FaxUpdate March 25, 2005: MORE DEADLINES LOOM FOR VOOM NEXT WEEK

[Bruce]

You did not read the 10-K properly. If you scroll up a couple paragraphs you would have seen

If you read it you would have noticed this: (Dollars in thousands)
So the amount shown starts at the one thousand range, not the dollar range, case in point this from the Cablevision 10-K:

Rainbow DBS

In January 2005, the Company's Board of Directors authorized and directed the sale of the assets of Rainbow DBS and the shutdown of its business. On January 20, 2005, Rainbow DBS entered into a definitive agreement to sell its Rainbow 1 direct broadcast satellite and certain other related assets to a subsidiary of EchoStar Communications Corp. for $200,000 in cash.

We all know how much E* will be paying for it and it is not two hundred thousand, it is two hundred million, you add the ,000 at the end of the amounts.

 

[Bruce]

You did not read the 10-K properly. If you scroll up a couple paragraphs you would have seen:

Quote:
The Company leases certain office, production, transmission, theater and event facilities under terms of leases expiring at various dates through 2027. The leases generally provide for fixed annual rentals plus certain real estate taxes and other costs. Rent expense for the years ended December 31, 2004, 2003 and 2002 amounted to $81,938, $82,187 and $76,600, respectively.

In addition, the Company rents space on utility poles for its operations. The Company's pole rental agreements are for varying terms, and management anticipates renewals as they expire. Pole rental expense for the years ended December 31, 2004, 2003 and 2002 amounted to approximately $13,607, $13,225 and $12,515, respectively.

MSG operates Radio City Music Hall under a long-term lease. Under the terms of the lease agreement, MSG is required to meet certain net worth, cash flow, and building utilization requirements. In the event MSG were to fail to meet the lease requirements and was unable to remedy such defaults, the landlord could have the option of terminating the lease.

That is for Radio City Music Hall, not Voom's bird, please do not use selective editing to try to prove someone wrong:

NOTE 13. OPERATING LEASES

The Company leases certain office, production, transmission, theater, and event facilities under terms of leases expiring at various dates through 2027. The leases generally provide for fixed annual rentals plus certain real estate taxes and other costs. Rent expense for the years ended December 31, 2004, 2003 and 2002 amounted to $81,938, $82,187 and $76,600, respectively.

In addition, the Company rents space on utility poles for its operations. The Company's pole rental agreements are for varying terms, and management anticipates renewals as they expire. Pole rental expense for the years ended December 31, 2004, 2003 and 2002 amounted to approximately $13,607, $13,225 and $12,515, respectively.

MSG operates Radio City Music Hall under a long-term lease. Under the terms of the lease agreement, MSG is required to meet certain net worth, cash flow, and building utilization requirements. In the event MSG were to fail to meet the lease requirements and was unable to remedy such defaults, the landlord could have the option of terminating the lease.

The above is Radio city, the below is AMC2:

In April 2004, Rainbow DBS entered into a ten-year lease agreement for transponder space on a satellite, commencing in October 2004. Rainbow Media Holdings provided irrevocable letters of credit for $19,800 as a security deposit. Rainbow DBS will initially lease 13 transponders, increasing to 16 in January 2005, with the option of leasing additional transponders. The agreement contains early termination provisions whereby Rainbow DBS would be permitted on certain dates and in certain circumstances to terminate the agreement. In the event of early termination, Rainbow DBS would be required to pay an early termination penalty. In addition, Rainbow DBS would be required to make payments pursuant to the agreement up to the termination date.

 

[mike123abc]

You really need to read the report NOTE 13 is the note, it includes 5 PARAGRAPHS and one table. Just because there is a page break between paragraphs 3 and 4 does not mean that they are separate. Note the key paragraph RIGHT OVER THE TABLE you quote your numbers from:

The minimum future annual rentals for all operating leases during the next five years, including pole rentals from January 1, 2005 through December 31, 2009, and thereafter, at rates now in force are as follows

Note they say including POLE RENTALS. These numbers are for all of CVC not just voom as I stated above.

Who would be stupid enough to rent a satellite for $100 million a year when you could build and launch one for about that price? If you examine 2004 numbers property leases like "certain office, production, transmission, theater and event facilities under terms of leases" accounted for "$81,938" of course that is $81,938,000 and pole rentals were "$13,607" which of course is $13,607,000. The radio city music hall was not broken out in cost. The first two alone are around $95 million. In 2004 (year 2003 annual report) if you go back and look at that report you will see they projected $94,538,000 (also in note 13) without the VOOM lease.

This actually indicates that the R-2 lease might be close to $10 million a year (of course they are only renting part of the bird to start with).

 

[bryan27]

I can't remember were I saw it, it might had been a press release, but somewhere I saw that the 9 year rental for the 16 TPs on AMC-6 would be a total of $86 million. This appears to be a reasonable price at $5.3 million per TP per year for 24/7/365 use. Typical rates for an entire KU-Band TP at 24/7/365 ranges between $2 million and $7 million. Rates are calculated on bandwidth used so if you are using 1/2 TP or part-time rates will be lower. Part-timers typically pay $1-$5 per minute, $60-$75 per hour, etc...

KU-Band FSS satellites are common carriers, as such everyone on an AMC satellite pays the same price for the same level of service. If the rate is X for 1 TP used 24/7/365 then that X price is the same for everyone. There can be some differences in price such as a discount for using an older satellite or bulk discounts, however everyone utilizing service is to be given the same price for the same level of service. The satellite owners also do not have the right to arbitarily deny service.

This is much like your landline phone which is also a common carrier everyone pays the same price for the same level of service. There are discounts for bulk use, bundling, etc... The price you pay is the same your neighbor pays for the same level of service and service can not be denied.