Headlines Overshadow
Cablevision's Strengths
By JACQUELINE DOHERTY--Wall street journal
February 27, 2005
Headlines about Cablevision's boardroom brawl and its battle to prevent construction of a stadium for the New York Jets football team in Manhattan have overshadowed the value of the company's lucrative cable operations.
While shares have risen from a 52-week low of $16.68 in August to a recent $30, bulls see more upside if investors focus on the quality of Cablevision's assets. Bear Stearns analyst Raymond Katz believes shares could be worth $35 by year end.
Revenue in the fourth quarter rose 11% to $1.36 billion. Still, the company posted a loss of $305.8 million, or $1.06 a share, primarily due to Voom, its money-losing satellite-TV venture. But the company expanded its net number of basic-service subscribers by 10,788, while customers choosing premium video, Internet and Internet-phone services grew by more than 260,000. The result: Revenue per subscriber jumped to $87.17 from $76.69 a year earlier.
The real home run would come if the Bethpage, N.Y., company splits its operations -- which has been speculated about for years. Were the firm sold in separate pieces, shares could be worth $40 or more, says Mario Gabelli, chief executive of Gabelli Asset Management, which owns Cablevision shares.
The Dolan family owns super-voting shares, giving it 76% of the vote and control over the company's fate. Chairman Charles Dolan, 78, directly controls more than 50% of the shareholder vote, according to a Bear Stearns estimate. Cablevision declined to comment. Among its assets is Madison Square Garden, the New York Knicks basketball team and New York Rangers hockey team.
While Cablevision has been battling to prevent construction of the Jets stadium, viewing it as a threat to the Garden, it also has had some internal battles. A few weeks ago, the majority of its board, including son James, voted against Charles Dolan and decided to sell Charles Dolan's pet project, Voom, to EchoStar Communications. The senior Mr. Dolan responded with a surprise bid to buy the remaining Voom assets.
Last week, breakup speculation intensified when Cablevision unwound a partnership with News Corp. that held sports teams, sports cable channels and Madison Square Garden. That further simplified its corporate structure, which would make a sale easier.
Cablevision's Strengths
By JACQUELINE DOHERTY--Wall street journal
February 27, 2005
Headlines about Cablevision's boardroom brawl and its battle to prevent construction of a stadium for the New York Jets football team in Manhattan have overshadowed the value of the company's lucrative cable operations.
While shares have risen from a 52-week low of $16.68 in August to a recent $30, bulls see more upside if investors focus on the quality of Cablevision's assets. Bear Stearns analyst Raymond Katz believes shares could be worth $35 by year end.
Revenue in the fourth quarter rose 11% to $1.36 billion. Still, the company posted a loss of $305.8 million, or $1.06 a share, primarily due to Voom, its money-losing satellite-TV venture. But the company expanded its net number of basic-service subscribers by 10,788, while customers choosing premium video, Internet and Internet-phone services grew by more than 260,000. The result: Revenue per subscriber jumped to $87.17 from $76.69 a year earlier.
The real home run would come if the Bethpage, N.Y., company splits its operations -- which has been speculated about for years. Were the firm sold in separate pieces, shares could be worth $40 or more, says Mario Gabelli, chief executive of Gabelli Asset Management, which owns Cablevision shares.
The Dolan family owns super-voting shares, giving it 76% of the vote and control over the company's fate. Chairman Charles Dolan, 78, directly controls more than 50% of the shareholder vote, according to a Bear Stearns estimate. Cablevision declined to comment. Among its assets is Madison Square Garden, the New York Knicks basketball team and New York Rangers hockey team.
While Cablevision has been battling to prevent construction of the Jets stadium, viewing it as a threat to the Garden, it also has had some internal battles. A few weeks ago, the majority of its board, including son James, voted against Charles Dolan and decided to sell Charles Dolan's pet project, Voom, to EchoStar Communications. The senior Mr. Dolan responded with a surprise bid to buy the remaining Voom assets.
Last week, breakup speculation intensified when Cablevision unwound a partnership with News Corp. that held sports teams, sports cable channels and Madison Square Garden. That further simplified its corporate structure, which would make a sale easier.
