Cablevision exploring spinoff of Rainbow Media

Cablevision is exploring whether to spin off Rainbow Media Holdings, the group that owns networks such as AMC, IFC, the Sundance Channel and Wedding Central, by the middle of next year.

The company's shares soared more than 7 percent in afternoon trading Thursday.

Cablevision Systems Corp. which spun off Madison Square Garden earlier this year, said it is "confident in the strength" of the Rainbow business. In the most recent quarter, Rainbow saw its revenue grow 12 percent to $291 million thanks to higher advertising revenue and subscriber numbers. Cablevision's overall revenue was $1.81 billion. '

Cablevision said the spinoff would be structured as a tax-free distribution to stockholders if the company were to propose one.

If the spinoff takes place, Cablevision said its cable and telecommunications business, along with Newsday, Clearview Cinemas, News 12 Networks and MSG Varsity will remain part of the company. Earlier this month, Cablevision said its third-quarter results were strong - only Newsday, its newspaper business, dragged revenue slightly lower.

Cablevision said it is targeting the middle of 2011 for the proposed spinoff. It said it is not considering a sale of Rainbow or of its cable and telecom business.

Shares of Cablevision, which is controlled by the Dolan family, jumped $2.17, or 7.5 percent, to $31.10 in afternoon trading. Earlier, the stock hit a 52-week high of $32.09.