- Mar 29, 2004
Also at the conference, Cablevision chief financial officer Michael Huseby offered a little more insight to the liabilities it will have to assume concerning its decision earlier this week to shut down its Rainbow DBS HD direct-broadcast satellite service, marketed as Voom.
Huseby said the biggest cash outlays will involve Rainbow DBS’ obligation to Loral Space and Communications Ltd. -- estimated to be about $42.4 million, according to securities filings -- and for transponder leases.
According to the Form 10 filed by Rainbow Media Holdings LLC in November, Cablevision issued a $19.8 million irrevocable letter of credit to SES Americom Inc. as a security deposit for leases for 13 transponders.
However, what it will cost Cablevision to cancel service contracts for Voom is undetermined. Huseby said Rainbow DBS had several contracts for call-center service and other services, and it will have to negotiate with each party to cancel those deals.
Cablevision had planned to sell the remaining assets of Rainbow DBS -- it agreed to sell its satellite assets to EchoStar Communications Corp. for $200 million -- to Cablevision chairman Charles Dolan and his son, Cablevision chief information officer Thomas Dolan. But Monday, the company said it had ceased negotiating with the Dolan group and plans to shut down the service in 30 days.
Despite a press release by the Dolan group stating its desire to obtain financing for Rainbow DBS, Rutledge seemed to give little hope that Cablevision will seek other buyers for the Voom assets.
Asked if Cablevision would be receptive to other offers for Voom, Rutledge said, “I’ve been directed to close it down, which I am in the process of doing.”