Cablevision board approves Rainbow spin-off
BETHPAGE, N.Y. (AP) – Cable TV operator Cablevision Systems Corp. said Thursday that its board of directors had approved the spin-off of Rainbow Media, which contains cable channels such as AMC and Sundance and the IFC suite of independent film production entities.
Cablevision CEO James Dolan said the spin-off will create two distinct companies – one focused on the provision of cable TV signals and hook-ups and another that focuses on programming. Businesses that will remain a part of Cablevision include the cable and telecommunications businesses, newspaper Newsday, News 12 Networks, MSG Varsity and Clearview Cinemas.
The move is expected to be completed by the middle of next year. Cablevision reiterated that it is not considering the sale of Rainbow or its cable and telecommunications business.
As part of the so-called leveraged spin-off, Rainbow will take on new debt to help it pay back about $1.25 billion of debt on Cablevision's books.
Both Class A and Class B shareholders will receive Rainbow stock. Both Cablevision and Rainbow will continue to be controlled by the Dolan family through their Class B shares.
Cablevision shares fell 28 cents to $34.44 in after-hours trading after closing the regular session up 3 cents at $34.72.