| Type | Public (NYSE: CVC) (NASDAQ: CVC) S&P 500 Component |
|---|---|
| Industry | Cable television, Professional sports |
| Founded | 1973 |
| Founder(s) | Charles F. Dolan |
| Headquarters | Bethpage, New York, U.S. |
| Area served | New York metropolitan area, Rocky Mountain states |
| Key people | Charles F. Dolan (Chairman) James L. Dolan (President and CEO) |
| Products | iO Digital Cable (Television) Optimum Online (Internet) Optimum Voice (VoIP Phone) Optimum Lightpath (Business) News 12 Clearview Cinemas Newsday amNewYork |
| Revenue | $ 7.230 billion - 2008 |
| Operating income | $ 687.26 million - 2008 |
| Net income | $ -227.58 million - 2008 |
| Total assets | $ 9.383 billion - 2008 |
| Total equity | $ -5.362 billion - 2008 |
| Employees | 14,471 - September 2009 |
| Divisions | Telecommunications Services |
| Subsidiaries | Newsday, LLC - 97.2% |
| Website | http://www.cablevision.com |
Cablevision Systems Corporation (NYSE: CVC) is an American cable television company with systems serving areas surrounding New York City. It is the 8th largest cable provider in the USA, with most customers residing in New York, New Jersey, Connecticut, and parts of Pennsylvania.[1] Cablevision also serves approximately 300,000 customers in Colorado, Montana, Utah, and Wyoming under the Optimum West brand. Cablevision also offers high-speed Internet connections (Optimum Online), as well as digital cable (iO), and VoIP phone service (Optimum Voice) through its Optimum brand name.
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Cablevision was founded by Charles Dolan in 1973. In the mid-1960s, Dolan had already built a cable system called Sterling Manhattan Cable in the borough of Manhattan and launched Home Box Office (HBO).[4] He ended up selling both the cable system and HBO to Time Life Inc. With the money he gained from the sale, he started a new cable system in suburban Long Island forming Cablevision. Cablevision quickly expanded and built system throughout the New York metro area expanding into New Jersey, Westchester County, Connecticut, and the other boroughs of New York City.
In the 1980s, Cablevision also expanded into the Chicago, Boston, and Cleveland areas. By the mid-1990s Cablevision would offer service to 2.9 million subscribers in 19 states. Through a series of transactions in the late 1990s, Cablevision decided to consolidate their cable systems into three core areas: New York, Cleveland, and Boston. Despite reducing the number of areas served they were able to bring the number of subscribers to 3.5 million through these transactions. One major transaction made at this time was with Tele-Communications Inc. (TCI). Cablevision gained 10 New York area cable systems from TCI and in exchange TCI gained 33% ownership in the company. In 1999, AT&T took over TCI thus giving them the one-third ownership in Cablevision.[5] In 2000, Cablevision sold-off its remaining systems outside of the New York area in Boston, Cleveland, and Kalamazoo, Michigan to Media One, Adelphia, and Charter Communications respectively. AT&T sold its share of Cablevision in 2001.
On June 13, 2010, Cablevision announced that it would acquire Bresnan Communications for $1.37 billion.[6] Bresnan provides service to about 308,000 cable subscribers in Colorado, Montana, Utah, and Wyoming. This is the first time in a decade that Cablevision has owned systems outside of the New York area (although Bresnan, like Cablevision, had its headquarters in the New York City suburbs). In May 2011, Cablevision rebranded the Bresnan systems as Optimum West.
In 2004 and 2005, Cablevision provided funding for an advertising campaign against the proposed construction of a stadium on the West Side of Manhattan supported by the Mayor of New York City, Michael Bloomberg. The stadium would have principally served the New York Jets, and was an essential part of New York City's failed bid for the 2012 Olympics. Cablevision had offered a competitive bid that far exceeded the bid of the Jets for property owned by the Metropolitan Transportation Authority, where the new stadium would have been located. The plans to build the stadium were abandoned in June 2005 when the New York State Assembly under the leadership of Speaker Sheldon Silver refused to provide state subsidies for the project.
From September 1988 through July 1989, Cablevision did not carry MSG Network (at the time owned by Gulf+Western, which later became Paramount Communications) over the question of whether MSG should be offered as a basic service or a premium service. This move also occurred as New York Yankees games on cable moved to MSG from Cablevision-owned SportsChannel.[7][8] The Cablevision position was that those who wished to pay for sports programming should shoulder the burden, not every consumer. This dispute ended with Cablevision offering MSG as a premium subscription service, just like "SportsChannel".
