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ITT REFUSES TO FOLD IN BID TO BUY GARDEN
Published December 21, 1994
ITT "insisted" that displeasure from the NHL and NBA over the company's acquisition of Caesars World would not prevent them from closing the $1.08B deal for Madison Square Garden. ITT and Cablevision are partners in a pending deal for the the Knicks and Rangers. Each league expressed concern over ITT's $1.7B offer for Caesars World yesterday, as both bar team owners from owning businesses that take bets on sporting events. ITT spokesperson James Gallagher said the company has discussed the issue with the commissioners of both leagues. Gallagher: "We are confident that we are going to be able to do the deals" (BLOOMBERG BUSINESS NEWS/N.Y. POST, 12/21). ESPN's Steve Levy: "ITT is feverishly working on concessions to O.K. the MSG purchase which could include separating its holdings and not taking action on games in either the NBA or NHL" ("SportsCenter," 12/20). Sources say ITT could drop hockey and basketball betting, if necessary, but the company "didn't plan on selling either of the sports teams." Caesars' sports book is estimated to generate less than 5% of the company's total gambling revenue. John Rochs, an analyst with Wertheim Schroder & Co., says a settlement restricting sports gambling would have a "minuscule impact" on profits (Eben Shapiro, WALL STREET JOURNAL, 12/21). However, Ron Pearlstein, an analyst at Loomis Sayles & Co., says "sport-betting salons are much too profitable": "My guess is the Knicks and the Rangers have got to go. ... The leagues might insist on it" (BLOOMBERG/N.Y. POST, 12/21). Both analysts agree that eliminating some sports betting could hurt overall profits. Rochs: "There is an unquantifiable aspect to it: How many people won't walk in the door in the first place?" (WALL STREET JOURNAL, 12/21).