Cablevision Gets Clocked

News of an SEC probe accompanies a power move by Chairman Charles Dolan.
By TSC Staff ,

Cablevision

(CVC)

slumped 6% Thursday morning after a simmering boardroom brawl boiled over at the Long Island-based cable TV system operator.

The company also said the

Securities and Exchange Commission

asked for information about trading in Cablevision stock.

Founder and Chairman Charles Dolan said Wednesday evening that he would replace three Cablevision directors and one board vacancy with four new board members of his own choosing. Dolan, who controls a special supervoting class of stock that enables him to elect a majority of the board if he so chooses, indicated Wednesday night that he would exercise that right when the company holds its annual meeting in May.

The power move by Charles Dolan came just a week after the company's board essentially overruled him on the fate of the money-losing Voom high-definition TV service. Charles Dolan had favored continuing to fund the satellite TV operation, but other board members, led by Dolan's son, CEO James Dolan, voted to shut the business down.

Cablevision last month agreed to sell Voom's only working satellite to

EchoStar

(DISH) - Get Report

for $200 million.

A group led by Charles Dolan and his son Tom had been in talks to take over the remainder of Voom, but a Monday deadline passed without an agreement in place. That led to a bizarre situation in which Cablevision told Voom employees the service would be shut down this month, but Charles Dolan told them that the service would continue.

The SEC inquiry relates to the company's Dec. 21, 2004, and Jan. 20, 2005, disclosures about the suspension of a planned spinoff of Rainbow Media Enterprises and the agreement to sell satellite assets to EchoStar, Cablevision said.

Late Wednesday, Dolan served notice in a press release that he would move to add Rand Araskog, Frank J. Biondi, John Malone and Leonard Tow to Cablevision's board. The new directors will replace William J. Bell and Sheila Mahony, both of whom recently retired as officers of Cablevision, as well as Steven Rattner and the late John Tatta. Dolan also indicated his intent to add Brian Sweeney, his son-in-law and a Cablevision exec, to fill a new seat.

"In light of the extensive industry experience and impressive qualifications of these individuals, the Class B stockholders believe that they will be very well-positioned to make significant contributions to the long-term success of the company," Dolan said.

Cablevision representatives didn't immediately return a call seeking comment Thursday. Thursday morning, Cablevision shares dropped $1.99 to $28.25.

Loading ...