Dolan has to raise financing by Feb. 28 for Voom buy-out

bradley

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Voom news boosts Cablevision stock

BY HARRY BERKOWITZ
STAFF WRITER

February 12, 2005

(NewsDay.com) Cablevision's stock price rose more than 3 percent Friday on news that chairman Charles Dolan plans to personally take over the remaining pieces of the company's struggling Voom satellite TV service as a private business.

But announcement of the plan late Thursday left many unanswered questions that could dramatically affect Cablevision Systems Corp., its founding chairman and its chief executive James Dolan, who split with his father Charles over Voom.Foremost among the questions is how Charles Dolan can raise financing for the money-losing venture, which has already cost Cablevision $1.4 billion.

"Investor speculation is now focused on his willingness to potentially sell Cablevision outright, including the highly coveted cable systems," said Merrill Lynch analyst Jessica Reif Cohen, adding that Voom needs $400 million in 2005 financing.

For Cablevision, unloading Voom quickly could save money. Although Dolan would not pay for the assets, he would assume some commitments.

Cablevision "could save roughly $100 million of cash flow from the wind-down of expenses," investment firm Friedman Billings Ramsey said of the Dolan plan for Voom, formally called Rainbow DBS. "We believe this change, which still hangs on financing, would remove the final overhang of the Rainbow DBS debacle."

Cablevision stock gained 87 cents per share to $27.46 Friday.

Dolan has to raise financing by Feb. 28, the deadline set by a special committee of four independent Cablevision directors for a definitive agreement.

"The Dolans' financing alternatives appear limited," Reif Cohen said. "We doubt a partner could be found to fund the cost of maintaining a niche commercial satellite video operation."

Dolan, a billionaire, controls 75 percent of Cablevision's shareholder vote and directly controls 30.8 million shares, worth $845 million, part of which he presumably could use as collateral.
 
the mistake that these analysts are making-is most of the losses are in the past--the uplink,the financing of rainbow 1-the liscence fees,ALL are done or picked up by echostar,(and cablevison gets to write it off)it's almost like a chp 11 bankruptcy.Voom starts fresh with only the day to day expenses of installs,staff and fees for carrige,BUT they do have a cash flow of the small # of voom subs AND if i am coorect the rainbow media they still own,AMC,IFC,etc etc
 
Plainly ,and i have said this over and over knowing him(not personally) since the manhattan cable tv days.Charles Dolan is no jerk..he knows what he is doing
 
rang1995 said:
Plainly ,and i have said this over and over knowing him(not personally) since the manhattan cable tv days.Charles Dolan is no jerk..he knows what he is doing
I know him as well as you do, and I think he's senile.
 
OK, simple plan, if Voom now has 40,000 subs, let's all send him (cough, cough) $10,000 apeice and make this a viewer-owned company. LOL.
 
I believe that he already has the financing although I am sure he would want more. I can't see them announcing this deal without having all their ducks lines up in a row. :D
 
Voom is not Charles Dolan's first business venture. He knows he will have to give up something (possibly his part of Cablevision) to get the backing he needs to keep Voom afloat. But, that is one small hurdle compared to the big one he will have in addressing the numerous installation problems. To bring up the sub numbers he has got to get control over these shoddy installations and get the installers out to the customers on schedule.
 
Scott Greczkowski said:
I believe that he already has the financing although I am sure he would want more. I can't see them announcing this deal without having all their ducks lines up in a row. :D


I'm in agreement. You wouldn't want an announcement like this made unless you already knew you could come up with the financing.
 
"The Dolans' financing alternatives appear limited," Reif Cohen said. "We doubt a partner could be found to fund the cost of maintaining a niche commercial satellite video operation."

Analyst-Schmanalyst!

Do you all realize how many times these so-called financial analysts are dead wrong?

Jessica Reif Cohen thinks high-definition content is a niche service. Does she realize that VOOM offers most of the SD channels that Dish and Direct and cable offer in addition to HD content of superior picture quality and superior quantity? Does she realize that HD sets are flying off the shelves with more sub-$1,000 models available than ever before with more on the way?

Does analyst Jessica Reif Cohen live in a cave?

It sounds to me llike this particular analyst should would better serve the world by resigning to become a stay-at-home soccer mom.

Dolan would have never announced the formation of VOOM HD LLC unless he already, as Scott stated, had his financial and legal ducks all in a row.

How some people get to be grossly overpaid financial analysts at major brokerage houses never ceases to amaze me.
 
most analysts are wrong

what is interesting is most buy or sell recommendations are after the stock has moved
 
Well, the real interesting thing about stocks is that you can usually perform just as well or better by tacking the stock page to a bulletin board and throwing darts at it to determine the picks as by using analysts recommendations.
 
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