VoomLLC (Analysis) 3.4.05

[bradley]

VoomLLC (Analysis) 3.4.05

(Analysis) It is apparent the reason voomllc.com was put into a limbo status; the board's legal counsel was directed to facilitate a temporary "gag" and/or "cease-and-desist" order(s). Whether this fiscally came about or the mere suggestion influenced, we observing the ongoing situation are left groping in the dark, guessing... what's next?

Why the website...? Material contained on both websites contains © copyrighted materials, more specifically, "Voom" ® is a registered trademark (tm), is the property of Rainbow Media LLC whose parent is CVC.

But this raises yet another issue... how does Voom continue to solicit new subscribers through its call centers if James Dolan and the remaining board members do have control; why have they not stopped the continued recruitment of new subscribers?

Voom's reported subscriber base as disclosed by the CVC board was approximately 24,000 as of December 2004. Yet, we find-out, in reality it exceeds 46,000 with 5,000 plus awaiting installation as of February 28, 2005. With growth exceeding 190% in as little as 60 days argues Voom's potential could be indeed bright. Again, the question arises, what causes the board to steer its present course?

Disposition of Black-hawk up-link facilities and Rainbow-1 represent approximately $350M in investments. CVC board under the direction of James Dolan sold these imperative assets off to Echostar for a mere $200M.

Is it any wonder why the SEC is curious and why other agencies will not soon follow?

Monday, March 7, 2005, Chuck Dolan is to present, once again, his pitch to the CVC board. How will this presentation be any different than any other...? The chemistry of the board may have changed with Chuck Dolan naming four industry veterans to the CVC board — John Malone, Frank Biondi, Rand Araskog and Leonard Tow to the CVC board to replace three ousted directors and fill a fourth seat vacant due to the recent death of Cablevision co-founder John Tatta. Monday will also bring Chuck Dolan's nomination asking the CVC board to create an additional seat for his son-in-law, Brian Sweeney, a Senior Vice-President for Cablevision E-Media (websites and interactive television service) to fill, representing the interests of the proportional ratio of "B" to "A" stock investors.

I must say, I wouldn't be alarmed if an agreement isn't reached Monday; I expect talks to earnestly continue as this has become a very complicated situation.

Past behavior by the CVC board has been very unbecoming; leaking memos, only pushes the issues to the forefront providing more fuel for the trades and market publicists.

It is hopeful Chuck Dolan's announcement of 4 new CVC board members yesterday will bring continuity and ease the concerns of the markets.

Without a doubt, CVC's board has acted in questionable methods and means.

I must add, it is becoming more likely, the highly lucrative cable division of CVC, will sold off and James Dolan CEO may find himself, sooner than later, removed from the CVC board following in the wake of his peers, the 3 board members dismissed yesterday.

Chuck Dolan is a strategist. He is in the process attempting to increase the board proportionally in size to reflect "B"* stock ownership with the motion to appoint Sweeney, Monday.

One can only speculate how this story will continue to unfold.

After all... It's not HBO, it's CVC.

Stay tuned...


(B*) = For those of you that may be unfamiliar with categories of stocks pertaining to CVC... the "A" and "B" stock; "A" stock is possessed by the general public, while "B" stock can only be held by Dolan family members and insiders to CVC. "B" stock voting rights cary a 10:1 ratio (each "A" stock share = cast 1 vote per/share, each "B" stock share = casts 10 votes per/share). "A" stock does NOT pay dividends and the company professes it is not likely to. The value of CVC "A" stock is its relative value to the market; how the market perceives the stock dictates its value. CVC stock has split (2:1) only twice in its history.

 

[Walter L.]

VoomLLC (Analysis) 3.4.05
The disposition of Black-hawk up-link facilities and Rainbow one represent approximately $350M in investments. The CVC under the direction of James Dolan sold them off to Echostar for a mere $200M.

Is it any wonder why the SEC is curious and why other agencies will not soon to follow?

I agree with you. This is what this investigation is all about.
Who knows? Maybe the SEC suspects that James Dolan got some $$$ "under-the-table"

 

[mike123abc]

Just going on pure speculation, the following is just thoughts:

I think that the negotiations with Dolan Sr and CVC never stopped. 2/28 came and the vote to shutdown was made to cut CVC liabilities off, not to stop negotiations. James changed the web site as a form of public notice in case an agreement could not be reached. The CSRs continuing to take orders points to continued negotiations. Eventually a point will be reached where the CSRs will have to stop taking orders and start notifying existing customers that it is shutting down.

Everyone on this board tends to blame James for the failure of VOOM. But, by not stopping the call centers points to him not really fighting against his father as much as he could do. If he was going to be the vidictive brat that everyone accuses him of being, the web site would have been shut down, the call center cut off and you would have received a letter telling you that you have a few days left to change providers because VOOM was going away.

