Memo Spells Doom for Voom

Cablevision (CVC) is trying to sell Voom, and members of the cable operator's controlling family may be buyers, according to what appears to be an internal company memo.

The memo, if authentic, confirms previous reports that Cablevision's board has been divided over the fate of its money-bleeding startup satellite service, and that a majority of directors were in favor of giving up on the venture.

The memo also serves to hearten many Cablevision analysts and investors, given the prevailing belief outside of Cablevision that the Voom HDTV-focused satellite service has little chance of competing profitably with the likes of DirecTV (DTV) and EchoStar (DISH).

Cablevision's shares rose 77 cents Thursday to trade at $25.15.

A Cablevision spokesman didn't return a call requesting comment.

On Wednesday evening, the Internet site SatelliteGuys.US posted what purported to be a memo out of Cablevision's Rainbow Media Enterprises programming unit, addressed to RME's staff.

The memo, purporting to be from Charles Dolan -- chairman of both Cablevision and Rainbow -- and Tom Dolan -- Charles' son and CEO of Rainbow -- reports that on Tuesday, Cablevision's board, in a split vote, resolved "to sell or dispose of Rainbow DBS; i.e., VOOM and VOOM 21."

"It is our expectation that RDBS will be offered for sale as an operating business," continues the memo. "Potential bidders for RDBS include members of the Dolan family."

On Thursday, Fulcrum Global Partners analyst Richard Greenfield issued a report indicating that the memo -- which he reprinted but which appears to have been pulled from the SatelliteGuys.US site -- appeared to confirm Voom's impending sale.

"While we have not been able to confirm its authenticity with CVC corporate management," wrote Greenfield, "we have confirmed with two different Rainbow Media employees that such a memo was sent out yesterday afternoon by Charles and Tom Dolan."

Greenfield, who like other analysts on Wall Street is of the opinion that Voom was a value-devouring lost cause of Cablevision's, has a buy rating on the stock.

One would suppose that Greenfield would not be passing along the memo without some confidence in its authenticity, given the NASD's recent enforcement action against a colleague of his. Last Friday, the NASD announced it had fined Fulcrum wireless telecom analyst Walt Piecyk $75,000 on charges, which Piecyk neither admitted nor denied, that Piecyk had circulated a negative rumor about RF Micro Devices (RFMD) without conducting "a reasonable inquiry into whether there was a basis for the rumor."

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