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http://biz.yahoo.com/rb/050303/media_cablevision_sec_6.html
Reuters
Cablevision Future Hinges on Deadline
Thursday March 3, 6:55 pm ET
By Kenneth Li
NEW YORK (Reuters) - Cablevision Systems Corp.'s future could be decided in the next four days, depending on how its chairman plans to meet a deadline to acquire the company's money-draining Voom satellite television assets.
Chairman Charles Dolan, the controlling shareholder of Cablevision, faces a March 7 deadline set by the company on Thursday to purchase Voom assets not already sold to EchoStar Communications Corp. .
On Thursday, Cablevision disclosed an informal regulatory probe by the U.S. Securities and Exchange Commission into trading activity in its stock during a time when Cablevision had sought to unwind Voom.
Dolan's desire to finance Voom as an ongoing venture could result in his selling part or all of his stake in Cablevision, or even the sale of the company in part or whole within the next two years, analysts said.
Dolan is also "intending to talk to" EchoStar in a possible deal to combine the remaining assets of Voom, including 21 high definition programming channels and 26,000 subscribers, with the satellite that EchoStar agreed to purchase in January.
The disclosure was made in a warning letter written by board member Victor Orison on behalf of Cablevision's independent committee of directors and Class A directors to Charles warning against delaying Cablevision's exit from the satellite business that was filed with the SEC on Thursday.
EchoStar declined to comment.
A series of recent boardroom showdowns, which have taken on the attributes of a made-for-cable movie, has pitted Dolan, who sees satellite as the future of media, against his son, Cablevision CEO James Dolan, who blocked further financing of the venture.
CABLEVISION SHARES FALL
The satellite service lost $661.4 million last year, resulting in Cablevision taking a $355 million writedown in 2004, with more possibly coming in 2005, the company said in a filing last month.
Cablevision shares fell 5.3 percent on news of the SEC inquiry.
"The 'Alice in Wonderland' Dolan family boardroom struggle at Cablevision must surely rank as one of the most byzantine in memory," Sanford C. Bernstein analyst Craig Moffett said in a research note.
Charles Dolan late on Wednesday exercised his controlling interest in the company to replace directors who had voted against him on Voom's future.
The new board members, most of whom are longtime associates of Charles Dolan, include media heavyweights John Malone, chairman of Liberty Media Corp., and former Viacom Inc. President Frank Biondi Jr.
The shakeup could even lead to the removal of James Dolan as CEO, according to a source familiar with board plans.
"It's heading in that direction," the source said, adding that no decision have been made at this time. "He's (Charles) taking incremental steps here and has the ability to do that."
Cablevision spokesman Charles Schueler said, "We don't typically respond to crazy speculation and blind quotes."
One analyst arrived at a similar assessment. "With relations between Charles Dolan (chairman) and son James Dolan (CEO) now appearing irreparable, we believe one possible objective could be the ouster of James as CEO," Moffett said.
Corporate governance experts criticized Charles' 11th-hour tactics. "It's very unusual to replace a director midstream absent significant allegations (of impropriety), and in many jurisdictions only shareholders can do it," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, but adding it was "probably legal."
BILLION DOLLAR BABY
Meanwhile, media watchers and investors are scratching their heads over how Charles Dolan, who founded New York's Cablevision and landmark pay cable channel HBO, plans to finance his dream venture, estimated to cost about $1 billion over the next two years.
The source said Charles Dolan, who along with another son, Thomas Dolan, created a new company Voom HD LLC to buy the assets, was tripped up over negotiations with EchoStar and missed the original Feb. 28 deadline to reach a final agreement with Cablevision to buy the stake.
Cablevision in January agreed to sell its satellite, some government-issued licenses and ground facilities to EchoStar for $200 million in cash.
Charles Dolan doesn't appear to have any financial backers yet to support the quixotic bid, which observers say is no less perplexing as creating HBO seemed in the early 1970s, when it was questionable whether anyone would pay more to watch TV.
"We believe the funding Chuck Dolan will need to finance VOOM will result in a sale of CVC over the next 12-24 months, as a sale to Time Warner or Comcast would provide the most tax-efficient means of raising capital," said Richard Greenfield, an analyst at Fulcrum Global Partners. Charles Dolan holds about 30.5 million Class B super voting shares and about 300,000 Class A shares worth about $950 million and would likely tap that reserve to fund a deal, according to Merrill Lynch analyst Jessica Reif Cohen. Cablevision's stock fell $1.59 to $28.65 on the New York Stock Exchange on Thursday. (Additional reporting by Martha Graybow and Michele Gershberg)
Please delete if it has been.
http://biz.yahoo.com/rb/050303/media_cablevision_sec_6.html
Reuters
Cablevision Future Hinges on Deadline
Thursday March 3, 6:55 pm ET
By Kenneth Li
NEW YORK (Reuters) - Cablevision Systems Corp.'s future could be decided in the next four days, depending on how its chairman plans to meet a deadline to acquire the company's money-draining Voom satellite television assets.
