Dolans Might Want New Garden in N.Y.

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Cablevision Systems Corp. is considering razing the Madison
Square Garden arena in New York City and replacing it with a more modern facility either
at the same site or nearby.

"We're going to need a new arena. I think there
is no doubt about that," Cablevision president James Dolan told Newsday last
week.

However, Dolan backtracked just a little the day after the Newsday
story hit the street, issuing a statement that said building a new facility was just one
of the options being considered.

"Cablevision is in the early stages of exploring ways
to ensure that New York fans and our professional sports teams have an arena that is
second to none and well-equipped for the 21st Century," Dolan said in the
statement. "While we have no timetable, we expect to work with interested parties in
the coming months to explore the possibilities."

Dolan is apparently disappointed with the layout of the
Garden, which underwent a $200 million renovation between 1989 and 1992. Although the
existing Garden is relatively fan-friendly, it lags behind more modern arenas with
better-positioned luxury boxes and better layouts.

The current Garden is located on 33rd Street
between 7th and 8th Avenue in Manhattan and was built in 1968. A
proposal by New York City Mayor Rudolph Giuliani for a new Garden on the city's West
Side has been stalled for months.

Why the Dolans want to spend the hundreds of millions a new
arena would require -- and how they intend to finance it -- is still a question. But one
way to do that is through a planned tracking stock for Cablevision's Rainbow Media
Holdings Inc. programming unit. Madison Square Garden is part of Rainbow Media, a
partnership between Cablevision, Liberty Media Group Inc., News Corp. and NBC Corp.
Cablevision controls and operates the arena. Other programming properties within the
Rainbow partnership include MSG Networks, Bravo, the Independent Film Channel and American
Movie Classics.

Cablevision also owns the two sports teams that play in the
Garden -- the National Basketball Association's New York Knicks and the National
Hockey League's New York Rangers.

Earlier this year Cablevision announced plans to issue a
Rainbow tracker, which would mirror the performance of the programming and sports unit.

"They're probably thinking they are going to
raise capital through the Rainbow spinout," said SG Cowen Securities Corp. analyst
Gary Farber. "The fact that they're talking about upgrading the Garden implies
they are going to raise money through Rainbow."

Farber said that to raise the money Cablevision would most
likely have to commence an initial public offering for Rainbow, but not necessarily right
away.

"They don't have to an IPO right out of the box,
but they might do it later," Farber said.

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