Another point of family dynamics is that Dolan Sr does not really have complete control of the family trust. You read the reports/SEC filings, it is a power shared with his wife Helen. She might have a different view of James getting fired...

 

[DucTape]

Yeah it's getting hairy at CVC and after what has come to light in the last few day's my bet has shifted to watching the sec among other's shutting down this whole gob of chit and filing charges in every direction. Which would put the kibosh to programing for a looong time unfortunately.

 

[bradley]

That's why I pose the questions; this isn't making a whole lot of sense.

Mike, I'll have to disagree with you regarding James. I can't see Chuck and James working under the table with one-another. Behavior I have seen borders on the malicious.

James is CEO, having significant influence over the day-today operations of his oversight.

James' negotiations with E* regarding the assets given how much is to be potentially lost here; a spread of $150M is 71% of market value, a 29% gain... factoring depreciation puts the buyer at an unprecedented advantage.

As a share "A" or "B" holder, it wouldn't go over well with me at all. I believe this is partly the reason for the informal SEC investigation. A real "red flag."

 

[mdonnelly]

That's why I pose the questions; this isn't making a whole lot of sense.

Mike, I'll have to disagree with you regarding James. I can't see Chuck and James working under the table with one-another. Behavior I have seen borders on the malicious.

James is CEO, having significant influence over the day-today operations of his oversight.

James' negotiations with E* regarding the assets given how much is to be potentially lost here; a spread of $150M is 71% of market value, a 29% gain... factoring depreciation puts the buyer at an unprecedented advantage.

As a share "A" or "B" holder, it wouldn't go over well with me at all. I believe this is partly the reason for the informal SEC investigation. A real "red flag."

I disagree. James Dolan's behavior is perfectly reasonable, considering his position as CEO of Cablevision.

The Rainbow DBS division has been a drag on CVC earnings since the inception, with no indication as of December 2004 that it would ever become a profit center. Divestiture of that division was imperitive, if he were to meet his responsibilites as caretaker of the shareholders' investments.

While there is a loss to be factored into CVC's financial statement, that loss is negated by terminating the drain on earnings that Rainbow DBS would have incurred in future quarters.

That is exactly why the CVC stock jumped in December, when it was announced that Rainbow DBS would be sold, and again in January when the assets were sold to E*.

The only questionable action is why the call centers are still open. I anticipate a sale of the customer base to some entity (E*, VOOM HD LLC., etc.).

 

[bradley]

mdonnelly,

Added to the mix increasing CVC stock value is the speculation of the foreseeable sale of cable assets. Investors have flocked to a potential spike, a result of a push in recent CVC prices. Simultaneously the recent instability is due in-part to the markets observation of perceived hostile in-fighting.

The CVC board failed to reach absolute agreement as to the closure of Voom business. Hence, premature announcement of closure due to a split decision even though a majority ruled; a dangerous position given there is no absolute decisive consensus of the board.

 

[mdonnelly]

mdonnelly,

The increase of CVC value is also attributed to speculation of the sale of cable assets. Investors have flocked to a potential spike, a result of a push in recent CVC prices. Simultaneously the recent instability is due in-part to the markets observation of perceived hostile in-fighting.

The CVC board failed to reach absolute agreement as to the closure of Voom business. Hence, premature announcement of closure due to a split decision even though a majority ruled; a dangerous position given there is no absolute decisive consensus of the board.

No, the CVC stock spiked in December as a direct result of CVC deciding to divest Rainbow DBS. That was certainly prior to the speculation on Dolan Sr. selling the company to fund VOOM.

The January spike was the result of CVC getting an return on their investment in the satellite and uplink centers, via the sale to E*. All of this was prior to any infighting speculation.

The only time CVC shares have dropped in the last few weeks is when the divestiture of Rainbow DBS is clouded by actions taken by Dolan Sr. and son Tom Dolan.

And, are you suggesting that a majority vote of any board isn't binding on the CEO?

 

[bradley]

mdonnelly,

I'm not shooting down your position, I'm merely adding to it... I added clarification to the previous... I can see how you would be so inclined to read it that way because it did.

Majority vote should be binding BUT obviously Voom wasn't resolved. The problems arising from Voom would have been more evident w/in the functioning of the board and should have never made its way out into the public domain.

Chuck is not working alone, nor is James.

Regarding the Street talk of potential sales, it has been speculated for several months now that CVC may be ripe for divesture of the cable assets. This isn't anything new. I am not implying it is the sole reason nor the majority for the upswing, I am simply stating there is the potential sale to be added regarding speculation. Savvy market players buy based on number of components; it adds to higher speculative gains.

