Cablevision Does Deal with the N.J. Devils

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In an attempt to tighten its hold on the New York-area
sports and entertainment business, Cablevision Systems Corp. announced a partnership with
the New Jersey Devils National Hockey League team last week to build an arena and
entertainment complex in Hoboken, N.J.

The announcement comes on the heels of Adelphia
Communications Corp.'s efforts to build a state-of-the-art waterfront project in Buffalo,
N.Y., to house its Empire Sports Network regional sports network and the NHL's Buffalo
Sabres, which Adelphia owns.

While those ambitious projects could net both companies
millions of dollars in incremental revenue from sports and ancillary entertainment
properties, they also could be risky financial prospects.

The Cablevision/Devils development plan, which would be
partially funded by a joint venture between the two companies, calls for an advanced
sports, communications and entertainment center in Hoboken to host Devils hockey games and
to house an entertainment and retail complex.

Along with Devils games, the venture is hoping to attract a
"wide array of sports, family entertainment, concerts and cultural events."

"Today's announcement extends the long-standing
relationship that Cablevision has enjoyed with [Devils owner] John McMullen and the New
Jersey Devils and provides a unique opportunity to build a world-class facility at the
right place at the right time," Cablevision chairman Charles Dolan said in a prepared
statement.

"We have great enthusiasm for the project and the
benefits it will bring to New Jersey," he added.

If the deal is completed, Cablevision would have equity in
its second New York/New Jersey arena, along with Madison Square Garden.

As part of the deal, the MSO would also extend its
multiyear contract with the Devils and Fox Sports New York, keeping the team's cable
rights away from potential rivals that may look to launch competing regional sports
networks.

The Cablevision plan follows a similar plan developed by
Adelphia to create a waterfront entertainment complex and sports facility in Buffalo.
Adelphia owns both the Sabres and the Marine Midland Arena where the team plays.

Adelphia also owns Empire Sports Network, which would be
relocated to the interactive complex along with Adelphia's national-operations center,
according to published reports.

But as is the case with most major development
undertakings, the projects come with major financial risks for both companies.

Local fans and observers have criticized Adelphia for not
spending the dollars necessary to upgrade the team or to erase the arena's financial
debts. The MSO, however, does have a partner for the project in The Cordish Co. of
Baltimore.

Representatives from Adelphia could not be reached for
comment at press time.

Meanwhile, Cablevision's deal is far from completed.
Cablevision and the Devils will seek approximately $30 million in private financing for
the project. Further, the plan would have to be approved by local and state governments.

There has already been grumbling from local officials who
are concerned about traffic and parking problems surrounding the facility.

Further, several New Jersey government officials have
stated in the past that any new arena funded with public dollars would have to house both
the Devils and the National Basketball Association's New Jersey Nets.

Both teams currently play in the Continental Airlines Arena
in East Rutherford, N.J., but the Nets hope to build a new arena in Newark, N.J.

The arena/entertainment complex would provide Cablevision
with an enormous opportunity to showcase its ancillary entertainment services.

Sources close to the situation said the entertainment
complex would almost certainly house outlets from such Cablevision-owned properties as The
Wiz retail stores and Clearview Cinema Group.

"It's like one-stop shopping for advertisers,"
Paul Kagan Associates Inc. sports analyst John Mansell said. "It gives [Cablevision]
a way to go to advertisers and offer a multitude of opportunities with the arena, the team
and its other entertainment properties."

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