Cablevision Disavows Dolan and Dish Offers No Aid

[ksload]

http://www.newsday.com/business/ny-bzvoom4200028apr02,0,1115121.story?coll=ny-business-headlines

Cablevision disavows Dolan

BY HARRY BERKOWITZ
STAFF WRITER

April 2, 2005

In the latest move in a convoluted corporate chess match, Cablevision Systems Corp. has disavowed a federal filing in which chairman Charles Dolan seeks to block the company's deal to sell a satellite to EchoStar Communications.

Dolan needs the satellite to rescue the company's Voom TV service, which he refuses to shut despite board pressure and despite the $200-million deal signed in January by his chief executive son, James, to sell the satellite.

A Cablevision law firm told the Federal Communications Commission in a filing that the company had not authorized Charles Dolan to file a 53-page challenge to the sale on Monday and disavows his action.

The company said Dolan's claims, which include that the satellite sale would be anti-competitive and hurt consumers by shutting the satellite TV service, are all without merit.

If Cablevision had not disavowed its chairman's filing, it could have left itself open to a lawsuit by EchoStar, which has said it was "perplexed" by Dolan's action.

Thursday, the day the board's interim agreement to extend the life of Jericho-based Voom expired, Dolan met in Colorado with EchoStar chairman Charlie Ergen, who continued to refuse to alter the deal, the trade publication Satellite Business News reported.

For the second day yesterday, Cablevision refused to comment on whether the board is giving Dolan more time to seek a rescue plan or whether he is continuing to personally help fund Voom in the meantime. He had put up $10 million of his own cash and Cablevision stock to help fund it in March and has pledged $400 million to buy the satellite and help resuscitate Voom.
Copyright 2005 Newsday Inc.

 

[riffjim4069]

Correction to the above article...according the 8-K filed by Cablevision on 3/31/2005, "In March 2005, Charles F. Dolan deposited $15,000 [dollars in thousands] with Cablevision in accordance with the March 2005 Agreement." This factoid was also reported early morning yesterday in the following SatelliteGuys VOOM Forum post http://www.satelliteguys.us/showthread.php?p=424352#post424352

 

[mdonnelly]

10 mil, 15 mil, it's still chump change for Chuck.

 

[riffjim4069]

It may be chump change when you're dealing with a billion dollar corporate budget, but it's not chump change when it's coming out of your own pocket. I'm a tight-wad and removing a $5 bill from my wallet almost brings me to tears; 15M is a lot of money...even if you're worth 1.8B.

 

[vurbano]

It may be chump change when you're dealing with a billion dollar corporate budget, but it's not chump change when it's coming out of your own pocket. I'm a tight-wad and removing a $5 bill from my wallet almost brings me to tears; 15M is a lot of money...even if you're worth 1.8B.

I agree. In general, the richer people are, the tighter they are with their money in business. That is, rich people that stay rich.

 

[Skittles]

Another article by Harry and Newsday from yesterday: He seems quite busy .....


BY HARRY BERKOWITZ
STAFF WRITER

April 1, 2005

Cablevision Systems chairman Charles Dolan plans to oust three more directors who had ordered him to shut the Voom satellite TV service that he is trying to rescue, the company disclosed yesterday.

The disclosure came on the same day that the board's interim agreement to extend the life of Voom expired. The satellite venture's uncertain fate has sparked an enormous feud between Dolan and his chief executive son, James, who wants to kill it.







Despite the agreement's expiration, the board did not meet yesterday to resolve the three months of turmoil. The company did not say whether the board would meet today.

On Monday, in an extraordinary action that defied the board, Dolan asked the Federal Communications Commission to block Cablevision's deal to sell Voom's sole satellite to EchoStar Communications for $200 million - a deal signed by James Dolan in January. Charles Dolan also personally pledged $400 million to resuscitate Voom.

If Voom is not immediately ordered shut, the planned further shakeup of the board could give Charles Dolan greater sway in determining the satellite service's fate, possibly enough to force Cablevision to hand Voom over to him.

But without the satellite that is being sold to EchoStar, which is not willing to alter the deal, it is not clear how Dolan could keep Voom operating, and analysts do not expect the FCC to side with Dolan.

Dolan and his son Tom, Voom's chief executive, have refused to shut the service, which has attracted only 40,000 subscribers, had $661million in losses last year and is given little chance of success by analysts and several board members.

The Cablevision disclosure included a letter written by Dolan to the board on Tuesday, informing directors that he plans to reduce from six to three the number of them who are approved by public shareholders - rather than by him - at an April 18 meeting. All six public-shareholder directors were among those who had ordered Voom shut.

Dolan said the six current public-shareholder directors would nominate three for the new board. He had indicated earlier that he would exercise his right to name 75 percent of the board.

Dolan's plan would shrink the board from 15 to 12 members - nine chosen and approved directly by him and three approved by public shareholders.

