This was speculated by an NYP story earlier this week and now Billboard fleshes it out, though in a slightly different direction: troubled Cablevision (NYSE: CVC) is close to a deal to acquire 49 percent of AEG Live, the live music touring arm of Anschutz Entertainment Group...it is partnering with Ticketmaster, in which IAC (NSDQ: IACI) holds a stake now, on the deal, according to the story.

A key component of the deal is Fuse TV, the cable and digital music channel which was formerly part of Rainbow Media, a division of Cablevision which includes We: Women’s Entertainment, IFC and AMC. as part of the complex deal, Fuse will undergo a multi-million dollar rebranding effort, and will play a large role in the repositioning of AEG Live as having a big media component and the world’s largest ticketing company in Ticketmaster.

AEG Live is the second-largest live music promoter in the world, reporting grosses totaling more than $742 million in 2007, second only to Live Nation (NYSE: LYV). The new company would be called Fuse-AEG, reports Variety. AEG Live will own 51 percent of the company, Cablevision will have 34 percent and Barry Diller’s IAC will have 15 percent. There was no definite word on how the company will be structured or what changes will be made. Ticketmaster is losing its deal with Live Nation at the end of the year...that’s the primary motivator for it to get involved with this new deal. Certainly multi-platform and digital music could become a big part of the new company.

Last week NYP came out with a report that Cablevision might be looking to sell off Rainbow Media, and that the unit could be worth $3 billion.