Cablevision Systems Corporation (NYSE: CVC) and Princeton Video Image, Inc. (PVI) (NASDAQ: PVII), today announced a strategic alliance that should help fuel a dramatic expansion of the PVI business, while giving Cablevision full and early access to PVI’s groundbreaking technologies across its full range of media, sports and entertainment properties.

PVI is a global leader in digital imaging solutions and applications in virtual advertising. The company develops and markets a real-time video insertion system that places computer-generated electronic images into telecasts – including the acclaimed virtual first down marker featured in NFL telecasts.

PVI has also driven major advances in digital enhancements and product placements, and is a member of the joint venture that is developing EyeVision, a breakthrough, 270 degree video system that debuted during the recent live broadcast of Super Bowl XXXV.

For PVI, this agreement will bring an immediate cash infusion in the form of an equity investment and licensing fees. Cablevision will work with PVI to develop, market and utilize innovative digital technological applications across its broad array of businesses including Madison Square Garden, the New York Knicks and Rangers, Radio City Entertainment, Rainbow Media Holdings’ numerous national and regional cable networks and other content platforms.

This agreement will give Cablevision access to all of PVI’s existing technologies, which are already changing audience expectations of the way they view sports programming, and hold enormous potential when applied to other forms of popular video content. It also allows Cablevision to participate fully in the development of new applications and features that can enhance the customer experience of digital television, which Cablevision will begin offering in its territories this year.

Highlights of the agreement follow:

Cablevision will make a $10 million investment in PVI in exchange for 4,000,000 common shares of PVI’s stock. Half of Cablevision’s investment will occur immediately, with the balance due upon PVI shareholder approval. Shareholders are expected to vote in the second calendar quarter of 2001.

Upon PVI shareholder approval, PVI will also grant Cablevision three-year warrants that will allow Cablevision to increase its ownership in PVI up to a total of 45% of the company on a fully-diluted basis at an average strike-price of $ 9.00 per share.

PVI has granted a non-exclusive license to Cablevision for all of PVI’s current technologies and products, including virtual advertising, programming enhancements (especially for live sports events) and virtual product placement.

Cablevision and PVI agree to develop jointly additional technologies and products, including valuable targeted advertising over new digital set-top boxes utilizing Cablevision’s state-of-the-art digital platform in the New York market.

Cablevision will prepay to PVI $2.5 million in license fees promptly and an additional $5 million will be paid upon PVI shareholder approval of the transaction.

Cablevision will receive one seat on PVI’s Board of Directors.

James L. Dolan, president and chief executive officer of Cablevision, said, ‘Cablevision has a rich history of leadership in the areas of national and regional sports and entertainment programming. And, as we undertake our transformation from an analog to digital platform, the opportunities presented by PVI’s technologies are abundant. We welcome this new partnership as an opportunity to offer new and innovative applications which will enhance the home entertainment experience for both Cablevision customers and viewers of our networks.’

Dennis Wilkinson, president and chief executive officer of PVI, stated, ‘Cablevision, with its unique and tremendous portfolio of marquee businesses, represents the perfect strategic fit for PVI and gives us the opportunity substantially to broaden our business. Our technologies have demonstrated applications in areas such as advertising, sports telecasting, television and film product placement, all areas in which Cablevision has a significant presence. This new alliance and investment will help to ensure our future growth and ability to deliver strong returns for our shareholders.’

First Union Securities acted as PVI’s financial advisor on this transaction.

For further information, please contact:

Sam McCleery
VP of Business Development
Tel: +1 609 912 9400

For Cablevision
Victoria Rodriguez
Tel: +1 516 803 2352
Don Nathan
Tel: +1 212 484 7782