MGM will buy 20% stake in 4 of Rainbow Media Holdings’ national c...
MGM will buy 20% stake in 4 of Rainbow Media Holdings’ national cable networks for $825 million in cash, MGM and Rainbow Media parent Cablevision Systems announced late Feb. 1. Move by Hollywood studio, which came after Cablevision called…
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off full- scale auction for its programming unit because bids weren’t high enough, paves way for MSO to proceed with earlier plans to create separate tracking stock for Rainbow Media later this month. MGM, which said it might try to boost its stake in Rainbow Media to as much as 50% eventually, will receive interest in American Movie Classics, Bravo, Independent Film Channel and We: Women’s Entertainment (formerly Romance Classics). But MGM won’t get stake in Rainbow Media’s sports or regional programming networks. Nor will MGM gain any management control, board seats or guaranteed cable distribution for its films, companies said, but MGM officials indicated that they hoped to work out some kind of exclusive licensing or promotion deal with Rainbow Media. Cablevision said cash infusion would be used to finance Rainbow Media’s expansion and reduce unit’s debt. MSO doesn’t intend to sell any other stakes in Rainbow Media, it said. As result of deal, which values all 4 channels at just over $4.1 billion, Cablevision once again rescheduled its special stockholders meeting for voting on creation of tracking stock. Instead of shareholder vote Feb. 2, as most recently planned, Cablevision said it now would hold meeting Feb. 16.