NY Rangers, Knicks, Gardens et. al. to be spun off...

Discussion in 'The Business of Hockey' started by Sp5618, Jun 20, 2005.

Thread Status:
Not open for further replies.
  1. Sp5618

    Sp5618 Registered User

    Joined:
    Nov 26, 2004
    Messages:
    7,191
    Likes Received:
    0
    Trophy Points:
    0
    It appears that the Dolan family, who control Cablevision and "entertainment assets" such as the Rangers, Knicks, Madison Square Garden, some TV and radio networks, etc., want to spin off the entertainment group while retaining 20% ownership. They would like to take Cablevision itself private- meaning the retention of this company by the Dolan family at a 100% ownership level.

    They believe their entertainment assets' value is being pulled down by Cablevision. Who agrees?




    Read more here.
     
  2. nyrmessier011

    nyrmessier011 Registered User

    Joined:
    Feb 9, 2005
    Messages:
    3,354
    Likes Received:
    0
    Trophy Points:
    0
    Location:
    Charlotte/NYC
    what does this mean? Will Dolan still own the team??

    (praying, praying...)
     
  3. tantalum

    tantalum Registered User

    Joined:
    Apr 2, 2002
    Messages:
    16,967
    Likes Received:
    997
    Trophy Points:
    214
    Gender:
    Male
    Occupation:
    Chemist
    Location:
    Missouri
    Seems to me he would own 20 % of the team. The new company "Rainbow" will be the umbrella for the knicks, rangers, MSG etc.... Currently those assets are under the Cablevision umbrella. The Dolan family will own 20% of Rainbow with the other 80% being owned by other groups. This would also make them minority owners with presumably no final say in the business decisions of Rainbow and hence the Rangers.

    Basically it seems to me they just want the "guaranteed" monies from the cablevision cable/internet business while discarding the more volatile and probably less lucrative entertainment holdings.

    The entertainment holdings are prized as they are the Knicks Rangers, MSG etc....lots of history to those franchises but I don't think they are "prized" by the Dolan family in terms of profit and loss. I think that they are actually saying the entertainment holdings are devaluing Cablevision.
     
    Last edited: Jun 20, 2005
  4. RangerBoy

    RangerBoy TRUST THE PROCESS

    Joined:
    Mar 3, 2002
    Messages:
    38,532
    Likes Received:
    2,064
    Trophy Points:
    231
    Location:
    New York
    Home Page:
    This is a non-story. :shakehead

    Cablevision is taking all of the non-cable system properties and putting them into a tracking stock called Rainbow Media Holdings.Cablevision calls their cable channels(AMC,FUSE,WE and IFC) Rainbow Networks.Guess who will run Rainbow Media Holdings?James Dolan

    The family that controls Cablevision Systems Corp. has proposed taking the cable TV operator private while spinning off its entertainment assets, which include the New York Knicks and Rangers, Madison Square Garden and cable channels like American Movie Classics into a separate publicly traded company.

    The $7.9 billion deal would give Cablevision stockholders $21 in cash for each share they currently own, plus shares in the new company, Rainbow Media Holdings. Rainbow also would include Cablevision's regional sports networks, Radio City Music Hall and Clearview Cinemas.

    Charles Dolan would be chairman of the private cable company; the chief executive would be Thomas Rutledge, currently chief operating officer of Cablevision. James Dolan would be chairman and chief executive of Rainbow.


    http://www.forbes.com/home/feeds/ap/2005/06/20/ap2100840.html

    They are not selling the sports assets
     
  5. tantalum

    tantalum Registered User

    Joined:
    Apr 2, 2002
    Messages:
    16,967
    Likes Received:
    997
    Trophy Points:
    214
    Gender:
    Male
    Occupation:
    Chemist
    Location:
    Missouri
    Well they currently own 71 % of voting shares of cablevision. With Rainbow they will be downgrading that to 20 % ownership though no mention on how much of the vote they would get. Dolan would indeed stay on and run the company but it would appear the other stockholders who are getting essentially shuffled to entertainment holding owners would control the company. Until the details on who gets what in terms of voting shares of Rainbow who knows. No idea how much stock in in Cablevision they own just that they have "supervoting shares" giving them 71% of the voting power.
     
