Cablevision, News Corp. Reach Deal

The day its put option to Cablevision Systems Corp. was set to expire, News
Corp. worked out a deal with the MSO to reduce its ownership in two regional
sports networks in exchange for about $100 million.

News Corp. agreed to reduce its interest in Fox Sports Net Bay Area and FSN
Chicago from about 70 percent to 40 percent, bringing its interest in those
networks in line with its interests in its other regional sports networks with

Although neither company announced a value for the deal, sources familiar
with the situation estimated that it was worth under $100 million.

The regional programming partners can pay that amount in either of three ways: in stock, via a
three-year interest-only bullet note, or by proceeding with an initial public
offering of the two networks.

News Corp. had the right to exercise a put for all of its interests in the
regional sports networks -- estimated by some to be worth as much as $1 billion
-- since Dec. 18. Those put rights were set to expire Saturday, and they will
not be available again until Dec. 18, 2005.

"We welcome the continuation of our sports partnership with News Corp.,"
Cablevision vice chairman Hank Ratner said in a prepared statement. "As we have
said all along, any of the outcomes with regard to the Fox put would be a
positive for Cablevision."

Cablevision and News Corp. have been hinting for months that they might opt
to allow the put rights to expire, citing their happiness with the existing
relationship. While it turned out otherwise, it was not the dramatic shift that
some analysts had predicted.

Last year, industry analysts expected News Corp. to swap its interest in
Madison Square Garden -- which includes the arena of the same name, three
professional-sports teams and MSG Network -- for full control of five regional
sports networks outside of New York. However, as late as December, Cablevision
executives made a point at industry conferences to stress the importance of the
regional sports networks to the company's bottom line.