Cablevision: Voom Shutdown Less Costly
By Mike Farrell -- Multichannel News, 6/6/2005 12:38:00 PM
Cablevision Systems Corp. said in a securities filing Monday that it believes the shutdown costs for its Rainbow DBS direct-broadcast satellite service will be lower than first expected.
In a filing with the Securities and Exchange Commission, Cablevision said the shutdown of Rainbow DBS -- which sold service under the Voom brand name -- will cost $100 million-$130 million. That is substantially lower than the $115 million-$155 million Cablevision estimated in May.
Neither total includes about $45.8 million in liabilities already on Rainbow DBS’ balance sheet.
Cablevision shut down Voom -- which provided 21 original HD channels -- April 30, but the company agreed to explore making the channels available to other distributors. The service had been the source of much contention between Cablevision chairman Charles Dolan, who wanted to keep it up and running, and his son, CEO James Dolan, who did not, over the better part of the year.
In January, Rainbow DBS agreed to sell its Rainbow 1 satellite to EchoStar Communications Corp. for about $200 million in cash.EchoStar agreed in May to provide 10 Voom HD channels to its subscribers, with the other 11 becoming available by 2006.
Also in Monday’s filing, Cablevision said Voom’s contract with Lockheed Martin Commercial Space Systems to construct satellites has been suspended. Rainbow DBS has until Nov. 21 to decide whether it wants to restart the deal or terminate it.
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