Princeton Video Image (PVI), which develops digital advertising technology for television, rose 59 cents to $5.34 by the 1 p.m. PST close of regular trading. Cablevision shares gained 62 cents to $83.82.
Lawrenceville, N.J.-based PVI makes the virtual yellow line first down marker featured in NFL telecasts. The company also debuted its EyeVision video system during the Super Bowl.
Under Monday's deal, Cablevision will pay a $7.5 million nonexclusive licensing fee to PVI, which will cover the advertising company's current technologies and products, including virtual advertising, programming enhancements and virtual product placement.
In addition, Cablevision will make a $10 million equity investment in the company in exchange for 4 million shares of PVI. The agreement also contains three-year warrants that would allow Cablevision to up its stake to 45 percent with an average strike price of $9 a share.
Cablevision, which owns a controlling interest and operates Madison Square Garden and its sports teams, including the New York Knicks and New York Rangers, plans to use the technology for its various units.
The two companies also said they will work jointly to develop new technologies and products, including targeted advertising services over digital set-top boxes on Cablevision's systems in the New York area.