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Cable Operators

Cablevision’s RME Spinoff Moves Closer

11/08/2004 7:01 AM Eastern

Cablevision Systems Corp. said Monday that it would recontribute a $350 million redeemable preferred interest in a subsidiary of Rainbow Media Enterprises -- a move that should facilitate the planned spinoff of RME.

In a Securities and Exchange Commission filing Monday, Cablevision said it would recontribute the $350 million preferred interest it had originally expected to retain to an RME subsidiary that includes its AMC and WE: Women’s Entertainment cable networks. The transfer essentially gives RME an additional $350 million in borrowing capacity, presumably for its Rainbow DBS direct-broadcast satellite subsidiary.

Cablevision said in the SEC document that it made the decision to return the preferred interest “in light of expected increases in the financing requirements of Rainbow Media Enterprises.”

Cablevision had intended to spin off RME -- which includes national cable networks AMC, WE and The Independent Film Channel; Rainbow DBS; and Clearview Cinemas -- in the fourth quarter. The most recent move has some analysts speculating that the spinoff is on track.

“We believe this change in the spin plan may clear a hurdle for the company with the SEC approval process,” UBS Warburg LLC cable debt and equity analyst Aryeh Bourkoff said in a research note.

“Eliminating the link between Cablevision and the spin would likely be perceived positively by the SEC and may expedite the process of spinning out Rainbow Media Enterprises,” he added.

September