Cablevision to use Madison Square liquidity to fund renovation after spin

By Jennifer Lanning Drey

Portland, Ore., July 30 - Cablevision Systems Corp. expects the renovation of the Madison Square Garden arena to be funded with the Madison Square's existing liquidity and cash flows following the planned spin-off of the division, Hank Ratner, vice president of Cablevision, said Thursday.

"To the extent that we determine MSG would benefit from additional capital, we intend to do that against the existing assets of MSG," Ratner said during Cablevision's second-quarter earnings conference call.

Ratner is slated to become chief executive officer of Madison Square after the spin-off.

Cablevision and Madison Square are currently working to finalize the timetable and overall cost of the project, which is now expected to be higher than the originally estimated $500 million, he said.

Cablevision announced Thursday that its board of directors has authorized the company's management to move forward with the spin-off of Madison Square Garden to its stockholders.

"While both the Cablevision and MSG businesses are attractive in their own right, their business plans have significantly different free cash flow characteristics over the next several years," Gregg Seibert, executive vice president of Cablevision, said during the call.

"As separate public companies, we would expect that each company would be appreciated for its unique characteristics and would develop its own investor base."

Cablevision hopes to complete the spin-off by the end of the year.

Cablevision cash flow

During the call, Cablevision also reported that it generated more than $200 million in free cash flow in the second quarter, bringing Cablevision's total free cash flow for the first six months of 2009 to $403 million.

The company had consolidated cash of $407 million and net debt of $10.9 billion at the end of the second quarter, Seibert said.

Cablevision's consolidated net revenues grew to $1.88 billion in the second quarter, representing an increase of 9.8% over the comparable prior-year period.

Within that, the Madison Square Garden division's net revenues decreased by about 1%.

Cablevision is a Bethpage, N.Y.-based telecommunications, media and entertainment company.

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