Voom Soap Opera

Earlier this week, it looked like the Voom HD satellite service was dead, but it now seems that reports of its demise were at least slightly exaggerated. On Tuesday, we reported that Cablevision, Voom's parent company, decided to pull the plug after founder Charles Dolan failed to meet a February 28 deadline for purchasing Voom's remaining assets. (The Voom satellite and FCC licenses to operate at its orbital location are being purchased by rival EchoStar, subject to regulatory approval.)

Since then, Dolan has been a busy fellow. On Wednesday, as controlling shareholder of Cablevision, he removed three board members—Sheila Mahony, William Bell, and Steven Rattner—and replaced them with friends from the industry. He also filled a vacancy left by the recent death of Cablevision co-founder John Tatta. The four new directors are John Malone, chairman of Liberty Media Corp.; Leonard Tow, founder of Century Communications; Frank Bondi, former CEO of Viacom, Inc.; and Rand Araskog, former head of ITT Corp. It should be noted that, in the mid-1990s, Viacom sold Madison Square Garden, the New York Knicks basketball team, and the New York Rangers hockey team to Cablevision and its partner at the time, which was—wait for it—ITT under Araskog.

Then, on Thursday, the new board extended the deadline for Dolan to buy Voom's remaining assets to March 7. Apparently, Dolan even used Cablevision funds to put up a new Web site, voomllc.com, to continue soliciting new subscribers, but as of this writing, the only thing on the cite was a statement saying, "This site is temporarily unavailable. Please check back at a later time." Meanwhile, the original Voom site says, "Voom has ceased taking new customer orders and will shut down by the end of March."

Many analysts believe that Dolan will have to sell Cablevision to raise enough cash to buy what's left of Voom. That is probably one reason why his son, Cablevision CEO James Dolan, opposes the Voom sale: if the elder Dolan sells Cablevision, the younger Dolan will likely be out of a job. Other concerns include scrutiny from the Securities and Exchange Commission, which will probably take a dim view of Dolan's machinations, seeing as how they cast him in the roles of both buyer and seller. The SEC is also looking into recent trading of Cablevision shares dating back to November. As of Thursday, Cablevision stock tumbled by $1.59, or 5.3%, to $28.65 on the New York Stock Exchange.

Some reactions from various corners of the financial world were amusing. In a recent research report, analyst Craig Moffett wrote, "The 'Alice in Wonderland' Dolan family boardroom struggle at Cablevision must surely rank as one of the most Byzantine in memory." According to Columbia University law professor John Coffee, "This isn't corporate governance—it's King Lear. He just wanted to reestablish control of his own house." What will happen next? Stay tuned…

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