Cablevision Systems [NYSE: CVC] is taking steps to spin off its proposed satellite TV service, Rainbow DBS, and its Clearview Cinemas theater chain.

The Cablevision board approved the spin-off plan as a tax-free, pro rata distribution to Cablevision’s shareholders. The deal, to be completed by the end of this year, includes a cash contribution of up to $450 million from Cablevision to the new entity when the spin off occurs.

Cablevision’s board also approved an additional $114 million investment in Rainbow DBS for the balance of 2003. Cablevision expects to fully fund the combined $564 million in 2003 and to generate positive free cash flow in 2004, company officials said.

Following the spin off, Cablevision shareholders will own shares in both Cablevision and the new entity and will have the option to concentrate their holdings in either or both, Cablevision officials said. In addition, the spin-off is expected to provide Cablevision with improved access to capital, as well as a lower cost of capital and greater financial flexibility, company officials said.

In addition, Lockheed Martin‘s [NYSE: LMT] Atlas team has begun preparing the next Atlas V rocket for its scheduled launch of Cablevision’s Rainbow 1 satellite from Cape Canaveral, Fla., on July 17. The rocket has 5 meter-diameter payload fairing, which encloses the satellite, and two Aerojet strap-on solid rocket boosters to augment liftoff thrust and vehicle performance. The satellite was manufactured by Lockheed Martin Commercial Space.

Separately, Lockheed Martin’s International Launch Services said it has rescheduled the launch of the AMC-9 aboard a Proton rocket for this Friday 6:15 EST from the Baikonur Cosmodrome in Kazakstan. The launch was postponed May 17 because a launch vehicle anomaly on one of the gyro units was identified during the pre-launch testing. The satellite is being launched for Alcatel Space and SES Americom.

For more on Cablevision’s satellite TV plans, see the June 9 issue of SATELLITE NEWS. For information on subscribing to PBI Media’s satellite newsletters, check out our Web site at http://www.telecomweb.com/catalog.