DOW JONES NEWSWIRES

Cablevision Systems Corp.'s (CVC) board has approved going ahead with its plan to spin off its Madison Square Garden and related assets by year's end as the cable-telelvision company looks to focus on core operations.

Meanwhile, second-quarter earnings fell 8.1% on hedging losses, more than offsetting rising sales.

Cablevision also reiterated "it is not considering the sale of MSG, any of MSG's businesses or any other Cablevision business at this time."

The company said in May it was reviewing a spinoff of the iconic arena and related busineses, which include its sports teams - the New York Rangers and Knicks - and other entertainment venues in New York City. In subsequently raising Cablevision's credit ratings, Moody's Investors Service said the move would simplify the company's business model and reduce volatility in operations and capital requirements.

Under the proposal, Cablevision holders would get a share of MSG for each share of Cablevision.

James Dolan would become MSG's chairman and remain Cablevision's president and chief executive. Hank Ratner would oversee MSG's day-to-day operations and remain Cablevision's vice chairman.

Dolan said, "The new MSG will be an attractive combination of sports entertainment and programming properties, while Cablevision will continue to house a portfolio that includes industry-leading telecommunications services and popular programming networks. We believe that the combined value of these assets has not been fully realized."

The company posted income of $87 million, or 29 cents a share, down 8.1% from $94.7 million, or 32 cents a share, a year earlier. The latest results included a $15.9 million loss on derivatives contracts, while the prior year's included a $65.8 million gain on the contracts and a much-higher gain on swap contracts.

Revenue increased 9.2% to $1.88 billion.

Analysts polled by Thomson Reuters expected earnings of 29 cents and revenue of $1.88 billion.

At Cablevision's telecommunications business, by far the company's largest, revenue rose 5% and earnings grew by 15%, driven by higher numbers of Internet and voice customers. Basic video subscribers fell 1.2% from a year earlier and were down 0.3% from the first quarter. Optimum Online high-speed data customers grew 4.5% and 0.7%, respectively.

At the MSG business, revenue edged down 0.9% as its operating loss widened. Cablevision's Rainbow unit, which includes cable channels such as AMC and IFC, posted a 5.3% gain in revenue as income jumped 61%. Cable networks have been a rare bright spot in the industry as they are less advertising-dependent.

Cablevision's shares closed Wednesday at $18.93 and haven't traded premarket.

-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com