Bailing on an outright sale, Cablevision Systems agreed to sell 20% of its Rainbow Programming entertainment networks to MGM for $825 million. And it will proceed with the creation of a tracking stock around the operation.
MGM agreed ponied up the $825 million for a piece of American Movie Classics, Bravo, Independent Film Channel and WE and also agreed to license its movie library to the networks. That values the Rainbow networks at $4.1 billion.
Cablevision Chairman Chuck Dolan tried to get that kind of a valuation for 100% of the network, holding an auction two weeks ago. But only Viacom bid, and its figure was much lower, $3.4 billion.
USA Networks Chairman Barry Diller didn't bid in the auction, but declared he would negotiate privately. At one point, Diller anted up $4 billion, but later retreated from that figure.
- John Higgins