By ANDREW ROSS SORKIN
June 20, 2005
The Dolans, one of New York's most powerful and fractious families,
moved yesterday to buy out the public shareholders of their media
empire, Cablevision Systems, and create a separate company for its
prized entertainment assets, which include Madison Square Garden and
Radio City Music Hall.
In a letter to the company's board, the family made a $7.9 billion
bid to take Cablevision's lucrative cable systems in New York's
suburbs private. The move came two weeks after the family succeeded
in staving off competition for Madison Square Garden by blocking the
construction of a stadium on the West Side of Manhattan.
As part of the transaction, the family proposed putting all of its
other entertainment assets -- which also include the New York Knicks,
the New York Rangers and several cable channels like American Movie
Classics -- into a separate company.
The deal would move the Dolans, who own 71 percent of the voting
rights of Cablevision, away from the spotlight and scrutiny of Wall
Street, which has grown concerned in recent months about the company's
direction amid a series of strategy shifts and feuds within the
Charles F. Dolan, the company's 78-year-old founder and chairman, and
a son, Thomas C. Dolan, lost a boardroom showdown earlier this year
with another son, James L. Dolan, Cablevision's chief executive, over
the sale of a money-losing high-definition satellite unit. For a time,
Charles and James Dolan stopped speaking to each other. Charles Dolan
then ousted several of the company's directors who had voted against
him and replaced them with his friends.
Then, in April, Mr. Dolan, by then reconciled with his son James,
again surprised Wall Street by making an 11th-hour bid for Adelphia
Communications, a move that was roundly derided by analysts, in part
because it would have diluted its focus on the New York area.
Adelphia was later sold to Time Warner and Comcast.
In their letter yesterday to the board of Cablevision, which is based
in Bethpage, N.Y., Charles and James Dolan said they believed that the
cable business could do better as a private business without the
pressure to meet quarterly earnings targets.