Cablevision to raise Adelphia bid?
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Is the true agenda coming to light at last??
This could be the stuff of a book & movie, "When Billionaires Collide"
da Doug
This could be the stuff of a book & movie, "When Billionaires Collide"
da Doug
Adelphia needs to be purchased. They are horrible in South FLorida. Don't even have the major locals in HD yet.
NewsDay
Cablevision and size: Asking the 'big' question
BY HARRY BERKOWITZ
STAFF WRITER
April 12, 2005
Can Cablevision stay small?
Or does it have to spread its wings to thrive?
That's what some analysts are asking as Cablevision Systems Corp. decides whether to ratchet up what many of them called a puzzling bid for Adelphia Communications.
Last week, Adelphia presented a bankruptcy judge with a handshake deal to accept a bid of nearly $18 billion in cash and stock from Time Warner and Comcast Corp., rejecting Cablevision's last-minute cash bid of $16.5 billion. The deal needs approval from the bankruptcy judge and creditors.
If Cablevision does indeed lose, can it settle for lagging in size far behind four other cable TV companies and two satellite TV operators at a time when the leaders are adding and consolidating clusters of subscribers?
Or will it eventually have little choice but to sell itself - an option Cablevision chairman Charles Dolan has come close to accepting in the past?
"Cablevision looks to be increasingly subscale," said cable analyst Craig Moffett, of Sanford C. Bernstein & Co. "The question is whether they are a long-term buyer or a long-term seller."
Unlike Comcast, which has nearly 22 million subscribers, and Time Warner, with 11 million, Cablevision's 3 million customers are all in a single region - the New York metropolitan area.
On the plus side, it is a market where people are especially eager to sign up for cable services. Cablevision leads the industry in growth and market penetration of digital cable TV, high-speed Internet and Internet-based phone services. For the first time ever it is starting to generate the kind of profits that can be used for paying dividends - or making acquisitions.
Chief operating officer Tom Rutledge has said the marketing, managerial and operational skills that have brought that success can be applied to other areas. He also has said that as the company grows and adds new services, it can seek to boost its advertising revenue while moderating its customer price increases.
But analysts say that while Time Warner and Comcast can combine their many clusters with those of Adelphia, which has 5.3 million customers, Cablevision, which sold off some of its outlying clusters in the past, has nothing to combine except in the New York area. And Cablevision is weighed down by an $11-billion debt. "It's hard to see, given their current debt and interest load, how they will grow their way out of the problem," Moffett said.
If it does not grow bigger, Cablevision may not get the kind of price breaks the industry leaders get when they negotiate with the cable channels they provide to their subscribers, analysts say. So far, Rutledge says, that has not been a problem. Small size also makes it harder for Cablevision to gain distribution for channels it owns.
Ultimately, Cablevision could be left vulnerable at a time when big scale in cable has become increasingly attractive. "We will have fewer and larger cable companies," telecommunications analyst Jeff Kagan said. "There will be a lot of mergers in the next few years."
If Time Warner and Comcast are successful in acquiring Adelphia, a bid by one or both of them for Cablevision may have to wait a year or two.
"Cablevision will now be valued just on its operations, and not on the prospect for sale," said Thomas Eagan, an Oppenheimer & Co. analyst.
Further complicating the outlook for Cablevision, which last week gave up on Voom, its satellite television operation, and which has bid to build a residential complex on Manhattan's West Side, is what analysts call the Dolan factor.
"The tendency for the Dolans to get sidetracked into other interests is a negative for the stock," Eagan said.
The cloudy picture includes questions about whether Charles Dolan or his chief executive son, James Dolan, will set the strategy.
"It's not clear that we know which direction the company is going to go in," said UBS analyst Aryeh Bourkoff.
Cablevision at a glance
Where it's based: Bethpage
What it does: Provides cable TV, high-speed Internet and voice-over-Internet services to 3 million subscribers.
Where it operates: Primarily in the metropolitan area, including parts of Connecticut and New Jersey.
Where it ranks: Eighth largest cable company in U.S. What it owns: Madison Square Garden, New York Knicks, New York Rangers, Radio City Music Hall, networks including AMC and We, Clearview Cinemas.
Who works there: 19,095 people
Who's the boss: Charles F. Dolan, chairman and founder.
Sources: Cablevision, Hoovers Inc., Broadcasting & Cable
Cablevision and size: Asking the 'big' question
BY HARRY BERKOWITZ
STAFF WRITER
April 12, 2005
Can Cablevision stay small?