Cablevision did not carry most of the games of the New York Yankees in 2002, because they would not accept the price asked during the inaugural season of YES Network. Again, at the root of the argument was who was to pay for sports programming. Cablevision wanted to offer YES as a premium service, like MSG and Fox Sports NY, where YES ownership wanted the channel on the 'Family Cable' tier. After a long standoff, a deal was made the following year. As a result, YES, along with MSG and Fox Sports NY, moved to the 'Family Cable' Tier.
Cablevision has also never carried the NFL Network, as the company has stated that it would like to be able to carry NFL Sunday Ticket (which is, by contract, exclusive to DirecTV until the completion of the 2014 season) before it carries NFL Network. This has been criticized by New Jersey legislators.[9] Recently however, Cablevision purchased Bresnan Communications, a company headquartered in Purchase, New York, but which did all of its business in the Rocky Mountain region. Because of this, the NFL Network is carried on the former Bresnan (now Optimum West) systems, but not on Optimum systems in Greater New York.
Cablevision, as a content provider, also engaged in a dispute with Verizon over the carriage of MSG Network and Fox Sports Net New York on its FiOS television systems. Verizon sued Cablevision, claiming that the Cablevision did not want to make their valuable local sports coverage available to an emerging competitor to their cable systems. An agreement was reached in November 2006 allowing FiOS to carry these channels.[10] However, MSG's programming continues to be restricted to standard-definition on FiOS systems, even following MSG's spinoff from Cablevision.
Additionally, Cablevision owned exclusive rights to the MSNBC news network in its service territory, preventing its carriage by FiOS in overlapping areas.[11] However, this exclusivity ended in February, 2010.[12]
Because it was unable to reach a deal with Scripps Networks Interactive concerning retransmission fees, Scripps Networks Interactive revoked Cablevision's rights to carry the disputed channels, HGTV and the Food Network, on January 1, 2010.[13] Cablevision issued a statement saying, "We wish Scripps well and have no expectation of carrying their programming again, given the dramatic changes in their approach to working with distributors to reach television viewers."[14] While the channels were affected, Cablevision ran commercials advertising their point of view and set up an area on their website to send out messages to Scripps Networks to tell them to re-carry Food Network and Home & Garden Television.[15] Cablevision also looped a public service announcement on each affected channel and forced all of its customers' set-top boxes to channel 1999, which looped the same annnouncement. Cablevision and Scripps reached an agreement, and as of January 21, 2010, the two networks were back on Cablevision systems. The details of the agreement have not been disclosed.
On March 2, 2010, WABC-TV in New York along with Philadelphia sister station WPVI (carried in Mercer, Monmouth and Ocean counties) stated that they would pull their programming from Cablevision on March 7, 2010 (at midnight), unless a new payment structure is implemented for its network programming. Cablevision responded by citing WABC-TV and WPVI's free, over-the-air accessibility. Cablevision spokesman Charles Scheuler stated "It is not fair for ABC-Disney to hold Cablevision customers hostage by forcing them to pay what amounts to a new TV tax." [16]
The removal of both stations occurred on the weekend of the 82nd Academy Awards, which was scheduled to be one of ABC's largest yearly specials, and was projected to cause a devastating blow to advertisers for the Oscars and to Cablevision itself.
On Sunday March 7, 2010 at 12:01 a.m. ET, both WABC and WPVI were removed from Cablevision leaving a black screen in their place, confirming the rumors that if a deal with Cablevision and ABC was not reached by midnight, the network and other Disney-owned channels would go off the air.
Cablevision began looping a public service announcement on each affected channel and forcing all of its customers' set-top boxes to channel 1999, which was looping the same annnouncement, much like was done when Scripps Networks pulled their cable channels' programming. Besides providing certain details of the disagreement they stated that ABC shows could be watched online through TV websites such as Hulu.
Also that day, Cablevision announced through e-mail that their entire film catalog of on-demand movies would be available without charge until midnight that evening as an apology to their customers.[17]
At 8:50 p.m. that day, WABC and WPVI returned to Cablevision's programming, after a notification during the 82nd Academy Awards announced progression in "Work to complete our negotiations", and the return of ABC's programming during the negotiations.
Cablevision's contract with News Corp to carry FOX (including MyNetwork TV) expired on October 15, 2010. The contract includes WNYW and WWOR-TV in New York and WTXF in Philadelphia. The contract also includes the cable networks National Geographic Wild, Fox Business, and Fox Deportes (formerly Fox Sports en Español). Programming affected by the dispute includes the coverage of the NFL on Fox, 2010 National League Championship Series, part of the 2010 World Series, and popular shows like American Idol and Glee.
