Cablevision To Acquire TCI Systems Serving 820,000 New York-Metro Area Customers In Stock Transaction
WOODBURY, N.Y.--(BUSINESS WIRE)--June 9, 1997--
Announces Commitment to Roll-Out
Advanced Telecommunications System With
Cable TV, Telephone, Internet and Other Services
100-Plus Channels Will Include New "MetroPak" Community Programming
Tailored to Tri-State Area
MSG Network on HDTV by 1999
In a major expansion of its commitment to the New York-area market, Cablevision Systems Corp. (ASE:CVC) today announced that it has agreed to acquire 10 cable systems serving 820,000 customers from Tele-Communications Inc. (NASDAQ:TCOMA) in exchange for approximately 12.2 million shares of Cablevision Class A stock.
The systems are located in New Jersey, Long Island and New York's Rockland and Westchester counties, and they will increase Cablevision's metropolitan-New York customer base from 1.7 million to more than 2.5 million.
The agreement gives Cablevision the necessary scale for investing in a new generation of telecommunications and programming services, while at the same time providing TCI with the opportunity for a long-term equity investment in the key New York market.
``Today, we have acquired the scale that is essential to providing the most advanced communications services to our customers, deleveraged our balance sheet, and sharpened our focus on our New York cluster, where we have a long record of programming innovation,'' said James L. Dolan, Cablevision's chief executive officer.
``There will be intense competition to provide the next generation of programming and services to the Tri-State area. Let there be no mistake: we will win this race by providing innovative programming that meets the needs of our customers,'' Mr. Dolan added.
Cablevision said it is in the process of building the most dependable and advanced telecommunications and entertainment system in the Tri-State area. New technology will enhance the company's service, improve ease of use for customers and provide the platform for delivering a wide range of news, sports and editorial programming. The company will continue and expand its effort to enhance educational opportunity by bringing high-speed cable modem service and distance-learning to educational institutions.
Cablevision currently plans to deliver all of the following within the next two years:
-- 100-Plus Channels: Cablevision will expand its system capacity to more than 100 channels in all of its New York area cable systems. With this sharply expanded capacity, Cablevision will seek to offer customers the choice of virtually every cable programming service available.
-- Local Programming: Cablevision's Rainbow Media will continue to develop and roll-out new, highly regionalized ``MetroPak'' programming for the Tri-State region -- an eclectic guide to the sights and sounds of the region that will be the television equivalent of the Sunday newspaper. With five of the projected package of 10 channels already launched, MetroPak will devote one channel each to such diverse customer interests as local news, weather, sports, education, shopping, arts and music, personalities and traffic.
-- Advanced Telephone and Data Transmission Services: With its new, state-of-the-art telecommunications system, Cablevision will continue to introduce commercial and residential telephone service to Tri-State region customers, as well as high-speed data transmission services to area businesses, residents and educational institutions.
-- MSG on HDTV: MSG Network, home of the Knicks and Rangers, will become the first of Cablevision's channels to go to HDTV, delivering three times the screen size and three times the resolution of analog television for a full panoramic view of the sports action. As many as six channels will cablecast different camera angles and replays simultaneously.
-- Video-on-Demand: More than 1,000 video titles will be available at the push of a button. This service will begin rolling out to much of Cablevision's customer base during the next two years.
``By investing in the next generation of technology, we will bring important service innovations to the Tri-State region and deliver vibrant, creative programs that speak directly to the concerns and interests of our customers,'' Mr. Dolan said.
Details of the Transaction
In the transaction, TCI will receive approximately 12.2 million newly issued Cablevision Class A shares, which will represent 33% of Cablevision's total shares outstanding. Cablevision will continue to be controlled by Dolan family interests.
More than half of the systems have been upgraded to 550MHz or more, and they generate in excess of $200 million in cash flow per year. Cablevision will also assume approximately $669 million in TCI debt associated with the acquired systems.
TCI will receive two seats on Cablevision's Board, which will come from the seats elected by the Class B shareholders. The percentage of the Board elected by other Class A stockholders will not be reduced. The transaction is subject to regulatory approvals.
A History of Programming Innovation
Cablevision will build on the record of programming innovation that produced News 12, a service that provides community-oriented coverage to all four regions of the Tri-State area. News 12 Long Island was the first channel in the nation to provide 24-hour regional coverage. Cablevision also introduced such innovative cable networks as American Movie Classics, Bravo, The Independent Film Channel, ExtraHelp, MuchMusic USA, Romance Classics, American Sports Classics and the SportsChannel Regional Network -- all products of Cablevision's subsidiary Rainbow Media Holdings, Inc.
Cablevision is the nation's sixth largest operator of cable television systems, serving 2.8 million customers in 19 states with major operations in Boston, Cleveland and the New York metropolitan area, where Cablevision currently has 1.7 million customers. Rainbow Media manages entertainment, news and sports programming. Cablevision Lightpath Inc., a wholly owned subsidiary, provides local and long distance telephone service to nearly 600 major businesses on Long Island. The company recently announced its intention to acquire a majority stake in the Madison Square Garden properties which include the Madison Square Garden Arena complex, the Knicks and the Rangers professional sports teams, and the MSG television network. |
