Voom deadline nears
Cablevision chair must find financing by Monday for struggling satellite service in his bid to revive it
BY HARRY BERKOWITZ
STAFF WRITER
February 26, 2005
Monday is D-Day for Cablevision chairman Charles Dolan.
That's the board's deadline for him and his son Tom to come up with financing so they could take the Voom satellite TV service off the company's hands and try to resuscitate it.
Wall Street analysts speculate Dolan may go to great lengths to come up with funding for Voom, which had an operating loss of $660 million for 2004.
"We firmly believe that Chuck Dolan is committed to building out Voom to prove the skeptics wrong," Fulcrum Global Partners analyst Richard Greenfield told investors, adding that Voom is a "money pit."
That could mean Dolan puts up a big chunk of his family's controlling stake in Cablevision as collateral, or even proceeds to sell the company or its cable channels, including AMC, in the next year or two.
"To raise $500 million of capital to fund Voom, Mr. Dolan would have to sell roughly half of his stake in the company," Smith Barney analyst Niraj Gupta told investors.
Cablevision has agreed to sell Voom's sole satellite to EchoStar Communications for $200 million, leaving Dolan to lease satellite space if he keeps operating the venture, technically referred to as DBS, or direct-broadcast-satellite service.
"Regardless of any theoretical advantages that may be realized from a third entrant in the DBS market, in reality, the market has shown itself unable to sustain more than two nationwide DBS providers," EchoStar and Cablevision said in applying to the Federal Communications Commission to transfer satellite licenses. Four in 10 initial Voom customers dropped the service or were no longer paying, leaving only 26,000 as of Sept. 30, the filing states.
If Dolan does not find financing, Cablevision said it may further slash Voom's estimated value, beyond the $355 million write-down it announced.
The most likely buyer of Cablevision is Time Warner or Comcast, analysts say, adding Cablevision could fetch up to $18 billion in a sale, including $3.8 billion to $4.8 billion for its cable channels AMC, IFC and WE: Women's Entertainment.
Copyright © 2005, Newsday, Inc.
Cablevision chair must find financing by Monday for struggling satellite service in his bid to revive it
BY HARRY BERKOWITZ
STAFF WRITER
February 26, 2005
Monday is D-Day for Cablevision chairman Charles Dolan.
That's the board's deadline for him and his son Tom to come up with financing so they could take the Voom satellite TV service off the company's hands and try to resuscitate it.
Wall Street analysts speculate Dolan may go to great lengths to come up with funding for Voom, which had an operating loss of $660 million for 2004.
"We firmly believe that Chuck Dolan is committed to building out Voom to prove the skeptics wrong," Fulcrum Global Partners analyst Richard Greenfield told investors, adding that Voom is a "money pit."
That could mean Dolan puts up a big chunk of his family's controlling stake in Cablevision as collateral, or even proceeds to sell the company or its cable channels, including AMC, in the next year or two.
"To raise $500 million of capital to fund Voom, Mr. Dolan would have to sell roughly half of his stake in the company," Smith Barney analyst Niraj Gupta told investors.
Cablevision has agreed to sell Voom's sole satellite to EchoStar Communications for $200 million, leaving Dolan to lease satellite space if he keeps operating the venture, technically referred to as DBS, or direct-broadcast-satellite service.
"Regardless of any theoretical advantages that may be realized from a third entrant in the DBS market, in reality, the market has shown itself unable to sustain more than two nationwide DBS providers," EchoStar and Cablevision said in applying to the Federal Communications Commission to transfer satellite licenses. Four in 10 initial Voom customers dropped the service or were no longer paying, leaving only 26,000 as of Sept. 30, the filing states.
If Dolan does not find financing, Cablevision said it may further slash Voom's estimated value, beyond the $355 million write-down it announced.
The most likely buyer of Cablevision is Time Warner or Comcast, analysts say, adding Cablevision could fetch up to $18 billion in a sale, including $3.8 billion to $4.8 billion for its cable channels AMC, IFC and WE: Women's Entertainment.
Copyright © 2005, Newsday, Inc.
