Investors and consumer groups will be watching for just such a possibility following U.S. District Court decision Friday to let Cablevision pursue an antitrust claim against Viacom. More than a year ago the cable company charged that it was improperly forced to carry 14 channels it didn’t want (including Palladia and Tr3s) in order to offer eight that it did. Viacom asked the court to dismiss the complaint, saying that Cablevision failed to make a prima facie case that its bundles violated antitrust law. But Judge Laura Swain said there were enough facts to “support plausibly an inference of anticompetitive effects.” Although far from a definitive ruling, the decision to let the case proceed “was not a given, so it was a victory for Cablevision,” Guggenheim Partners’ Paul Gallant says today.
If Cablevision prevails, the case could rock Big Media. Most of the top content companies’ business models depend on their ability to require pay TV distributors and their customers to pay for channels they don’t want. If the court says that’s illegal, then “that could feed into the nascent Telecom Act rewrite — or perhaps a narrower bill updating the 1992 Cable Act — in an unwelcome way for content companies,” Gallant says.
But the case could take more than a year to approach a verdict. Viacom appears ready to fight: Cablevision wants to “renege on a long-term business agreement, using arguments directly contrary to positions it has taken in other cases and to its own business practices,” the … Read More »
Loud noises on both coasts — hosannas in New York, wails of despair in Los Angeles — are coming from basketball fans today after Phil Jackson was hired as president of the New York Knicks. But the move isn’t just about games. Investors wonder whether the Zen master, coach of 11 NBA champions, star player on two others, will help not just the Knicks but also its parent the Madison Square Garden Company?
Executive Chairman Jim Dolan, whose family controls MSG as well as Cablevision and AMC Networks, introduced his new team president at a news conference this morning at the Garden. He says his pal Irving Azoff — the longtime personal manager (Eagles, Steely Dan, Christina Aguilera) and CEO of recently launched partnership Azoff MSG Entertainment – introduced him to Jackson in December at a party at his house.
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The cable company has a stake in the high court’s view of Aereo: Cablevision opened the door for the streaming service in 2008 when it beat back a challenge by broadcasters to its remote storage DVRs. Courts in that case agreed with the cable company that there was little difference, in legal terms, between a DVR that stored shows miles away on a remote server vs a set-top box. Aereo says the same principle applies to its remote antennas: They pick up over-the-air TV the same way consumers would if they had an antenna at home. But Cablevision says, in an amicus brief today, that it disagrees with arguments from Aereo and broadcasters alike. The streaming service should be deemed illegal, Cablevision says, because it’s “functionally identical to a cable system” that must pay broadcasters for the right to retransmit their over-the-air signals. “The fact that Aereo delivers programming on an individualized basis through mini-antennas and hard-drive copies does not change the basic nature of its service.” But Cablevision says that broadcasters go too far when they argue that their copyrights give them broad rights to determine what happens with the shows that they transmit. That view, if upheld, would “imperil nearly any cloud technology that enables remote storage and playback” such as Amazon’s MP3 Store and player. Although broadcasters say they wouldn’t threaten such services, Cablevision says they “advance an overbroad prior performance theory and then, in an effort to avoid its absurd results, engraft on an ad hoc exception for cloud technologies.” Read More »
The Cablevision CEO rarely grants interviews, which makes the one in this morning’s Wall Street Journal interesting. Jim Dolan continues to hint broadly, as he did in a call with analysts last week, that he’d be open to a sale. “We are going to continue to do the right things for shareholders,” he says. While he didn’t say specifically whether Cablevision was engaged in any deal talks, he noted that business is “in our blood” — and if his family didn’t have cable systems then “there would be another business.” And he seems troubled about prospects for cable’s video services. He says programmers and operators live in a “bubble” by requiring subscribers to buy channels as a bundle. As online video becomes more appealing to young viewers, the bundled channel model will mature “badly.” Indeed, he says “there could come a day” when Cablevision stops offering its own video service, allowing someone else to provide programming over the company’s broadband infrastructure. The leader of blues band JD & the Straight Shot, just off a tour opening for the Eagles, likened what’s happening in cable to the decline of the music business. Those who don’t “ride the wave” get “eaten by the wave,” he told the paper.
