New effort to save Voom
Charles Dolan moves to shrink Cablevision's board and oust 3 more who ordered him to shut satellite service
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.
Charles Dolan moves to shrink Cablevision's board and oust 3 more who ordered him to shut satellite service
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.
