Prompting the latest round of head-shaking was Cablevision's announcement last week that it had signed a contract with Lockheed Martin ( LMT) under which the aerospace company would construct five new satellites for Voom for a price of $740 million.

About the only bright spots that analysts saw in that announcement was that the contract -- which Cablevision says will require $48 million of payments in the first year -- won't require huge upfront costs for Voom, and is cancelable by the satellite operator, subject to a termination fee.

While the downside to Cablevision itself may be limited, given Rainbow's expected spinoff, news like this continues to weigh on Wall Street's valuation of the combined Cablevision/Rainbow.

The Lockheed Martin announcement prompted Lehman Brothers analyst Vijay Jayant to cut his price target on Cablevision on Monday from $24 to $23. "Given the limited opportunity for Rainbow DBS," writes Jayant in his research report, "executing on the contract to construct five ... satellites will destroy equity value."

In the best-case scenario, writes Jayant, no new satellites are built but a $100 million termination fee is incurred. In that case, RME -- which also includes the national programming services American Movie Classics, the Independent Film Channel and WE: Women's Entertainment -- is worth $1 per Cablevision share.

In the worst case, Jayant calculates that all five satellites are built, requiring $1.2 billion in additional funding -- a number covering not only construction but also launch and insurance costs. "A decision by Voom to think about constructing five ... satellites makes the bear case outlook on Rainbow Media take a higher probability," writes Jayant. (The analyst has an equal-weight rating on Cablevision; Lehman hasn't done recent banking for the company.)

Under one theory, Cablevision could be investing in Voom in order to sell it to DirecTV or EchoStar -- EchoStar being more likely, since DirecTV recently announced plans to launch satellites that would increase its own capacity for transmission of HDTV programming.

But Scherman, for one, says EchoStar CEO Charlie Ergen is unlikely to pay what Cablevision CEO James Dolan would want to recover costs on Voom. "The notion that Jimmy Dolan is going to outnegotiate Charlie Ergen is something laughable," Scherman says.

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