Adelphia stock drops on news of debt, loss
Adelphia Communications Corp. stock initially plummeted more than 30 percent to $14 a share last week after the company disclosed $2.3 billion in off-balance-sheet debt and an unrelated, wider-than-expected fourth-quarter loss resulting in a $1.5 billion write-down. The latter reflects the dashed value of its Adelphia Business Solutions, which filed for Chapter 11 bankruptcy protection last week. Analysts are questioning how the controlling Rigas family has borrowed funds through privately held partnerships and is using the publicly traded cable company to guarantee the loans.
Viacom prospects dimmer for Q1
Morgan Stanley Dean Witter analyst Richard Bilotti sounded the alarm on a slower-than-expected advertising recovery by cutting his estimates for first-quarter revenues and cash flow for Viacom, half of whose revenues are rooted in conventional advertising. Mr. Bilotti now is calling for a modest ad recovery beginning in late 2002 and cites weak daytime and news ad trends.
Cablevision and YES can’t get past no
The struggle between Cablevision Systems and the YES Network is getting personal. YES Network Chairman and Executive Leo Hindery responded to a written offer from Cablevision to carry the network’s Yankees baseball games on a newly designated channel by complaining that the letter from Cablevision President Jim Dolan was released to the press before Mr. Hindery saw it. “This is not a matter that can or should be negotiated in the press,” Mr. Hindery said in a prepared statement. “… It is outrageous that Cablevision, without any prior discussion with YES, proposes a discriminatory form of carriage, which differs from that afforded literally every other basic service.”
News Corp. taking Gemstar write-down
News Corp. said it will take another $2 billion write-down-this time in its fiscal third quarter-against earnings on its investment in Gemstar-TV Guide International. Gemstar recently took a $5 billion write-down related to new good-will accounting rules.