Cablevision eyes indie duplex

Sundance, IFC may end up under the same roof

There could be an indie-film double feature playing soon at Cablevision if the company lands Sundance Channel.

If the Long Island-based cable operator makes good on its bid to acquire the network, Cablevision could have a battle of the brands on its hands between its latest asset and IFC, which also is focused on indie films.

"They are so similar that I would think they would combine them to save money unless they lose channel carriage, which contracts might permit in the case of a rebranding," said Dennis Leibowitz, managing general partner at media-focused hedge fund Act II Partners.

The sales process has advanced along enough that a deal could be announced in the coming days or weeks.

Miller Tabak analyst David Joyce said there could be some value in merging IFC and Sundance "for the channel placement space -- if their carriage agreements allow a rebranding."

But he also said Cablevision could simply run two differently focused indie film networks and benefit from cost savings in overlapping staffing areas, an increase in IFC ad inventory or more sponsorships on Sundance, which hasn't used traditional ads. Said Chris Marangi, analyst at Mario Gabelli's GAMCO Investors: "I don't think they would merge it with IFC, but there may be opportunities for the two to work together. As they introduce more advertising to the channel, it could benefit from Rainbow's existing sales infrastructure."

Part-owner Robert Redford appears to be considering a sale of his financial stake in Sundance but might remain on board in some way. That would allow the new owners to continue the channel's loose relationship with the Sundance Film Festival and Sundance Film Institute. It has, for example, shown coverage from the festival and acquired some of its documentaries.

Another big question is what would happen to key personalities at the Sundance Channel, including president and CEO Larry Aidem.

The New York Post reported Monday that Cablevision has submitted the highest bid so far and that the price tag was approaching $500 million. That would value the network at about $19 per subscriber.

The Post reported that Viacom also was in the running, but it apparently has not made a bid. Time Warner also has been seen as a candidate to acquire the Sundance Channel, but a source familiar with the sales process said Monday that it was not in the running anymore.

Pali Research analyst Richard Greenfield first mentioned the auction this year and estimated that the sale of Sundance could fetch about $400 million, or about $15 for each of the channel's 26 million subscribers.

Launched in 1996, Sundance has seen several ownership changes. Several conglomerates currently have a stake, including NBC Universal, which owns 57%; CBS Corp., via Showtime, holds a stake in the mid-30% range, and Redford owns 6%-10%, based on recent reports.

Nellie Andreeva in Los Angeles contributed to this report.
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