reisen Holding AG... 414,399 414,399 *

Barclays Industrial
Development Limited....... 740,418 740,418 *

Barclays PVLP Partner
Limited................... 389,665 389,665 *

------------------------------

* Because the Selling Stockholders may sell all or a portion of the USA common
stock that is being offered pursuant to this prospectus, the number of
shares of USA common stock that will be owned by each Selling Stockholder
upon termination of this offering cannot be determined.

We have filed a registration statement with the SEC, of which this
prospectus forms a part, with respect to the resale of the USA common stock
subject to this prospectus from time to time under Rule 415 under the Securities
Act. The USA common stock being offered under this prospectus is being
registered to permit public secondary trading of such USA common stock. Subject
to the restrictions described in this prospectus, the Selling Stockholders may
offer the USA common stock being offered under this prospectus for resale from
time to time. Because the Selling Stockholders may dispose of all or a portion
of their USA common stock, we cannot estimate the number of shares of USA common
stock that will be held by the Selling Stockholders upon the termination of any
such disposition. In addition, subject to the restrictions described in this
prospectus, the Selling Stockholders identified above may sell, transfer or
otherwise dispose of a portion of the USA common stock being offered under this
prospectus in transactions exempt from the registration requirements of the
Securities Act. See "PLAN OF DISTRIBUTION."

USA'S RELATIONSHIPS WITH THE SELLING STOCKHOLDERS

On March 28, 2002, we entered into a sale and purchase agreement with the
Selling Stockholders and other parties, pursuant to which we acquired all of the
issued ordinary share capital of TV Travel Group Limited on May 1, 2002. In
exchange for their ordinary shares of TV Travel Group Limited, the Selling
Stockholders and the other sellers of TV Travel Group Limited ordinary shares
received cash and shares of USA common stock. In addition, as part of the
acquisition by USA, certain Selling Stockholders used cash proceeds received by
them from TV Travel Group Limited in redemption or repayment of TV Travel Group
Limited preference shares and shareholder loans to purchase shares of USA common
stock directly from USA. The USA common stock issued to the Selling Stockholders
in connection with the TV Travel Group transaction, all of which is being
offered under this prospectus, was issued pursuant to an exemption from the
registration requirements of the Securities Act.

In connection with the sale and purchase agreement, we and the Selling
Stockholders entered into a registration rights agreement, pursuant to which we
granted registration rights relating to the USA common stock being offered under
this prospectus. Pursuant to that registration rights agreement, USA filed a
registration statement, of which this prospectus is a part, with respect to the
USA common stock subject to this prospectus on April 30, 2002. The registration
rights agreement is filed as an exhibit to that registration statement and
incorporated herein by reference.

In connection with the TV Travel Group transaction, USA, the Selling
Stockholders and other sellers of TV Travel Group Limited ordinary shares
entered into escrow and security arrangements under which such Selling
Stockholders and the other sellers of TV Travel Group Limited ordinary shares
deposited a portion of the cash paid by USA in respect of their ordinary
shares of TV Travel Group Limited and shares of USA common stock acquired by
them in connection with the TV Travel Group transaction with an escrow agent
(for the cash) and a collateral agent (for the shares of USA common stock).
At the date hereof, 799,869 of the 1,616,061 shares of USA common stock owned
by the Selling Stockholders and being offered under this prospectus were
being held by the collateral agent under the escrow and security
arrangements. Under the terms of the escrow and security arrangements, those
Selling Stockholders whose shares of USA common stock were deposited with the
collateral agent are permitted, on or before the 60th business day after the
date of this prospectus, to elect to substitute their shares of USA common
stock that are held by the collateral agent subject to the escrow and
security arrangements with the cash proceeds from a sale of those shares,
which cash proceeds will be converted into pounds sterling and deposited with
the escrow agent. The sale of any shares of USA common stock subject to the
escrow and security arrangements must be completed on a recognized investment
exchange in a transaction carried out in a customary broker transaction in a
market transaction at the then-prevailing price. The registration statement
of which this prospectus is a part has been filed, in part, to facilitate
such substitutions, if any Selling Stockholders choose to make them.

