Gabelli Solicits Potential Cablevision Board Members9/26/2008 8:00 PM Eastern
Gamco Investors, the Rye, N.Y.-based mutual fund headed by activist investor Mario Gabelli, has increased its position in Cablevision Systems and is soliciting other shareholders to put together a possible slate for the MSO’s board of directors.
In a Securities and Exchange Commission filing Sept. 25, Gamco revealed that it spent about $14 million to increase its position in Cablevision to 19.7 million shares, or about 8.4% of the operator’s 233.7 million outstanding shares.
Gamco also revealed in the filing that it also is “considering contacting individuals concerning their interest and their qualification to serve on the board of directors of certain public companies, including [Cablevision].”
As a result, Gamco wrote that it may submit recommendations for one or more nominees at Cablevision’s annual meeting. And, the filing continued, if that person or persons are selected, Gamco would vote for their election.
In an interview, Gabelli said that the statement in the Cablevision filing is one Gamco has made in Securities & Exchange Commission filings with its other large holdings. “It’s not singling out Cablevision or Telephone & Data Systems, but the ones we’ve circulated are highly on our minds,” Gabelli said.
Gamco, he said, owns stakes of 5% or greater in about 120 companies, including Media General, Telephone & Data Systems and Cablevision. In the past few days it has included the board member solicitation wording in a dozen SEC filings.
“We’re not going to pay a consulting firm to bring us anyone. The whole world is going to be knocking on our door. Let’s see what happens.” Gabelli said.
Gabelli added that he hasn’t spoken to any serious candidates yet.
But his decision seems to be at least in part sparked by the entry of a new investor on the Cablevision scene — Harbinger Capital, which began amassing its 9% Cablevision interest earlier this year and is known as an activist shareholder that pressures companies for board seats.
Gamco’s chances of changing the board is unclear. Cablevision expanded its board to 17 members in August, adding two members of the Dolan family — chairman Charles Dolan’s daughter Deborah Dolan-Sweeney and his son-in-law Brad Dorsogna.
The Dolan family, which controls about 74% of Cablevision’s vote through its Class B super-voting shares, also dominates board selection.
According to Cablevision’s 2007 proxy statement, the Class B shareholders elect 75% of the board and there is no requirement that any of those directors be independent or be chosen independently.
Of the 17 current board members, nine are members of the Dolan family and three — former Viacom CEO Frank Biondi, former ITT chairman Rand Araskog and former Century Communications chairman Leonard Tow — were first named personally by Charles Dolan in 2005.
Cablevision spokesman Charles Schueler declined to comment.