NEW YORK (CelebrityAccess MediaWire) — Cablevision has hinted that it may be considering a spin-off of its Madison Square Garden division, which includes two major sports franchises – the NBA's Knicks and the NHL's Rangers – Madison Square Garden, the Beacon Theatre and Radio City Music Hall along with other assets.
"The operative word here is explore," Gregg Seibert, executive vice president of Cablevision told the New York Times. "We're going to look at all the considerations associated with a potential spin, but at this point we really can't comment."
The suggestion that Cablevision was considering such a move came from a single statement at the end of a quarterly earnings report that showed the cable operator returning to profit. Company execs declined to comment on the matter during an investor conference call.
Cablevision's primary business is provisioning cable television, telephone and broadband lines in the New York market and many analysts have speculated that this component of the company would be a tempting acquisition for national-level companies such as Time Warner or Comcast. Divesting the non-telecom related components of the company would make such a deal more attractive to any potential suitors.
Some analysts have also concluded that the Dolan family would likely seek to retain the MSG assets. "Cablevision watchers (and we'd put ourselves in that category) have long pondered possible endgames, and the notion that the Dolans would retain ownership of M.S.G. and the New York sports teams long after the rest of the assets had been divested has always been viewed as among the most likely outcomes," wrote one such analyst, Craig Moffett, in a note to investors.
The Dolans have remained quite active in relation to the MSG properties and James L. Dolan, chairman of Madison Square Garden and son of Cablevision's chairman, Charles F. Dolan, is an active voice in the management of both sports teams.
Jimmy Dolan has said many times he wants to run these assets for the rest of his life," Bob Gutkowski, former president of the MSG Network and Madison Square Garden.
Other analysts such as Pali Capital analyst Richard Greenfield have suggested that the spin-off may make MSG a more attractive partner for an entertainment merger with a company like AEG or Ticketmaster with Mr Greenfield noting the close ties between the Dolan family and Frontline's Irving Azoff, the Financial Times said.
A spin-off may mean delays for the planned refurb of Madison Square Garden and its environs that is currently underway and on-track for the 2012-13 season, but the company has recently pushed the estimated price for the project up by $500 million. – CelebrityAccess Staff Writers