The Deal: The Ex-Cable Guy

Sean Mota

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Sep 8, 2003
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Maybe they should change the name to Doublevision Systems, because the message coming out of Cablevision Systems Corp. these days couldn't be more confusing, polarizing and, to cable companies everywhere, agonizing.
Just when investor sentiment toward cablers is showing signs of improvement, cable pioneer Chuck Dolan has cast his lot with the satellite broadcasters. And he has done so in a way that could trigger a major rethink about cable's supposed superiority.

It's no longer a stretch to think Dolan would borrow against this trust — if not sell its Cablevision shares outright — to pursue his beam dream. Never mind that such a move would jeopardize the job security of another son, Jim Dolan, Cablevision's president and CEO. For this was the son who rallied the company's board against further support for Voom and, by extension, for his father.

That the senior Dolan refuses to acquiesce demonstrates his "obsession with Voom," reports Fulcrum Global Partners analyst Richard Greenfield, "and his complete lack of interest in the core cable business."

That Dolan thinks sat broadcasting is a good idea can no longer be doubted. He's not even new to the game, having partnered 15 years ago with News Corp.'s Rupert Murdoch and NBC's Bob Wright in a sat-TV startup called Sky Cable. Although bickering drove the partnership apart after a year, leaving it to fourth partner Hughes Electronics Corp. to pick up the pieces, the experience left all three exiting partners with what Schaeffler calls "the bug."

A world where marketing trumps technology requires a mindset different than the one Schaeffler contends has driven content distributors for years. "The smart guys have always known it's not about cable versus satellite versus broadcast versus telephony versus [Internet service provider]," he says. "It's all about delivering content down a pipe."
 
Sean Mota...Never mind that such a move would jeopardize the job security of another son said:
...I really feel for the poor soon-to-be-unemployed Jim Dolan. I'll save a place in line for him at the employment office...NOT
 
Bilodeaumj said:
...I really feel for the poor soon-to-be-unemployed Jim Dolan. I'll save a place in line for him at the employment office...NOT
I wouldn't worry about James Dolan. Happy CVC shareholders will reward him. :D
 
Dang ... they made the article "paid subscribers only". :(
I loaded it once and went back to grab a quote and got blocked out.
(It seems to be cookied - killing the browser let me reload.)

Now Dolan and son Tom have until the end of February to secure financing for the 21 high-definition channels that Cablevision began packaging as Voom HDTV in October 2003. The exercise won't be easy, given that Voom, in addition to burning through $1.4 billion by year's end, is on track to lose even more over the next few years. But who's going to bet against its governing duo, especially since Dolan père controls a family trust dominated by $1.8 billion in Cablevision shares?

Voom HD LLC has until Monday to finalize the deal.

BTW: The author should remember where E* and D* are in the grand scheme of cable/satellite. E* now reaches 10% of television homes and D* is bigger. Very few cable companies are bigger than these major players.

JL
 

Voom Magazine

Webcast: Q4 2004 Cablevision Systems Corp. Earnings Conference Call

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