Cablevision Weighs MSG Spinoff
The move to dump its sports assets comes as other teams are weighing sales, diluting stakes—or, possibly, going bankrupt.
May 7, 2009
Cablevision Systems Corp. could sell its world-famous Madison Square Garden operations, the company announced, as it revealed a first-quarter profit.
The spinoff, potentially worth up to $1.5 billion, includes three venues: MSG, Radio City Music Hall and the Beacon Theater, along with New York’s Rangers and Knicks franchise.
The move to spin its ancillary businesses off now positions Cablevision as a potential takeover target, stated a Bank of America/Merrill Lynch report posted at Thomson Analytics.
“We value MSG at $1.6 billion,” the report stated. “However, this gives zero value to the underlying real estate assets inclusive of the air rights over MSG.” That, the report stated, could push the Cablevision asset’s value to $2.5 billion.
Cablevision’s stock was up about four percent on the news, trading in the late afternoon at $19.06 per share. The company, in its quarterly earnings call, revealed it moved to a profit from the first quarter of 2008 on improved operating income at its cable systems and networks.
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