Cablevision Selling Voom Assets to Dolan

Feb 10, 2005  •  Post A Comment

Cablevision Systems Corp. said Thursday it has reached an agreement with a group of shareholders that includes Chairman Charles Dolan, to create a private company that will acquire the remaining assets of Cablevision’s failed satellite business Voom, including 21 high-definition channels that were at the heart of the service.

The sale, whose financial terms were not disclosed, comes three weeks after Cablevision sold the Voom satellite itself and its attendant ground operations to EchoStar Communications for $200 million.

As part of the deal, the newly created company, called Voom HD LLC, will acquire the satellite business and its assets and liabilities from Cablevision. That includes the 21 Voom-owned high-definition networks, various licenses, a satellite lease and all existing customer relationships.

Owners of the new company are described by Cablevision as certain Cablevision Class B stock holders, including Mr. Dolan and his son Thomas Dolan, who had been named CEO of the satellite business. Most of Cablevision’s Class B shares are held by members of the Dolan family.

In exchange, Voom HD will assume and indemnify Cablevision against nearly all of the liabilities the satellite business incurred, enabling Cablevision to avoid shutdown costs and other liabilities associated with shutting down the service.

Voom, which has struggled since its October 2003 launch and had only 26,000 subscribers when it was shut down, eventually became a major bone of contention at Cablevision, pitting Charles Dolan, who wanted to keep pumping money into the venture, against one of his sons, Cablevision CEO James Dolan, who wanted to dump the service. The battle led to a showdown during a January board meeting that some observers say has created a rift in the family.