It's becoming a thrill a minute at Cablevision (NYSE: CVC), the Long Island-based cable and entertainment company, which soon will morph into a cable, entertainment, and publishing concern.
Let's start with the basics. Last week, the company reported a loss of $31.6 million, or $0.11 a share, for the quarter that ended in March. Those figures compare to a loss of $26.3 million, or $0.09 a share, a year ago. The increased loss occurred despite a 10% improvement in revenue and a 44% hike in operating income. The latter improvement resulted largely from success in signing on more customers for the company's triple-play offering of digital video, high-speed Internet, and phone service.
So how did Cablevision manage a bigger loss, you ask? It turns out that the most recent quarter also included a $104.9 million blemish from financial derivative contracts, compared to derivative gains last year. Oh, that financial engineering!
But beyond the quarter's operating results -- and probably more interestingly in today's slow deal market -- the Dolan family, which controls the company, has been on a buying spree. Last week, for instance, it announced that Cablevision would pay $496 million for the Robert Redford-founded Sundance Channel. The new holding will be folded in with Cablevision's Rainbow Media programming unit.
And on Monday, Cablevision confirmed that it had emerged victorious in the quest to buy its neighboring Long Island newspaper Newsday from Sam Zell's Tribune for $650 million. In so doing, it reportedly trumped a $580 million bid by Rupert Murdoch's News Corp. (NYSE: NWS). New York Daily News owner Mort Zuckerman's bid matched Rupert's offer.
The Newsday purchase was announced amid hosannas to the marketing and advertising synergies that management expects to result from the combination, along with bouquets to Newsday's "...reputation for quality as well as its leadership in print and online journalism."
But I'm frankly of two minds about this flurry of news: On the positive side, Cablevision's operating success in the quarter was laudable, particularly since it follows similarresults from Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC). In addition, Sundance appears to be a reasonable addition to Rainbow's solid lineup of networks.
But conversely, since the emergent trend is to split print and broadcast media -- a la Belo (NYSE: BLC) and New York Times (NYSE: NYT) -- I'll be observing from Missouri how wise the Newsday addition proves to be. On that basis alone, I'll pass on Cablevision for now.
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