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Cablevision Abandons Voom Spinoff Plans

Dec 21, 2004  •  Post A Comment

Cablevision Systems Corp. said Tuesday it is abandoning its plans to spin off its struggling satellite business, opting instead to explore what it described as strategic alternatives for the unit.

The move comes just weeks after Cablevision said it would not complete its planned spinoff by the end of year. The company, which made the announcement in a Securities and Exchange Commission filing Tuesday, provided no details about its new strategy.

Cablevision has been awaiting approval from the Securities and Exchange Commission for the split, which was first announced in October 2003 and would combine the Voom satellite service and Cablevision’s three national cable networks — AMC, WE: Women’s Entertainment and IFC — into a separately traded company.

Cablevision’s decision to suspend the split was greeted as welcome news by Wall Street analysts. Most have seen the Voom service as a money loser that would have great difficulty competing against more established satellite operators DirecTV Group and EchoStar Communications.

With Cablevision scuttling its plans to split the channels and satellite service, analysts believe it is likely the Voom service will be sold. EchoStar, which needs more satellite capacity, particularly in the high-definition realm, is viewed as a likely buyer.

Voom, which Cablevision has touted as the country’s only high-definition satellite service, has struggled since its launch in late 2003. The service had around 24,000 subscribers as of the third quarter, adding just 1,000 net new subscribers since the second quarter.