Biz Briefs

Apr 5, 2004  •  Post A Comment

Paxson Communications Chairman and CEO Lowell “Bud” Paxson repeated his company’s position last week that it isn’t required to redeem NBC’s 32 percent stake in the broadcaster this November because it doesn’t have the money and because the terms of Paxson’s debt prohibit it from making such a payment. “Legally, we don’t have a dispute with NBC,” Mr. Paxson said during a conference call to discuss the company’s fourth-quarter earnings. “The agreements speak for themselves.”
Last fall, NBC exercised its right to have Paxson redeem the stake, now valued at $557 million, and has told the company to pay NBC by Nov. 13. However, Paxson officials believe they are not required to pay NBC, saying instead that NBC has the right to transfer the stake to a third party if it wants to dump the investment. Paxson said it has $100 million in cash on hand, and its debt stood at $925.6 million as of Dec. 31.
Separately, Paxson reported a narrowed fourth-quarter loss of $51.8 million, or 73 cents a share, from a year-earlier loss of $75.3 million, or $1.16 a share. Revenue fell 3 percent to $82.4 million, largely due to lost revenue at stations that had been sold. For the year, the company’s red ink was $146.3 million, or $2.14 a share, from year-earlier red ink of $450.7 million, or $6.95 a share.
Cablevision Issues $2 Billion in Debt
Cablevision Systems last week issued $2 billion in debt to reduce the leverage of its CSC Holdings unit. The securities, $1.5 billion of which will be issued by Cablevision itself and $500 million of which will be issued by CSC Holdings, will be offered in private transactions and sold to a group of institutional investors. Proceeds from the Cablevision sale will be used to purchase CSC Holdings stock, while proceeds from CSC Holdings’ offering will be used to repay debt. Cablevision said CSC Holdings will then borrow the amount repaid for a lower interest rate.
Meanwhile, Cablevision officials said the company expects its first-quarter financial results to be impacted by last week’s arbitration ruling that ordered the operator to carry the YES Network on basic cable. The company said the costs of the new YES pact would be applied in the first quarter and would include retroactive payments to the network for the quarter.