All Eyes on Cablevision, VOOM Monday - 3.4.05
(SkyREPORT) This week's roller coaster ride for Cablevision and VOOM will take more twists and turns Monday when the company's board of directors meet concerning the fate of the struggling satellite TV business.
Cablevision Chairman Charles Dolan, who wants to keep VOOM alive and take it over from the cable operator, turned heads this week when he announced new board directors for the company. It's expected that Dolan will address the board about his VOOM wishes on Monday.
Wall Street has taken notice of the behind-the-scenes skirmish. And some suspect the Dolan moves may lead to a Cablevision sale.
"The Alice in Wonderland Dolan family/boardroom struggle at Cablevision must surely rank as one of the most Byzantine in memory. Improbably, it has now taken a turn from the simply strange to the truly bizarre," said Craig Moffett of Bernstein Research. "The decision to replace directors at Cablevision at first blush only muddies the situation further. But we believe the governance battle may be putting the company on an irreversible path toward liquidation, and must in the end be viewed as a positive."
Richard Greenfield of Fulcrum Global Partners said the new board members may be more receptive to Dolan's VOOM acquisition plan. "If this theory proves accurate, we believe the funding Chuck Dolan will need to finance VOOM will result in a sale of Cablevision over the next 12 to 24 months, as a sale to Time Warner or Comcast would provide the most tax-efficient means of raising capital," Greenfield said.
Moffett also eyed the struggle between Chairman Charles Dolan and his son, Cablevision CEO James Dolan. "With relations between Charles Dolan and son James Dolan now appearing irreparable, we believe one possible objective could be the ouster of James as CEO," he said.
Even more details are surfacing concerning Cablevision, its VOOM satellite TV service and attempts by Chairman Charles Dolan to take over the struggling satellite TV service.
A letter sent Thursday to Dolan by Victor Oristano, on behalf of independent directors and class A shareholder directors, detailed how Dolan planned to approach EchoStar to negotiate an arrangement in which the Rainbow-1 satellite supporting VOOM's service could be "brought" together with the VOOM business outside of Cablevision. "For our part, we agreed to support a delay in the shutdown of VOOM for a short period while you engage in those discussions and that if you are able to negotiate such an arrangement with EchoStar on terms satisfactory to us, we would be prepared to renew discussions with you for a sale of the VOOM business," the letter sent to Dolan stated.
It's unclear how Dolan would gain use of the Rainbow 1 satellite, if he could get access to the satellite at all, or even if a deal was actually discussed between the Cablevision chairman and EchoStar.
Cablevision released the contents of the letter through a Securities and Exchange Commission filing. EchoStar has a deal in place with Cablevision to buy the satellite and other assets for $200 million, and Dolan has been working to gain the other VOOM assets through an entity he set up called VOOM HD.
Cablevision suspended plans to shut down VOOM at the end of the month a day after Dolan appointed new Cablevision board members.
The letter also took issue with a new Web site - http://www.voomllc.com - that apparently is helping with the enrollment of new VOOM customers. "These efforts - likely to deceive new subscribers and the public into believing that VOOM is still an authorized going business of Cablevision - are in direct contradiction to the action taken by the board ... because they are an expansion rather than a shutdown of the business," the letter stated.
The Web site was still accessible Thursday night, but contained a message stating its services were temporarily unavailable.
Also, Cablevision revealed Thursday that the Securities and Exchange Commission is conducting an informal inquiry into the trading of its securities, and has requested information concerning the suspension of its Rainbow Media spin-off and agreement to sell certain Rainbow DBS assets to EchoStar.
(SkyREPORT) This week's roller coaster ride for Cablevision and VOOM will take more twists and turns Monday when the company's board of directors meet concerning the fate of the struggling satellite TV business.
Cablevision Chairman Charles Dolan, who wants to keep VOOM alive and take it over from the cable operator, turned heads this week when he announced new board directors for the company. It's expected that Dolan will address the board about his VOOM wishes on Monday.
Wall Street has taken notice of the behind-the-scenes skirmish. And some suspect the Dolan moves may lead to a Cablevision sale.
"The Alice in Wonderland Dolan family/boardroom struggle at Cablevision must surely rank as one of the most Byzantine in memory. Improbably, it has now taken a turn from the simply strange to the truly bizarre," said Craig Moffett of Bernstein Research. "The decision to replace directors at Cablevision at first blush only muddies the situation further. But we believe the governance battle may be putting the company on an irreversible path toward liquidation, and must in the end be viewed as a positive."
Richard Greenfield of Fulcrum Global Partners said the new board members may be more receptive to Dolan's VOOM acquisition plan. "If this theory proves accurate, we believe the funding Chuck Dolan will need to finance VOOM will result in a sale of Cablevision over the next 12 to 24 months, as a sale to Time Warner or Comcast would provide the most tax-efficient means of raising capital," Greenfield said.
Moffett also eyed the struggle between Chairman Charles Dolan and his son, Cablevision CEO James Dolan. "With relations between Charles Dolan and son James Dolan now appearing irreparable, we believe one possible objective could be the ouster of James as CEO," he said.
Even more details are surfacing concerning Cablevision, its VOOM satellite TV service and attempts by Chairman Charles Dolan to take over the struggling satellite TV service.
A letter sent Thursday to Dolan by Victor Oristano, on behalf of independent directors and class A shareholder directors, detailed how Dolan planned to approach EchoStar to negotiate an arrangement in which the Rainbow-1 satellite supporting VOOM's service could be "brought" together with the VOOM business outside of Cablevision. "For our part, we agreed to support a delay in the shutdown of VOOM for a short period while you engage in those discussions and that if you are able to negotiate such an arrangement with EchoStar on terms satisfactory to us, we would be prepared to renew discussions with you for a sale of the VOOM business," the letter sent to Dolan stated.
It's unclear how Dolan would gain use of the Rainbow 1 satellite, if he could get access to the satellite at all, or even if a deal was actually discussed between the Cablevision chairman and EchoStar.
Cablevision released the contents of the letter through a Securities and Exchange Commission filing. EchoStar has a deal in place with Cablevision to buy the satellite and other assets for $200 million, and Dolan has been working to gain the other VOOM assets through an entity he set up called VOOM HD.
Cablevision suspended plans to shut down VOOM at the end of the month a day after Dolan appointed new Cablevision board members.
The letter also took issue with a new Web site - http://www.voomllc.com - that apparently is helping with the enrollment of new VOOM customers. "These efforts - likely to deceive new subscribers and the public into believing that VOOM is still an authorized going business of Cablevision - are in direct contradiction to the action taken by the board ... because they are an expansion rather than a shutdown of the business," the letter stated.
The Web site was still accessible Thursday night, but contained a message stating its services were temporarily unavailable.
Also, Cablevision revealed Thursday that the Securities and Exchange Commission is conducting an informal inquiry into the trading of its securities, and has requested information concerning the suspension of its Rainbow Media spin-off and agreement to sell certain Rainbow DBS assets to EchoStar.
