Kentucky Jet Posted March 7, 2005 Share Posted March 7, 2005 Jets, others eye bids for MSG and teams Cablevision board meets today By Anne Michaud & Aaron Elstein Published on March 07, 2005 With the sale of Cablevision Systems Corp. increasingly likely, wealthy New Yorkers, including New York Jets owner Woody Johnson, are considering bids for the company's sports assets--Madison Square Garden, the New York Knicks and the New York Rangers. These assets are the crown jewels of a family-run business that is unraveling in full public view. At a meeting this afternoon, the Cablevision board is expected to decide the fate of the cable and entertainment company and its chief executive, James Dolan, who is locked in a bitter feud with his father, Cablevision founder Charles Dolan. The board could decide to put the company up for sale, many analysts believe. Cablevision has never been the model of a happy family. In addition to its internecine battles, the Dolan-dominated company has aggravated shareholders for years with its poorly performing stock and quixotic decisions. Last week, Charles Dolan sacked three board members and brought in four of his friends as part of his effort to keep alive a satellite broadcasting venture that has cost the company millions. Cablevision is also spending millions of dollars to fight Mayor Michael Bloomberg's proposed football stadium on the West Side. If Cablevision breaks apart, the younger Mr. Dolan is said to want to retain control of the two sports teams and the rest of the Garden's assets, including Radio City Music Hall. But analysts are speculating that the son could be forced out entirely. Also, it seems likely that the board would come under enormous pressure to maximize shareholder return by seeking bids to top any offer from Mr. Dolan. The Jets' Mr. Johnson is looking at making an offer for the teams, say several sources close to the football organization. One sports industry executive notes that the teams could play in an arena inside the new stadium. The Jets owner, who is an heir to the Johnson & Johnson fortune, also has a strong interest in forcing James Dolan out of the New York sports scene. Mr. Dolan is the prime mover behind Cablevision's multimillion-dollar effort to thwart the West Side stadium, which would be built primarily by the Jets and could be used for the 2012 Summer Olympic Games. Worth at least $2 billion Telecommunications honcho Leo Hindery also says he would be interested in bidding for Cablevision's teams. He is managing partner of a new private investment firm called InterMedia Partners. He believes there would be many other contenders as well. "Anyone who has an interest in content, which we do, is going to take a look at these assets," says the former chief executive of the YES Network. The price would be steep. Cablevision and a partner bought the sports assets and the MSG cable network from Viacom in 1995 for $1 billion. Forbes magazine estimates that the Knicks are worth $494 million, second in the NBA behind the Lakers, which it says are worth $510 million. The Rangers are worth $282 million, the most valuable franchise in the NHL. However, teams are routinely sold for more than Forbes' estimates. Robert Tilliss, chief executive of investment banking firm Inner Circle Sports, estimates that the MSG assets are now worth $2 billion. Still, he doubts that Cablevision would be interested in parting with the teams. "They are Jimmy Dolan's pet assets," Mr. Tilliss says. Cable, satellite clash Mr. Hindery believes a company sale is also inevitable, as the elder Mr. Dolan seeks to keep alive his plan for a satellite television business. The satellite plan is simply incompatible with a cable TV company, Mr. Hindery says. The father-son blowup, which on one afternoon resulted in dueling press releases, is Shakespearean in nature, he says. "It's an absolutely fascinating meltdown of a family and its supervotes," Mr. Hindery says, referring to the Dolans' 75% controlling interest. One longtime investor says he would expect Cablevision's 3 million-subscriber-strong cable TV business to be sold in two parts. He reckons that Time Warner would covet Cablevision's Long Island and Westchester territories, while Philadelphia-based Comcast would set its sights on the New Jersey unit. As for the Madison Square Garden part of the business, which generated 16% of Cablevision's revenues last year, the investor says: "It would certainly be better for the fans, not to mention investors, if Cablevision sold the teams. Lord knows, the Rangers and Knicks haven't had many good seasons on Cablevision's watch." Link to comment Share on other sites More sharing options...
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