Communacopia: Cablevision CEO Doland: Credit Crunch Makes Asset Sale Tough; Focus On Debt Paydown
This story was written by Joseph Weisenthal.
Constant chatter aside, don't hold your breath waiting for Cablevision (NYSE: CVC) to dispose of its sundry entertainment assets. When asked about a possible sale of its cable networks, CEO James Dolan said his answer "probably was different a month ago", meaning that the widening Wall St. crisis made sale less likely at the price tag the company would like to fetch. In his interview at Goldman's Communacopia conference, Dolan said the credit crunch meant his top priority right now is to manage the company's debt (and so you can see the problem here, since an asset sale is the easiest way to reduce debt levels). On the question of whether the Dolan family might ever try to take Cablevision private again, Dolan said he would "never completely rule it out." But that, "at this time it's not on our radar screen" (again, credit crunch; it's just not realistic to do an attractive leverage deal right now).
-- Newsday: We'll see if Cablevision can carry over its reputation for cable innovation into the newspaper business when asked about the integration of the Long Island-based newspaper, COO Tom Rutledge made some interesting comments about "Developing electronic distribution of the newspaper that preserves (the CPMs)" and various ways of integrating the cable network and sale of the paper. There's an interactive Newsday channel on the Cablevision lineup that can take orders for the paper, and the company is experimenting with advertising cross-selling opportunities between cable and the newspapers. He also mentioned "hyper-local products that are web-like in their approach that are part of the subscriber relationship." What does any of this mean? They didn't get into details, but if the company manages to develop web-like, hyper-local products that preserve traditional CPMs, the rest of the industry would love to know about them.
-- Verizon: Outwardly, Cablevision is not admitting its concern. Dolan: "We've been overbuilt by phone companies in the past what Verizon (NYSE: VZ) has built is just another cable system; they say it's superior, but it isn't. Their actual wires into the house is inferior to ours."
-- Venues Business: Cablevision is bullish on its venues business (Madison Square Garden, Radio City, etc.), but it Dolan says they don't want to become Live Natoin. "The Live Nation (NYSE: LYV) Model goes into more artist representation; that's not something that we're necessarily going to get into."
-- Economy: Other than all the credit crunch, leverage and asset sale issues, Dolan says they're not feeling an impact from the economy. Even people laid off from their jobs want to watch CNBC (for the schadenfreude?) get online, and make phone calls, he said. He used the word "counter-cyclical".
By Joseph Weisenthal