×
You will be redirected back to your article in seconds

Rainbow nets spinoff set

AMC’s Don Draper, of Madison Avenue, will soon be taking up residence on another famous New York thoroughfare, Wall Street.

Investors are anxiously awaiting the arrival Friday of a third pure-play cable programmer as Cablevision prepares to spin off its former Rainbow Media business, newly named AMC Networks, home of the hit show “Mad Men.”

AMC will join Discovery Communications and Scripps Networks Interactive as the biz’s only public companies solely focused on cable channels, with dual revenue streams of advertising and distribution fees that Wall Street has loved.

At the same time, AMC will become the latest spinoff by a media company; in recent years MSG has separated from Cablevision, and AOL and Time Warner Cable from Time Warner. The prime reasons for such a move have been to focus on core businesses or jettison underperformers.

Cablevision is set to spin its family of channels, including AMC, IFC, WeTV and Sundance, on Thursday with regular trading commencing on Nasdaq on Friday. Wall Street is bullish about the prospect of a new cable-only investing option.

“With the content pendulum swinging in AMC’s favor, we believe AMC has the ability to drive notable higher advertising sales over the next few years,” said BTIG analyst Rich Greenfield.Greenfield is predicting AMC Networks shares could rise to $50 in the first year, after initial pricing at about $35.

He also predicts that AMC Nets could be bought by another company in 2013, giving the company time to ramp up affiliate fees and further boost ratings. With an enterprise value of about $4.8 billion for AMC Networks, Greenfield said suitors could include CBS, NBCUniversal and Time Warner.

The new company is expected to have revenues of $1.2 billion this year, with net profits of $129 million.

Free of cable programming, Cablevision is now primarily a cable operator, bulkding up earlier this year with the addition of the Bresnan systems out west. The exceptions are its Newsday newspaper holdings and the Clearview Cinemas chain.

In addition to AMC, AOL, Time Warner Cable and MSG, News Corp. has talked about spinning off SkyNews as part of its buy-in of BSkyB. Liberty Media John Malone plans to spin off Liberty Starz and Liberty Capital. Lionsgate, while silent on the topic lately, once pondered spinning off its digital assets, including Break Media. And publisher Conde Nast is considering spinning its social news media site Reddit.

“The trend is symptomatic of the frustration with the underperformance of share price and subsegements of entertainment not being recognized,” said Harold Vogel, founder of investment firm Vogel Capital. “In most cases, they work, by adding value.”

More TV

  • Chuy Bravo seen at Focus Features

    Chuy Bravo, 'Chelsea Lately' Sidekick, Dies at 63

    Chuy Bravo, Chelsea Handler’s sidekick on her E! talk show “Chelsea Lately,” has died in Mexico City. He was 63. According to reports, the Mexican American actor died suddenly after being hospitalized with stomach pains while visiting family in Mexico. Handler posted a tribute to Bravo on Instagram shortly after reports of his death began [...]

  • SATURDAY NIGHT LIVE -- "Scarlett Johansson"

    'Saturday Night Live' Parodies 'A Marriage Story' with Kellyanne Conway (Watch)

    Scarlett Johansson may be nominated for a Golden Globe for her performance in “A Marriage Story,” but when she hosted the Dec. 14 episode of “Saturday Night Live,” she slid into a less flashy role for that sketch comedy’s parody of the new dramatic film. Johansson took on the role of therapist to Kate McKinnon’s [...]

  • SATURDAY NIGHT LIVE -- "Scarlett Johansson"

    'Saturday Night Live': Kate McKinnon's Greta Thunberg Tells Trump to 'Grow Up' (Watch)

    With the December holidays upon us, “Saturday Night Live” took a brief detour from its usual parodies of political press conferences and the impeachment hearings to instead begin its Dec. 14 episode with a sketch about average families discussing the state of the world over dinner — with a special message from Greta Thunberg (as [...]

  • Christmas Town Hallmark

    Hallmark Faces Holiday Controversy After Rejecting Ad With Same-Sex Couple

    Hallmark Channel delivered a sentiment very different from the ones found in its parent company’s greeting cards when its executives questioned an ad showing two women getting married — and barred the commercial from running on its schedule. Zola, a company that offers online wedding registries and wedding planning services, had been running commercials in [...]

More From Our Brands

Access exclusive content