If USA becomes entitled to recover amounts for claims under the sale and
purchase agreement relating to the TV Travel Group transaction, those amounts
may be satisfied out of the cash and/or shares of USA common stock, if any, that
are subject to the escrow and security arrangements. Because a portion of the
shares of USA common stock being offered under this prospectus is subject to
those escrow and security arrangements, in the event that USA becomes entitled
to recover amounts from such cash and/or shares of USA common stock, USA may
ultimately receive funds from the same escrow and security arrangements into
which the proceeds from the sale of a portion of the shares of USA common stock
under this prospectus will be deposited. To the extent that any such proceeds
are ultimately received by USA, they will be used by USA for general corporate
purposes.

In addition, the sale and purchase agreement contains limitations on the
number of shares of USA common stock that the Selling Stockholders may sell
during any single trading day. See "PLAN OF DISTRIBUTION--VOLUME LIMITATION."

As a result of USA's acquisition of TV Travel Group Limited, Harry Goodman,
a Selling Stockholder, has become an employee of a subsidiary of USA. In the
ordinary course of business, USA and some of our subsidiaries may be parties to
various commercial arrangements with Kuoni Reisen Holding AG, Barclays
Industrial Development Limited and Barclays PVLP Partner Limited, each a Selling
Stockholder, or parties to which they may be related, all of which arrangements
were negotiated on an arm's-length basis and none of which are material to USA.

PLAN OF DISTRIBUTION

METHOD OF SALE

Subject to the restrictions contained in the escrow and security
arrangements (which preclude shares of USA common stock subject to those
arrangements from being sold (1) later than the 60th business day after the date
of this prospectus or (2) other than on a recognized investment exchange in a
transaction carried out in a customary broker transaction in a market
transaction at the then-prevailing price) and otherwise described in this
prospectus, the Selling Stockholders may sell the USA common stock being offered
under this prospectus directly to other purchasers, or to or through
broker-dealers or agents, in separate transactions or in a single transaction.
The Selling Stockholders will act independently of USA in making decisions with
respect to the timing, manner and size of each sale. To the extent required, the
number of shares of USA common stock to be sold, purchase price, public offering
price, the names of any such agent or dealer and any applicable commission or
discount with respect to a particular offering will be set forth in an
accompanying prospectus supplement.

- The USA common stock may be sold through a broker or brokers, acting as
principals or agents. Transactions through broker-dealers may include
block trades in which brokers or dealers will attempt to sell the USA
common stock as agent but may position and resell the block as principal
to facilitate the transaction. The USA common stock may be sold through
dealers or agents or to dealers acting as market makers. Broker-dealers
may receive compensation in the form of discounts, concessions, or
commissions from the Selling Stockholders and/or the purchasers of the USA
common stock for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).

- The USA common stock may be sold on any national securities exchange or
quotation service on which the USA common stock may be listed or quoted at
the time of sale, in the over-the-counter market, or in transactions
otherwise than on such exchanges or services or in the over-the-counter
market.

- The USA common stock may be sold in private sales directly to purchasers.

Subject to the restrictions contained in the escrow and security
arrangements for shares of USA common stock (and the proceeds from the sale of
such shares) subject to those arrangements, the Selling Stockholders may enter
into hedging transactions with counterparties (including broker-dealers), and
the counterparties may engage in short sales of the USA common stock in the
course of hedging the positions they assume with such Selling Stockholders,
including, without limitation, in connection with distribution of the USA common
stock by such counterparties. Such counterparties may receive compensation in
the form of underwriting discounts, concessions or commissions from the Selling
Stockholders or the purchasers of the USA common stock for whom they may act as
agents. In addition, the Selling Stockholders may sell short the USA common
stock, and in such instances, this prospectus may be delivered in connection
with such short sales and the USA common stock offered

hereby may be used to cover such short sales. The Selling Stockholders may also
enter into option or other transactions with counterparties that involve the
delivery of the USA common stock to the counterparties, who may then resell or
otherwise transfer such USA common stock.

Subject to the restrictions contained in the escrow and security
arrangements for shares of USA common stock (and the proceeds from the sale of
such shares) subject to those arrangements, the Selling Stockholders may also
loan or pledge the USA common stock and the borrower or pledgee may sell the USA
common stock as loaned or upon a default may sell or otherwise transfer the
pledged USA common stock.