 

[James Long]

Past behavior by the CVC board has been very unbecoming; leaking memos, only pushes the issues to the forefront providing more fuel for the trades and market publicists.

Is filing a memo with the SEC considered a leak? You used a plural, what are the memos leaked?

If anything, Cablevision and especially Voom HD LLC should leak more - in the form of press releases giving updates "Voom HD LLC is working hard to close the deal and guarantee the continuance of America's premier HD service." But alas, they are silent.

JL

 

[bradley]

Victor Oristano's memo to Chuck Dolan as he represented the Independent Committee and the Class "A" Directors caught my attention.

I was deeply concerned and uneasy while reading this memo and the accusations contained. It made me question motives and actions... first of Chuck.. and later of the opposition's.

Given the growth that took place in 60 days of 190%, up from 24,000 to 47,000, I wondered why this did not become a topic discussed or even addressed by the board? Was it simply an attempt to burry it and be done? Because from what I see in the most recent actions such behavior becomes questionable.

A couple of other trades have eluded to additional information that appeared through other sources other than Victor Oristano's memo. Be it word of mouth, etc, the reality is the inter-workings of a Fortune 500 firm should be resolved in the boardroom and not spill into the streets. It has the potential to undermine the economy even if the economy is on a micro-economy level, it still impacts lives and livelihood; jobs extending out to providers and subcontractors... a domino effect that touches an almost endless chain of lives.

I believe board members living their opulent lives have no idea what is is to be common and try to survive day-today. Even Victor Oristano is probably well to do. None of them really feel the impacts of their decisions unless it touches their lives directly. And in their cases more often they touch themselves in a beneficial way than not; not in the way Michael Jackson chooses to.

On the other-hand... if none of this became public none of us would have been any wiser.

I opt for the present situation BUT it is not professional for the CVC board to allow things to be aired in public. It simply undermines what they have set out to do.

 

[Vicki]

I'm too tired to go back and look...

...but if this is in reply to JL, and not someone who posted earlier...I plead with you, don't answer him, even indirectly. If it is a reply to someone earlier, it would be beneficial if you referred to or quoted them.

I remember that you said JL was suffering from a personal loss, and that may be the reason for his behavior. I know he's suffering from something, but I am still skeptical. If you are convinced of the validity of his claim, and that is why you replied, I will respect your evaluation of the situation. Nonetheless, I would like to see the context and judge for myself, so if you have any recollection of where that statement occurred, please let me know.

Apart from that...are we having fun yet? You've had lots of good posts. Have'nt been able to respond to as many as I'd like, but you know I'm usually in agreement!

I'm cashing it in, for tonight! Too old for this kind of stuff!! Vicki

Victor Oristano's memo to Chuck Dolan as he represented the Independent Committee and the Class "A" Directors caught my attention.

I was deeply concerned and uneasy while reading this memo and the accusations contained. It made me question motives and actions... first of Chuck.. and later of the opposition's.

Given the growth that took place in 60 days of 190%, up from 24,000 to 47,000, I wondered why this did not become a topic discussed or even addressed by the board? Was it simply an attempt to burry it and be done. Because from what I see in the most recent actions such behavior becomes questionable.

A couple of other trades have eluded to additional information that appeared through other sources other than Victor Oristano memo. Be it word of mouth, etc, the reality is the inter-workings of a Fortune 500 firm should be resolved in the boardroom and not spill into the streets. It has the potential to undermine the economy even if the economy is on a micro-economy level, it still impacts lives and livelihood; jobs extending out to providers and subcontractors... a domino effect that touches an almost endless chain of lives.

I believe board members living their opulent lives have no idea what is is to be common and try to survive day-today. Even Victor Oristano is probably well to do. None of them really feel the impacts of there decisions unless it touches their lives directly. And in their cases more often in a positive way than not.

On the other-hand... if none of this became public none of us would have been any wiser.

I opt for the present situation BUT it is not professional for the CVC to allow things to be aired in public. It simply undermines what they have set out to do.

 

[James Long]

I believe filing the memo with the SEC was the right way to make it public. I agree that we have heard a lot of "behind the scenes" talk with sources omitted. The public sees a public action and asks "what's going on" but instead of saying that they cannot say anything they leak a little - and leak a little more.

It appears that the board was trying to work with Charles - doing THEIR JOB of protecting Cablevision for the benefit of Cablevision shareholders. But Charles didn't like the final decison on Feb 28th and changed the board to be more to his liking (he hopes). Knocking off three members is a big deal, and those questions from investers about what is going on really gets heavy.

So an answer is given to the question in the best way possible. Call Charles Dolan on the problems the board saw and make it public. Let people know that the board was trying to protect Cablevision stockholders. Whether that answer the full truth is beyond our guess ... unless we listen to more leaks.

JL