Cablevision Systems Corp.'s plans for a direct-broadcast satellite service took an interesting turn last week, when reports surfaced that it had paired up with an investment group to raise money for the costly venture.
At least two published reports named Skyway Capital Partners as a vehicle through which the Bethpage, N.Y.-based MSO could raise the needed $2 billion to $2.5 billion to launch a DBS platform. But as it turned out, Skyway was not connected to Cablevision at all, both entities later confirmed.
"We find it very curious that an investment solicitation document we have never seen nor been party to, circulated by an alleged investment group we have never heard of, found its way into media reports regarding the EchoStar [Communications Corp.]-DirecTV [Inc.] merger," Cablevision spokesman Charles Schueler said in a statement early last week. "We are moving swiftly to ensure that Skyway Capital Partners, or whoever else may be behind this unauthorized activity, cease and desist immediately."
Skyway was formed about two years ago by former Communications Equity Associates vice president Scott Feuer, mainly as a commercial investment bank that would help fund media, entertainment and other business ventures.
Although David Beddow, former CEO of Liberty Livewire — the television- and film-production arm of Liberty Media Corp. — was named as the head of the venture in some reports, Beddow said in an interview that he is not an officer of the company.
Beddow has a long history in the satellite industry and was co-founder of PrimeStar Inc., the cable-satellite venture that was sold to DirecTV in 1999.
The "prospectus" that some reports said has been circulating among several financial groups was actually a 14-page PowerPoint presentation recently made to six investment banks, said Beddow.
"We were not attempting to raise money on behalf of Cablevision," Beddow said. "What we were doing was seeing if we could put together funding for a venture that perhaps Cablevision or someone else would contribute assets to. We were not trying to represent Cablevision or anybody else other than ourselves."
No third wheel
Beddow said he was not an officer of Skyway, but if the investment venture were to launch a DBS service, it's likely he would be involved in some capacity.
He would not comment on Cablevision's satellite intentions, but said he believes a competitive DBS venture is viable, depending on the business plan.
Launching a service that would compete head-to-head with DirecTV and EchoStar would not be viable, he added.
"If you chose to enter the business on that basis, you'd need to have your head examined," Beddow said. "The issue is whether you enter the business in a different way that allows you to differentiate yourself from the two competitors. There are ways to differentiate in the programming and home-equipment area."
He declined to elaborate.
Skyway has received some interest from investors, said Beddow, but has not yet received any money. He added that Skyway is seeking between $2 billion and $2.5 billion.