At any time, USA may waive, in whole or in part, any or all of the
restrictions contained in the escrow and security arrangements described above.

USA common stock covered by this prospectus which qualifies for sale
pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus.

The Selling Stockholders reserve the right to accept and, together with
their agents from time to time, to reject, in whole or in part, any proposed
purchase of USA common stock to be made directly or through agents.

In order to comply with securities laws in certain jurisdictions, the USA
common stock being offered under this prospectus will be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the securities offered hereby may not be
offered or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with.

VOLUME LIMITATION

Under the sale and purchase agreement entered into in connection with the TV
Travel Group transaction, each of the Selling Stockholders agreed that, prior to
May 1, 2003, it would not transfer or sell, during any trading day, an aggregate
number of shares of USA common stock which, when added to the number of shares
of USA common stock transferred or sold on that day by all other Selling
Stockholders, is greater than an amount equal to 10% of the average daily volume
for trading in shares of USA common stock on The Nasdaq National Market over the
five trading days immediately preceding that trading day. USA may waive this
restriction, in whole or in part, at any time.

TIMING AND PRICE

Subject to the restrictions described in this prospectus, the shares of USA
common stock being offered under this prospectus may be sold from time to time
by the Selling Stockholders. See "SELLING STOCKHOLDERS--USA'S RELATIONSHIPS WITH
THE SELLING STOCKHOLDERS". There is no assurance that the Selling Stockholders
will sell or dispose of any or all of their shares of USA common stock.

Under the registration rights agreement entered into with the Selling
Stockholders, we are required to keep the registration statement of which this
prospectus is a part effective until the earlier of the date on which the
Selling Stockholders no longer hold the USA common stock or May 6, 2003.

The Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of USA common stock by them.

Subject to the restrictions contained in the escrow and security
arrangements (which preclude shares of USA common stock subject to those
arrangements from being sold other than on a recognized investment exchange in a
transaction carried out in a customary broker transaction in a market
transaction at the then-prevailing price), the USA common stock being offered
under this prospectus may be sold at a fixed price, which may be changed, or at
varying prices determined at the

time of sale or at negotiated prices. Such prices will be determined by the
holders of such securities or by agreement between such holders and purchasers
and/or dealers (who may receive fees or commissions in connection therewith).

PROCEEDS, COMMISSIONS AND EXPENSES

The aggregate proceeds to the Selling Stockholders from the sale of the USA
common stock offered by them under this prospectus will be the purchase price of
such USA common stock less discounts, concessions and commissions, if any. Other
than as described in this prospectus under the section "SELLING
STOCKHOLDERS--USA'S RELATIONSHIPS WITH THE SELLING STOCKHOLDERS", USA will not
receive any proceeds from the sale of USA common stock by the Selling
Stockholders.

The Selling Stockholders will be responsible for payment of commissions,
concessions and discounts of dealers or agents. The Selling Stockholders will
pay for the fees and expenses of their counsel, as well as all applicable stock
transfer taxes, brokerage commissions, discounts or commissions. We will pay any
printing costs, SEC filing fees and other fees, disbursements and out-of-pocket
expenses and costs incurred by us in connection with the preparation of the
registration statement of which this prospectus is a part and in complying with
all applicable securities and blue sky laws.

The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of the USA common stock may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the USA common
stock may be deemed to be underwriting commissions or discounts under the
Securities Act.

Under the registration rights agreement described above, USA has agreed to
indemnify the Selling Stockholders against certain liabilities, including
certain liabilities arising under the Securities Act. The Selling Stockholders
may agree to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the USA common stock against certain
liabilities, including liabilities arising under the Securities Act.

NASDAQ LISTING STATUS

USA common stock is currently listed on the Nasdaq National Market under the
symbol "USAI."

DESCRIPTION OF USA COMMON STOCK

Set forth below is a description of the USA common stock being offered under
this prospectus. The following statements are brief summaries of, and are
subject to the provisions of, our restated certificate of incorporation, as
amended, our amended and restated by-laws, and the relevant provisions of the
General Corporation Law of the State of Delaware.

