Voom Goes Ka-Boom

As Michael Fremer discussed in his February 2005 column, Cablevision recently agreed to sell the primary assets of its Voom HD satellite service—including the satellite itself and FCC licenses to operate DBS services on 11 frequencies from the satellite's orbital location as well as ground facilities in South Dakota—to EchoStar, the company behind competitor Dish Network, for $200 million in cash. Apparently, Cablevision founder and chairman Charles Dolan opposed the sale, while his son James, CEO of the company, supported it. The elder Dolan and another son, Tom, then signed a letter of intent to purchase the remaining Voom assets from Cablevision.

What they intended to do with those assets, especially without the satellite and operating licenses, is anyone's guess. Now we'll never know; the sale fell through when the February 28 deadline passed without consummation. As a result, Cablevision announced today that they will shut down Voom altogether, providing current customers with continuing service for at least 30 days during what the company is calling a "transition period." The real question is, transition to what? Cablevision did not immediately return phone calls seeking additional comments.

Speaking of current customers, Cablevision disclosed in its most recent regulatory filing that the Voom service had only 26,000 subscribers, compared with over 13.9 million for DirecTV and 11 million for Dish Network. In terms of money, Voom posted an operating loss of $661.4 million on revenues of $14.9 million for all of 2004, including $354.9 million in write-downs. In early trading today, Cablevision shares fell $1.04, or 3.3 percent, to $30.02.

Click here for the next chapter in this saga.