Dolan: Cablevision has no plans to sell cable TV assets
Copyright 2003 Newsday, Inc.
Newsday (New York)
October 31, 2003 Friday ALL EDITIONS
The plan to split Cablevision Systems Corp. in two is not a prelude to selling off its 3 million-subscriber cable-television service, chairman Charles Dolan said yesterday.
"That certainly wasn't the idea," Dolan said in reaction to Wall Street speculation that the plan to split off a satellite venture would make it easier for a company like Time Warner to acquire the remaining cable assets.
The timing of the spinoff is in question because of ongoing federal investigations into possible accounting irregularities at two of the three channels that would be part of the new company — AMC and WE: Women's Entertainment. The third is Independent Film Channel.
"I don't think the signoffs that are needed for the spinoff can be secured until that is cleared up," Dolan told reporters at the satellite TV industry's SkyForum conference in Manhattan. The company says the spinoff will take place as early as possible next year.
Dolan said he will leave the board of directors of Bethpage-based Cablevision, which he founded 30 years ago, as well as switch from being chairman of Cablevision to being chairman of the new Jericho-based company. That is necessary to win tax-free status for the spinoff and avoid potential conflicts of interest.
Under the current plan, stockholders would receive one share of stock in the new company for each share they own in Cablevision, said Dolan, 77, who controls a majority of Cablevision shares and who plans to keep stakes in both companies.
Dolan said he does not think the decision of Steven Rattner's Quadrangle Capital Partners to cash out the $75 million investment in Cablevision it announced a year ago is a sign Rattner has lost faith in the company or doesn't approve of the satellite venture. "Steven continues on the board," Dolan said. "He wouldn't continue on the board if he didn't have faith in the company." Rattner did not return a phone call seeking comment.
Several Wall Street analysts have criticized the spinoff plan, saying the satellite venture could drain cash flow from the three channels being contributed, whose combined value is estimated up to $3 billion.
Dolan told reporters later he is gratified by the partial rebound of Cablevision's stock price after it dropped 9 percent last Friday following the announcement of the plan. The stock ended yesterday at $19.83 per share, up 10 cents for the day and down 81 cents, or 4 percent, since the announcement.
Dolan also confirmed Cablevision had held discussions about the possible sale of its stakes in various Fox regional sports networks. Comcast Corp., the nation's biggest cable operator, has reportedly negotiated to buy the stakes in Fox Sports Net in Chicago and at least one other market.
Meanwhile, Cablevision announced its Optimum Online Internet service has topped 1 million customers, a landmark Dolan said the company's staff celebrated on Wednesday night.