John Corn
11-04-02, 05:28 AM
NBC is near a deal to acquire the Bravo cable entertainment channel from the Cablevision Systems Corporation for about $1.25 billion in cash and stock, executives close to the negotiations said yesterday.
The executives said the companies were trying to finish the deal late last night and were hoping to announce it today.
The deal would end NBC's pursuit of an entertainment-based cable channel, adding Bravo to its lineup, which includes the news channels, MSNBC and CNBC, and the Spanish-language cable network, Telemundo.
The acquisition of Bravo, which broadcasts films and programs like "Inside the Actors Studio," would give NBC a network with one of the most upscale audiences in television — reaching 60 million subscribers. NBC could also use Bravo as an outlet for new programs, to experiment with different formats, to rerun NBC shows and to explore the use of NBC news and entertainment content for various programs.
For Cablevision, the nation's seventh-largest cable television provider and the owner of Madison Square Garden, the sale is an important part of its effort to shed assets to pay its debts. Cablevision has been hamstrung, in part, by billions it borrowed to provide digital service to customers.
Cablevision recently announced that it would sell its movie theater chain, Clearview Cinemas, and close more than half of its 43 Wiz electronics stores to bridge a cash deficit of perhaps as much as $600 million that is looming for next year.
Spokesman for NBC and Cablevision declined to comment.
The transaction would also end an increasingly strained financial relationship between Cablevision and NBC. NBC, which is owned by General Electric, has a 21 percent stake in Cablevision's programming unit, Rainbow Media Holdings, which includes Bravo, American Movie Classics, WE Women's Entertainment, the Independent Film Channel and MuchMusic USA.
In August, Cablevision angered NBC executives when it scrapped a planned stock to track the performance of Rainbow Media, which NBC had hoped to use to realize value from its investment in the programming unit. Instead, NBC's stake became convertible into 53.5 million Cablevision shares, which have been falling along with most cable stocks.
Under the terms of the deal for Bravo, NBC would pay Cablevision $1 billion in stock, swapping its stake in Rainbow Media — worth about $535 million — and paying the rest — about $465 million — in General Electric stock, according to the executives.
Cablevision would be able to immediately sell the General Electric stock for cash to help its financing requirements, the executives said.
NBC would separately pay $250 million in cash to Metro-Goldwin-Mayer, which owns part of Bravo and is a major stakeholder in Rainbow Media, the executives said.
The deal may be the first of many for Cablevision as analyst speculates that it will sell additional Rainbow Media channels, possibly to Metro-Goldwin-Mayer or another suitor like Viacom, which has expressed an interest.
Besides paying down debt, Cablevision needs cash for its ambitious plan to start a satellite TV service next year.
http://www.nytimes.com/2002/11/04/business/media/04CABL.html?pagewanted=print&position=top
The executives said the companies were trying to finish the deal late last night and were hoping to announce it today.
The deal would end NBC's pursuit of an entertainment-based cable channel, adding Bravo to its lineup, which includes the news channels, MSNBC and CNBC, and the Spanish-language cable network, Telemundo.
The acquisition of Bravo, which broadcasts films and programs like "Inside the Actors Studio," would give NBC a network with one of the most upscale audiences in television — reaching 60 million subscribers. NBC could also use Bravo as an outlet for new programs, to experiment with different formats, to rerun NBC shows and to explore the use of NBC news and entertainment content for various programs.
For Cablevision, the nation's seventh-largest cable television provider and the owner of Madison Square Garden, the sale is an important part of its effort to shed assets to pay its debts. Cablevision has been hamstrung, in part, by billions it borrowed to provide digital service to customers.
Cablevision recently announced that it would sell its movie theater chain, Clearview Cinemas, and close more than half of its 43 Wiz electronics stores to bridge a cash deficit of perhaps as much as $600 million that is looming for next year.
Spokesman for NBC and Cablevision declined to comment.
The transaction would also end an increasingly strained financial relationship between Cablevision and NBC. NBC, which is owned by General Electric, has a 21 percent stake in Cablevision's programming unit, Rainbow Media Holdings, which includes Bravo, American Movie Classics, WE Women's Entertainment, the Independent Film Channel and MuchMusic USA.
In August, Cablevision angered NBC executives when it scrapped a planned stock to track the performance of Rainbow Media, which NBC had hoped to use to realize value from its investment in the programming unit. Instead, NBC's stake became convertible into 53.5 million Cablevision shares, which have been falling along with most cable stocks.
Under the terms of the deal for Bravo, NBC would pay Cablevision $1 billion in stock, swapping its stake in Rainbow Media — worth about $535 million — and paying the rest — about $465 million — in General Electric stock, according to the executives.
Cablevision would be able to immediately sell the General Electric stock for cash to help its financing requirements, the executives said.
NBC would separately pay $250 million in cash to Metro-Goldwin-Mayer, which owns part of Bravo and is a major stakeholder in Rainbow Media, the executives said.
The deal may be the first of many for Cablevision as analyst speculates that it will sell additional Rainbow Media channels, possibly to Metro-Goldwin-Mayer or another suitor like Viacom, which has expressed an interest.
Besides paying down debt, Cablevision needs cash for its ambitious plan to start a satellite TV service next year.
http://www.nytimes.com/2002/11/04/business/media/04CABL.html?pagewanted=print&position=top