Cablevision Bids $16.5B for Adelphia

Cablevision Systems Corp. has jumped into the Adelphia Communications Corp. auction with a $16.5 billion all-cash bid.

Although not as high as an estimated $17.6 billion offer from Time Warner Inc. and Comcast Corp., which have widely been viewed as the front-runners to secure Adelphia’s 5.3 million subscribers, Cablevision’s all-cash gambit could prove more attractive to the bankrupt Denver-based operator’s board of directors and bondholders.

Cablevision, according to published reports, may yet combine with Kohlberg Kravis Roberts & Co. and Providence Equity Partners Inc. on a joint bid. KKR and Providence have already made an offer valued at some $15 billion.

Cablevision declined to comment on the matter.

Should Cablevision prevail in its Adelphia play, it would vault to the No. 3 MSO with more than 8 million subscribers, including major positions in the nation’s two largest markets, New York and Los Angeles.

The Adelphia bid marks a departure from previous market retrenchment by Cablevision, which once owned systems in Boston, Cleveland and Kalamazoo, Mich., but sold them in 2000 for a combined $3 billion to focus more on its New York assets.

The move is just the latest loose end for Cablevision. The March 31 deadline for chairman Charles Dolan to present a funding plan to continue its fledgling Rainbow DBS direct-broadcast satellite service, better known by its Voom brand name, came and went. In government filings, Dolan indicated that he has secured $400 million for the project. He also filed documents with the Federal Communications Commission to block Cablevision’s proposed sale of Rainbow DBS’ satellite, Rainbow 1, to EchoStar Communications Corp. for $200 million.

The company has also been at odds with the National Football League’s New York Jets and the New York Metropolitan Transportation Authority over a tract of land on Manhattan’s West Side that may become the site of a football stadium.

Yesterday, Madison Square Garden L.P. -- which would be impacted should the stadium rise -- filed suit in State Supreme Court in Manhattan against the Jets, the MTA and New York City, contending that the city and transit unit colluded to accept the Jets’ lower bid. Cablevision, which owns MSG, is seeking a preliminary injunction blocking the sale of the rights to the Jets

MSG said its $760 million bid -- comprising $400 million in cash upfront and $360 million for a platform over the rail yards, on which its residential-development plan would be raised -- was passed over by the MTA for a Jets bid of $210 million in present value and was made contingent on zoning changes while requiring at least a $600 million public subsidy.

A stadium would also serve as a centerpiece for New York’s bid for the 2012 Summer Olympic Games. The International Olympics Committee is scheduled to make its decision about the host city in July.