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Redstone to sell Nat’l Amusements?

Mogul may choose between CBS and exhibitor

To the list of bizarre recent events such as taxpayers owning a chunk of Citigroup, and Lehman Bros., Bear Stearns and Merrill Lynch all biting the dust can be added the prospect of Sumner Redstone selling National Amusements holdings.

Privately held National is essentially the holding company for Redstone’s stakes in both CBS and Viacom as well as the theater chain run by daughter Shari Redstone.

Nothing is official, but a divestment of theaters is on the table as the mogul wrangles over how best to address the looming debt payments of about $800 million. Redstone has repeatedly vowed not to sell “one single share” of either company and to hold onto the 1,500-screen exhib circuit, the original building block of his empire.

Redstone has rhapsodized for years about the magical powers of the movie theater experience and its central role in his rise through the media biz.

Holding onto anything in this rip-current economy isn’t easy, however. In Tuesday’s edition, the New York Times cited people close to Redstone in reporting he’ll have to either sell the theaters or unload his voting majority stake in ad-dependent CBS.

Unlike past media reports, the Times dispatch didn’t elicit a defiant statement by Redstone, but as talks continue through the holiday stretch, two problems have become clear with the potential sale of National Amusements. One is figuring out how much it’s worth, and the other is determining whether that value will help retire the $1.6 billion in debt, half of which is due by year’s end.

Theaters are in the midst of a digital conversion that proponents say will usher in a new wave of revenue. Trouble is, in the ongoing credit crunch, financing the changeover has been a headache — and naysayers say 3-D and other new bells and whistles won’t boost admissions much.

Those conflicting views on the exhib biz help explain why bankers holding the debt value National at $500 million and Redstone’s camp insists the chain is worth $1 billion.

Let’s hope the negotiators don’t keep talking while carving Thanksgiving turkey.

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