The Dueling Dolans

bradley

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Jun 9, 2004
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The dueling Dolans

© 2005 Newsday

Feud over Voom reveals fractious family relations, clouds Cablevision’s future

BY HARRY BERKOWITZ
STAFF WRITER

March 2, 2005

An intense feud among members of the Dolan family continues to rage following the decision by Cablevision's board of directors to shut the failed Voom satellite TV service.

Members of the family that controls Cablevision Systems Corp. issued dueling press releases and conflicting memos to Voom employees after the board, backed by chief executive James Dolan, acted Monday to pull the plug over chairman Charles Dolan's objections.

Cablevision's stock price fell 2.2 percent yesterday as Wall Street tried to unravel the corporate soap opera and figure out what the family developments might mean for Cablevision, including whether it has become less or more likely that its cable systems or cable TV channels will be sold.

Charles Dolan and his son Thomas, Voom's chief executive, insisted in their joint memo that financing for them to take Voom off Cablevision's hands was "in place" and "members of the Dolan family" remain "committed to this bright and promising business" as Voom goes through a "period of uncertainty."

But yesterday Cablevision surprised those Dolans by posting a notice on Voom's Web site that replaced all other content: "Voom has ceased taking new customer orders and will shut down by the end of March."

CEO James Dolan - who referred to his father, Charles, and brother Thomas as "certain Class B shareholders" in his memo to Voom employees - indicated that Cablevision chief operating officer Tom Rutledge would lead the transition team to manage the shutdown.

"Are Dolan family dinners a thing of the past?" Fulcrum Global Partners analyst Richard Greenfield asked in a note to investors. "Regardless of the fate of Voom, we wonder whether irreparable harm has been done to Dolan family business relations. With Jim Dolan and the board overruling Jim's father and brother, we believe the potential for a sale of Cablevision is becoming ever more probable."

Some analysts, however, said that likelihood actually had decreased, because Charles Dolan no longer needs to sell Cablevision or a big chunk of his stake in it to raise hundreds of millions of dollars to finance the money-losing Voom.

"The disagreement highlights fractious relations among the Dolans, which may ultimately affect [Cablevision's] strategic direction," UBS analyst Aryeh Bourkoff told investors. The stock price, which had been rising partly because Cablevision was unloading Voom, dropped by 69 cents per share to $30.37 yesterday.

Charles and Thomas Dolan apparently had been buoyed by a rise in subscribers for Voom, which was offering installation in up to three rooms for $1.

Voom subscribers have increased to 46,262, including 5,622 who have been awaiting installation, compared with about 26,000 on Sept. 30, 2004, according to a source familiar with the numbers. That's still far short of the more than 10 million satellite customers DirecTV and EchoStar Communications each have. And Voom had an operating loss of $660 million for 2004.

Voom insiders said that as much as Charles Dolan wants to carry out his vision, he also has been intent on giving Thomas a moment in the spotlight as he has given James, the much more combative and aggressive younger brother.

"Everyone feels Chuck Dolan is doing this for Tom," one insider said.

But Thomas, a shy executive who majored in geology in college and headed computer technology systems at Cablevision, has had trouble stepping into a leadership role at Voom, especially one that could involve challenging his father, the insiders said.

One remaining mystery is which side Charles' son Patrick, who runs News 12 and is a board member, has taken in the feud, and which other family members were prepared to back Charles and Thomas. Cablevision is not telling, and neither are the Dolans.

"We are more than ever convinced of the viability of the Voom service," Thomas said in the release issued by him and his father. "If we are able to complete negotiations with Cablevision, we are certain that Voom HD will emerge as a robust new vendor providing a valuable alternative to the two services that now dominate the satellite industry."

The Voom story so far

October 2003: Cablevision launches Voom satellite TV service; plans to split it off as part of separate company.

May 2004: Problems emerge in attracting customers as Voom losses mount.

November 2004: Voom reveals it lost more customers than it attracted in the summer amid operational and marketing problems.

December 2004: Board, backed by CEO James Dolan, abandons spin-off and defies chairman Charles Dolan by deciding to sell or shut Voom.

January 2005: Cablevision agrees to sell Voom's sole satellite to EchoStar Communications for $200 million.

Feb. 10: Cablevision signs letter of intent to give rest of Voom to chairman Charles and Thomas Dolan if they arrange financing.

Feb. 28: Cablevision says it has no definitive agreement with the Dolans and will shut Voom. Dolans say they have financing, want a deal.

- Harry Berkowitz
 
Some analysts, however, said that likelihood actually had decreased, because Charles Dolan no longer needs to sell Cablevision or a big chunk of his stake in it to raise hundreds of millions of dollars to finance the money-losing Voom.

