Cablevision’s Week of Ink

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Cablevision Systems Corp. — a company whose media strategy is “no ink is good ink” — found itself awash in the stuff last week, culminating with New York Mayor Michael Bloomberg’s public bashing of the MSO at a rally to build a new West Side stadium.

Cablevision, which counts Madison Square Garden among its holdings, is strongly opposed to the idea of a new domed stadium for the New York Jets (and the 2012 Summer Olympics), which could offer some stiff competition, if it ever comes to fruition.

Bloomberg who spoke to thousands of labor-union members who rallied near the Garden last week, took the view that the erection of the $600 million dollar facility, which would come out of tax payers’ pockets, would create new jobs for the city and make New York an even more attractive venue for the Olympics. “We aren’t going to let any company’s selfish interest take away our future. Did you hear that Cablevision?” Bloomberg bellowed.

Cablevision, which is just one of many entities which oppose the plan — others are the city’s own police and firefighters’ unions — is not alone in this battle to stop the new stadium. I actually find myself siding here with Cablevision.

But far more perplexing were the other headlines the company made last week. For starters, the Securities and Exchange Commission and the U.S. Attorney’s Office both continue with their investigations of the family-run company.

That was despite the fact that an independent accounting firm, Wilmer, Cutler & Pickering, had completed its probe of Cablevision and found no new accounting problems. Those woes began in June 2003 when Cablevision fired 14 employees from its AMC division, including president Kate McEnroe, for accounting irregularities. People are still asking: is “Katie-gate” mushrooming because three of Cablevision’s top financial dogs “resigned?”

Late on Friday, Sept. 24 — when companies love to deliver the bad news — Cablevision announced the resignation of those three financial executives, but offered no further explanation.

Naturally, Wall Street assumed the worst and punished Cablevision, and the MSO’s stock took a 7 percent drop, down $1.42 a share, the following Monday.

If that weren’t enough, Cablevision announced last week that its planned spin-off of Rainbow Media Enterprises would be delayed.

Are your eyebrows raised by now? As senior finance editor Mike Farrell reports this week, Cablevision has already raised $1.75 billion in a bond offering to fund the RME unit and got a tax-free ruling from the Internal Revenue Service for the spin-off.

At a Merrill Lynch Media & Entertainment conference last week, Cablevision CEO James Dolan tried to reassure investors that the spin-off was not on indefinite hold.

In the meantime Cablevision’s chief financial officer, Michael Huseby, is serving as acting principal accounting officer until a replacement is found. Sure sounds like the company needs one, and fast.

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