Voomless Cablevision May Go Private

The Dolan family has disclosed it wants to make Cablevision Systems a privately held company and create a separate public company for its entertainment assets (most of which being HD-worthy products or venues), including the New York Knicks (NBA) and Rangers (NHL), Madison Square Garden, Radio City Music Hall and the AMC channel on cable.

The plan the family presented to its board this week to go private follows a very public display of familial quarreling over what do with Cablevision's chancy--and ultimately costly--venture into satellite premium channels. Voom included several unique HD channels.

In a June 19 letter to Cablevision's board, Charles Dolan, the company's chairman, and James Dolan, his son and the CEO, said it was necessary to remove the company from public market scrutiny to "meet the challenges of new technologies and competitors." Both executives were at odds over Voom, and at one point the elder Dolan reconfigured his board to better suit his pro-Voom sentiments (a regrouping that bought him more time, but little else, as far as Voom's eventual demise).

Cablevision's stock climbed 19 percent on June 20 to $32 a share, the first business day after the announcement of the cable firm's intentions. The nearly $8 billion deal would give Cablevision stockholders $21 in cash per share, plus shares in the new company, Rainbow Media Holdings, according to the AP. Also, Rainbow would include Cablevision's regional sports networks and Clearview Cinemas.

The Dolan family estimates the spin-off of Rainbow would be worth $12.50 per share, giving Cablevision shareholders a combined $33.50 for each Cablevision share. Charles Dolan would be chairman of the private cable company and chief executive would be current Cablevision COO Thomas Rutledge. James Dolan would be chairman/CEO of Rainbow.

Cablevision, the sixth largest cable firm in the United States with about 3 million subs in the New York City metro, recently succeeded in a battle to block plans for a new multi-billion dollar stadium on Manhattan's West Side that was to be the cornerstone in vying for a future summer Olympics. The new sports complex was widely seen as a competitor to Cablevision's Madison Square Garden.

Exactly how such a restructuring of the company's entities might have on its future HD product--regardless of transmission technology--is not yet known. Two smaller cable firms, Cox and Insight, already have gone private.