NEW YORK — Chuck Dolan and his son Tom appear to have ended their plan to buy the financially disastrous Voom satellite business from Cablevision Systems Corp.
In a statement released late Monday, Cablevision said it would shut down the Voom programming service in the next 30 days, following the expiration of a “letter of intent” by Dolan to buy out Voom assets. The Voom affair had split Chuck from his son Jim, who is president of Cablevision and who sided with the board, which was against keeping Voom in business.
The only way Dolan could’ve financed the continued building of Voom was to sell Cablevision’s lucrative New York City-area cable systems that reach 2.9-million subscribers, many of them in affluent suburbs, said Richard Greenfield, cable analyst for Fulcrum Partners.
EchoStar has engineered an agreement in principle to buy Voom’s satellite transponders, and in the satellite license application to the FCC, the parties were unsparingly frank. Greenfield quotes the following passages from the application: “Despite Cablevision’s expertise in programming and distribution, the Voom service has not been a commercial success … approximately 39% of the customers who had activated Voom service subsequently terminated their service.”
Cablevision said it plans to alert Voom customers immediately that the service will shut down in the next month or so. Cablevision also said it would encourage Voom employees who are losing their jobs “to pursue employment opportunities elsewhere at Cablevision.”