Metro-Goldwyn-Mayer (MGM) isselling its 20% stake in three US cable channels AMC, IFC and WE: Women'sEntertainment back to Cablevision for $500m. Once the deal is done, probably inthe third quarter 2003, the three channels will once again be 100%-owned byCablevision.

The deal could haveramifications for both MGM and Cablevision which are separately involved in thebidding for the entertainment assets of Vivendi Universal, MGM on its own andCablevision with Edgar Bronfman Jr.

Cablevision sold a 20% stakein those three networks and Bravo to MGM in April 2001 for $825m; last year thetwo sold Bravo to NBC for $1.25bn. Ironically, General Electric/NBC is also abidder for the Universal assets.

MGM will receive $250m atclosing of the deal and $250m five months later. The company expects to reporta book loss associated with the transaction of some $93m in its second quarterending June 30, 2003.

"We are turning anasset for which the financial community gave us little credit into over $2 pershare in cash," said MGM chairman and CEO Alex Yemenidjian in astatement. "Upon completion of the transaction, our balance sheet will be100% debt free, which will give us more flexibility in pursuing other valuecreation opportunities for our shareholders."

Bronfman and Cablevisionhave made it clear that the channels will be a major component of their bid forVivendi Universal Entertainment (VUE) which already owns USA Network and Sci-FiChannel. MGM's offer for the non-music activities of VUE is more focusedon the film and TV production activities and could entail a merger ofMGM's film studio and vast library with Universal Studios.