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Rainbow stock seen in August

Cablevision Systems plans to create a tracking stock tied to its Rainbow Media Holdings unit by August but may not include a big chunk of the division's properties in the deal.

Speaking at a Banc of America media conference in New York, Vice Chairman William J. Bell said the company has not yet decided which assets to include in the tracking stock subsidiary but executives are "leaning toward" including only its national entertainment networks: American Movie Classics, Bravo, Independent Film Channel and Romance Classics.

That would exclude its partly owned regional sports channels MSG Network and FOX Sports New York, its pro sports teams and properties like Radio City Music Hall. That's in part because those properties have substantial cross-promotional opportunities with Cablevision's metro New York cable systems.

But Rainbow's ongoing renegotiation of TV rights to New York Yankees' games is expected to push the price so high that some analysts believe the value of the regional sports operation could be severely crunched and would be a drag on the tracking stock.

Cablevision is likely to distribute Rainbow's tracking stock to company shareholders and then follow with a "small" initial public offering, Bell said.