MORE BREAKING NEWS: Cablevision files SEC Form 8-K
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"The Companies will continue to explore strategic alternatives, including monetization, for their remaining Rainbow DBS related assets, including programming, equipment and spectrum."
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On January 20, 2005, Cablevision Systems Corporation and CSC Holdings, Inc. (the “Companies”) entered into a definitive agreement for Rainbow DBS Company LLC to sell its Rainbow 1 direct broadcast satellite and certain other related assets to a subsidiary of EchoStar Communications Corp. for $200 million in cash.
Under the terms of the agreement, EchoStar will acquire the Rainbow 1 satellite located at the 61.5 degree W.L. orbital position as well as FCC licenses to construct, launch and operate DBS services over 11 frequency channels at the 61.5 degree W.L. orbital location. In addition, EchoStar will acquire the contents of Rainbow DBS’ ground facility in Black Hawk, S.D. and related assets. The transaction is subject to regulatory approvals.
The Companies will continue to explore strategic alternatives, including monetization, for their remaining Rainbow DBS related assets, including programming, equipment and spectrum.
Rainbow DBS’ VOOM programming service will continue to provide service to its current customers during a transition period.
The Companies and EchoStar and their respective affiliates have entered into, and may in the future enter into, transactions and agreements with each other in the ordinary course of business.
ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
As disclosed in the Companies’ Current Report on Form 8-K dated December 20, 2004, the Companies’ Boards of Directors decided to suspend pursuing the spin-off of their Rainbow Media Enterprises subsidiary and instead to pursue strategic alternatives for their Rainbow DBS business. In light of the January 20, 2005 sale agreement with EchoStar described above, it is expected that the Companies will record material charges under generally accepted accounting principles as they exit that business. The Companies are not able to establish an expected completion date for the EchoStar transaction at this time because it is subject to regulatory approvals. As noted above, the Companies are continuing to explore strategic alternatives for the remaining Rainbow DBS related assets and are not able at this time to establish a definitive time frame for completion of that process. At this time, the Companies are not able in good faith to make a determination of the amounts or range of amounts expected to be incurred in connection with this course of action or an estimate of the amount or range of amounts of the charge that will result in future cash expenditures.
ITEM 2.06 MATERIAL IMPAIRMENTS.
Furthermore, the Companies will record material charges for impairment of the value of the Rainbow DBS assets under generally accepted accounting principles. In accordance with those principles, a portion of such charges are expected to be reflected in the Companies’ fourth quarter 2004 financial statements and additional impairment charges are expected to be recorded in 2005. At this time, the Companies are not able in good faith to make a determination of an estimate of the amount or range of amounts of the impairment charges or of the amount or range of amounts of the impairment charges that will result in future cash expenditures.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CABLEVISION SYSTEMS CORPORATION
By: /s/ MICHAEL P. HUSEBY
Title: Michael P. Huseby
Executive Vice-President and
Chief Financial Officer
On January 20, 2005, Cablevision Systems Corporation and CSC Holdings, Inc. (the “Companies”) entered into a definitive agreement for Rainbow DBS Company LLC to sell its Rainbow 1 direct broadcast satellite and certain other related assets to a subsidiary of EchoStar Communications Corp. for $200 million in cash.
Under the terms of the agreement, EchoStar will acquire the Rainbow 1 satellite located at the 61.5 degree W.L. orbital position as well as FCC licenses to construct, launch and operate DBS services over 11 frequency channels at the 61.5 degree W.L. orbital location. In addition, EchoStar will acquire the contents of Rainbow DBS’ ground facility in Black Hawk, S.D. and related assets. The transaction is subject to regulatory approvals.
The Companies will continue to explore strategic alternatives, including monetization, for their remaining Rainbow DBS related assets, including programming, equipment and spectrum.
Rainbow DBS’ VOOM programming service will continue to provide service to its current customers during a transition period.
The Companies and EchoStar and their respective affiliates have entered into, and may in the future enter into, transactions and agreements with each other in the ordinary course of business.
ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
As disclosed in the Companies’ Current Report on Form 8-K dated December 20, 2004, the Companies’ Boards of Directors decided to suspend pursuing the spin-off of their Rainbow Media Enterprises subsidiary and instead to pursue strategic alternatives for their Rainbow DBS business. In light of the January 20, 2005 sale agreement with EchoStar described above, it is expected that the Companies will record material charges under generally accepted accounting principles as they exit that business. The Companies are not able to establish an expected completion date for the EchoStar transaction at this time because it is subject to regulatory approvals. As noted above, the Companies are continuing to explore strategic alternatives for the remaining Rainbow DBS related assets and are not able at this time to establish a definitive time frame for completion of that process. At this time, the Companies are not able in good faith to make a determination of the amounts or range of amounts expected to be incurred in connection with this course of action or an estimate of the amount or range of amounts of the charge that will result in future cash expenditures.
ITEM 2.06 MATERIAL IMPAIRMENTS.
Furthermore, the Companies will record material charges for impairment of the value of the Rainbow DBS assets under generally accepted accounting principles. In accordance with those principles, a portion of such charges are expected to be reflected in the Companies’ fourth quarter 2004 financial statements and additional impairment charges are expected to be recorded in 2005. At this time, the Companies are not able in good faith to make a determination of an estimate of the amount or range of amounts of the impairment charges or of the amount or range of amounts of the impairment charges that will result in future cash expenditures.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CABLEVISION SYSTEMS CORPORATION
By: /s/ MICHAEL P. HUSEBY
Title: Michael P. Huseby
Executive Vice-President and
Chief Financial Officer
"monetization" means turning those assets into cash, i.e. selling them. Also note that "the companies" refers to CVC, not both companies.
I do not believe that CVC wants to sell their RDBS broadcast assets. They have many stations, not just Vooms channels.
What happens to Vooms channels is totally separate from their broadcast properties.
I do not believe that CVC wants to sell their RDBS broadcast assets. They have many stations, not just Vooms channels.
What happens to Vooms channels is totally separate from their broadcast properties.
"Rainbow DBS’ VOOM programming service will continue to provide service to its current customers during a transition period."
So, Voom won't be going dark for a while. Congrats, you've been given a repreive. After "transition period", it's lights out.
So, Voom won't be going dark for a while. Congrats, you've been given a repreive. After "transition period", it's lights out.
FrankJo said:
I believe you are wrong about "lights out". Voom will survive after the sale of hardware. More satellites are ordered and ready for construction. I think the sale of Rainbow 1 and the new up-link center was to raise cash to get Voom through to the end zone. Dolan has something or someone up his sleeve. The service is alive and well into the future.
- Nov 29, 2003
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Indy said:
What are you smoking, investors will have lawsuits up the a** against Cablevision if they continue Voom in anyway, Voom has shown that it cannot make money, cannot gain any type of Market Share ( subs ), and all it will ever be is a drain on Cablevision assets, CVC stock is up more then $3.00 a share on the news today, what do you think the stock price will be if they announce Voom will continue.
By the way, they have a buyout of $100 million to get out of that buliding sat. deal.
Indy said:
Indy, I think you may be correct here.
Just my speculation here, but I don't think that the Dolans are finished yet with Voom. See the following (maybe canned) response I got from Cablevision on the Voom subject.
=========================================================
Dear ***************
Thank you for your encouraging message. We will do our best to continue Voom as we share your convictions about it.
Charles Dolan
========================================================
Echostar needed a replacement for 61.5. The sat is in not the best condition.
Voom leased space for a epriod of 10 year, i believe, on AMC-6, but single dish to get both satellites is not possible. Channel capacity on AMC-6 is bigger than on 61.5.
Channels will move to AMC-6. Echostar bought Rainbow1 for replacement of existing sat., while generating capital for RDBS. Meanwhile the 5 new sats are being build for RDBS. Sats will become operational and AMC-6 no longer needed.
See, this is just silly, like so many other posts here. It's just all speculation. We don't know and will not know till there is an official announcement from Voom and/or Cablevision. Let's just go on with life, enjoy Voom as long as it is there, when you have planned installation, just go on with it as long as nobody cancels on you. Voom is still there, and enjoy it for now. You have nothing to loose.
