Where's VOOM in all of this?

Sean Mota

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Supporting Founder
Sep 8, 2003
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I think this post was lost so I am reposting

Cable Firms Looking To Buy Or Be Bought

Cablevision has about 3 million customers in New York City, Long Island and Connecticut. The No. 6 cable firm launched a satellite TV service called Voom late last year.

Cablevision has told shareholders it plans to spin off the satellite service as a separate company.

"With the split up of Cablevision, Time Warner is the most likely buyer of the cable systems company," said Act II's Leibowitz, who's a former analyst for Donaldson, Lufkin & Jenrette and Credit Suisse First Boston. Time Warner has geography and entertainment interests in common with Cablevision.

Before any satellite spinoff can happen, the Securities and Exchange Commission must complete a probe into expense accounting at Cablevision's cable channels. The Voom service might need Cablevision's support until it garners enough subscribers to attract advertisers. So says Jimmy Schaeffler, analyst at consulting firm Carmel Group.

He estimates that Voom has only 10,000 to 20,000 customers.

"(Cablevision) can afford to carry (Voom) for a long time, even with the pressure from Wall Street and the board," he said.

Leibowitz, though, says Cablevision's shareholders might balk at rising costs and force a spinoff soon. That would be good news for Time Warner.

He also says Dolan plans to package three cable networks — American Movie Channel, WE and the Independent Film Channel — with the satellite service when it's spun off. That will make it easier for the satellite service to raise money, he says.

CABLEVISION AXES 80 AT MSG

Officials at Madison Square Garden said the layoffs, which will come mostly in administrative and corporate areas, represent about 3.5 percent of the arena's workforce.

It's part of a series of cutbacks by Cablevision, which is struggling to keep investors happy.

Last month, Cablevision fired about 71 employees at its Lightpath division, which provides telephone and Web access to businesses. The layoffs were the largest since Cablevision eliminated 3,000 positions in 2002.

Charles Dolan, Cablevision's mercurial chairman, has frustrated investors with his sometimes evangelical pursuit of new businesses.

He launched a high-definition satellite television service called Voom in the fall, which the company plans to spin off later this year.

Meanwhile, Cablevision's sports teams are in danger of losing more fans. The Rangers are in second-to-last place in their division, and the New York Knicks could face more competition from a Brooklyn-based Nets team.

There's also been speculation that Cablevision could be a buyout target, or at least a possible merger partner with Time Warner's cable division.

The Garden layoffs had been considered for some time, after McKinsey & Co., a management consulting firm, conducted a workplace study last year.

Barry Watkins, a spokesman for the Garden, said the arena does not expect the layoffs to affect customer service.

Perhaps heartened by Cablevision's moves, investors bumped up the company's stock price by about 30 percent in the past two months. It closed up 25 cents at $25.13.
 

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