Sunday, June 19, 2005

Dolan Family Bids $7.1 Billion to Privatize Cablevision

New York's Dolan Family Group launched a $7.9 billion bid to acquire the cable and telecommunications businesses of Cablevision Systems Corporation. Under the proposal, Rainbow Media Holdings would also be spun off to all Cablevision shareholders on a pro rata basis. The spin-off will include the national cable networks (AMC, IFC, WE), fuse, regional sports networks, Madison Square Garden, the New York Knicks, the New York Rangers, Radio City Music Hall, News 12 and Clearview Cinemas.

The Dolan family currently owns approximately 20% of the common stock (representing approximately 71% of the voting power) of Cablevision Systems Corporation. After the completion of the transactions, the Dolan Family Group would own 100% of the Cablevision telecom and cable businesses and approximately 20% of Rainbow. Charles Dolan would continue to serve as the Chairman of Cablevision. His son, James Dolan, would be the CEO and Chairman of Rainbow and a director of Cablevision, and Tom Rutledge would be the CEO of Cablevision.

In a statement, Charles and James Dolan said "With new technologies and aggressive competitors redefining content delivery, the cable and telecommunications businesses have truly entered a new and challenging era. We strongly believe that a long-term, entrepreneurial management perspective - not constrained by the public markets' tendency to focus on short-term results - will better enable the cable company to meet its competitive challenges. We are prepared to shoulder the risks of full ownership and are confident the company will achieve success.

  • Earlier this year, Cablevision Systems said it was adding more than 1,000 new cable VoIP users per day in its New York metropolitan market. Cablevision's Optimum Voice digital voice- over-cable (VoIP) service surpassed the 250,000-customer milestone at yearend 2004.

  • Earlier this month, the New York Public Service Commission rejected a petition from Cablevision and the Cable Telecommunications Association of New York that sought to stop Verizon's FTTP rollout until it obtained local franchise agreements for offering cable-TV services.

See also