Or does it have to spread its wings to thrive?
That's what some analysts are asking as Cablevision Systems Corp. decides whether to ratchet up what many of them called a puzzling bid for Adelphia Communications.
Last week, Adelphia presented a bankruptcy judge with a handshake deal to accept a bid of nearly $18 billion in cash and stock from Time Warner and Comcast Corp., rejecting Cablevision's last-minute cash bid of $16.5 billion. The deal needs approval from the bankruptcy judge and creditors.
If Cablevision does indeed lose, can it settle for lagging in size far behind four other cable TV companies and two satellite TV operators at a time when the leaders are adding and consolidating clusters of subscribers?
Or will it eventually have little choice but to sell itself - an option Cablevision chairman Charles Dolan has come close to accepting in the past?
"Cablevision looks to be increasingly subscale," said cable analyst Craig Moffett, of Sanford C. Bernstein & Co. "The question is whether they are a long-term buyer or a long-term seller."
Unlike Comcast, which has nearly 22 million subscribers, and Time Warner, with 11 million, Cablevision's 3 million customers are all in a single region - the New York metropolitan area.
On the plus side, it is a market where people are especially eager to sign up for cable services. Cablevision leads the industry in growth and market penetration of digital cable TV, high-speed Internet and Internet-based phone services. For the first time ever it is starting to generate the kind of profits that can be used for paying dividends - or making acquisitions.
Chief operating officer Tom Rutledge has said the marketing, managerial and operational skills that have brought that success can be applied to other areas. He also has said that as the company grows and adds new services, it can seek to boost its advertising revenue while moderating its customer price increases.
But analysts say that while Time Warner and Comcast can combine their many clusters with those of Adelphia, which has 5.3 million customers, Cablevision, which sold off some of its outlying clusters in the past, has nothing to combine except in the New York area. And Cablevision is weighed down by an $11-billion debt. "It's hard to see, given their current debt and interest load, how they will grow their way out of the problem," Moffett said.
If it does not grow bigger, Cablevision may not get the kind of price breaks the industry leaders get when they negotiate with the cable channels they provide to their subscribers, analysts say. So far, Rutledge says, that has not been a problem. Small size also makes it harder for Cablevision to gain distribution for channels it owns.
Ultimately, Cablevision could be left vulnerable at a time when big scale in cable has become increasingly attractive. "We will have fewer and larger cable companies," telecommunications analyst Jeff Kagan said. "There will be a lot of mergers in the next few years."
If Time Warner and Comcast are successful in acquiring Adelphia, a bid by one or both of them for Cablevision may have to wait a year or two.
"Cablevision will now be valued just on its operations, and not on the prospect for sale," said Thomas Eagan, an Oppenheimer & Co. analyst.
Further complicating the outlook for Cablevision, which last week gave up on Voom, its satellite television operation, and which has bid to build a residential complex on Manhattan's West Side, is what analysts call the Dolan factor.
"The tendency for the Dolans to get sidetracked into other interests is a negative for the stock," Eagan said.
The cloudy picture includes questions about whether Charles Dolan or his chief executive son, James Dolan, will set the strategy.
"It's not clear that we know which direction the company is going to go in," said UBS analyst Aryeh Bourkoff.
Cablevision at a glance
Where it's based: Bethpage
What it does: Provides cable TV, high-speed Internet and voice-over-Internet services to 3 million subscribers.
Where it operates: Primarily in the metropolitan area, including parts of Connecticut and New Jersey.
Where it ranks: Eighth largest cable company in U.S. What it owns: Madison Square Garden, New York Knicks, New York Rangers, Radio City Music Hall, networks including AMC and We, Clearview Cinemas.
Who works there: 19,095 people
Who's the boss: Charles F. Dolan, chairman and founder.
Sources: Cablevision, Hoovers Inc., Broadcasting & Cable
Here we go. Everything is comming to light. Think about it. In the 12+++++ hour of the Charles Dolan voom agreement with the Cablevision board he suddenly works with the board for a 15-0 vote. Hmm. Did James say "Dad (Charles) - How about I just buy you another cable company if you give up on your Voom idea".
Sometimes I question if Chuck knows what he is doing anymore.
Then again - Maybe there is a master plan here with Voom 21.
God I hate these mind games
-Scott
Sometimes I question if Chuck knows what he is doing anymore.
Then again - Maybe there is a master plan here with Voom 21.
God I hate these mind games
-Scott
