Cablevision, News Corp Swap Sports Assets

Cablevision Systems Corp. (CVC) and News Corp. (NWS) Tuesday agreed to an asset swap that gives News Corp. full ownership of several regional sports networks and Cablevision full ownership of some New York area sports teams, venues and local sports channels.

The restructuring, which simplifies Cablevision's portfolio structure, could make it easier to put itself up for sale, analysts said.

Previously, Cablevision owned 60 percent of the Regional Programming Partners, the name under which the sports networks operated, while News Corp. owned 40 percent.

The Bethpage, Long Island, cable operator will gain full ownership of the New York Knicks (search) basketball team, the WNBA's New York Liberty (search) and the Rangers hockey team, as well as Radio City Entertainment, the MSG Network cable channel and regional sports networks FSN New York and Chicago.

News Corp. will get full ownership of Fox Sports Net (search) as well as FSN Ohio and Florida and National Advertising Partners. Both companies will continue to share ownership of a regional sports network in the San Francisco Bay area.

News Corp. is the parent company of the Fox News Channel, which operates

Although Cablevision has never confirmed it was up for sale, cleaning up the ownership structure is viewed as another step toward unraveling the company founded by cable pioneer Charles Dolan (search), analysts said. Cablevision declined to comment.

"The silver lining for Cablevision shareholders is this significantly simplifies its portfolio and is likely to be taken as yet another step toward an eventual possible sale," said Craig Moffett, an analyst at Sanford C. Bernstein.

In recent weeks, Dolan, who is chairman of Cablevision, said he planned to purchase the remaining assets of a fledgling satellite television service it launched in 2003 as the third U.S. competitor to News Corp.-controlled DirecTV Group and EchoStar Communications Corp. (DISH).

Dolan's decision to buy the assets and an ensuing rift with the board of directors and his son James Dolan, the CEO of Cablevision, was widely viewed as reflecting Charles' growing dissatisfaction with cable operations after years spent creating the industry.

Charles Dolan has become enamored of satellite service's ability to court new customers across the country, while cable operations are regionally clustered, analysts have said.

But to make Dolan's dream a reality, he needs financing. "(Dolan's) CVC stock would appear to be the only way to finance this entrepreneurial project," Richard Greenfield, an analyst at Fulcrum Global Partners, wrote in a research note.

The companies said the restructuring is generally a tax-free exchange of assets.

Separately, Cablevision earlier this year launched an aggressive $600 million bid for a construction site on Manhattan's West Side, surpassing a $100 million bid that would use the site for a stadium for the New York Jets football team and for New York City's bid to host the 2012 Olympics.

A third bidder, privately owned New York City energy company TransGas Energy Systems, this week offered to pay $700 million for the site owned by the Metropolitan Transportation Authority.

Cablevision has said it hopes to develop new offices and apartments on the site.

Cablevision shares rose 10 cents to $28.04 while News Corp. shares fell 38 cents to $17.03 on the New York Stock Exchange (search).