Cablevision DBS Worries Wall Street

[Steve Mehs]

Despite recent layoffs and restructuring charges, Chuck Dolan's Cablevision continues on its quest to launch a DBS service - and that's got some on the Street mighty worried.

In a recent note to investors, Merrill Lynch analyst Jessica Reif Cohen notes that, in her opinion, "The best outcome for the (Cablevision) DBS business is an outright sale to EchoStar for $300-$500 million."

But Dolan - recently nominated as one of the "worst CEOs" by Business Week magazine - seems intent on proceeding. Says Reif, "Despite the potential for signal interference west of the Mississippi, the $1.5 billion-plus cost, and difficulty of providing a viable service with just one satellite, we believe that Cablevision intends to provide proprietary content on the DBS service and launch a third competitive U.S. satellite service."

Cablevision must launch its satellite by the end of this March or risk losing its FCC license.

From SkyReport (http://www.skyreport.com/skyreport/jan2003/011603.shtm#three) (Used with Permission)

[Mike123abc]

R/L DBS needs to see the light and cut its losses. With 11 (maybe 13 if they can get the unassigned assigned to them) they will be able to provide up to 200 channels. But, they will have no LIL service and west of the Mississippi they will be suffering from low satellite angle. D*/E* have tons of LIL east of the Mississippi and far more channel capacity.

[Jacob S]

But they will be ANOTHER service that some WILL take. They will have a plan where you do not need to buy the equipment or pay for install, reminds me of Primestar in which had done VERY well. They will allow picking and choosing of some channels, more HDTV than any other provider, that in itself will allow for some sales for those that have the high end tv's. There will be a niche for this. They could apply some promo's but if they do the packaging right, they wont have to, therefore making more from each sale bc they have things packaged like the consumers would want it.

[Brett]

$300 to $500 million isnt that much.

Fox paid $425 million for the UHF UPN station in Chicago (WPWR). http://www.newscorp.com/feg/fegreport2002/fox_annual2002.pdf

Do search for "425"


That was a way overpriced amount Fox paid just to have a duopoly. It seems to me the satellite licenses are worth much more than a UPN station.

[Mark Holtz]

Chicago is also a highly-rankd DMA.

[bryan27]

Here is something that may occur, and would be a money saver for Rainbow/Cablevision. Instead of taking the Provider route like E* & D* they take the Common Carrier route. All of Rainbow's channels and the channels of all of Raibow's & Cablevision's partners are uplinked to a C-Band satellite where all the cable & DBS companies get the signals. Since Ranbow/Cablevision has to rent space on the satellite they just cut that link and save money by having all their channels only available from their new satellite at 61.5. Every cable company (& DBS) would have to purchase new receivers and dishes in order to receive the programming. When new channels come along like MGM Classics they are only uplinked to the R/L DBS satellite where cable & DBS will have to use R/L equiptment to receive the channels.

Rainbow/Cablevision could save a bundle by cutting out the middleman.

[MarkA]

bryan, I don't think they can do that, can they? I'm not sure, but I thought DBS transponder licenses had to be used for direct-to-home broadcast service.

[TV38]

Jacob S
Do you have a site or somewhere that says they will operate as you describe? Nothing to do with believing you - just interested as this would be an expensive route for them to take. (expensive for the consumer - not many subscribers paying for individual channels = high cost)

[Mike123abc]

There already is a satellite service for this. There is a service set up for digital cable with the channels all ready to send down the cable.

[bryan27]

Zac, yes they could do this. DBS license holders have the option to run as a Provider or as a Common Carrier. The FCC had hoped that some of the DBS license holders would be Common Carriers. Being a Common Carrier doesn't necessarily mean that it isn't at DTH service.

TV38, A-la-carte packages on C-Band run about 75 cents to 1.25 per channel/group. Also since they own channels and are partly owned by other corps that own channels they con more or less sell channels any way they want. You can find the brochure at http://wvjw.info/daily-news/

The proposal for the 105.5 slot is a Common Carrier one.

[Jacob S]

Yeah, thats the link that I was talking about, where you can pick and choose some of the channels.

That would be GREAT to have common carrier from a dbs slot instead of a c-band slot. The only difference would be that the signal would originally be transmitted to the dbs slot instead of a c-band slot first then the dbs slot.

This would be almost like the c-band days again, where you could purchase channels individually at different slots, although there would be a lot more channels at each slot than what there used to be, and more free channels again.