Fresh off the announcement of the sale of its Bravo programming network to
General Electric Co.'s NBC television unit for $1.25 billion in cash and stock,
Cablevision Systems Corp. CEO James Dolan hinted that another programming
network -- AMC (formerly American Movie Classics) -- could be on the block, as
well.
'We continue to look to maximize the value of our assets,' Dolan said on a
conference call with analysts discussing Cablevision's third-quarter results.
'It is certainly possible that we will have additional asset sales. There has
been quite a lot of speculation about AMC, and I would not rule that out.
However, we don't need to do any asset sales, but if the right offer comes
along, we would be likely to take it.'
Analysts have valued AMC at between $2 billion and $2.4 billion, or between
15 times and 18 times 2003 cash flow. Bravo sold for 19 times 2003 cash
flow.
In addition, Dolan hinted that Cablevision's direct-broadcast satellite
spectrum could be for sale.
Cablevision has about 11 transponder slots, which it is currently leasing to
EchoStar Communications Corp.
As part of EchoStar's attempts to salvage its failed merger with DirecTV Inc.
parent Hughes Electronics Corp. -- which the Federal Communications Commission
and U.S. Department of Justice blocked last month for anti-competitive reasons
-- EchoStar proposed giving an additional 40 transponder spots to Cablevision to
help it launch a competitive national DBS service.
Although Dolan said plans to launch a satellite in March are still on --
adding that the MSO would spend an additional $75 million between January and
June 2003 to do so -- he hinted that the satellite frequencies could also be
sold.
'With the possibility of having at least two satellite companies operating
(EchoStar and DirecTV), the Cablevision satellite assets become even more
valuable,' Dolan said. 'It will be the most technologically advanced satellite
in the sky and crucial to any company wanting to operate providing
local-into-local in the satellite business.'
He continued, 'We're in a very good position with satellite. This company has
the reputation of taking advantage of its strategic positions. I look forward to
how we're going to do that with this satellite.'
Asked if that meant Cablevision was more likely to sell the spectrum than to
launch the DBS service, Dolan said that was not necessarily the case. 'We're
going to continue to look at the options, maximize the value and take advantage
of the strategic opportunities,' he added.
For the third quarter, revenue at the MSO's cable operations rose 8 percent
while adjusted operating cash flow was up 14 percent.
Cablevision lost about 22,000 basic subscribers in the period, ending the
quarter with 2.97 million customers. However, the company said its subscriber
losses are declining -- in October, it lost about 1,300 customers.
Cablevision added 38,000 digital-cable subscribers in the period, ending the
quarter with 80,000. The company upped its year-end guidance for digital
subscribers from between 125,000 and 150,000 to between 150,000 and 175,000.
Cablevision also added 70,000 high-speed-data customers, finishing the period
with 680,000. And the MSO increased its guidance for high-speed data to 750,000
customers from the previous estimate of between 700,000 and 725,000.
Cablevision stock dropped 30 cents each in trading Thursday to
$15.25 each, down almost 2 percent, after the company lowered its revenue guidance for the year to
between 9 percent and 11 percent instead of between 10 percent and 12
percent.
However, the company increased its cash-flow guidance for the year to between
15 percent and 16 percent, up from 15 percent.
