Business Briefs

Oct 7, 2002  •  Post A Comment

MGM still wants Rainbow Media
MGM, which estimates it will generate $800 million in free cash flow over the next four years, reiterated the growing strength of its core businesses that makes it an attractive acquisition or merger candidate at Goldman Sachs’ Communacopia media conference Oct. 3. But Alex Yemenidjian, chairman and CEO, declined comment on MGM’s potential sale. He said MGM wants to acquire the 80 percent of the Rainbow Media Group cable channels (Bravo, AMC, IFC and WE) it doesn’t already own. But rather than pay Cablevision Systems’ inflated asking price, MGM could “tag along” with other potential suitors such as NBC. MGM is working with Goldman Sachs to find a strategic partner or buyer for MGM, which analysts say could fetch up to $5 billion. Suitors could include The Walt Disney Co., Viacom, General Electric Co.’s NBC and News Corp.
Alarms sounding over 3Q projections
Charter Communications’ disclosure that it will fall short of its third-quarter revenue projections due to a decline in basic subscriber growth has set off industrywide alarms. Cable operators have been banking on at least stable basic subscriber growth off of which to launch new digital services. The unstable economy appears to be jeopardizing that. Charter said its third-quarter revenue growth would be about 13 percent, at the low end of its previous guidance, and that it would miss targeted 14 percent cash flow growth.
Moody’s slams Cablevision rating
Moody’s Investors Service hammered Cablevision Systems for not moving fast enough to offset a looming $1 billion funding gap that could drive it into bankruptcy Jan. 1, 2003. In assigning a speculative-grade liquidity rating to the company’s CSC Holdings subsidiary, it said it does not expect the company to generate any free cash flow from its core or noncore businesses, relying solely on “insufficient” bank credit and Rainbow Media Group free cash flow to pay bills. Asset sales may take longer than expected and cable system upgrades may not be completed, the service said.
Eisner’s name on IPO perk list
Walt Disney Chairman and CEO Michael Eisner received shares of Goldman Sachs when it went public, based on his strong ties with the investment banking firm. Mr. Eisner was one of many CEOs named in documents released by the House Financial Services Committee in its investigation of Wall Street initial public offering awards to top executives.