Cablevision Won’t Comment on Voom Memo

Jan 23, 2005  •  Post A Comment

A Cablevision Systems spokeswoman confirmed last week that the cable operator continues to examine its options for its floundering satellite service Voom. But she refused to comment on an internal Cablevision memo that was briefly posted on a Web site that states the company will sell Voom and that some members of the controlling Dolan family are possible buyers.

The document, which reportedly was written to Rainbow Media Enterprises employees by Cablevision Chairman Charles Dolan and his son, Rainbow CEO Thomas Dolan, indicated that the Cablevision board met last Tuesday and in a split vote agreed to sell the satellite operation. The memo went on to say potential bidders include members of the Dolan family.

The memo was posted last week on the Web site SatelliteGuys.us, but was taken down at the request of Voom officials. Scott Greczkowski, owner of SatelliteGuys.us, said Voom officials explained to him that the memo was not intended for public eyes.

The fate of Voom has been a big issue since Cablevision late last year said in a filing that it was shelving its plan to spin off the satellite business into a separate company. Since then, speculation has abounded that Cablevision would sell the cash-draining operation.

Whether the service has any takers remains another story. Some analysts have said there will likely be little interest in Voom unless the price is cheap. EchoStar Communications has often been mentioned as a potential buyer, but Wall Street observers say EchoStar is in a strong position and could choose to walk away from a possible Voom deal.

Launched in October 2003, Voom’s major selling point was that it had the highest concentration of high-definition channels of any satellite operator. However, the service has had trouble getting off the ground. Despite having spent $500 million to $750 million on the service so far, Voom has attracted only 26,000 subscribers as of the end of the third quarter of 2004, and suffers from a high rate of subscriber abandonment, or churn.