10 Feb 2005 21:48 ET WSJ(2/11)Cablevision To Sell Remaining Voom Assets To Dolan
(From THE WALL STREET JOURNAL)
By Peter Grant
In a last-ditch effort to save his cherished Voom satellite TV service, Charles Dolan, the chairman of Cablevision Systems Corp., has decided to acquire what remains of the service himself.
The move is the latest twist in a family and corporate drama that reached a climax last month when Cablevision board members joined Mr. Dolan's son, Cablevision Chief Executive James Dolan, in voting to stop funding the service. In the wake of that vote, Cablevision decided to sell Voom's satellite to EchoStar Communcations Corp.
A new company set up by Mr. Dolan and another one of his son's, Tom Dolan, has reached a tentative deal with Cablevision to acquire what EchoStar isn't buying -- Voom's 21 high-definition channels, customer agreements and satellite licenses, according to a statement released by Cablevision.
While Voom no longer owns its own satellite, it would be able to keep providing service by leasing capacity on other spacecraft. The service had 26,000 subscribers at the end of the third quarter.
Charles Dolan's decision to keep Voom going himself raises new questions about whether his struggle to save the satellite service could lead to the breakup of Cablevision, the country's sixth-largest cable operator and the owner of cable networks, Madison Square Garden and the New York Knicks and Rangers professional basketball and hockey teams.
Mr. Dolan could have a difficult time obtaining financing for the new company given widespread skepticism that Voom has a viable business plan. Some analysts believe the most-likely way for him to finance the venture would be for him to sell a large stake of his stock in Cablevision. "This could be a step towards selling the company," says Richard Greenfield, an analyst with Fulcrum Global Partners.
In exchange for Voom's assets, Mr. Dolan's new company, Voom HD LLC, will pay no consideration to Cablevision other than assuming substantially all of the satellite service's liabilities. "The transaction will allow (Cablevision) to avoid various shutdown costs and other liabilities . . . which it would have incurred had it proceeded with its original plan to shut the service," according to the Cablevision statement. The statement says that the letter of intent to sell Voom's assets to Mr. Dolan's company was negotiated by a committee of the company's independent directors.
Cablevision said Voom HD is in the process of obtaining financing to support the service, which lost $75.3 million in the third quarter of last year alone. The deal reached between Voom HD and Cablevision expires if it isn't finalized by the end of this month, the company said.
Charles Dolan, one of the pioneers of the cable industry, has been trying to launch a satellite-television business for over a decade, and has refused to give up his dream despite a lack of support from the company, his advisers, and his son, James. He believes that satellite is a more-efficient way to deliver television signals than cable systems. But most analysts don't believe a third satellite service will be able to carve out sufficient market share given the intense competition that already exists between the two established satellite operators, EchoStar and DirecTV Group Inc., and the cable industry.
The buzz is still hot, and the ball is rolling...let's help it get down the field!! 
Vicki