As of the date of this prospectus, our authorized capital stock consists of
1,600,000,000 shares of USA common stock, par value $0.01 per share, 400,000,000
shares of USA Class B common stock, par value $0.01 per share, and 100,000,000
shares of preferred stock, par value $0.01 per share. As of April 25, 2002,
there were 348,611,228 shares of USA common stock outstanding, 63,033,452 shares
of USA Class B common stock outstanding and 13,120,533 shares of USA preferred
stock outstanding.

With respect to matters that may be submitted to a vote or for the consent
of our stockholders generally, including the election of directors, each holder
of USA common stock, USA Class B common stock and USA preferred stock will vote
together as a single class. In connection with any such vote, each holder of USA
common stock is entitled to one vote for each share of USA common stock held,
each holder of USA Class B common stock is entitled to ten votes for each share
of USA Class B common stock held and each holder of USA preferred stock is
entitled to two votes for each share of USA preferred stock held.
Notwithstanding the foregoing, the holders of USA common stock,

acting as a single class, are entitled to elect 25% of the total number of our
directors, and, in the event that 25% of the total number of directors shall
result in a fraction of a director, then the holders of USA common stock, acting
as a single class, are entitled to elect the next higher whole number of
directors. In addition, Delaware law requires that certain matters be approved
by the holders of USA common stock voting as a separate class.

Shares of USA Class B common stock are convertible into shares of USA common
stock at the option of the holder thereof, at any time, on a share-for-share
basis. Such conversion ratio will in all events be equitably preserved in the
event of any recapitalization of USA by means of a stock dividend on, or a stock
split or combination of, outstanding USA common stock or USA Class B common
stock, or in the event of any merger, consolidation or other reorganization of
USA with another corporation. Upon the conversion of USA Class B common stock
into shares of USA common stock, those shares of USA Class B common stock will
be retired and will not be subject to reissue. Shares of USA common stock are
not convertible into shares of USA Class B common stock.

In all other respects, the USA common stock and the USA Class B common stock
are identical. The holders of USA common stock and the holders of USA Class B
common stock are entitled to receive, share for share, such dividends as may be
declared by our board of directors out of funds legally available therefor. In
the event of a liquidation, dissolution, distribution of assets or winding-up of
USA, the holders of USA common stock and the holders of USA Class B common stock
are entitled to share ratably in all assets of USA available for distribution to
our stockholders, after the rights of the holders of the USA preferred stock, if
any, have been satisfied.

In connection with our acquisition of USA Network and Studios USA from
Universal Studios in 1998, we granted to Universal Studios and Liberty
preemptive rights which generally provide that each of Universal Studios and
Liberty may elect to purchase a number of shares of USA stock, or shares of a
subsidiary of USA exchangeable for shares of USA stock, referred to as LLC
shares, so that the percentage equity interest such entity owned of us after our
acquisition of USA Network and Studios USA will be the same as before such
acquisition, in each case, assuming the exchange of all LLC shares owned by
Universal Studios and Liberty and shares of Home Shopping Network owned by a
subsidiary of Liberty. The purchase price for shares of USA stock pursuant to a
preemptive right election is the fair market value of the USA stock, or LLC
share, purchased. Subject to specified limits set forth in the governance
agreement, Universal may elect to receive shares of USA common stock or USA
Class B common stock in connection with a preemptive exercise, or LLC shares
exchangeable for shares of USA common stock; Liberty's preemptive exercises are
for USA common stock only, or LLC shares exchangeable for shares of USA common
stock. In connection with, and effective upon completion of, the VUE
transaction, Vivendi's preemptive rights will be eliminated.

Our certificate of incorporation provides that there can be no stock
dividends or stock splits or combinations of stock declared or made on USA
common stock or USA Class B common stock unless the shares of USA common stock
and USA Class B common stock then outstanding are treated equally and
identically.

