By gloria stravelli
Staff Writer
Red Bank’s popular Clearview Cinema is up for sale as parent company Cablevision Systems Corp. takes strategic steps designed to cut costs and refocus on its core businesses.
Cablevision announced it will sell the entire tristate Clearview chain of 59 cinemas, including the two-screen theater on White Street in Red Bank, as well as a 10-screen theater in the Middlebrook Shopping Center on Route 35 in Ocean Township.
A company spokeswoman said the chain is profitable. Cablevision itself is operating in the red, however.
At the same time the company is trying to sell, Cablevision will close 26 Nobody Beats the Wiz stores that are running in the red. The company owns 43 of the electronics outlets.
The company did not disclose whether the Wiz located on Route 36 in Eatontown is one of those to be closed.
The announcements came as Cablevision made public a growth plan that calls for directing capital to revenue generating operations, and includes a number of strategic steps designed to achieve capital and operational cost savings.
To reduce overhead, the company will cut staff by about 7 percent, and freeze senior management salaries and cash bonuses through 2003.
Spokeswoman Laura Conover said the Clearview cinemas ended the third quarter with net revenues of $22.2 million, a 23-percent increase over the prior year. The earnings increase can be attributed to current strong box office demand, she said.
Cablevision purchased the Clearview chain in two acquisitions in 1998 and 1999, Conover said. The Red Bank cinema was formerly a Loews property.
"The reason for the purchase was not only because they were entertainment properties. The company purchased Clearview with the goal of marketing its other properties to the moviegoer, like Radio City Music Hall, and some digital products and services, like Optimum high speed Internet access and Interactive Optimum, a digital TV service now rolling out," she said.
"Clearview is a small- to medium-size chain of neighborhood theaters. They’re local, and in this industry right now, with large multiplexes being built, the feeling was there would be another owner who could better take Clearview to another level," Conover added.
Conover said Cablevision acquired the Wiz stores, then in bankruptcy proceedings, in January 1998 for $100 million.
"The chain has not been breaking even since, and the thinking behind selling 26 of the 43 will be to allow the company to focus on the 17 stores that are profitable," she said.
"The Wiz was also bought by Cablevision to market digital products and services, and Cablevision is still focused on that strategy," she added.
Cablevision Systems is headquartered in Bethpage, N.Y. The company’s cable television operation serves 3 million customers in the New York metropolitan area. Through Rainbow Media Holdings Inc. it operates programming businesses including American Movie Classics, Bravo, the Independent Film Channel, and other national and regional services. In addition, Rainbow is a 50-percent partner in Fox Sports Net. Cablevision also owns a controlling interest in and operates Madison Square Garden and its sports teams, including the Knicks and Rangers.
The value of the entertainment and telecommunications company fell by roughly 90 percent during the past year. The 52-week high for Cablevision’s shares was $53. The company is now trading off its 52-week low of $5.25. The stock closed at $5.46 Monday, after trading as low as $4.83 per share.