Cablevision, News Corp. Settle 'Puts'

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 Fox Sports Net Chicago from about 70 percent to 40 percent, bringing its interest in those networks in line with its interests in the other RSNs it jointly owns with Cablevision.

Although neither company announced a value for the deal, sources familiar with the situation estimated it was worth less than $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 Jan. 18 and will not be available again until Dec. 18, 2005.