The network behind Mad Men is about to be set free as Cablevision Systems’ (CVC) board of directors approved the spinoff of AMC Networks (formerly known as Rainbow Media). The new company will trade under the ticker AMCX with the share distribution occurring on June 30 to shareholders on June 16th (today). Bear in mind that the Dolan family of NY basketball/hockey team mismanagement fame will remain in control of the company with Charles serving as Executive Chairman and James as a member of the board. Josh Sapan will remain CEO of the new company.
The reason for the spinoff is mainly to improve both shareholder value and the credit profile of the parent. Take a look at the Form 10 here for much of the important information including business fundamentals, financial performance and executive compensation. It looks like historically the company’s compensation has been heavily tied to performance which bodes well. Another situation worth monitoring is that the new company will be taking on a sizable amount of debt as a result of the spinoff. The clock is running out (literally) to get in pre-spin and CVC’s performance has remained strong (post-board announcement the name popped 5+%).
Disclosure: Author holds no position in any stock mentioned.