In connection with the acquisition of a controlling interest in Expedia,
Inc., USA issued approximately 13,125,000 shares of its preferred stock, par
value $0.01 per share, "Series A Cumulative Convertible Preferred Stock,"
each having a $50.00 face value and a term of 20 years, which we refer to in
this prospectus as USA preferred stock. Each share of USA preferred stock is
convertible, at the option of the holder at any time, into that number of
shares of USA common stock equal to the quotient obtained by dividing $50 by
the conversion price per share of USA common stock (as defined in the
certificate of designation for the USA preferred stock). In the event of a
voluntary or involuntary liquidation, dissolution or winding up of USA,
holders of USA preferred stock shall be entitled to receive, in preference to
any holder of USA common shares, an amount per share equal to all accrued and
unpaid dividends plus the greater of (a) face value, or (b) the liquidating
distribution that would be

received had such holder converted the USA preferred stock into USA common stock
immediately prior to the liquidation, dissolution or winding up of USA.

The arrangements described in this prospectus in the section "RISK FACTORS",
and more fully described in the documents identified under the caption "WHERE
YOU CAN FIND MORE INFORMATION", may have the effect of delaying, deferring or
preventing a change in control of USA.

The transfer agent for the shares of USA common stock and USA preferred
stock is The Bank of New York.

The shares of USA common stock being offered under this prospectus are
validly issued, fully paid and non-assessable.

CERTAIN MATERIAL UNITED STATES
FEDERAL TAX CONSEQUENCES

GENERAL

The following is a general discussion of certain material United States
federal income and estate tax consequences of the ownership and disposition of
USA common stock.

As used herein, a "United States person" is

- a citizen or resident of the United States;

- a corporation created or organized in the United States or under the laws
of the United States or of any state;

- an estate the income of which is includible in gross income for United
States federal income taxation regardless of its source;

- a trust if a court in the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust; or

- any person otherwise subject to United States federal income tax on a net
income basis in respect of its worldwide taxable income.

A "U.S. Holder" is a beneficial owner of USA common stock who is a United
States person. A "Non-U.S. Holder" is a beneficial owner that is not a U.S.
Holder.

This discussion is based on current law, which is subject to change,
possibly with retroactive effect, or different interpretations. This discussion
is limited to holders who hold USA common stock as capital assets. Moreover,
this discussion is for general information only and does not address all the tax
consequences that may be relevant in light of your particular circumstances, nor
does it discuss special tax provisions which may apply if you have relinquished
United States citizenship or residence.

EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT A TAX ADVISOR WITH RESPECT
TO CURRENT AND POSSIBLE FUTURE TAX CONSEQUENCES OF PURCHASING, OWNING AND
DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE
UNDER STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.

TAXATION OF U.S. HOLDERS

This section describes the tax consequences to a U.S. Holder. If you are not
a U.S. Holder, this section does not apply to you.

DISTRIBUTIONS. Distributions on USA common stock will constitute dividend
income, taxable at ordinary income rates, to the extent of USA's current or
accumulated earnings and profits. Any excess will be treated as non-taxable
return of capital to the extent of the holder's basis in the common stock, and
thereafter as capital gain.

SALES OR EXCHANGES. On the sale, exchange or other disposition of shares of
USA common stock (other than a redemption of the common stock, discussed below),
holders will generally recognize capital gain or loss equal to the difference
between the sale proceeds and the adjusted tax basis in the stock sold,
exchanged or disposed of. This gain or loss will be long-term capital gain or
loss if at the time of the sale, exchange or disposition the holder has held the
stock sold, exchanged or disposed of for more than one year. The deductibility
of capital losses is subject to limitations.

DIVIDENDS TO CORPORATE SHAREHOLDERS. In general, a distribution on the USA
common stock that is taxable as a dividend and that is made to a corporate
shareholder will qualify for the 70% corporate dividends-received deduction
under the Internal Revenue Code. However, a dividend that arises upon a
redemption of common stock will generally constitute an "extraordinary dividend"
under Section 1059 of the Internal Revenue Code. In addition, constructive
dividends received on common stock within two years of the holder's acquisition
of the stock may also constitute "extraordinary dividends." If the extraordinary
dividend rules apply, the corporate shareholder may lose some or all of the
benefits of the dividends-received deduction. Furthermore, there are many
exceptions and restrictions relating to the availability of the
dividends-received deduction. Consequently, corporate shareholders should
consult their own tax advisors regarding the extent, if any, that the
dividends-received deduction is available to them and the extent to which the
extraordinary dividend rules may apply.