Singing a different tune now! How come? Where is the $ coming from?
 
Sean Mota said:
Singing a different tune now! How come? Where is the $ coming from?
What he's saying is that $ isn't needed now to finance VOOM, because it's DEAD.
 
All of these reporters are tuned into SatelliteGuys and are refreshing more then some of the members are.

Now only if they would give SatelliteGuys a nice plug I would be happy, after all we are making their life easy for them. :D
 
mdonnelly said:
What he's saying is that $ isn't needed now to finance VOOM, because it's DEAD.

If that's what was intended, there is something wrong in that statement. I have read three times and that's not what he is saying.
 
Scott Greczkowski said:
All of these reporters are tuned into SatelliteGuys and are refreshing more then some of the members are.

Now only if they would give SatelliteGuys a nice plug I would be happy, after all we are making their life easy for them. :D

But they will keep wondering why people keep posting pictures of dead raccoons in any thread that just a lurker post at.
 
Seems like a company that has these great expectations and grand financing could have come up with something better than a banner for a new web site on such a controversial day. lmao
 
As much as we are trying to read into this website thing, I am sure the website is actually on the bottom of their problem list. :)
 
Pat Dolan is now and will always be solidly behind his father. Pat is closer then any other of the sons to Chuck.
 
Your probably right about that, Scott
Has anyone checked to see if any of the Voom retailers are turning new sales away?
I would love to see them make it and come out with more HD with a DVR that freaking works for less than the holy chit prices of D* and E*.
 
Bruce, try to make complete sentences when you write so we can read them, ok?

Whoa, now there's a Patrick Dolan involved?? That complicates things. What is his position? For James or Charles? That Thanksgiving dinner in November ought to be real interesting at the Dolans.
 
Consider all that is transpiring up to this point.

A comment regarding the content of voomllc.com is uncalled for.

The problem at hand is voom.com is still spewing its message of "The End," while the general public has no idea as to voomllc.com. James and the board seem to be doing there best to quash VOOM.

Alarming as it may be, I am most certain litigation will ensue.

Q: Has the CVC board acted in a responsible manner or woeful acts to subvert?

What has transpired is damaging to all parties; VOOM, VOOL HD LLC, and CVC.
 
I really think that Voom is dead! ( I just got it and love but, this thing which could have been the future of tv is really expensive). I mean there are a lot of investors tired of loosing money.
or
This is a marketing genius!
but
for the rest of the WORLD that doesnt sit in the thread room. Voom is dead. Thats a lot of people. They will think its dead and or if it comes back think its unstable to get as a provider.

I really really hope I am wrong.
 
"James and the board seem to be doing there best to discredit VOOM. Alarming as it may be, I am most certain litigation will ensue. "

How could it, since Cablevision still owns all the rights to Voom and Voom.com
They have every legal right to shut down the web site and in my opinion should since if the deal goes sour they will be liable to any new accounts.
 
DucTape said:
"James and the board seem to be doing there best to discredit VOOM. Alarming as it may be, I am most certain litigation will ensue. "

How could it, since Cablevision still owns all the rights to Voom and Voom.com
They have every legal right to shut down the web site and in my opinion should since if the deal goes sour they will be liable to any new accounts.

They are still taking new orders... If James wants to shutdown VOOM, he needs to shutdown the operation centers to complete the job. Right now, the job has not been completed. It almost 24 hrs since the message appear and the operation centers are still taking orders.
 
It is pretty obvious negotiations are still going on between CVC and Dolan Sr. Although the web site has been shut down (because the board of directors voted to close down VOOM), they are still taking orders via CSRs. This is probably just a brief period of time to allow Dolan Sr. and CVC to keep negotiating. The web site serves as public notice of the shutdown in case CVC does not sell VOOM.

You know negotiations are probably broken down completely when CSRs start to call customers and letters go out giving notice of shutdown. They are probably going to stall this until next week to allow a deal to be made if it could be made.

Voomllc for all we know is just a VOOM dealer somewhere advertizing over the internet. Note that no one besides CVC has the right to say they are VOOM, and this web site will probably get a cease and desist order before long if it has not been authorized by CVC.

The holdup in the agreement probably is the long term liabilities that VOOM has signed. Things like satellite construction. If they go past certain milestones in their contract large sums of money are due. CVC probably wants an assurance (like a huge bond) that VOOM will cover these obligations. It could be something like wanting Dolan Sr to pledge so much stock or something as collateral.
 

OK...here's something else...!!!

voom updates on channel select page

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