Updated from 7:30 a.m.

The Dolan family reality show is back and better than ever.

The family that controls Cablevision ( CVC) backed out of a plan to take the Long Island-based cable company private and demanded a big dividend. The moves sent Cablevision shares down sharply Tuesday.

The Bethpage, N.Y., company issued a statement Tuesday morning saying its board had received a letter in which CEO James Dolan and his father, founding Chairman Charles Dolan, withdrew their June 19 offer to take Cablevision private and spin off its Rainbow Media unit. Cablevision also said the Dolans recommended the board consider a one-time $3 billion dividend. The board said no decision has been made on the dividend and it is considering the proposal.

The news hit Cablevision shares, sending them down 13% early Tuesday. The stock has been in decline anyway since the Dolans goosed it in June with their buyout offer.

Shares of the No. 6 cable company jumped 19% in a day after the Dolans said they would pay $7.9 billion for the 80% of the company they don't own. The proposed deal would have paid stakeholders $21 a share in cash, along with shares of the long-anticipated spinoff of media and entertainment assets into separately-traded Rainbow Media. Those holdings are worth an additional $12.50 a share. The price represented a 24% premium over Cablevision's closing level the day before.

Cable sector stocks have been under pressure this, year leaving industry chiefs squirming for solutions. Squeezed by satellite TV services like EchoStar ( DISH) and DirecTV ( DTV), and following similar moves by cable leaders like Cox, the Dolans' offer to take the company private was seen as a strategy to attract higher bids or break up the media and cable assets.

After the acrimonious Voom fiasco and a controversial dark-horse bid for Adelphia's cable systems, the Dolans seemed to have finally found a business route that even they could agree on.

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