What's a Cablevision Systems Corp. (NYSE:CVC) earnings announcement without some kind of dealmaking rumors?
Since Cablevison has made it a habit of talking about completed deals as well as possible ones it saw in the horizon over its last couple of quarterly earnings announcements, it's becoming a tradition. While the Bethpage, N.Y.-based cable company announced a third-quarter profit of $98.9 million, or 33 cents a share, Tuesday, led by an overall increase in advertising revenue, the company was more than willing to shed some more light of what it was going to do with its Madison Square Garden unit.
"We are moving forward with the spin-off of our Madison Square Garden business and believe we are on track to complete the transaction by year-end," chairman and CEO James L. Dolan said.
The MSG spinoff has been a hot topic of discussion for Cablevision since May, when it formally announced it was looking into the possibility. The unit includes MSG Media (MSG, MSG Plus, Fuse, and MSG Interactive), MSG Entertainment and MSG Sports (including the New York Knicks, the New York Rangers, the New York Liberty and a wide variety of other premiere live sporting events).
Yhe spinoff is "an extremely smart decision," Rich Greenfield, an analyst at Pali Capital LLC, told Bloomberg in reference to a possible spinoff in July . "It will not only highlight the strong free cash flow of Cablevision's core cable business, but it certainly makes an acquisition of the company easier in the long term, as it will remove the hardest asset to value within the company."
Overall, MSG's net revenue increased 0.6% to $161.8 million in the third quarter impacted by:
MSG Media, including a $10.7 million increase in revenues due to higher network affiliation fees as well as a $6.3 million decrease in operating costs
MSG Entertainment, including a $9.8 million decrease in revenues offset by a $5.9 million fall in event-related variable costs primarily due to fewer entertainment events in the
Madison Square Garden Arena
Lower legal and other professional fees of $8.9 million.
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Gerald Magpily
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