The WSJ (sub required) has an interesting piece of the pending board meeting of Cablevision and the future status of Voom. While Voom is the clear leader in HD content, it has yet to attract enough customers to make it a viable business risk for the Cablevision parent. It’s actually pretty amazing they still only have 26,000 customers.
Charles Dolan, founder and chairman of Cablevision, wants the company to keep funding Voom, which launched service about a year ago but had only 26,000 subscribers at the end of the third quarter. Other board members, including James Dolan, Cablevision’s chief executive and Charles Dolan’s son, favor shutting it down or selling it at a discount if necessary.
A majority of the 14-member board sides with James Dolan, according to people familiar with the matter. “There is a significant disagreement between Chuck and everybody else over the Voom project,” one person said.
The dispute could lead to a shakeup of board members, according to people familiar with the matter. The Dolan family through its voting stock appoints eight of the directors. Among the eight seats the family controls are several members of the Dolan family, including both Charles and James Dolan. It is unclear whether Charles Dolan controls enough of the family interest to remove directors who oppose him. However, as the founder and family patriarch, Charles Dolan likely has the influence to have his way. His son, James Dolan, likely has less influence than his father over the rest of the family.
Cablevision chief operating officer Thomas Rutledge and Victor Oristano, a member of the board, declined to comment. Charles and James Dolan couldn’t be reached. People familiar with the matter said it was uncertain whether today’s board meeting will lead to any decisions or public announcements. “This is a very fluid situation,” one person added.
The battle represents one of the most dramatic disputes to surface within the Dolan family, which has built Cablevision into the country’s sixth-largest cable operator with about three million subscribers in the New York City region. But public spats aren’t unusual for the Dolans. Currently, James Dolan is engaged in a high profile fight against New York Mayor Michael Bloomberg over whether the city should help build a new stadium on Manhattan’s West Side. James Dolan argues, among other things, that a new stadium would hurt Madison Square Garden, another Cablevision property.
The satellite business has long been a dream of Charles Dolan, one of the pioneers of the cable industry who founded, among other things, Home Box Office. He has long believed that satellite is a more efficient means of delivering television than cable systems. Charles Dolan also believes a satellite business would give Cablevision a way of selling the cable networks it owns, like AMC and Independent Film Channel, directly to households without having to go through the middlemen of other cable or satellite companies. [WSJ]