Elder Dolan Commits Own Stock Funds to Keep Voom HD Alive
March 16, 2005
Voom lives! At least for now. As more details come into focus over exactly what's going on at Cablevision Systems and its HD money-sucking machine called Voom that it was trying to rid itself of a couple of weeks ago, company Chairman Charles Dolan will stake about $10 million of his own money (which he'll raise by selling off some of his own high-grade company stock) and will attempt to map out a long-term fiscal strategy (HD Notebook, March 9).
The relative calm in the corporate storm comes following a bizarre series of events which is pitting Dolan against his son, Cablevision CEO James Dolan, that very quickly resulted in the elder Dolan successfully replacing enough key members of the Cablevision board to buy him some valuable time to purchase Voom as a separate entity. Several of the details in the arrangement were disclosed in a filing to the Securities and Exchange Commission and reported in detail by several publications, including the Wall Street Journal.
According to analyst Richard Greenfield of Fulcrum Global Partners, the need for the elder Dolan to put up his own funds to keep the HD satellite enterprise going is a positive sign (for stockholders, at least) that even the newly sympathetic board will not give its chairman a free hand to try to reverse Voom's fortunes. Voom's premium service currently includes 35 HD channels.
Published reports speculated that the elder Dolan may receive some financial backing from media billionaire John Malone, who happens to be one of the four new Cablevision board members recently hand-picked by the elder Dolan. However, Malone nixed that notion this week when he said he would not invest his own money in the Voom venture, nor advise others to do so, according to the New York Post.
Last year, Voom reportedly lost more than $660 million. Current Voom subscribers have been promised that their service will continue for now, and the Voom Web site is now back in business, taking orders for new subscriptions and offering a variety of pricing packages. Stay tuned.