US Cablevision Clan Awaits $660m Windfall

12 April 2006

US cable clan, the Dolans, stands to pocket around $660 million (€544.8m; £378.7m) following the Cablevision Systems board's approval of a special dividend.

The family owns 22% of the New York-headquartered operator, which reported fourth quarter profit of $54.1m for the period ending March 31.

The figures compare with a loss of $305.8m in the same quarter in 2004, due to a $354.9m charge after pulling the plug on its fledgling Voom satellite TV business.

Company chairman Charles Dolan and his ceo son, James, fell out publicly over the ill-fated Voom venture, but appeared united in their decision to pull out of a plan to take the company private [WAMN: 27-Oct-05].

The $3 billion special dividend has been financed partly by extra borrowing $3.5bn, a move which has surprised some analysts. They question why the company chose to take on additional debt and why it opted for a dividend instead of a share buyback.

Jason Bazinet of Citigroup, suggests it may allow the Dolans to take the company private in a different way and could be a stratagem to sell some assets in a tax-efficient way.

Data sourced from Wall Street Journal Online; additional content by WARC staff