Cablevision has gotten a lot of press lately, not all good, not all bad. The company even did a dog and pony show for Wall Street investors earlier this month, trying to patch up some rough spots with major shareholders. One of the newest -- and largest -- shareholders, hedge fund Harbinger Capital Partners, didn't show, and that kind of set the tone for the gathering.
CEO James Dolan, scion of the family that controls some 74 percent of the Long Island, N.Y. cable outfit's voting stock, has some real problems on his hands. Citi yesterday downgraded Cablevisions stock from buy to sell, citing Verizon's push into New York City with its FiOS network as a major potential source of market erosion. Share prices quickly fell 5 percent. Plus, Citi notes, Cablevision has a hefty $1.4 billion in debt due to be refinanced, and with the credit market still fighting to regain its footing, that could mean a substantial bump in interest payments.
On Friday Harbinger, Cablevision's fourth-largest shareholder with nearly 8.1 percent of its Class A shares, let the company know it wants a meeting. Analysts say that despite the Dolan's grip on the company, Harbinger has the ability to shake things up.
Mario Gabelli, whose company Gabelli & Co. also owns a sizable chunk of Cablevision, has been pushing for change. He wants the Dolans to sell assets, specifically the cable business, to TWC.
"Cablevision has always been off limits, since it's controlled by the Dolans," Stanford Group analyst Fred Moran told Wired. "But since shareholders like Mario Gabelli are pushing for a split up of Cablevision's assets -- timed concurrently with the spin off of Time Warner Cable from Time Warner -- you could see for the first time potential discussions of merging Time Warner Cable with Cablevision -- or [Time Warner Cable] buying selected parts of Cablevision's systems."
For more:
- See the Wired report
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