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).
