Sean - you might want to hold onto that DirectTV equipment, just in case:
By PETER GRANT Staff Reporter of THE WALL STREET JOURNAL
January 19, 2005; Page B3
The board of Cablevision Systems Corp. reiterated its determination to shut down or sell its unprofitable satellite service over the protests of Cablevision Chairman and Founder Charles Dolan, who wants to keep it going, people familiar with the matter said.
At a three-hour meeting via phone, the board asked Cablevision's management to give it a plan for cutting back funding of the service, known as Voom, which launched about a year ago.
The board also asked for a status report on efforts to sell the business. The company has funded the service, which lost $75.3 million in the third quarter of last year, only until the end of the month, people said.
A Cablevision spokesman declined to comment.
The satellite service has created an unusual public rift between Mr. Dolan and his son James Dolan, Cablevision's chief executive. James Dolan sides with the majority of directors who voted last month in favor of shutting Voom down or selling it.
Charles Dolan has indicated that he might try to unseat some of the directors who oppose him. He would likely be able to do this because the Dolan family elects 75% of the directors through a separate class of stock that it owns. Charles Dolan is believed to control the family stake through his own shares and his influence with other family members.
Charles Dolan didn't mention the threat to replace board members at yesterday's meeting, people familiar with the matter said. But he continued to argue that Cablevision should continue funding Voom, they added.
Most investors and analysts favor pulling the plug on Voom, which has cost Cablevision over $500 million and would likely run at a deficit for years. In 4 p.m. composite trading on the New York Stock Exchange, the stock was trading down 38 cents, or 1.6%, at $23.97.
"The uncertainty will persist until they can figure out a structure to get rid of Voom," says Aryeh Bourkoff, a cable analyst with UBS Securities who downgraded Cablevision on the news of the board rift.
Its not over yet, but its not looking good for Voom. Most likely it will be shut down and Dish will buy the satellite for cheap.