source: http://news.com.com/Cablevision+chairman+to+lay+out+plan+for+Voom/2100-1026_3-5602297.html
Cablevision chairman to lay out plan for Voom (Reuters/CNET) 03.07.05
Published: March 7, 2005, 7:29 AM PST
By Reuters
(Reuters) Cablevision Systems Chairman Charles Dolan is expected to present details Monday of an ambitious plan to purchase the remaining assets of a satellite venture that lost $661.4 million last year.
It is unclear how he plans to pay for Cablevision's Voom assets, which include 21 high-definition programming channels, a lease on a satellite and the 46,000 subscribers he says Voom has, Wall Street analysts and media industry observers said last week.
The cost of running the Voom service over the next two years has been estimated at over $1 billion, according to Richard Greenfield at Fulcrum Global Partners.
Anticipating Dolan's plans, which he is expected to present Monday to the board at a meeting, is difficult because his actions thus far have diverged from conventional business logic, Sanford C. Bernstein analyst Craig Moffett said.
But Dolan, who launched the HBO service in the early 1970s and who made cable television a household commodity in New York over more than three decades, has had the knack to see lucre where others face brick walls.
The 78-year-old chairman could be betting the future of the cable and sports company that he founded in 1973 and which now holds a richly valued New York area subscriber base of 3 million, analysts said.
This time, his repeated attempts to keep Cablevision running and ultimately to purchase the Voom assets has drawn the attention of regulators, who launched an informal inquiry into stock trades during the satellite venture's unwinding.
It also has pitted Dolan against his son James, who is Cablevision's chief executive, and other board members who believe the company should further distance itself from a business traditionally viewed as a competitive threat to its core cable television service.
That struggle has led some Wall Street analysts to speculate that Charles Dolan may sell off part or all of Cablevision to finance Voom.
A stern letter to Charles Dolan from the company's independent and Class A shareholders also suggests his plans could jeopardize an earlier agreement to sell off Voom's one satellite for an estimated $200 million to EchoStar Communications.
UBS analyst Aryeh Bourkoff said that a reversal of that deal would mean Cablevision loses the $200 million of expected proceeds from the sale, and would have to continue to try to run the money-losing business.
"A possible reversal could reintroduce a value-destructive asset to the company, compounded with removal of $200 million of anticipated proceeds," he said.
The letter, written by board member Victor Oristano and filed with the U.S. Securities and Exchange Commission last week, briefly mentions discussions Charles Dolan intended to have with rival EchoStar.
The talks would center around combining the satellite and licenses that have been pledged to EchoStar with the rest of the satellite business, which is what Dolan intends to buy.
With control of super-voting class B shares, Charles Dolan last week removed three board members who had opposed him. He replaced them with a slate of media industry heavyweights including Liberty Media Chairman John Malone and former Viacom President Frank Biondi Jr.
Charles Dolan has about 37 percent direct ownership of a family trust that controls 75 percent of Cablevision's vote.
He also is planning to request an additional board seat for Brian Sweeney, senior vice president of e-media at Cablevision and Dolan's son-in-law.
Story Copyright*© 2005 Reuters Limited.*All rights reserved.
Cablevision chairman to lay out plan for Voom (Reuters/CNET) 03.07.05
Published: March 7, 2005, 7:29 AM PST
By Reuters
(Reuters) Cablevision Systems Chairman Charles Dolan is expected to present details Monday of an ambitious plan to purchase the remaining assets of a satellite venture that lost $661.4 million last year.
It is unclear how he plans to pay for Cablevision's Voom assets, which include 21 high-definition programming channels, a lease on a satellite and the 46,000 subscribers he says Voom has, Wall Street analysts and media industry observers said last week.
The cost of running the Voom service over the next two years has been estimated at over $1 billion, according to Richard Greenfield at Fulcrum Global Partners.
Anticipating Dolan's plans, which he is expected to present Monday to the board at a meeting, is difficult because his actions thus far have diverged from conventional business logic, Sanford C. Bernstein analyst Craig Moffett said.
But Dolan, who launched the HBO service in the early 1970s and who made cable television a household commodity in New York over more than three decades, has had the knack to see lucre where others face brick walls.
The 78-year-old chairman could be betting the future of the cable and sports company that he founded in 1973 and which now holds a richly valued New York area subscriber base of 3 million, analysts said.
This time, his repeated attempts to keep Cablevision running and ultimately to purchase the Voom assets has drawn the attention of regulators, who launched an informal inquiry into stock trades during the satellite venture's unwinding.
It also has pitted Dolan against his son James, who is Cablevision's chief executive, and other board members who believe the company should further distance itself from a business traditionally viewed as a competitive threat to its core cable television service.
That struggle has led some Wall Street analysts to speculate that Charles Dolan may sell off part or all of Cablevision to finance Voom.
A stern letter to Charles Dolan from the company's independent and Class A shareholders also suggests his plans could jeopardize an earlier agreement to sell off Voom's one satellite for an estimated $200 million to EchoStar Communications.
UBS analyst Aryeh Bourkoff said that a reversal of that deal would mean Cablevision loses the $200 million of expected proceeds from the sale, and would have to continue to try to run the money-losing business.
"A possible reversal could reintroduce a value-destructive asset to the company, compounded with removal of $200 million of anticipated proceeds," he said.
The letter, written by board member Victor Oristano and filed with the U.S. Securities and Exchange Commission last week, briefly mentions discussions Charles Dolan intended to have with rival EchoStar.
The talks would center around combining the satellite and licenses that have been pledged to EchoStar with the rest of the satellite business, which is what Dolan intends to buy.
With control of super-voting class B shares, Charles Dolan last week removed three board members who had opposed him. He replaced them with a slate of media industry heavyweights including Liberty Media Chairman John Malone and former Viacom President Frank Biondi Jr.
Charles Dolan has about 37 percent direct ownership of a family trust that controls 75 percent of Cablevision's vote.
He also is planning to request an additional board seat for Brian Sweeney, senior vice president of e-media at Cablevision and Dolan's son-in-law.
Story Copyright*© 2005 Reuters Limited.*All rights reserved.
