By Indiewire | Indiewire July 2, 2003 at 2:0AM
MGM Sells Interests in IFC, AMC and WE as Vivendi Universal Considers Suitors
by Eugene Hernandez
MGM announced that it has sold its stake in Rainbow Media's cable properties AMC, the Independent Film Channel, and WE: Women's Entertainment back to Cablevision, Rainbow's parent. The deal is valued at $500 million, according the Cablevision announcement earlier this week, and it comes as MGM and Cablevision emerge as just two of the players in a potential acquisition of Vivendi Universal Entertainment (VUE).
"MGM has been an excellent partner and we have been grateful for its support," said Cablevision President and CEO James Dolan in a prepared statement. "For Cablevision, we are very pleased to again retain 100 percent ownership of our Rainbow networks as we amicably exit this arrangement. We thank MGM for this successful partnership and look forward to working with MGM in the future."
As has been the case for years now, the ownership of Vivendi Universal, parent of Universal Studios and Focus Features, among many other entertainment properties, offers ongoing fodder for entertainment industry observers.
A number of potential buyers are being considered by Vivendi Universal, the company that was created in 2000 when Seagram, Vivendi, and StudioCanal were merged. Among the suitors are the aforementioned MGM, General Electric/NBC, Viacom, Liberty Media and notably a group that includes Cablevision with former Seagram and Vivendi head Edgar Bronfman, Jr.
"VUE have made a first proposal with various perimeters, valuations, and other conditions as expected," the Vivendi Universal board said in a statement on Tuesday following a meeting in Paris. "In-depth negotiations will now be pursued with selected bidders."
MGM acquired its 20-percent interest in Rainbow two years ago when Rainbow also owned Bravo. Rainbow sold that TV arts network to NBC last year. After buying the partial stake in Rainbow, MGM is said to have pursued a purchase of Rainbow that was ultimately rejected.
As a history lesson, it is fascinating to recall that VUE bidder Edgar Bronfman was atop Universal back in the '90s when the studio owned October Films. The film unit later became USA Films and was even later merged with Good Machine to create Focus Features. October co-founder Bingham Ray is now head of United Artists, the specialty division owned by MGM. And Chris McGurk, MGM's current vice chairman, served as Universal Pictures president during the period of Bronfman and October Films.
Cablevision is a national cable company that also owns Clearview Cinemas, a theater chain that it recently announced is no longer for sale. Other Cablevision properties include Madison Square Garden, the New York Knicks, and the New York Rangers; it also manages Radio City Music Hall in Manhattan. Its Rainbow Media Holdings owns a number of networks in addition AMC, IFC, and WE. It also owns Fuse (formerly known as MuchMusic), sports networks (including 50 percent of Fox Sports Net), New York's MetroChannels and Long Island's News 12 Networks.
[DISCLOSURE: indieWIRE LLC publishes IFCRant as a magazine co-venture with the Independent Film Channel (IFC). IFC is a part of Cablevision's Rainbow Media Holdings, Inc.]