REDEMPTION OF USA COMMON STOCK. A redemption of USA common stock generally
would be a taxable event and would be treated as if the holder sold the common
stock if the redemption:

- results in a "complete termination" of the holder's interest in USA stock;

- is "substantially disproportionate" (i.e., after the redemption, the
percentage of all our outstanding voting stock that is owned by the holder
is less than 80% of the percentage of all our outstanding voting stock
(and the percentage of all our outstanding common stock that is owned by
the holder is less than 80% of the percentage of all our outstanding
common stock) that was owned by the holder immediately before the
redemption); or

- is "not essentially equivalent to a dividend" (i.e., the redemption must
meaningfully reduce the holder's proportionate interest in USA based on
the holder's particular circumstance; the Internal Revenue Service (the
"IRS") has indicated that this test is satisfied by even a small reduction
in the percentage interest of a shareholder whose relative stock interest
in a publicly held corporation is minimal and who exercises no control
over corporate affairs).

In determining whether any of these tests has been met, holders must take
into account the shares of stock actually owned and the shares of stock
constructively owned by reason of certain constructive ownership rules set forth
in Section 318 of the Internal Revenue Code.

If stock is redeemed in a redemption that meets one of the tests described
above, the holder generally would recognize taxable gain or loss equal to the
difference between the amount of cash and the fair market value of property
received and the holder's tax basis in the stock redeemed. This gain or loss
would be long-term capital gain or capital loss if the stock were held for more
than one year.

If a redemption does not meet any of the tests described above, the entire
amount of the cash and the fair market value of property received generally
would be taxed as a dividend as explained above under "Distributions." If a
redemption is treated as a distribution that is taxable as a dividend, the
holder's basis in the redeemed stock would generally be transferred to the
holder's remaining shares of stock, if any.

INFORMATION REPORTING AND BACKUP WITHHOLDING. Information reporting will
generally apply to dividends received on USA common stock and to the proceeds
received on the sale or disposition of such stock by a U.S. Holder who is not an
exempt recipient. Generally, individuals are not exempt

recipients, whereas corporations are exempt recipients. Backup withholding will
apply only if the U.S. Holder is not an exempt recipient and:

- fails to furnish its Taxpayer Identification Number ("TIN") which, in the
case of an individual, is his or her Social Security Number;

- furnishes an incorrect TIN;

- in the case of dividends, is notified by the IRS that it has failed to
properly report payments of interest or dividends; or

- fails to certify, under penalty of perjury, that it has furnished a
correct TIN, has not been notified by the IRS that it is subject to backup
withholding (or has since been notified by the IRS that it is no longer
subject to backup withholding) and is a U.S. person (including a U.S.
resident alien).

U.S. Holders should consult their tax advisors regarding their qualification
for exemption from backup withholding and the procedure for demonstrating such
an exemption if applicable.

The amount of any backup withholding from a payment to a U.S. Holder is not
an additional tax and is allowable as a credit against the U.S. Holder's United
States federal income tax liability, if any, or may be claimed as a refund,
provided that the required information is furnished to the IRS.

TAXATION OF NON-U.S. HOLDERS

This section describes the tax consequences to a Non-U.S. Holder. If you are
a U.S. Holder, see the above discussion under "--Taxation of U.S. Holders."

DIVIDENDS. If dividends are paid, Non-U.S. Holders will be subject to
withholding of United States federal income tax at a 30% rate or a lower rate as
may be specified by an applicable income tax treaty. To claim the benefit of a
lower rate under an income tax treaty, Non-U.S. Holders must properly file with
the payor an IRS Form W-8BEN, or successor form, claiming an exemption from or
reduction in withholding under the applicable tax treaty. In addition, where
dividends are paid or deemed paid to a Non-U.S. Holder that is a partnership or
other pass through entity, persons holding an interest in the entity may need to
provide certification claiming an exemption or reduction in withholding under
the applicable treaty.

If actual or deemed dividends are considered effectively connected with the
conduct of a trade or business within the United States and, where a tax treaty
applies, are attributable to United States permanent establishment, those
dividends will not be subject to withholding tax, but instead will be subject to
United States federal income tax on a net basis at applicable graduated
individual or corporate rates, provided an IRS Form W-8ECI, or successor form,
is filed with the payor. In the case of a foreign corporation, any effectively
connected dividends may, under certain circumstances, be subject to an
additional "branch profits tax" at a rate of 30% or a lower rate as may be
specified by an applicable income tax treaty.

