Most Wall Street analysts cheered Friday morning upon hearing of Cablevision Systems Corp.’s late-Thursday decision to sell its controversial Rainbow DBS platform to EchoStar Communications Corp. for $200 million in cash.
In a research report, Sanford C. Bernstein & Co. cable analyst Craig Moffett said the sale “closes the book on Voom and is good news for everyone involved.”
Under the terms of the agreement, EchoStar will acquire the “Rainbow 1” satellite, located at the 61.5-degrees-west-longitude orbital position, as well as Federal Communications Commission licenses to construct, launch and operate direct-broadcast satellite services over 11 frequency channels at the same orbital position.
It also gets the contents of Rainbow DBS’ ground facility in Black Hawk, S.D., and related assets.
The transaction is subject to regulatory approvals.
In a prepared statement, Cablevision said it will continue to explore strategic alternatives, including monetization, for its remaining Rainbow DBS-related assets, including programming, equipment and spectrum.
For more on the Voom sale, see Mike Farrell’s and Steve Donohue’s story on page one of Monday’s issue of Multichannel News.