I've gotta agree with this last post... Let's not make this a self-fulfilling prophecy. We've seen a lot of speculation on this board that has proven to be incorrect. Just because Voom sold a satellite does not necessarily mean it's the end. What sort of business planning would invest in a new product like the DVR, make a big showing at CES, and then shut its doors a month later.
I'm not saying there's no room for the possibility that Voom is in trouble either. But in the balance, people are asking if they should be canceling their installs. Let's not scare off new customers, and cause the exact lack of subscribers that would cause Voom to be in trouble.
If someone decides to go ahead and get the install, and Voom goes out of business, then hell, maybe it means someone walks away with some relatively cheap antennas, right?
I, for one, am not convinced that Voom is going away just based on the sale of this satellite, and am ready to stick with Voom until I hear some definitive announcement from the company. I hope others who are considering Voom will accept this banter for what it is - speculation - and don't let it have more impact on your decision than it deserves...
I'm not saying there's no room for the possibility that Voom is in trouble either. But in the balance, people are asking if they should be canceling their installs. Let's not scare off new customers, and cause the exact lack of subscribers that would cause Voom to be in trouble.
If someone decides to go ahead and get the install, and Voom goes out of business, then hell, maybe it means someone walks away with some relatively cheap antennas, right?
I, for one, am not convinced that Voom is going away just based on the sale of this satellite, and am ready to stick with Voom until I hear some definitive announcement from the company. I hope others who are considering Voom will accept this banter for what it is - speculation - and don't let it have more impact on your decision than it deserves...
So, some of you are saying that Dish is buying Voom to continue the VOOM service? I really think that after everything is dotted and the transaction is complete....Voom will go dark. Voom has to contractually complete their service agreement until the sale is complete. Dish bought VOOM for what the sat's are going to do for them in the long run. It will enable Dish to better compete with Directv. Dish really hit a home run with this purchase.
Yo! Wake Up! Voom Is Dead!
So what! You got an email. I beleive people got an memo stating that Voom was alive and kicking and that the Dolans might buy it. BY THE END OF THE DAY, VOOM WAS GONE!
Voom, as a satelite service is dead. The channels may end up somewhere else, but they will not be being beamed into that stb that you have now. Echostar has NO INTEREST in keeping it going as a separate servive.
I'm not trying to be harsh, but that is the reality of the situation. Once the "transition period" is over, VOOM WILL HAVE NO WAY TO BROADCAST TO YOU.
So what! You got an email. I beleive people got an memo stating that Voom was alive and kicking and that the Dolans might buy it. BY THE END OF THE DAY, VOOM WAS GONE!
Voom, as a satelite service is dead. The channels may end up somewhere else, but they will not be being beamed into that stb that you have now. Echostar has NO INTEREST in keeping it going as a separate servive.
I'm not trying to be harsh, but that is the reality of the situation. Once the "transition period" is over, VOOM WILL HAVE NO WAY TO BROADCAST TO YOU.
Can Dish use both satellites at the same time (the 2 61.5 locations that they now have)? What I mean is, can my box be recieving signals from both of those satellites at the same time?
If they can - a prediction:
They use the new satellite to expand their signal capacity, then switch completely to rainbow 1 when the switch to mpeg 4 is complete.
If they can - a prediction:
They use the new satellite to expand their signal capacity, then switch completely to rainbow 1 when the switch to mpeg 4 is complete.
FrankJo said:
You didn't get what I said, neither did Vinny. I don't care about the email.
The facts are simple: Rainbow1 sold to Echostar. New uplink center being sold to Echostar. Echostar did NOT buy RDBS, it bought the satellite and uplink center. RDBS still broadcasting signal. RDBS has still a 10 year lease on AMC-6 to be utilized. RDBS has ordered 5 satellites, didn't get cancelled. All other is speculation. Nothing less, nothing more. Even the shut down as you state is speculation, because AMC-6 can be used...
these are just real facts. We just don't know till Cablevision and/or Voom will give an official statement.
The dish would be fine, but we would need a new LNBF (low noise block/feedhorn): Rainbow 1 uses circular polarity, and AMC-6 uses linear (horizontal and vertical) polarity.
-Dan
-Dan