  6. Sp5618

    Sp5618 Registered User

    Joined:
    Nov 26, 2004
    Messages:
    7,191
    Likes Received:
    0
    Trophy Points:
    0
    Let's see if this is really a non-story.

    The Dolan's will assume 100% ownership of the portion of business that is a guaranteed repeat business. It is also one in which they have done much, much better than other cable service providers. Better in the sense that they've done really well at expanding into telephone and other services not typically considered "TV cable" business, but which utilizes the same infrastructure (a sunk cost).

    They dilute their overall ownership of the entertainment assets, which now will be 20%, which can also mean they are removing themselves from the volatility inherent in these stocks. If they had chosen to retain 71% of that as well....and were betting that these stocks really were going to increase greatly...wouldn't it make sense to hold on to more of the business that had the greater growth potential?

    Basically they are trading the current value of the entertainment assets to underwrite their takeover (in the private sense) of the cable business. At the end of the day, they have traded this value for the cable business...

    I am thinking they are thinking the cable business is a better long term investment. Furthermore, the entertainment assets may carry a greater value as the sum of individual components vs. keeping them all under one umbrella. If I were planning to sell off any pieces of the entertainment assets, I'd first separate those out from the main portfolio then sell them one by one to maximize return on the original investment. The Dolans will earn 1/5 of this, the other stakeholders get the remaining 4/5. Again, it does seem that they are reducing their stake and planning accordingly....
     
  7. RangerBoy

    RangerBoy TRUST THE PROCESS

    Joined:
    Mar 3, 2002
    Messages:
    38,532
    Likes Received:
    2,064
    Trophy Points:
    231
    Location:
    New York
    Home Page:
    This becomes a story if the sports assets are put for sale.The son loves the sports team and it just so happens that he will be running that part of the company
     
  8. Sp5618

    Sp5618 Registered User

    Joined:
    Nov 26, 2004
    Messages:
    7,191
    Likes Received:
    0
    Trophy Points:
    0
    You don't believe that the family's overall dilution of ownership in this portion of the portfolio as being significant? It may not be for the reasons we have cited here....but isn't it a reduction nonetheless?
     
  9. Levitate

    Levitate Registered User

    Joined:
    Jul 29, 2004
    Messages:
    25,730
    Likes Received:
    702
    Trophy Points:
    169
    yeah, i can't see dolan giving up the rangers and knicks, not yet anyways. i'm pretty sure he'll still have control over them in this new arangement
     
  10. Levitate

    Levitate Registered User

    Joined:
    Jul 29, 2004
    Messages:
    25,730
    Likes Received:
    702
    Trophy Points:
    169
    i don't know a ton about this kind of stuff, but several people have remarked that the dolans had "supervoting stock" in cablevision before...which i take to mean stock who's voting rights had more "sway", so they didn't need to own as much stock to have more control.

    if this new arangement has something like that with the rainbow group, the dolans might have more control that it appears at first glance
     
  11. Sp5618

    Sp5618 Registered User

    Joined:
    Nov 26, 2004
    Messages:
    7,191
    Likes Received:
    0
    Trophy Points:
    0
    From what I understand that is written in the articles, they do retain control since the CEO and CBO will be a Dolan.

    It is like owning 70% of your house, then you decide to reduce your ownership in the house to 20%. Since no one other entity owns more than 20%, you are the de facto largest stakeholder. However, someone else carries 80% of the risk/reward and you carry only 20%...
     
  12. thinkwild

    thinkwild Veni Vidi Toga

    Joined:
    Jul 29, 2003
    Messages:
    8,845
    Likes Received:
    147
    Trophy Points:
    111
    Location:
    Ottawa
    Taking all the entertainment holdings, and putting them into a tracking stock as a separate publicly traded company. Well I guess with cost certainty, the team can become part of a publicly traded company.

    This has interesting implications. There will be a board of directors accountable to public shareholders for the return, instead of a billionaire. Getting extra budget room will now require some fancy talking to a board defintely more concerned with return than winning.

    If the shares are trading low, the owner can justify cutting costs simply by pointing to nasdaq. If the shares drop too low, it would be easier to fold, because its shareholders biting the bullet, not the billionaire. And the market will have spoken. Eventually, your cap space could be determined on the stock market.

