BRIEFS

Cable World, June 9, 2003

STREET GETS CLARITY FROM CABLEVISION

Cablevision System's decision to spin off Rainbow DBS, its satellite venture, and its Clearview Cinema unit is the latest in a string of transactions that have left Wall Street more confident in the MSO. By clarifying its total investment in the DBS unit - the company expects to invest $114 million this year and has pledged another $450 million at the time of the spin-off - Cablevision has eased investors' fears that it would keep pumping money into the venture. As Richard Greenfield, the former Goldman Sachs analyst who last week initiated coverage of the cable sector at his firm, Fulcrum Global Partners, said in a report, "The fact that Cablevision has clarified its ultimate financial exposure to DBS and further simplified its corporate structure is a major positive."

COMCAST LEADS CABLE SECTOR'S REBOUND

After declining over 40% between October 2001 and October 2002, cable stocks have bounced back. Cox Communications' attainment of free cash flow has bolstered investors' confidence in the sector, said analyst Richard Greenfield in a report initiating coverage of the cable sector. Greenfield said Comcast is the best-positioned MSO in the sector, and that once its integration of former AT&T systems is complete it will start generating free cash flow and will have a far cleaner balance sheet. He placed buy ratings on Comcast and Cablevision, and neutral ratings on Charter Communications, Cox, Insight Communications and Mediacom Communications.

MORE EYES ON NEWS CORP./DIRECTV DEAL

News Corp.'s $6.6 billion acquisition of Hughes Electronics and its DirecTV unit has attracted further scrutiny from regulators. On June 2, the Antitrust Division of the Department of Justice asked the companies for additional information, according to a registration statement the companies filed with the Securities and Exchange Commission. The companies pointed out in the filing that DoJ actions could delay the closing or impose "onerous conditions in connection with its clearance." The FCC also must approve the deal. After receiving the companies' application, the FCC opened a public comment period on May 16 that will last through June 16. In the SEC filing, the companies said the transaction is on track to close by the end of this year or in the first quarter of 2004. They set a walkaway date of April 9, 2004.