Early last month, Dolan ousted three board members who had ordered Voom shut and hand-picked five new ones: son-in-law Brian Sweeney, who is Cablevision's senior vice president for e-media; Liberty Media chairman John Malone; former Viacom chief Frank Biondi; former ITT chairman Rand Araskog; and cable pioneer Leonard Tow.

In the new letter, Dolan said he believes the four outside executives would qualify under New York Stock Exchange and Securities and Exchange Commission "independence" requirements to serve on the board's audit and compensation committees.

The current members of those committees are public-shareholder directors Victor Oristano, who signed a letter early last month warning Dolan to stop soliciting new Voom subscribers; former New York State economic development director Vincent Tese; former Chase Securities managing director Thomas Reifenheiser; and Vice Adm. John Ryan. Regent Capital Management chairman Richard Hochman and law firm partner Charles Ferris are the other public-shareholder directors.

 

[MarcelV]

Ergen not being cooperative may be well another reason why the FCC will deny the transfer. By now, he should understand that deals are made by diplomacy, not hardball. Hey, but it's Ergen. Man of 1000 broken promises. (Based on an average of 10 per Charlie Chat... )

 

[gutter]

It is funny that SATBIZ totally ignored the restructuring of the board and its meaning. Again, the blinders are on to promote only one outcome and not to take it all into context.

 

[vurbano]

Cablevision dissavows Dolans action but yet doesnt move to shut down the service eventhough Chuck broke the agreement. It doesnt take much to realize that james is no longer in control of this and the board restructuring has already taken place in private. Its just not official yet.

 

[txdude]

"If Cablevision had not disavowed its chairman's filing, it could have left itself open to a lawsuit by EchoStar".

In other words Cablevision board and CEO are covering their asses which is to be expected. Other than that, this article provides no new information.

 

[ksload]

It should make sense that the FCC require Charlie to take on Voom's customers if they approve the satellite sale. He should be required to show how he would transition the Voom customers into the fold by continuing the HD content.

 

[Nayl]

lol I will go back to watching network T.V or switch to D** before Charlie or E** gets a dime of my money ever again.

 

[Walter L.]

No news here. Come on guys... anybody expected Cablevision to approve Dolan's FCC challenge?

 

[AxE]

It should make sense that the FCC require Charlie to take on Voom's customers if they approve the satellite sale. He should be required to show how he would transition the Voom customers into the fold by continuing the HD content.

My thoughts exactly. The FCC wants as many people to be happy with them as possible after all of the crap they pulled on Howard Stern......LOL.

But like I said before in another thread, it would be a very smart business move for Ergen anyway. Keep the price lower and keep all V* hd programming available. 46,00 new customers in one pop.

 

[DucTape]

lol I will go back to watching network T.V or switch to D** before Charlie or E** gets a dime of my money ever again.

You do have a right to whatever provider you choose but for me if Charlie and Charlie get something worked out that would make what Direct or Cable has to offer look like a joke in my opinion.

 

[Ilya]

FYI: here is the actual text of the Cablevision's response quoted in the article.
(Posted by justalurker in another thread.)

 

[ericpd]

Well I am really sadden by the news AND how you guys are responding to it. I know little of this industry, so in many cases, I know not how to interpret the news. My climate is set more so by how you guys react to the news. Right now, the reaction I'm seeing from ya'll (folks who know a lot more about this stuff than I do) scares me.

Damn, I just got VoOm installed no more than a little over a week ago, and my new Mit HDTV is only a week older than that. I'm just praying I ain't gotta fall back on D* and their 7 HD channels.

Hope things look better tomorrow!

 

[James Long]

It should make sense that the FCC require Charlie to take on Voom's customers if they approve the satellite sale. He should be required to show how he would transition the Voom customers into the fold by continuing the HD content.

E* didn't buy the customers, just the satellite, an uplink and related licenses. E* has zero obligation to V* customers.

JL

 

[Skittles]

I know little of this industry, so in many cases, I know not how to interpret the news. My climate is set more so by how you guys react to the news. Right now, the reaction I'm seeing from ya'll (folks who know a lot more about this stuff than I do) scares me.

Damn, I just got VoOm installed no more than a little over a week ago, and my new Mit HDTV is only a week older than that. I'm just praying I ain't gotta fall back on D* and their 7 HD channels.

Hope things look better tomorrow!

I have had voom since ordering Dec. of 2003 and have been lurking here for almost as long ..... This is all speculation so don't try to read too much into these posts or try to predict the future of the service based on news articles. Do like I have done for the last 15 months and enjoy the HD while hoping for the best ............

 

[bratboy]

I think someone else hit the nail on the head in that this was a CYA on thier part so that , in the event the sale doesnt go thru, they cant be sued because of any sort of breach. This way they can say hey we told everyone we were not behind Dolans move so you can't sue US type deal. Then again thats just my opinion and probably it isnt worth much more than it cost to give it hehe.