Chairman Charles Dolan, the controlling shareholder of Cablevision, faces a March 7 deadline set by the company on Thursday to purchase Voom assets not already sold to EchoStar Communications Corp. .
On Thursday, Cablevision disclosed an informal regulatory probe by the U.S. Securities and Exchange Commission into trading activity in its stock during a time when Cablevision had sought to unwind Voom.
Dolan's desire to finance Voom as an ongoing venture could result in his selling part or all of his stake in Cablevision, or even the sale of the company in part or whole within the next two years, analysts said.
Dolan is also "intending to talk to" EchoStar in a possible deal to combine the remaining assets of Voom, including 21 high definition programming channels and 26,000 subscribers, with the satellite that EchoStar agreed to purchase in January.
The disclosure was made in a warning letter written by board member Victor Orison on behalf of Cablevision's independent committee of directors and Class A directors to Charles warning against delaying Cablevision's exit from the satellite business that was filed with the SEC on Thursday.
EchoStar declined to comment.
A series of recent boardroom showdowns, which have taken on the attributes of a made-for-cable movie, has pitted Dolan, who sees satellite as the future of media, against his son, Cablevision CEO James Dolan, who blocked further financing of the venture.
CABLEVISION SHARES FALL
The satellite service lost $661.4 million last year, resulting in Cablevision taking a $355 million writedown in 2004, with more possibly coming in 2005, the company said in a filing last month.
Cablevision shares fell 5.3 percent on news of the SEC inquiry.
"The 'Alice in Wonderland' Dolan family boardroom struggle at Cablevision must surely rank as one of the most byzantine in memory," Sanford C. Bernstein analyst Craig Moffett said in a research note.
Charles Dolan late on Wednesday exercised his controlling interest in the company to replace directors who had voted against him on Voom's future.
The new board members, most of whom are longtime associates of Charles Dolan, include media heavyweights John Malone, chairman of Liberty Media Corp., and former Viacom Inc. President Frank Biondi Jr.
The shakeup could even lead to the removal of James Dolan as CEO, according to a source familiar with board plans.
"It's heading in that direction," the source said, adding that no decision have been made at this time. "He's (Charles) taking incremental steps here and has the ability to do that."
Cablevision spokesman Charles Schueler said, "We don't typically respond to crazy speculation and blind quotes."
One analyst arrived at a similar assessment. "With relations between Charles Dolan (chairman) and son James Dolan (CEO) now appearing irreparable, we believe one possible objective could be the ouster of James as CEO," Moffett said.
Corporate governance experts criticized Charles' 11th-hour tactics. "It's very unusual to replace a director midstream absent significant allegations (of impropriety), and in many jurisdictions only shareholders can do it," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, but adding it was "probably legal."
BILLION DOLLAR BABY
Meanwhile, media watchers and investors are scratching their heads over how Charles Dolan, who founded New York's Cablevision and landmark pay cable channel HBO, plans to finance his dream venture, estimated to cost about $1 billion over the next two years.
The source said Charles Dolan, who along with another son, Thomas Dolan, created a new company Voom HD LLC to buy the assets, was tripped up over negotiations with EchoStar and missed the original Feb. 28 deadline to reach a final agreement with Cablevision to buy the stake.
Cablevision in January agreed to sell its satellite, some government-issued licenses and ground facilities to EchoStar for $200 million in cash.
Charles Dolan doesn't appear to have any financial backers yet to support the quixotic bid, which observers say is no less perplexing as creating HBO seemed in the early 1970s, when it was questionable whether anyone would pay more to watch TV.
"We believe the funding Chuck Dolan will need to finance VOOM will result in a sale of CVC over the next 12-24 months, as a sale to Time Warner or Comcast would provide the most tax-efficient means of raising capital," said Richard Greenfield, an analyst at Fulcrum Global Partners. Charles Dolan holds about 30.5 million Class B super voting shares and about 300,000 Class A shares worth about $950 million and would likely tap that reserve to fund a deal, according to Merrill Lynch analyst Jessica Reif Cohen. Cablevision's stock fell $1.59 to $28.65 on the New York Stock Exchange on Thursday. (Additional reporting by Martha Graybow and Michele Gershberg)