Cablevision shares shot up 5.8% this morning after James Dolan told analysts “you never say never” when asked whether his family might sell the cable company — seen as a potential target for Charter or Time Warner Cable. He doesn’t want to look like he’s inviting a sale. “Our plans are to continue to proceed in terms of operating the company in the best interest of the company and its shareholders.” The Cablevision CEO also seemed to back away slightly from his previous reference to Long Island’s Newsday as a core asset. “The business is somewhat in transition” he said although he adds that Cablevision believes the newspaper helps the company and “there is a potential for a very bright future for that business.” The comments follow Cablevision’s so-so Q2 earnings report this morning. The company’s net income included $107.5M from discontinued operations, led by Rocky Mountain systems it sold to Charter and the Clearview Cinema chain sold to Bow Tie Cinemas. With their contributions, net income ended up at $135.4M, +113.1%, on revenues of $1.57B, +0.8%. That’s just a hair short of the $1.58B in revenues that analysts expected. The video business underperformed: Cablevision ended the quarter with 2.87M subs, down 20,000 over the three month period. The Street expected a loss of 9,000. The company also reported that revenues from video fell … Read More »
This could be an important development, and not just for Cablevision customers. Cable execs have been keeping an eye on the company’s efforts to pioneer the cloud-based DVR, which gives subscribers the ability to use a conventional cable box — without a hard drive — to record shows and fast forward through the ads. Today’s changes boost the number of channels subscribers can simultaneously record to 10 from four, ups the storage capacity to 75 hours of HD from 25 hours, and raises the price to $12.95 a month from $10.95. (The company also is changing the name of the service to Optimum’s Multi-Room DVR, from DVR Plus.) “Our cloud-based DVR is the industry’s most advanced DVR service and provides customers with the flexibility they need to enjoy the programming they love without being forced to choose between shows,” says VP of Video Product Management Bradley Feldman. By comparison, DirecTV’s Genie DVR can record five channels simultaneously and Dish Network’s Hopper can record up to six. If Cablevision’s upgrades give it a clear advantage over its competitors, at a low price since it doesn’t require lots of new equipment, then don’t be surprised if lots of other operators introduce their own cloud-based DVRs.
Listen to (and share) episode 42 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s executive editor talks with host David Bloom about emerging trends from the first half of 2013, led by a renewed appetite for dealmaking; Tribune’s big broadcasting bet as it comes out of bankruptcy; and what’s driving up prices for the red-hot stocks of Cablevision and Lionsgate.
Deadline Big Media, Episode 42 (MP3 format)
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The National Labor Relations Board can go ahead with its administrative trial this month on charges that Cablevision resorted to intimidation, bribery and harassment to stop some of its workers in the Bronx from joining the Communications Workers of America (CWA). Chief Justice John Roberts — who’s also the Circuit Justice for D.C. — turned down, without comment, Cablevision’s plea for him to stop the proceeding. The cable company asked Roberts to step in after the U.S. Court of Appeals in D.C. declined on Friday to stop the NLRB. Cablevision argued that the NLRB lacks a quorum. The company says that President Obama’s recess appointments were illegal because they were made while the Senate was on an intrasession break, not between sessions. Cablevision also says that an appointment can only be made to positions that open up during a recess. The Obama Administration “bypassed Congress in order to stack the NLRB in favor of Big Labor,” Cablevision says. It adds that other courts have challenged the NLRB’s authority and when the D.C. Circuit Court makes a final ruling on its petition it “will put a stop to the NLRB’s evasion of the law.” CWA Political and Legislative Director Bob Master counters that the cable company “must be desperately looking for a new lawyer who can appeal to an even higher power. In the meantime, the Cablevision workers remain willing to negotiate a fair contract, which would cost … Read More »
The cable company is responding to its loss on Friday at the U.S. Court of Appeals in D.C.: Justices upheld the National Labor Relations Board’s authority to hold an administrative trial this month on charges that Cablevision resorted to intimidation, bribery and harassment to stop some of its workers in the Bronx from joining the Communications Workers of America (CWA) — part of a long-running series of disputes between the company and the union. But Cablevision now wants Supreme Court Chief Justice John Roberts — the Circuit Justice for D.C. — to stay the Appeals Court decision. Cablevision argued that the NLRB lacks a quorum. The company says that President Obama’s recess appointments were illegal because they were made while the Senate was on an intrasession break, not between sessions. Cablevision also says that an appointment can only be made to positions that open up during a recess. Read More »
