Cablevision’s questionable decision to buy fellow Long Island-er Newsday last summer will result in a writedown ranging from $375 million and $450 million for its 2008 earnings, the company said in an SEC filing. The cable operator, which reports its Q4 and full-year ’08 earnings on Feb. 26, bought Newsday from Tribune Company in July for about $650 million; the purchase included free metro daily amNewYork and a group of Long Island-based community shopper publications. The writedown was pinned on “continuing deterioration of values in the newspaper industry,” Cablevision (NYSE: CVC) said.
Apart from that, Cablevision also plans to sell $500 million in senior notes to institutional investors pay down upcoming debt. Craig Moffett, analyst at Sanford Bernstein, tells Reuters that it’s encouraging that the market is willing to lend to Cablevision in this environment. It’s also a testament to the expectation of the cable industry’s ability to continue to produce strong cash flows. Last month, Cablevision turned to the debt markets again, offering $750 million in 3.25-year notes that carried an 11.3 percent yield.