re: ncp - 11.65 today,jdorran ?
Hope u noticed this jd ?News Corp. slides with BSkyB news Plus: Cablevision seen making Rainbow spinoff moves
By Jon Friedman & Emily Church, CBS.MarketWatch.com Last Update: 5:59 PM ET Aug. 4, 2004 E-mail it | Print | Discuss | Alert | Reprint | RSS
NEW YORK (CBS.MW) -- Shares of News Corp., Rupert Murdoch's worldwide media empire, were under pressure as investors expressed concern about the fortunes of British-based satellite broadcaster BSkyB, one of its big holdings.
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U.S.-listed shares of News Corp. (NWS: news, chart, profile) fell 4.5 percent, or $1.55, to $32.80. BSkyB (BSY: news, chart, profile), in which News Corp. is the largest minority holder, saw its stock drop 17 percent, down $7.75 to $36.85.
Investors reacted negatively to BSkyB's announcement that it would boost marketing expenses on top of plans to ramp up capital spending by 450 million pounds ($821 million) as it moves to increase its subscriber base 35 percent by 2010.
However, the broadcaster said it expects operating margins to shrink in 2006.
BSkyB also said it planned to tap into its cash surplus for stock buybacks or special dividends for shareholders. In its fiscal year that ended in June, BSkyB said revenue rose 15 percent to 3.65 billion pounds and posted a 75 percent surge in pre-tax profit to 322 million pounds.
Pre-tax profit before one-time items rose to 595 million pounds, ahead of the consensus forecast from analysts of 498 million pounds, according to an AFX News poll.
Elsewhere, shares of Cablevision (CVC: news, chart, profile) were down 80 cents, or 4.2 percent, to $18.05. A key media analyst said Cablevision Systems, which has a large position in the crucial greater New York television market, appears to be moving closer to spinning off its Rainbow DBS operation.
Jessica Reif Cohen, Merrill Lynch's influential analyst, said in a report to investors that Cablevision "is closing in on instituting a separate capital structure at its start-up satellite operation, the key condition enabling the eventual spin-off of its Rainbow DBS venture."
Rainbow National Services, a new borrowing entity holding such core assets as the AMC, IFC and WE cable channels, intends to issue $800 million in senior notes in a private offering.
"We believe that the private placements could be completed within the next two weeks, compatible with a September distribution date for the spin-off," the analyst wrote in her report.
Analysts say Cablevision has been mentioned frequently as a possible takeover target. Comcast (CMCSA: news, chart, profile) and Time Warner (TWX: news, chart, profile), the nation's two largest cable companies are both interested in making big acquisitions, and Cablevision is regarded as a valuable prospect because of its cable assets. It reaches millions of viewers in its stronghold outside New York City, including on Long Island, a wealthy customer base.
But an acquirer might seek to sell many of Cablevision's other assets. These might include Madison Square Garden, and underperforming assets like the New York Knicks basketball team, the New York Rangers hockey franchise as well as Radio City Music Hall.
Jon Friedman is Media Editor for CBS.MarketWatch.com in New York. Emily Church is London bureau chief of CBS.MarketWatch.com.