    I guess this is the world of cost certainty. No longer will a billionaire be making decisions. I remember when Bryden was putting together his last attempt at a deal. He had worked for some tax breaks, and had put together a complicated deal. One of the potential buyers, Nelson Peltz, had a publicly traded company that was looking at the books to become Brydens partner. In the end, he basically said, his publicy audited company had rules against getting involved in the type of deal Bryden was trying to complete. Too risky. Perhaps illegal. His auditors would never allow it.

    We'll see if fans are better served for it. Perhaps having the highest stock price will be the new bragging rights.
     
  13. Sp5618

    Sp5618 Registered User

    Joined:
    Nov 26, 2004
    Messages:
    7,191
    Likes Received:
    0
    Trophy Points:
    0
    If the owners of an original six team, located in the US's biggest population and media market think it is time to distance themselves, I'm not sure what is says for the chances the rest of the teams have.

    Remember this is the team that everyone liked to blame for everything gone wrong, where it was often claimed it did not matter if they won or lost...they were in New York. Yeah, it'll be interesting to follow the stocks here- then again, maybe not.
     
  14. RangerBoy

    RangerBoy TRUST THE PROCESS

    Joined:
    Mar 3, 2002
    Messages:
    38,532
    Likes Received:
    2,064
    Trophy Points:
    231
    Location:
    New York
    Home Page:
    Once again you are making way too much of this.Distance themselves?Hello?

    The father and the son at Cablevision are barely on speaking terms.The father likes the cable systems.In fact,the father founded cable television.The son hates the cable system business and loves the sports teams.The father gets the cable systems while the kid gets the sports and entertainment assets

    As part of the Dolans' proposal to take Cablevision private, the father-son team would go their separate ways: the senior Dolan would remain chairman of Cablevision, while the junior Dolan would be given his own glitzy fief to run in the company's entertainments assets, which include prestigious properties like Madison Square Garden and Radio City Music Hall.

    Distance themselves?No

    In their statement announcing the bid, the Dolans said that the entertainment unit, which includes the New York Knicks, the New York Rangers and several cable channels like American Movie Classics, would be even stronger as a "pure play" if it was unwound from the cable business.

    "We have long believed the value of these scarce assets was not fully reflected in Cablevision's stock price, and will be more readily recognized in a standalone company."


    If they sell some of entertainment assets it will be the cable channels such as American Movie Classics,WE,FUSE and Independent Film Channel.Liberty Media which owns Starz,Encore,QVC,The Game Show Network and Discovery is interested

    http://www.nytimes.com/2005/06/21/business/media/21place.html?oref=login

    They are offering $7.9 billion to buy out the shareholders but the cable systems are worth much more
     
  15. Sp5618

    Sp5618 Registered User

    Joined:
    Nov 26, 2004
    Messages:
    7,191
    Likes Received:
    0
    Trophy Points:
    0
    I guess I look at it as a simple put your money where your mouth is scenario. This move to me says the plum of the empire is the cable business and that is where the family is putting their money. It is that simple.

    Yes, the son may love the sports business and wants to retain a stake in it, but the Dolan money is moving to the cable side. The NY Times article you've cited makes mention of the other side of the coin, that the Dolans believe it is the cable shares that are undervalued...somewhat contrary to the public statement.

    Maybe it is as simple as push coming to shove. They needed to do something to increase stock value of all the businesses. Perhaps it could not be done with the existing set up.
     
  16. RangerBlues

    RangerBlues Registered User

    Joined:
    Apr 27, 2004
    Messages:
    3,319
    Likes Received:
    146
    Trophy Points:
    111
    Occupation:
    I fix stuff
    Location:
    BRONX NYC
    Jim Dolan is a *******......
     
  17. FLYLine27*

    FLYLine27* BUCH

    Joined:
    Nov 9, 2004
    Messages:
    42,410
    Likes Received:
    1
    Trophy Points:
    0
    Occupation:
    PO
    Location:
    NY
    Wont find anyone disagreeing with that.
     
Thread Status:
Not open for further replies.

Share This Page

monitoring_string = "358c248ada348a047a4b9bb27a146148"