Cablevision Shares May Rise After Bid for Knicks, Rangers Teams
Nov. 21 (Bloomberg) -- Shares of Cablevision Systems Corp., the largest cable-television provider in New York, may rise after the company received an offer for the Knicks basketball and Rangers hockey teams.
Financier Russell Glass, a former protégé of Carl Icahn, led a group that made a $700 million bid for the assets, a person with knowledge of the offer said. Charles Schueler, a Cablevision spokesman, confirmed yesterday that the Bethpage, New York-based company had received an offer. He wouldn't say who made the bid.
Selling the teams may help Cablevision pay for a $3 billion dividend the company is considering after Chief Executive Officer James Dolan and his father, Chairman Charles Dolan, dropped an offer to take the company private. The stock has fallen 11 percent since the Dolans withdrew the bid and suggested a dividend, in part on concern that Cablevision didn't have the cash for the payout.
``An asset sale of sports teams might be very attractive way for them to improve the company's liquidity,'' said Jack Liebau, of Pasadena, California-based Liebau Asset Management Co.
A $700 million offer would compare with the teams' value of more than $750 million based on a Forbes magazine survey.
The Glass-led group in its Oct. 18 bid also offered to buy Madison Square Garden without setting a price, the Wall Street Journal reported yesterday.
``Cablevision has no plans to sell the Knicks and Rangers and the inquiry did not look credible to us,'' Schueler said. Glass declined to comment for this story.
Cablevision shares yesterday fell 8 cents to $24.75 in New York Stock Exchange composite trading.
Offer
The bid on the sports team arrived last month as Cablevision's board weighed the Dolan family offer to take the company private.
Under that plan, James Dolan, 50, would have led a publicly traded spinoff holding the teams, Madison Square Garden and cable channels AMC, IFC and WE. Chairman Charles Dolan, 79, would have run the private cable business.
``I think Jim Dolan gets lots of personal satisfaction from running the sports teams,'' Liebau said.
The Knicks are worth $494 million, the second-highest value in the National Basketball Association, and the Rangers are worth $263 million, ranking second in the National Hockey League, according to Forbes.
``Odd is an understatement for that offer,'' said Marc Ganis, president of Chicago-based Sportscorp Ltd. ``Usually there will be an unsolicited high-ball offer, not something like this.''
Knicks, Rangers
The Knicks missed the playoffs last season for the third time in four years, finishing tied for last in the Atlantic division. They are 3-7 this season under new coach Larry Brown.
The Rangers, who haven't reached the postseason since 1997, had a National Hockey League-record $90 million payroll in 2003- 2004, the year before a lockout that wiped out a season. This season they are first in the Atlantic division with a payroll of less than half that of two years ago.
The Cablevision unit holding the teams has posted declining profit for two consecutive quarters on higher costs for personnel and lower revenue from the lost1 hockey season.
Cablevision shareholders have endured a boardroom coup, a battle between Charles Dolan and the company over closing the Voom satellite service, a fight with New York City and a failed effort to buy Adelphia Communications Corp.
The company's board on Nov. 3 told managers to prepare to pay a $3 billion dividend after the Dolans withdrew their offer. A dividend would hand $600 million to the Dolan family.
It's ``highly likely'' the board will approve the dividend, Merrill Lynch analyst Jessica Reif Cohen said today in a note.
Glass
Glass worked for Icahn Associates, Icahn's investment company, as president and chief investment officer between 1998 and 2002.
The composition of the investor group bidding for Cablevision's assets isn't known, though it doesn't include Icahn or the Spanos family, for whom Glass also has worked, the Journal said, The Spanos family owns the San Diego Chargers football team.
The investment group has a letter of interest from General Electric Co.'s GE Commercial Finance unit to provide debt financing, the Journal said.
To contact the reporter on this story:
Connie Guglielmo in San Francisco at
cguglielmo@bloomberg.net; Allan Kreda in New York at
akreda@blo1omberg.net
Last Updated: November 22, 2005 00:13 EST
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