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Cable television broadcasting industry

New York State Attorney General Opens Antitrust Investigation of Madison Square Garden Deal

Strategic Insights

— 2 min read

The proposed purchase of Madison Square Garden from Viacom Inc. by ITT Corporation and Cablevision Systems Corporation has raised concerns among regulators, with New York State Attorney General G. Oliver Koppell announcing an antitrust investigation into the deal. The Attorney General expressed concerns about the potential for increased cable subscription fees and reduced consumer choice following the consolidation of sports networks under one owner.

Key Takeaways:

  • The New York State Attorney General, G. Oliver Koppell, has opened an antitrust investigation into the proposed purchase of Madison Square Garden by ITT Corporation and Cablevision Systems Corporation.
  • The deal raises concerns about the potential for increased cable subscription fees and reduced consumer choice following the consolidation of sports networks under one owner.
  • Cablevision, which owns Sportschannel, a cable sports service, has substantial franchises in the metropolitan New York area, which could be a factor in the investigation.
  • ITT shareholders have expressed concerns about the deal, with shares of ITT falling $4.125 to $82 on the New York Stock Exchange.
  • Cablevision shares rose 37.5 cents to $58 on the American Stock Exchange.
  • Analysts and lawyers expect Federal authorities to review the deal as well.
  • The investigation could affect future bidding for broadcast rights for teams not owned by the Garden.
  • The consolidation of sports networks under one owner may not necessarily result in higher cable subscription fees.

Statistics:

  • $1.075 billion: The amount that ITT Corporation and Cablevision Systems Corporation will pay for the Madison Square Garden arena and related properties.
  • $600 million: The amount of cash that ITT will put up to help finance the purchase.
  • $82: The price per share of ITT on the New York Stock Exchange after the announcement.
  • $58: The price per share of Cablevision on the American Stock Exchange yesterday.
  • 37.5 cents: The price increase of Cablevision shares on the American Stock Exchange.
  • 13: The number of stores in the New York City area that R. H. Macy & Company would have to divest to satisfy concerns about a merger with Federated Department Stores.

Sources:

  • "New York State Attorney General Opens Antitrust Investigation of Madison Square Garden Deal," [no date]
  • "ITT, Cablevision to Buy Garden for $1.075 Billion," [The New York Times, Sunday]
  • [ Robert A. Bowman, executive vice president and chief financial officer at ITT Corporation]
  • [Jack L. Kelly, analyst at Goldman, Sachs]
  • [G. Oliver Koppell, New York State Attorney General]
  • [Mario M. Cuomo, Governor of New York]
  • [Richard J. Kessel, executive director of the State Consumer Protection Board]
  • [Charles F. Dolan, chairman of Cablevision]

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