Post by dkennedy on Mar 8, 2005 7:08:47 GMT -5
For now, no Voom to grow
Board of directors fails to decide the fate of Cablevision's satellite effort, leaving it in a state of limbo
BY HARRY BERKOWITZ
STAFF WRITER
March 8, 2005
A newly reconstituted Cablevision board of directors failed yesterday to decide anything it could announce about the fate of the Voom satellite TV service, leaving the strife-torn company in limbo.
The meeting in Palm Beach County, Fla., was the first to be held since chairman Charles Dolan last week ousted three directors who were among the majority that voted a week ago to shut Voom. Dolan also handpicked four new directors who presumably would be more amenable to his plan to resuscitate the ailing venture and take it off Cablevision's hands.
Wall Street analysts said the outcome indicated Dolan may not have solidified the plan enough to warrant a formal extension for Voom, especially because directors on the 14-member board are wary of potential lawsuits holding them responsible for faulty decisions. One such suit was filed yesterday by a shareholder seeking to undo the board shakeup.
"By announcing nothing, they are de facto letting Voom run a little longer," said Sanford C. Bernstein analyst Craig Moffett. "Anything other than a very short extension would open directors to a lawsuit."
Yesterday's board meeting left many unanswered questions about the fate of Voom, the Dolans and the company, including whether Dolan would sell Cablevision or part of it to raise money to keep Voom going, or who ultimately will lead either company.
Dolan has been trying to alter the deal his chief executive son James Dolan, who wanted Voom shut, made in January to sell its sole satellite to EchoStar Communications for $200 million. Charles Dolan apparently must alter that deal to rescue Voom, but six independent directors warned him in a letter last week not to do it in a way that harms Cablevision.
Satellite Business News, a trade publication, reported yesterday Dolan had not reached a deal with EchoStar chairman Charlie Ergen and would continue to meet with him.
In the lawsuit filed yesterday in Delaware Chancery Court, Cablevision shareholder Eleanor Leonard, an interior designer who lives in Manhattan and Amagansett, said, "The board is in turmoil as a result of Dolan's high-handed interference with the directors' managerial prerogatives. Dolan has threatened to remove any director who challenges him, and he has made clear that he intends to pack the board with individuals aligned with him."
Cablevision would not even comment yesterday on whether the directors had approved expanding the board so Dolan could add his son-in-law, Brian Sweeney, as a fifth new director, which might give Dolan a majority of eight, including sons Tom and Patrick.
Kim Kerns, a Cablevision spokeswoman, would go no further than to confirm that the meeting, held in Manalapan, Fla., had concluded and nothing was being announced. Some key unanswered questions are how Dolan thinks he could turn around Voom's huge losses, which totaled $660 million last year, or how he plans to raise hundreds of millions of dollars to keep it going.
Analysts say Cablevision could not continue to own Voom, given previous decisions by the old board to shut it and sell its satellite.
Cablevision also could not spin off Voom as a public company, an option abandoned last year after the Securities & Exchange Commission would not give its blessing.
That leaves the alternative of Dolan, and son Tom, the Voom chief executive, taking Jericho-based Voom off Cablevision's hands as a private company.
Charles Dolan's hits and misses
HITS:
Formed Sterling Manhattan Cable, which won the cable franchise for Lower Manhattan in 1965
Founded Home Box Office in 1971 and sold it to Time-Life two years later
Launched News 12, the nation's first local 24-hour cable news operation, in 1986
Partnered with NBC in 1988 to create CNBC
Gained full ownership of Madison Square Garden in 1997
MISSES:
Bought The Wiz electronics stores in 1998. Poured over $500 million into the chain until shutting it down in 2003
Bought Clearview Cinemas in 1998, then unsuccessfully attempted to sell it in 2002; the chain barely breaks even.
Copyright © 2005, Newsday, Inc.
Board of directors fails to decide the fate of Cablevision's satellite effort, leaving it in a state of limbo
BY HARRY BERKOWITZ
STAFF WRITER
March 8, 2005
A newly reconstituted Cablevision board of directors failed yesterday to decide anything it could announce about the fate of the Voom satellite TV service, leaving the strife-torn company in limbo.
The meeting in Palm Beach County, Fla., was the first to be held since chairman Charles Dolan last week ousted three directors who were among the majority that voted a week ago to shut Voom. Dolan also handpicked four new directors who presumably would be more amenable to his plan to resuscitate the ailing venture and take it off Cablevision's hands.
Wall Street analysts said the outcome indicated Dolan may not have solidified the plan enough to warrant a formal extension for Voom, especially because directors on the 14-member board are wary of potential lawsuits holding them responsible for faulty decisions. One such suit was filed yesterday by a shareholder seeking to undo the board shakeup.
"By announcing nothing, they are de facto letting Voom run a little longer," said Sanford C. Bernstein analyst Craig Moffett. "Anything other than a very short extension would open directors to a lawsuit."
Yesterday's board meeting left many unanswered questions about the fate of Voom, the Dolans and the company, including whether Dolan would sell Cablevision or part of it to raise money to keep Voom going, or who ultimately will lead either company.
Dolan has been trying to alter the deal his chief executive son James Dolan, who wanted Voom shut, made in January to sell its sole satellite to EchoStar Communications for $200 million. Charles Dolan apparently must alter that deal to rescue Voom, but six independent directors warned him in a letter last week not to do it in a way that harms Cablevision.
Satellite Business News, a trade publication, reported yesterday Dolan had not reached a deal with EchoStar chairman Charlie Ergen and would continue to meet with him.
In the lawsuit filed yesterday in Delaware Chancery Court, Cablevision shareholder Eleanor Leonard, an interior designer who lives in Manhattan and Amagansett, said, "The board is in turmoil as a result of Dolan's high-handed interference with the directors' managerial prerogatives. Dolan has threatened to remove any director who challenges him, and he has made clear that he intends to pack the board with individuals aligned with him."
Cablevision would not even comment yesterday on whether the directors had approved expanding the board so Dolan could add his son-in-law, Brian Sweeney, as a fifth new director, which might give Dolan a majority of eight, including sons Tom and Patrick.
Kim Kerns, a Cablevision spokeswoman, would go no further than to confirm that the meeting, held in Manalapan, Fla., had concluded and nothing was being announced. Some key unanswered questions are how Dolan thinks he could turn around Voom's huge losses, which totaled $660 million last year, or how he plans to raise hundreds of millions of dollars to keep it going.
Analysts say Cablevision could not continue to own Voom, given previous decisions by the old board to shut it and sell its satellite.
Cablevision also could not spin off Voom as a public company, an option abandoned last year after the Securities & Exchange Commission would not give its blessing.
That leaves the alternative of Dolan, and son Tom, the Voom chief executive, taking Jericho-based Voom off Cablevision's hands as a private company.
Charles Dolan's hits and misses
HITS:
Formed Sterling Manhattan Cable, which won the cable franchise for Lower Manhattan in 1965
Founded Home Box Office in 1971 and sold it to Time-Life two years later
Launched News 12, the nation's first local 24-hour cable news operation, in 1986
Partnered with NBC in 1988 to create CNBC
Gained full ownership of Madison Square Garden in 1997
MISSES:
Bought The Wiz electronics stores in 1998. Poured over $500 million into the chain until shutting it down in 2003
Bought Clearview Cinemas in 1998, then unsuccessfully attempted to sell it in 2002; the chain barely breaks even.
Copyright © 2005, Newsday, Inc.