Voom or Bust? Clan at Odds at Cablevision
By Andrew Wallenstein
LOS ANGELES (Hollywood Reporter) - Why bother with Fox's "Arrested Development" when Cablevision offers its own real-life family of squabbling rich people to watch?
The fictional battling Bluths of "Arrested" are no match for the Dolans, the reigning clan that owns the country's sixth-biggest cable company, Cablevision Systems Corp., which controls much of New York's prime cable system real estate, among many other assets.
Earlier this month, Cablevision CEO James Dolan defied the company's chairman -- his father, Charles "Chuck" Dolan -- by selling the satellite operations carrying the company's faltering new Voom venture to rival EchoStar, the nation's No. 2 satellite TV provider behind DirecTV. Not to be outdone, Chuck and another of his sons, Tom, formed a new company that declared its intent to buy Voom's remaining assets.
Unless Dr. Phil steps in to mediate this family feud, many analysts believe that Chuck might try to sell all or part of his massive stake in Cablevision to finance the acquisition, which the company's board needs to approve by month's end. A recent asset swap with News Corp. that untangled their mutual sports holdings further fueled such speculation.
Now the world waits to see whether Chuck Dolan will part with a core business that drew rave reviews last week with its fourth-quarter results in order to pursue the flying Edsel that is Voom, minus the hardware that EchoStar just bought. Cablevision spent hundreds of millions of dollars to superserve 21 original channels to the minuscule HD market only to reap 26,000 subscribers. Voom makes TiVo look like a healthy business.
At a time when others might be thinking about retirement, Chuck Dolan, 79, prefers the steely curves of a $250 million Lockheed-Martin satellite to yachts, golf courses or other traditional rich-guy recreational pursuits. To each his own.
But perhaps he has a strategy up his sleeve. No one should underestimate the man who saw the potential of pay TV way back in 1972 with the launch of HBO, and he's also credited with building New York's first cable systems.
There is something charmingly quixotic about Chuck Dolan's obsession with Voom, like Howard Hughes' devotion to the beloved airplane he called Hercules. Unfortunately, Jim Dolan thought Voom was the next Hindenburg.
Truth be told, Cablevision investors have grown accustomed to strange occurrences in recent years, from the company's ill-advised dalliance with the consumer-electronics chain the Wiz to the accounting scandal that led to the ouster of more than a dozen senior executives at its Rainbow Media Holdings division -- home of AMC, IFC and other cable channels -- in 2003.
The mystery of the Dolans' intramural business skirmishes are further deepening with Jim Dolan's avowed intent to spend $600 million on a new stadium on Manhattan's West Side in order to head off a competitive alternative to Cablevision's Madison Square Garden. But that sum is probably a few dollars short of the payroll at another Cablevision property, the NBA's New York Knicks, and look how their season is turning out.
All in all, Cablevision is cementing a reputation as the North Korea of the cable business: No one understands what they're doing, but everybody is concerned. Chuck Dolan's actions could upset the cable industry's balance of power in the Northeast, where Time Warner has long wanted to annex Cablevision's 3 million subscribers. If Time Warner can carve out a piece of Adelphia as well, Comcast surely will take notice.
The cable industry also might suffer the embarrassment of having one of its pioneers leaving to join the competition right before the annual industry gathering at the NCTA's National Show in April in San Francisco. At least Chuck Dolan hasn't decamped for a satellite superpower like DirecTV. Only he can explain why he's switching horses midstream when Voom seems to have one hoof in the glue factory.
Reuters/Hollywood Reporter
By Andrew Wallenstein
LOS ANGELES (Hollywood Reporter) - Why bother with Fox's "Arrested Development" when Cablevision offers its own real-life family of squabbling rich people to watch?
The fictional battling Bluths of "Arrested" are no match for the Dolans, the reigning clan that owns the country's sixth-biggest cable company, Cablevision Systems Corp., which controls much of New York's prime cable system real estate, among many other assets.
Earlier this month, Cablevision CEO James Dolan defied the company's chairman -- his father, Charles "Chuck" Dolan -- by selling the satellite operations carrying the company's faltering new Voom venture to rival EchoStar, the nation's No. 2 satellite TV provider behind DirecTV. Not to be outdone, Chuck and another of his sons, Tom, formed a new company that declared its intent to buy Voom's remaining assets.
Unless Dr. Phil steps in to mediate this family feud, many analysts believe that Chuck might try to sell all or part of his massive stake in Cablevision to finance the acquisition, which the company's board needs to approve by month's end. A recent asset swap with News Corp. that untangled their mutual sports holdings further fueled such speculation.
Now the world waits to see whether Chuck Dolan will part with a core business that drew rave reviews last week with its fourth-quarter results in order to pursue the flying Edsel that is Voom, minus the hardware that EchoStar just bought. Cablevision spent hundreds of millions of dollars to superserve 21 original channels to the minuscule HD market only to reap 26,000 subscribers. Voom makes TiVo look like a healthy business.
At a time when others might be thinking about retirement, Chuck Dolan, 79, prefers the steely curves of a $250 million Lockheed-Martin satellite to yachts, golf courses or other traditional rich-guy recreational pursuits. To each his own.
But perhaps he has a strategy up his sleeve. No one should underestimate the man who saw the potential of pay TV way back in 1972 with the launch of HBO, and he's also credited with building New York's first cable systems.
There is something charmingly quixotic about Chuck Dolan's obsession with Voom, like Howard Hughes' devotion to the beloved airplane he called Hercules. Unfortunately, Jim Dolan thought Voom was the next Hindenburg.
Truth be told, Cablevision investors have grown accustomed to strange occurrences in recent years, from the company's ill-advised dalliance with the consumer-electronics chain the Wiz to the accounting scandal that led to the ouster of more than a dozen senior executives at its Rainbow Media Holdings division -- home of AMC, IFC and other cable channels -- in 2003.
The mystery of the Dolans' intramural business skirmishes are further deepening with Jim Dolan's avowed intent to spend $600 million on a new stadium on Manhattan's West Side in order to head off a competitive alternative to Cablevision's Madison Square Garden. But that sum is probably a few dollars short of the payroll at another Cablevision property, the NBA's New York Knicks, and look how their season is turning out.
All in all, Cablevision is cementing a reputation as the North Korea of the cable business: No one understands what they're doing, but everybody is concerned. Chuck Dolan's actions could upset the cable industry's balance of power in the Northeast, where Time Warner has long wanted to annex Cablevision's 3 million subscribers. If Time Warner can carve out a piece of Adelphia as well, Comcast surely will take notice.
The cable industry also might suffer the embarrassment of having one of its pioneers leaving to join the competition right before the annual industry gathering at the NCTA's National Show in April in San Francisco. At least Chuck Dolan hasn't decamped for a satellite superpower like DirecTV. Only he can explain why he's switching horses midstream when Voom seems to have one hoof in the glue factory.
Reuters/Hollywood Reporter