You can’t attribute the 9.4% increase in Cablevision‘s share price today — and 23% jump over the last five days — to the day’s only solid news: Charter just closed the deal announced in February to pay $1.63B for Cablevision’s systems in Colorado, Montana, Wyoming and Utah. No, investors are more excited by new reports that the Dolan family — led by Cablevision founder Charles Dolan and his son, CEO Jim Dolan — may finally be willing to sell the company, and that Time Warner Cable as well as Charter want to kick the tires. TWC has long salivated to combine its crown jewel cable system in Manhattan with Cablevision’s franchises in New York’s outer boroughs and suburbs including Long Island. Up to now, the Dolans haven’t been interested. The family tried to take the company private in 2007, but shareholders rejected the offer. Cablevision’s stock took a roller-coaster ride as execs grappled with growing competition from phone companies led by Verizon’s FiOS and restructured operations — including spinoff deals in 2010 for Madison Square Garden, and in 2011 for AMC Networks. But Cablevision’s stock price has been virtually dormant since the beginning of 2012, at least until the latest speculation-fueled run-up. The change: Liberty Media’s John Malone recently paid $2.6B for a 27.3% stake in Charter — run by former Cablevision COO Tom Rutledge. They’re eager to snag Time Warner Cable. Read More »
Apparently so, according to a Reuters report. The No. 2 cable operator has spoken to Cox and Cablevision about possible deals “in recent months” and continues to be interested in them, the news wire says. Execs recognize that the cable industry is mature and poised for consolidation. But they’re also cool to the idea of combining with Charter, a much smaller company that’s seen as a stalking horse for John Malone after his Liberty Media paid $2.6B for a 27.3% stake. The problem: Charter, which has a market value of $12.5B, likely would have to take on a lot of debt in order to buy Time Warner Cable, valued as $32.7B. And Evercore Partners’ Bryan Kraft notes that TWC’s board might “see selling now as premature if it believes management is righting the ship.” TWC already has rejected Malone’s overtures, leading him to take his case directly to its investors, The Wall Street Journal says. TWC, which has about 12M video subscribers, is the only cable company big enough to turn Charter into a major industry player. Investors have waited for years, though, to see TWC (which controls the system in Manhattan) combine with Cablevision (which dominates NYC’s surrounding boroughs and suburbs). TWC has had to bide its time because the Long Island-based Cablevision — with a market value of $4.5B — is controlled by Charles … Read More »
Shares in Time Warner Cable, Charter, and Cablevision popped this afternoon after Bloomberg reported that the one-time King of Cable is “exploring scenarios” to help Charter buy one of the other companies. Investors have speculated for weeks about a deal, seen as a real possibility since May when John Malone‘s Liberty Media paid $2.6B for a 27.3% stake in Charter. Today’s story took things further, citing unnamed sources who added details — including one who said that Malone and Charter “would like to get a friendly deal done [with Time Warner Cable] in the coming months.” Charter needs to show that it can afford to play; its $12.5B market value pales next to Time Warner Cable’s $31.7B. A buyer likely would have to pay much more: Evercore Partners’ Bryan Kraft says this week that TWC shareholders would want “a significant premium” to compensate them for giving up control, accepting additional risk, and creating most of the cost-saving synergies. Read More »
UPDATED: The cable company wants the U.S. Court of Appeals in DC to rule that the National Labor Relations Board lacks a quorum, alleging that President Obama’s recess appointments “were not legal.” If Cablevision prevails, then it would halt the NLRB’s plan to file a complaint charging that the company resorted to intimidation, bribery and harassment to stop some of its workers in the Bronx from joining the Communications Workers of America. Cablevision says that federal appeals courts in DC and the Third Circuit “have ruled that the NLRB lacks a valid quorum and thus has no authority to take action. Yet the NLRB is ignoring these rulings”, requiring the cable operator to “devote overwhelming amounts of time and money to participate in a lengthy, pointless trial.” Read More »
“This will never end, do you understand that?” said one of at least three people who apparently represented the Communications Workers of America and derailed an interview today with Cablevision CFO Gregg Seibert at the Nomura U.S. Media and Telecom Summit. The audio stream of the session was cut off after two protesters were ejected and a third interrupted the proceedings. “Greedy people like yourself and like the owner of Cablevision James Dolan refuse to give workers a fair contract,” the first said. The scene follows last week’s similar interruption of the Cablevision annual shareholders meeting: Police were called in to eject the CWA supporters. The union says that Cablevision illegally sacked 22 staffers who elected to join the union. The company and union also have spent more than a year disputing terms of a contract. That fight is now before the National Labor Relations Board. Seibert initially tried to joke through the protest: “This is just a brief sample we arranged today so you can see what we’re dealing with in terms of the Communications Workers of America. My apologies for that interruption.”
