Clearview buy extends Gotham reach
NEW YORK — Cablevision Systems Corp. will extend its presence in the Gotham entertainment arena by acquiring fast-growing New York-area exhib Clearview Cinemas for $160 million in cash, stock and assumption of debt, the companies said Thursday.
The deal will enable Cablevision to promote its growing array of cable and live entertainment services in Clearview’s theaters, which are largely located in or near Cablevision’s New York-area systems, serving 2.7 million subscribers.
Cablevision gives Clearview a deep-pocketed parent to finance an aggressive growth strategy, which has taken it from eight screens four years ago to 254 screens in 45 theaters.
“Growing this business requires an enormous amount of capital. I spent 45% of my time raising money, but knowing that we have behind us the resources of Cablevision … made (the deal) irresistible,” Clearview CEO Dale “Bud” Mayo said during a conference call with reporters.
Cablevision has apparently already assisted Clearview’s bid for the 36 Gotham screens now being auctioned by Loews Cineplex Entertainment, judging by comments made by Mayo during the call.
He said the deal was “an outgrowth of the bidding process on the Sony New York theaters. We needed to have an equity partner to make that bid, (and) one thing led to another,” Mayo said, declining to elaborate.
Mayo has long had a plan to grow in what he calls “ever-widening circles,” moving gradually into New England and the mid-Atlantic region. It is not clear if Cablevision shares as aggressive a vision for the exhib, however.
On the fast track
Cablevision CEO Jim Dolan told reporters that Cablevision recognized Clearview’s growth history and “we are going to continue to support that fast growth,” although he noted “we think it makes particular sense in our own market areas,” which include Connecticut and Boston as well as New York.
Dolan said future Clearview expansion moves would be considered.
For Cablevision, the theaters fit into a strategy of building up a portfolio of live entertainment operations in the New York area to cross-promote its cable systems and cable channels, which include American Movie Classics, Bravo and MSG.
In the past two years, Cablevision has acquired two of the dominant live entertainment venues in Manhattan: Madison Square Garden and Radio City Prods., which operates Radio City Music Hall.
Acquiring Clearview is “a natural extension of our focus on live and television entertainment in the New York metro area,” Dolan said.
Clearview offers “cross-promotion and co-branding opportunities” ranging from use of its theater foyers for promoting cable products to distribution of ticket books that can be redeemed at either Clearview theaters or for video-on-demand services on the cable systems.
Cablevision has been pondering a move into exhibition for some time and even considered buying art theaters in Manhattan. But Dolan is believed to have decided against the move because Cablevision lacked management expertise in the industry.
Clearview solves that problem. Dolan noted that one of the big advantages of the acquisition was that “we get a very strong management team” led by Mayo, who will continue to run the company, reporting to Madison Square Garden CEO Dave Checketts.
The deal is a “home run” for Clearview shareholders, said a Wall Streeter, as Cablevision is offering $24.25 a share for their stock. That compares with Clearview’s closing price Wednesday of $22 and its initial public offering price of $8 a share just one year ago.
Clearview stock closed up 50¢ Thursday to $22.50.