Non-U.S. Holders must comply with the certification procedures described
above, or, in the case of payments made outside the United States with respect
to an offshore account, certain documentary evidence procedures, directly or
under certain circumstances through an intermediary, to obtain the benefits of a
reduced rate under an income tax treaty with respect to dividends paid or deemed
paid with respect to USA common stock. In addition, if a Non-U.S. Holder is
required to provide an IRS Form W-8ECI or successor form, as discussed above,
the Non-U.S. Holder must also provide its tax identification number.

Non-U.S. Holders that are eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by filing an appropriate claim for refund with the IRS.

GAIN ON DISPOSITION OF USA COMMON STOCK. Non-U.S. Holders generally will
not be subject to United States federal income tax on any gain realized on the
sale or other disposition of USA common stock unless:

- the gain is considered effectively connected with the conduct of a trade
or business within the United States and, where a tax treaty applies, is
attributable to a United States permanent establishment (and, in which
case, if the holder is a foreign corporation, may be subject to an
additional "branch profits tax" equal to 30% or a lower rate as may be
specified by an applicable income tax treaty);

- the holder is an individual who holds the USA common stock as a capital
asset and is present in the United States for 183 or more days in the
taxable year of the sale or other disposition and other conditions are
met; or

- we are or have been a "United States real property holding corporation,"
or a USRPHC, for United States federal income tax purposes. We believe
that we are not currently, and are not likely to become, a USRPHC. If we
were to become a USRPHC, then gain on the sale or other disposition of USA
common stock generally would not be subject to United States federal
income tax provided:

- USA common stock were "regularly traded" on an established securities
market; and

- the holder did not actually or constructively own more than 5% of the USA
common stock during the shorter of the five-year period preceding the
disposition or the holder's holding period.

FEDERAL ESTATE TAX. In the case of an individual, USA common stock held at
the time of death will be included in the individual's gross estate for United
States federal estate tax purposes, and may be subject to United States federal
estate tax, unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING. We must report annually to
the IRS and to each holder the amount of dividends paid or deemed paid and the
tax withheld with respect to those dividends, regardless of whether withholding
was required. Copies of the information returns reporting those dividends and
withholding may also be made available to the tax authorities in the country in
which a Non-U.S. Holder resides under the provisions of an applicable income tax
treaty or other applicable agreements.

Backup withholding is generally imposed on certain payments to persons that
fail to furnish the necessary identifying information to the payor. Generally
Non-U.S. Holders will be subject to back-up withholding tax with respect to
dividends paid on USA common stock unless they certify their status as Non-U.S.
Holders.

The payment of proceeds of a sale of USA common stock effected by or through
a United States office of a broker will be subject to both backup withholding
and information reporting unless the holder provides the payor with the holder's
name and address and certifies its Non-U.S. Holder status or otherwise
establishes an exemption. In general, backup withholding and information
reporting will not apply to the payment of the proceeds of a sale of USA common
stock by or through a foreign office of a broker. If, however, such broker is,
for United States federal income tax purposes, a United States person, a
controlled foreign corporation, a foreign person that derives 50% or more of its
gross income for certain periods from the conduct of a trade or business in the
United States, or, a foreign partnership that at any time during its tax year
either is engaged in the conduct of a trade or business

in the United States or has as partners one or more United States persons that,
in the aggregate, hold more than 50% of the income or capital interest in the
partnership, such payments will be subject to information reporting, but not
backup withholding, unless such broker has documentary evidence in its records
that the holder is a Non-U.S. Holder and certain other conditions are met or the
holder otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules generally will be
allowed as a refund or a credit against the holder's United States federal
income tax liability provided the required information is furnished in a timely
manner to the IRS.

LEGAL MATTERS

The validity of the USA common stock offered by this prospectus is being
passed upon for us by Wachtell, Lipton, Rosen & Katz, New York, New York.

EXPERTS

Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and financial statement schedule of USA as set forth in
their report, included in USA Networks, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 2001, which is incorporated by reference in this
prospectus. USA's consolidated financial statements and financial statement
schedule are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.