Copyright 2005 N.Y.P. Holdings, Inc.
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The New York Post
June 7, 2005 Tuesday
Cablevision could shell out a whopping $130 million to shut down its money-losing satellite service known as Voom.
In a regulatory filing yesterday, the Long Island cable giant said it will incur between $100 million and $130 million in costs to close down Voom.
The costs are mainly associated with the termination of contracts and employee termination benefits.
However, the company said the steep costs are not expected to "have a material impact on its liquidity position" because the costs will be funded from the $200 million in proceeds Cablevision will gain from the sale of one of its satellites to EchoStar - a deal announced in January.
The Voom service has been at the center of an ongoing feud this year between CEO Jimmy Dolan and his father Chuck Dolan, the founder and chairman of the board.
Voom had been a pet project of the elder Dolan's, and after the board voted to shut the service, a family drama erupted, with Chuck Dolan taking the radical step of reconfiguring the board of directors.
In March Chuck Dolan replaced four members of the board that had opposed Voom, and replaced them with such media industry veterans as Liberty Media chief John Malone and former Viacom honcho Frank Biondi.
Dolan later filed an objection with the Federal Communications Commission asking the government to block the EchoStar deal, but he ultimately retreated from his plans to keep Voom afloat.
Last year Voom lost $661.4 million on revenue of $14.9 million, including $355 million in write-downs.