Cablevision cloudy

Lower projections fuel speculation on future

NEW YORK — Chuck Dolan’s Cablevision Systems ignited a blaze of speculation about its future Friday when it revised downward all of its previous 2001 cash-flow projections and acknowledged that the faltering economy may force it to sell some of its assets.

Analysts immediately seized on the possibility that Time Warner Cable may be willing to fork over a premium for CSC’s 3 million cable subscribers, all in the Greater New York City area. Such a purchase would catapult TW Cable to No. 1 among all cable operators in the U.S., with 15.6 million subscribers overall, and make the company the dominant cable player in New York.

But a Cablevision spokeswoman said Dolan’s cable systems are the linchpin of the company’s long-term financial strategy: They’re the distribution pipeline for all of CSC’s cable networks under the Rainbow banner, including American Movie Classics, Bravo and WE: Women’s Entertainment, plus the company’s 60% stake in a batch of regional sports nets. Two of the sports webs, Madison Square Garden network and Fox Sports Net New York, are based in Gotham. Fox’s parent company News Corp. owns the remaining 40% of these networks.

Other Cablevision assets include the Madison Square Garden arena, Radio City Music Hall, the New York Knicks NBA team, the New York Rangers NHL team, the 65 moviehouses that make up the Clearview Cinema Group and the 41 Wiz retail stores.

In a statement, CSC said that “the continued weakness in advertising sales,” intensified by the Sept. 11 terrorist attacks, led to the lowering of cash-flow forecasts. The Madison Square Garden Network, for example, will bring in only an estimated $80 million, not $117.5 million, as earlier stated, because of a plunge in ad revenues and drastically reduced attendance at the live shows playing at Radio City Music Hall and the Theater at Madison Square Garden.

Because the economy is in the doldrums, Cablevision said it has also canceled plans to sell up to $1 billion of its stock, a blueprint filed with the Securities & Exchange Commission in May.

AT&T will sell stock

But CSC said that AT&T will go ahead with a previously announced strategy to sell $1.75 billion in CSC stock, using proceeds from the sale to pay down debt.

Cablevision said its economic setbacks would not derail the rollout of digital television to its cable subscribers. The kickoff began just 10 days ago with CSC’s offer of high-tech digital boxes to 50,000 homes in western Long Island. The digital service provides 20 basic-cable channels, video-on-demand movies, e-commerce, interactive services and a state-of-the-art onscreen navigator.

CSC’s stock closed Friday down 11% at $39.67.

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