Over The Rainbow: Cablevision Mulls Network Spinoff
In regard to content, Cablevision is going the Time Warner route as opposed to Comcast. Cablevision said it is exploring spinning off its Rainbow programming unit, which includes networks AMC and IFC, by mid-2011.
The new company would also include WE tv and the Sundance Channel and the IFC independent film production business. Cablevision would retain Newsday, News 12 Networks, MSG Varsity and Clearview Cinemas.
Cablevision said it is exploring a spinoff and not a sale of Rainbow. Rainbow becoming its own stock would follow Cablevision's recent spinoff of its MSG unit.
Time Warner has spun off its cable operations to become a pure-play content company, while Comcast is moving to acquire NBC Universal to diversify its assets.
Investors, who have long since inquired about a Rainbow spinoff, reacted by sending Cablevision shares up nearly 9% in early trading Thursday, hitting a 52-week high.
Rainbow accounted for 16% of Cablevision revenues in the third quarter with $291.4 million, about $30 million more than the period a year ago. Operating income was $63 million.
In the recent financial report, Cablevision president and CEO James Dolan cited AMC hit shows "Mad Men" and "Breaking Bad" as examples of Rainbow's success. Earlier, the company spun off Madison Square Garden, the home venue of the New York Knicks and Rangers, as well as other sports and concert events.