Cablevision Systems Corp. president and CEO James Dolan reiterated his commitment to the cable business at an investor conference last week, adding that Cablevision will focus on reducing debt and leave the riskier ventures to its planned satellite spin-off.
Cablevision announced Oct. 23 that it would split its business into two entities — one consisting of the cable systems, its regional programming units and Clearview Cinemas and the other comprising Rainbow DBS and its national programming networks, WE: Women's Entertainment, AMC, Independent Film Channel and Mag Rack. The spin-off is expected to take place some time next year.
Dolan, who would become chairman of the cable business after the spin-off, said at the UBS Warburg LLC Media Week conference here last week that the separation in part is a result of a need to stabilize Cablevision and help it reduce its debt.
"One of the reasons I wanted to come here is to tell investors I am completely committed to that strategy," Dolan said. "You will not see this company go off on any tangents."
Dolan added that the satellite service — dubbed Voom — did not fit the profile of the new company.
"It will be much more predictable," Dolan said of Cablevision. "The satellite venture is one we are enthusiastic about, but when you mix that with an operation like cable, they're very different and they require a different investment mindset."
Dolan said creating a pure-play cable company could go a long way to helping to pare down Cablevision's debt or to eventually issue dividends to shareholders.
Regarding consolidation, Dolan said he would never rule out selling the cable systems, but added that it would only be at a very high price.
"We would never completely rule that out," Dolan said. "There is a great deal of upside in this business, and any kind of consolidation or event like that would require a valuation like we have not seen before. For someone who's hungry, it would be a rather large bite."