Cablevision, the much-maligned Dolan family cable operation, shot up 14.3% yesterday. In part that’s because Cablevision (CVC) had a lights-out Q2, and in part because Jim Dolan promised to do something about the company’s listless shares. During yesterday’s earnings call, he said the company was going to “actively explore alternatives” to “close the value gap between our operating performance and the market value of … our stock.”
What does that mean? The Dolans have tried to take CVC private themselves, but shareholders rejected the deal last fall, and that window is going to remain shut as long as the credit markets are gasping. Another obvious solution: Selling off the company’s Rainbow group – a collection of cable channels that includes AMC, We.TV, Sundance, IFC and other odds and ends.
The Dolans have tried selling Rainbow many times in the past, and most recently had hired Bear Stearns (R.I.P.) to shop the company last winter. But Pali Research’s Rich Greenfield (reg. required) says he’s been told that a new book is now circulating, though he hasn’t seen it himself.
During the credit boom, the Dolans were looking to get at least $3 billion for the unit, but Rich doesn’t know what they’re asking for it now — bear in mind that Landmark asked $5 billion for The Weather Channel last fall and settled for $3.5 billion this spring. Rainbow is on a roll now, though, fuelled in part by hits like AMC’s “Mad Men”: The unit saw revenue grow 14.6%, to $240 million in the last quarter, while operating income grew 124%, to $30 million.
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