Family set to take company private
After repeated attempts to buy Cablevision, the founding Dolan family finally succeeded on Wednesday, ponying up $10.6 billion to obtain full control of the company.But how much will going private affect the operations of a company already seen as one of the more nimble media firms? The Dolans released a statement saying that they felt the move would free up Cablevision to make more aggressive additions and adjustments to its services. “We are very proud of the company’s track record of delivering quality service and innovative products to our customers. We believe the best way to continue this tradition in today’s increasingly competitive environment is as a privately held company.” But experts said that removing the watchful eyes of public investors will have a limited impact. “I don’t think it will really change how they operate,” said longtime cable analyst Bruce Leichtman. “All this means is that when they sell — and it’s when, not if — they’ll be able to see more money from that sale.” Time Warner and Comcast have both expressed an interest in Cablevision; even on Wednesday, Time Warner chairman-CEO Richard Parsons said his company was still interested. Cablevision Systems owns holdings that include an upscale cable operator, cable net AMC, Madison Square Garden and theatrical distrib IFC Films. Private ownership historically has an impact on how much money nets spend on programming, but that impact varies widely based on the owner. Cablevision has consistently been on the cutting edge of new-media progress; its size and upscale demographic has allowed it to outpace larger rivals including Comcast and Time Warner Cable on broadband service and digital upgrades. The deal — which will include $2 billion from Jim and Charles Dolan — reps an 11% premium over the closing price on Tuesday and a 30% increase on their offer just six months ago. The Dolans had made offers of $27 per share and $30 per share, but the board of independent directors had rejected both, holding out for a higher price before agreeing this week to a deal worth just over $36 per share. Still, some analysts feel the company is worth at least $40 per share. The deal unveiled Wednesday still has to be approved by a majority of Cablevision’s outside shareholders. The news is not likely to turn down the heat from the Gotham tabloids, which are frequent critics of how Cablevision and the Dolans run Madison Square Garden and its two flagship teams, the New York Knicks and New York Rangers. Cable has been on a bit of a Wall Street hot streak lately — Cablevision itself has seen its stock rise nearly 25% since the beginning of the year — but the sector has been plagued by fears over competition from both the Internet and telcos. The move continues what has turned into a monopoly game for cable and satellite providers. Over the past three months, part of Time Warner Cable has been spun out as an IPO and Rupert Murdoch’s News Corp. sold his 38% stake in DirecTV to John Malone’s Liberty Media. In the past few years, Cox Communications has gone private, while Time Warner and Comcast bought the remnants of the bankrupt Adelphia. Cablevision is set to announce earnings on Thursday. It may or may not be the last quarterly earnings report; no timetable has been given for the transfer of shares.
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