Sticking with Cablevision

While some of Rainbow Media Holdings Inc.’s programming entities will remain with Cablevision Systems Corp., their situation is far from static.

Perhaps the most subject to change is Rainbow Sports Networks, which comprises five regional channels. They use the branding of Rainbow’s partner, Fox Sports Net, which holds a minority interest and serves viewers in Chicago, San Francisco, Florida, New England and Ohio. In addition, the Madison Square Garden Network and Fox Sports Net New York are run by Cablevision’s Madison Square Garden unit.

But as is true for all sports channels, the Cablevision services face the specter of an ever-increasing number of sports teams launching their own dedicated channels — a situation that led to a tumultuous, three-year legal battle between Cablevision and the Yankees Entertainment & Sports Network. MSGN previously held the rights to the New York Yankees telecasts. The Big Apple’s other Major League Baseball franchise, the New York Mets, is currently contemplating whether to pursue its own network.

In the Windy City, Rainbow’s sports unit has suffered a major setback as Fox Sports Net Chicago service has lost the rights to the Blackhawks, Bulls, Cubs and White Sox. Telecasts of those teams’ games will begin this fall and spring on Comcast Sports Net Chicago. Fox Sports Net Chicago also lost general manager Jim Corno to the new regional.

Revenues for Rainbow Sports Networks had increased 18% last year — and first-quarter revenues rose 171%, to $96 million, largely due to consolidation of the Chicago and Bay area networks (Rainbow became a 60% owner in the services last December), higher affiliate fees and the “the timing of certain affiliate settlements,” according to Cablevision documents. But because of the Chicago team defections, they are expected to take a third-quarter hit.

Along with its sports channels, Cablevision owns a string of local news channels, including the flagship News 12 Long Island. All told, the web of regional news networks reaches 3.3 million homes in the New York DMA. Rounding out Cablevision’s local network offerings are MetroTV, MetroStories and Metro Traffic & Weather, a trio of New York-centric lifestyle and informational channels.

Cablevision’s national music channel Fuse was rebranded in the middle of last year after the company took total ownership of the service and parted ways with the Canadian MuchMusic service.

This summer, Fuse launched a new video-on-demand service and a music video show offering free music downloads on the channel’s Web site. And its Fuse on Your Mobile cell phone content allows fans to stay connected with their Web-enabled wireless phones.

Although its subscriber base grew 18% between first half 2003 and first half 2004, to 31 million, Fuse obviously has plenty of catching up to do with its fully distributed competitors in the music space.