The chairman of Cablevision Systems Corp. wants to keep going with the high-definition satellite programming service, Voom, a service that virtually all business analysts have said is a drain on the company's financial resources, not to mention redundant because many other competitors are in the field. Most of all, the problem with Voom is that Cablevision has agreed to the service's satellite and some programming contracts to EchoStar Communications.
But now Dolan has changed his mind - sort of. He wants to keep Voom going by buying up the remaining assets. And they are exactly what? Some low-level programming contracts? Some ground-based operations and overhead?
The satellite business has many competitors - all who have the exclusive rights to high-profile programming Dolan won't get near in the future. Someone should tell Dolan the satellite distribution business has many competitors - unlike the near monopoly the cable industry had for 20 years.
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Dolan replaced some board members to let him keep Voom, and, as analysts have mused, possibly sell Cablevision Systems, which continues to conflict with his son, James Dolan, the company's CEO.
For the last two years, Cablevision has been investigated by the Securities and Exchange Commission for accounting improprieties of its Rainbow Media programming division, which resulted in the departure of some senior executives.
Now, there's more trouble. The SEC opened an informal inquiry into recent trading problems of Cablevision shares since last November.
One current director has already issued a warning that Dolan's actions might be construed to the misleading appearance that Cablevision might be reneging its agreement with EchoStar. That's because Dolan started up a new Voom Web site -- while the original Web site says Voom is to be shut down this month.
Many years ago, Dolan likened cable to a newsstand, where there are many magazines to choose from. In those near monopolistic days - before the advent of satellite -- cable was a smug force that regularly increased cable rates and strong-armed business deals. But Dolan could never answer why there was only one 'newsstand' in which to buy those magazines.
Dolan still thinks he's the only game in town.