Cablevision (NYSE: CVC) execs began the call by offering their rationale for spinning off the Madison Square Garden segment into an independently traded entity. For one thing, the the tax free spinoff would provide more flexibility for both companies. Secondly, since the segment represents a relatively small part of Cablevision’s over results, investors haven’t been able to appreciate its full value, said Hank Ratner, Cablevision’s vice chairman.
As for the structure of the new entity, assuming it meets the usual regulatory approvals, it would be composed of three primary divisions: MSG Media, which would house cable channels like music video network Fuse; MSG Entertainment, which would serve the concerts and events promotion; and MSG Sports, which would have all the team franchises, such as the NY Rangers hockey organization and the Knicks and Liberty NBA properties. Later on during the call, Ratner said that the new MSG wouldn’t carry any debt at the outset, but it would be able to seek credit if necessary.
—Green shoots from local, interactive ads: In response to a question from analyst Jessica Reif Cohen about local advertising and expanding opportunities for interactive ads, COO Tom Rutledge conceded that while local ad revs were down 16 percent year-over-year in Q2, sequentially, ad dollars were up 34 percent. “So we are seeing some green shoots,” Rutledge said, a using a term that brought a few groans from the other execs on the call. For one thing, he said that auto ads were starting to come back. Separately, Rutledge highlighted plans to roll out more interactive ads. “We’ve introduced the ability to take a viewer watching and ad and move that viewer to a web-page like service on their TV, where they can examine a particular product and place an order. The latter half of the year will have higher advertising for interactive products.”
By David Kaplan