Dolans to Buy Voom Assets2/10/2005 10:34 AM Eastern
Voom apparently may not die after Cablevision Systems Corp. closes a deal to sell some of its Rainbow DBS assets to EchoStar Communications Corp.
Cablevision announced late Thursday that chairman Chuck Dolan, his son Tom and some unnamed holders of Cablevision class-B stock will acquire the remaining Voom programming and spectrum assets and continue operating the service.
Cablevision and the Dolans didn’t disclose a price for the deal. Cablevision said the agreement would allow it to avoid “various shutdown costs and other liabilities of the Voom service” that it would have incurred if it had followed through on the original plan to shut down Voom. That’s because Voom HD LLC, a new private company formed by the Dolans, will indemnify Cablevision of “ substantially all of the liabilities of the Rainbow DBS satellite business,” according to the MSO.
“We’re pleased to have an understanding that will permit us to continue Voom’s state-of-the-art service for its customers,” Tom Dolan said in a prepared statement.
Chuck Dolan -- who reportedly butted heads with his son, Cablevision CEO Jim Dolan, over whether to shut down Voom -- didn’t offer a comment in the announcement of the agreement.
Cablevision said Voom HD is still trying to line up financing for the deal, and the agreement must be finalized by Feb. 28.
Last month, Cablevision announced a $200 million deal to sell some core Rainbow assets to EchoStar, including the Rainbow 1 satellite, as well as Federal Communications Commission licenses to construct, launch and operate DBS services over 11 frequency channels.
But EchoStar didn’t agree to buy the Voom customer base, last reported at 26,000, nor did the company agree to buy Voom’s original-programming assets.
Under the terms of the new Voom deal, the Dolans would acquire the 21 Voom original HD channels; various Ka-band, Ku-band and wireless licenses; an SES Americom Inc. lease for the Rainbow 2 satellite; and existing subscriber contracts.