The split of ITT into separate components is profiled in the
current FORBES. Despite having purchased more than $4.5B in
assets over the past two years, ITT Chair Rank Araskog has "yet
to prove that he can make good returns for them." On new casino,
hotel and entertainment properties, Araskog has yet to show "he
can raise their profits sufficiently to justify the consistently
huge prices paid." ITT partnered with Cablevision to buy MSG,
MSG Network, the Rangers and Knicks from Viacom for $1B -- and,
"by wide agreement," overpaid. Despite a Rangers Stanley Cup and
a Knicks playoff run, MSG reported "just" $12M in pre-tax
earnings. But ITT President Robert Bowman notes an increased
cash flow, which he predicts will hit at least $90M this year
through increased ticket prices, personnel streamlining, the
Yankees' "unexpected payment" of $7M in debt, and a $1M fine from
the Heat over Pat Riley.
POWER SOURCE: ITT also added to its portfolio with the
purchase of the NYC-owned WNYC-TV, now renamed WBIS. Bowman says
with MSG, WBIS, and Cablevision's SportsChannel NY, ITT hopes to
put together a WTBS-like cable superstation. He stresses the
synergy between hotels, casino and sports, but FORBES notes his
examples "don't amount to a lot" (Chakravarty & Lubove, FORBES,
3/25 issue). ITT's split is also profiled in the current
FINANCIAL WORLD, with predictions on which segment is the best
buy for stockholders. The entertainment division could "be a
home run" if it all "fits together" (Pablo Galarza, FW, 3/25).
