Cablevision Clears Way for Sale

Cablevision Systems Corp. agreed to let AT&T; Corp. sell its roughly 30% stake in the company, which investors said might clear the way for a sale of the New York City area’s biggest cable-television operator.

Under the agreement, AT&T; may now sell 18.6 million of its 48.9 million Cablevision shares and register the rest for sale in six months, Cablevision said. Cablevision will sell as much as $1 billion in stock to the public under the plan.

Chairman Charles Dolan, whose family controls Bethpage, N.Y.-based Cablevision, has said he would sell the company “at the right price, any time.” AOL Time Warner Inc., which owns New York cable systems adjacent to Cablevision’s and is the second-biggest cable-TV company in the U.S., is the most likely bidder, investors say.

“Cablevision is free to negotiate with whomever wants to buy them, without having AT&T; have a say in it,” said Adrian Davies, an analyst at Federated Investment Management in Pittsburgh, which owns shares in AT&T; and AOL Time Warner. “Chuck Dolan is setting this company up for a sale.”

Executives at Cablevision and AOL Time Warner declined to comment. New York-based AT&T; will use proceeds of the Cablevision share sale to reduce debt, spokeswoman June Rochford said. She declined to comment further.

“It is my expectation that these shares will never hit the market,” said Uri Landesman of AFA Management Partners, which owns shares of New York-based AOL Time Warner and Cablevision. “I think Time Warner and AT&T; will make a deal.”

The Dolan family controls Cablevision through ownership of its Class B shares, which have 10 times the voting power of AT&T;’s Class A stock. Dolan started Cablevision, which also owns the Rangers hockey team and Knicks basketball team, in 1954.

“They’re interested in selling,” said Mark Greenberg, portfolio manager of the Leisure Fund at Invesco Funds Group Inc., which owns shares of Cablevision and AOL Time Warner.

Separately, Cablevision posted a second-quarter profit of $238.5 million, contrasted with a year-ago loss of $171.7 million, after its Rainbow Media Group programming unit sold some assets. Sales fell to $1.06 billion from $1.08 billion because the company sold some cable systems outside the New York area.

Cablevision said it will add fewer cable customers this year than forecast, following rivals such as Cox Communications Inc., which also said subscriber growth will lag estimates as the U.S. economy slows.

Cablevision had a pretax gain of $744.6 million from selling 20% of four cable channels to Metro-Goldwyn-Mayer Inc. in April. Cablevision spokesman Charlie Schueler declined to provide results excluding that item.

Cablevision shares fell $2, or 3.7%, to close $51.85. AT&T; closed unchanged at $19.58, and AOL Time Warner dropped 22 cents to $44.86. All trade on the New York Stock Exchange.