On October 16, 2010 at 12:01am, Fox pulled all of their networks involved in the dispute from Cablevision subscribers.[18] Because of Cablevision's dispute with FOX, Cablevision customers missed multiple new episodes of FOX network programming, multiple weeks of the NFL season, and the entire NLCS. Cablevision looped a public service announcement on each affected channel and forcing all of its customers' set-top boxes to channel 1999, which looped the same annnouncement, much like was done when Scripps Networks and ABC/Disney pulled their cable channels' programming. On October 27, 2010, the same day as Game 1 of the World Series, Cablevision offered a new one-year deal to FOX, which was rejected, continuing the blackout. Cablevision also repeatedly called on FOX to submit to binding arbitration, an offer which FOX repeatedly did not take Cablevision up on.[19]
The channels were restored during the evening of October 30, 2010, the same day as Game 3 of the World Series.[20] News Corp and Cablevision reached a deal "in principle" to restore the channels. News Corp did not disclose the terms of the deal, but Cablevision said it paid the higher fees Fox and News Corp wanted, "because it does not think its customers should any longer be denied the Fox programs they wish to see."[21]
Current members of the board of directors of Cablevision are: Charles Dolan, James Dolan, Patrick Dolan, Rand Araskog, Frank Biondi, Charles Ferris, Richard Hochman, Victor Oristano, Thomas Reifenheiser, John R. Ryan, Brian Sweeney, Vincent Tese, Leonard Tow.
In 2006, the Dolan family announced a plan to purchase the company and privatize it, after a failed attempt in 2005, which would have spun off Rainbow Media as a publicly traded company.
On May 2, 2007, after repeated attempts, the Dolan family announced that a deal worth $10.6 billion had been reached for Cablevision to be taken private, but agreement was not reached with other shareholders.[22] Cablevision stock trades under the ticker symbol CVC on the New York Stock Exchange.
In 1994, Paramount Communications, the owner of Madison Square Garden, was acquired by Viacom, who in turn sold the MSG properties to Cablevision and ITT Corporation, which had 50% ownership each. ITT would sell its share to Cablevision three years later.
On February 9, 2010 Cablevision spun off its subsidiary Madison Square Garden, L.P. into a new company named Madison Square Garden, Inc.. Although a separate company, James Dolan is the chairman and remains an important figure in both companies. The company has three division consisting of professional sports teams, two regional sports networks, and several entertainment venues.
MSG Inc. controls the Madison Square Garden arena in New York City, and the professional sports teams that play there—the New York Knicks, New York Rangers, and New York Liberty. The same company also owns the Connecticut Whale, formerly the Hartford Wolf Pack, a minor-league professional hockey team affiliated with the Rangers.
MSG Inc. also holds the TV rights for the Knicks, Rangers, Liberty, New York Islanders, New Jersey Devils, Buffalo Sabres and New York Red Bulls. These games are aired on their MSG Network and MSG Plus (formerly FSN New York) cable channels. Cablevision previously had the rights to the New York Yankees, New Jersey Nets and New York Mets, who left to start their own channels. Cablevision also previously attempted to purchase the Yankees,[23] Mets[24] and Boston Red Sox,[25] in part, to control their broadcast rights.
Other properties that are owned by MSG Inc., include the Beacon Theater,[26] WaMu Theater, and a long-term lease to operate Radio City Music Hall.
On July 1, 2011, Cablevision spun off its subsidiary, formerly known as Rainbow Media LLC, into a new company named AMC Networks. AMC Networks owns several national cable networks including AMC, IFC, Sundance Channel, and WE tv. Wedding Central, a cable channel that was launched as a spin-off of WE tv in 2009, was also run by Rainbow Media. However, upon AMC Networks achieving its independence of Cablevision, the channel was shut down due to low ratings.[27] Rainbow Media also controlled Fuse TV until 2010, when ownership was transferred to Cablevision's Madison Square Garden division, now operating independently as Madison Square Garden, Inc. (see above). The Rainbow Media subsidiary of Cablevision also operated a satellite television company called Voom, which was shut down on April 30, 2005, but lived on as a series of high-definition television channels named Voom HD Networks. They were available on Cablevision and iO digital cable until January 21, 2009. However, the 15 U.S. channels were eventually also shut down due to lack of distribution prior to the spinning off of Rainbow Media from Cablevision as the independent AMC Networks.[28]
Cablevision also owned the former SportsChannel America from its beginning in 1976 until it was dissolved into Fox Sports Net in the late 1990s. In 2007 Cablevision sold its control of FSN Bay Area and FSN New England to Comcast for $570 million.[29] These were the last of their regional sports networks outside of the New York area.
Cablevision also once owned New York-area electronics chain The Wiz, before closing it. The brand has since been sold to P. C. Richard & Son.
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