Cablevision To Explore Spin-Off of MSG Businesses

Assets could be worth as much as $1.5 billion
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Cablevision Systems said Thursday morning that its board of directors has authorized management to explore the spin-off of its Madison Square Garden businesses.

MSG includes the Madison Square Garden arena, sports teams the New York Knicks, the New York Rangers and the New York Liberty, music channel fuse, Radio City Music Hall, the Chicago Theater and the Beacon Theater.

In a research note, Miller Tabak media analyst David Joyce estimated the assets could be worth as much as $1.5 billion. The analyst said that a conservative valuation of the MSG properties would be about $755 million.

Cablevision reported consolidated revenue of $1.9 billion (up 10.6%) and consolidated adjusted operating cash flow of $590 million (up 14.3%) in the first quarter. The cable operations lost 6,300 basic video customers, but gained 9,400 digital video subscribers, 29,800 high-speed Internet customers and 51,400 telephone customers.

At MSG, revenue rose 2.3% to $271.3 million and adjusted operating cash flow was $15.9 million, compared to an AOCF deficit of $2.5 million last year.

Cablevision was scheduled to hold a conference call with analysts discussing results at 10 a.m.

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