Malone's Cablevision Exit May Be a Signal
09:11 a.m. 06/09/2005
http://news.yahoo.com/news?tmpl=story&u=/ap/20050609/ap_on_bi_ge/malone_cablevision_1
DENVER, Jun 09, 2005 (AP Online via COMTEX) -- The official reason given Wednesday for cable mogul John Malone's departure from the board of Cablevision Systems Corp. was that he could avoid any perception of conflict of interest.
Malone resigned from the cable TV company's board on Monday, indicating "he was resigning to avoid any potential concerns that could arise from his being a director of (Cablevision) and Liberty Media Corp., each of which owns programming companies," according to a Securities and Exchange Commission filing.
Malone is the chairman and chief executive of Englewood, Colo.-based Liberty Media, which has interests in cable channels such as Discovery, Court TV and the QVC shopping network.
But some analysts speculate that Malone's departure might be a sign of partnerships to come.
"Strategically, it could be that (Cablevision's) Rainbow is contemplating some kind of partnership with Liberty Media in which there would be a conflict of interest," said Oppenheimer senior analyst Thomas Eagan.
Rainbow Media Holdings, a subsidiary of Bethpage, N.Y.-based Cablevision, owns several cable channels, including American Movie Classics and WE: Women's Entertainment.
Eagan said Rainbow could get folded into some of Liberty Media's networks, "as Cablevision tries to create more value for its Rainbow networks."
Specifically, Rainbow assets could be combined with Liberty's 50 percent stake in Discovery and QVC, which are to be spun out in a separate stock, he said.
Another analyst, who asked not to be named, agreed there might be some behind-the-scenes dealmaking behind Malone's exit, but noted that Malone "had planned to be on Cablevision's board for only a short time."
Malone had joined Cablevision's board in March, in the midst of a battle between Cablevision founder and chairman Charles Dolan and his son, Cablevision CEO James Dolan, over the money-losing satellite TV service Voom.
The senior Dolan brought in Malone and former Viacom Inc. chief Frank Biondi, hoping new board members would save Voom. In April, Cablevision said it was shutting down the satellite TV service.
A spokeswoman for Cablevision declined further comment and Liberty Media officials couldn't be reached Wednesday.
