- The Washington Times - Wednesday, August 6, 2008

NEW YORK | Nine months after shareholders rejected the Dolan family’s latest bid to take Cablevision Systems Corp. private, the cable operator said Tuesday that it is considering several options to boost its stock price, including spinning off some of its diverse holdings.

Chief Executive Officer James Dolan, who has long argued that the market undervalues Cablevision, said the company is “actively looking” at options to close the gap between the company’s operating performance and the market value of its shares.

The Bethpage, N.Y., company is considered one of the strongest cable franchises in the country and also owns several cable networks and Madison Square Garden.

Cablevision’s market capitalization stood at about $8.5 billion, and it had about $12 billion in debt as of the end of June, according to Moody’s Investors Service.

The Dolan family controls Cablevision through a special class of shares and has tried to take the company private several times. Those attempts have all failed, some amid family fighting between James Dolan and his father, Charles, who at one point aired family grievances on the pages of New York tabloids.

The Dolans’ most recent offer was worth $36.26 per share, but that was rejected by shareholders as too low in October 2007. Cablevision shares rose $2.27, or 8.8 percent, to close at $28.20 Tuesday.

Cablevision did not say which of its businesses it would consider selling. Analysts consider its cable franchise, which serves the affluent New York area, one of the best-run in the business. The unit is the country’s fifth-largest cable system and accounts for 75 percent of company revenue.

“They are trying to get the value they think is reasonably in its various parts,” said Russell Solomon, a senior vice president in corporate finance at Moody’s Investors Service.

Mr. Solomon said that the cable franchise alone is worth $15 billion to $18 billion but that investors have grown skeptical of the Dolan entrepreneurial streak that has left the company with a diverse portfolio of unrelated properties. Cablevision most recently spent $650 million to buy Newsday, a newspaper based in Cablevision’s home turf of Long Island, N.Y.

In addition to Madison Square Garden, Cablevision owns the three sports teams that play there: basketball’s New York Knicks and New York Liberty, and hockey’s New York Rangers.

The Knicks would be worth about $500 million and the Rangers about $300 million, said Andrew Zimbalist, a sports economist with Smith College.

“There’s a very special media market in New York for sports teams,” Mr. Zimbalist said.

The company also runs several cable television networks, including classic movie channel AMC, independent film channel IFC and WE: Women’s Entertainment, as part of its Rainbow Media Holdings LLC unit. Mr. Solomon said that unit is probably worth at least $4 billion on its own.

Cablevision’s other entertainment venues include Radio City Music Hall and the Beacon Theater, both in New York, and the Chicago Theater.

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