Tuesday, May 13, 2008

Dazed and Confused

My jaw hit the floor at the price being paid by Cablevision for the Sundance Channel, the docs, short movies and music channel rolled out from the Sundance Film Festival. It's good news for major shareholder Robert Redford, and there seems to be some technical reasons for the sale as Cablevision swaps out of a position in another of the channel's ultimate owners, GE.

Still, half a billion! For a niche TV channel. No wonder everyone's trying to jump onto this Internet TV bandwagon.

Cablevision's as disfunctional as ever. Chuck Nolan's sprawling empire which has seemed to crawl from crisis to crisis managed to make the near simultaneous announcement of the acquisition of old fashioned dead tree newspaper Newsday for $650m.

Of late, Cablevision seems to have been doing rather well, with a 11.3% increase in sales to almost $6.5 billion in 2007. With free cash flow of this would seem to be a great position to be in and buying strong media brands a sensible move until you realise that all of that free cashflow little more than services debts of $11.6 billion.

Now, I'm a great fan of the venerable Cablevision founder, who has been involved in a long running internecine battle with son Jim, and have also spent a lot of time down at Penn Plaza trying to get the company to recognise the value of Internet TV, where the penny certainly hadn't dropped the last time I walked out of the Rainbow offices in despair.

The good news to aspiring Internet TV moguls is that strong brands with dedicated audiences still have exalted values in traditional media land; the bad news is that traditional media companies seem to be utterly, utterly confused about their future strategies if these moves and other reports are to be believed.

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