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Cablevision battle sparks talk of sale (Star-Ledger NJ) 03.08.05
Tuesday, March 08, 2005
BY MATTHEW FUTTERMAN
Star-Ledger Staff
(Star-Ledger NJ) The future of Cablevision Systems remained shrouded in mystery yesterday as an intrafamily squabble at the highest level of the company continued to evolve into a classic boardroom showdown.
As the company's board of directors convened, speculation spread that the Long Island-based cable, sports and entertainment conglomerate would ultimately be sold, leading to an auction for nearly 3 million cable households and some of the biggest names in sports and entertainment, including the Knicks, Rangers, Madison Square Garden and Radio City Music Hall.
After the board meeting ended late yesterday, Kim Kerns, a Cablevision spokeswoman, said the company would have no announcement about the deliberations, where the company's chairman and founder, Charles Dolan, was set to square off with his son, James Dolan, the company's chief executive.
Analysts said yesterday's meeting was focused on whether the board would give Charles Dolan additional time to raise more than $200 million to buy Voom, the company's satellite television service. James Dolan reached a deal recently to sell Voom for an estimated $200 million to competitor EchoStar Communications.
The move was roundly applauded by Wall Street analysts, who had urged Cablevision to part with Voom, which lost some $660 million last year and will cost $1 billion to run during the next two years.
However, Charles Dolan opposes the sale and has tried to take back control of the company's board, replacing several members loyal to his son with media industry veterans he has known for years, including John Malone, a fellow cable pioneer, and Frank Biondi, the former president of Viacom.
Craig Moffet, an analyst with Sanford Bernstein, said Dolan's tactics of dumping board members who opposed his moves were "highly unusual."
"No one can find an example of the kind of corporate governance breaches at a public company that we're seeing here," Moffet said.
The discord has produced a strange combination of effects -- uncertainty and discomfort among analysts about Cablevision's future, but also a rise in the stock price due to speculation the discord will lead to a liquidation.
Neal Pilson, a top analyst for the sports industry, said he expected the uncertainty to continue and for any potential sale to attract numerous suitors, especially for the sports teams and Cablevision's cable networks, which include MSG and Fox SportsNet New York.
"You're going to have a number of different bidders," Pilson said. "There is a lot of value to owning those teams and the networks they play on."
Cablevision is the second-largest cable operator in New Jersey after Comcast.
© 2005 The Star-Ledger. Used by NJ.com with permission.
Cablevision battle sparks talk of sale (Star-Ledger NJ) 03.08.05
Tuesday, March 08, 2005
BY MATTHEW FUTTERMAN
Star-Ledger Staff
(Star-Ledger NJ) The future of Cablevision Systems remained shrouded in mystery yesterday as an intrafamily squabble at the highest level of the company continued to evolve into a classic boardroom showdown.
As the company's board of directors convened, speculation spread that the Long Island-based cable, sports and entertainment conglomerate would ultimately be sold, leading to an auction for nearly 3 million cable households and some of the biggest names in sports and entertainment, including the Knicks, Rangers, Madison Square Garden and Radio City Music Hall.
After the board meeting ended late yesterday, Kim Kerns, a Cablevision spokeswoman, said the company would have no announcement about the deliberations, where the company's chairman and founder, Charles Dolan, was set to square off with his son, James Dolan, the company's chief executive.
Analysts said yesterday's meeting was focused on whether the board would give Charles Dolan additional time to raise more than $200 million to buy Voom, the company's satellite television service. James Dolan reached a deal recently to sell Voom for an estimated $200 million to competitor EchoStar Communications.
The move was roundly applauded by Wall Street analysts, who had urged Cablevision to part with Voom, which lost some $660 million last year and will cost $1 billion to run during the next two years.
However, Charles Dolan opposes the sale and has tried to take back control of the company's board, replacing several members loyal to his son with media industry veterans he has known for years, including John Malone, a fellow cable pioneer, and Frank Biondi, the former president of Viacom.
Craig Moffet, an analyst with Sanford Bernstein, said Dolan's tactics of dumping board members who opposed his moves were "highly unusual."
"No one can find an example of the kind of corporate governance breaches at a public company that we're seeing here," Moffet said.
The discord has produced a strange combination of effects -- uncertainty and discomfort among analysts about Cablevision's future, but also a rise in the stock price due to speculation the discord will lead to a liquidation.
Neal Pilson, a top analyst for the sports industry, said he expected the uncertainty to continue and for any potential sale to attract numerous suitors, especially for the sports teams and Cablevision's cable networks, which include MSG and Fox SportsNet New York.
"You're going to have a number of different bidders," Pilson said. "There is a lot of value to owning those teams and the networks they play on."
Cablevision is the second-largest cable operator in New Jersey after Comcast.
© 2005 The Star-Ledger. Used by NJ.com with permission.