UPDATE, 7:51 PM: Cablevision returned fire at Comptroller John Liu for challenging the directors who failed to win a majority of the votes. The company says that they “have helped to create great value for Cablevision shareholders. We look forward to their continuing contributions. Our shareholders know that Cablevision is a controlled company and they understand the rules by which our directors are elected. Once again, Mr. Liu is off base attacking another major New York employer. Mr. Liu is no position to lecture anyone about ethics.”
PREVIOUS, 6:35 PM: The term “zombie director” refers to a board member who’s elected without the support of a majority of the shareholder votes — and their existance infuriates corporate governance watchdogs. But Cablevision reports today that two of the five candidates for the board seats to represent public investors failed to meet that threshold at yesterday’s annual meeting. Since the company only nominated five people for the openings — and there were no outside candidates — they couldn’t lose. But Bond Street Holdings’ Vincent Tese won with just 45.2% supporting him and 54.8% withholding approval. New Century Holdings’ Leonard Tow was supported by 48.2%. Another director who failed to win a majority last time — former JP Morgan Chase Managing Director Thomas Reifenheiser — barely made it above that level with 50.5% support. The results outraged New York City Comptroller John Liu who oversees the city pension funds’ 532,020 Class A Cablevision … Read More »
The Communications Workers of America has been beefing with the cableco for more than a year, since it claimed Cablevision illegally sacked 22 staffers who elected to join the union. The two sides have been embroiled in a fight that has landed at the National Labor Relations Board, and the union fired a salvo Thursday by disrupting Cablevision’s annual shareholders confab. The Wall Street Journal reports that after repeated attempts to quiet the protesters, CEO James Dolan summoned the cops to eject them from the meeting at the cabler’s Long Island HQ. The union countered that shareholders had “asked the company tough questions about the potential impact” of the labor flap. Cablevision said later, “This is a shareholder meeting with a clear set of rules. The CWA attempted to disrupt the meeting; they were asked to refrain, and when they did not, they were asked to leave. The matter is now in the hands of the authorities.”
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The preschooler-targeted network Sprout is the latest addition to Cablevision’s Optimum TV, which announced on Wednesday that Glenn Beck’s TheBlaze network would be available by the end of the month. Sprout announced a slate of new programming last month at NBC’s Summer Press Day, as well as the renewal of its hit The Chica Show for a second season. Click over to read today’s release: Read More »
Cablevision announced today that Glenn Beck‘s news, opinion and entertainment network TheBlaze will be added to Optimum TV’s line-up in late May. TheBlaze is the exclusive provider of The Glenn Beck Program. The network also offers original news and opinion shows such as Real News, Wilkow! and For The Record, late-night comedies The Wonderful World Of Stu and B.S. Of A., family-friendly Liberty Treehouse as well as documentaries and original specials. TheBlaze first launched online on September 12, 2011 as GBTV and became a television network the following year. TheBlaze will be available to Optimum’s residential customers with the Optimum Preferred, Silver and Gold Packages and to commercial customers with Optimum Business or Optimum Entertainment.
The deal includes Clearview‘s venues except for Manhattan’s famous Ziegfield Theatre — which Bow Tie will manage for Cablevision. The companies didn’t disclose a price for the deal. The acquisition of Clearview’s 41 theaters will make Bow Tie the nation’s No. 8 exhibition company. Clearview’s Chelsea Cinemas will become Bow Tie’s Manhattan flagship and will continue to be “a prime venue for iconic industry events” including the Tribeca Film Festival,” the company says. Bow Tie adds that it will “further develop the relationships between Chelsea Cinemas and the local community.” It also vows to pay for “key upgrades that are designed to enhance the movie-going experience” including digital and 3D projection. Cablevision bought Clearview in 1998 and put it on the block about a year ago. “It is not a strategic asset for us,” Cablevision CFO Gregg Siebert said at the time. Cablevision also has other fish to fry as it struggles to grow as it deals with tough competition from Verizon and AT&T for video, broadband, and phone customers.
Here’s the release: Read More »