EchoStar chief Charlie Ergen walked away with the goods from the Voom fire sale yesterday. EchoStar picked up the assets of Voom, Cablevision’s erstwhile satellite service, for $200 million, less than half the amount the Bethpage, N.Y. cable concern invested in it.
Specifically, EchoStar agreed to buy the Rainbow 1, Voom’s only satellite, located at 61.5 degrees west longitude, as well as the rights to 11 DBS frequencies at that location. In addition, EchoStar will also buy the Rainbow ground facility in Black Hawk, S.D., and related assets.
Voom, launched in October 2003, was positioned as a hi-def satellite service. Cablevision, which has 3 million cable TV subscribers in the New York metropolitan area, sunk nearly $500 million into the venture. By the end of 2004, it had netted around 26,000 subscribers and lost more than $76 million. Nonetheless, Voom execs went out in November and leased 16 transponders over 10 years from SES Americom. The following month, Voom agreed to buy five birds from Lockheed Martin for upwards of $1.5 billion.
Cablevision will retain its proprietary programming units, which include an HD news network launched specifically for Voom. Additional satellite orbital slots not purchased by EchoStar remain for sale. Cablevision said it would continue to provide DBS service to its Voom contingent during the transition.
And so ends Charlie Dolan’s vision of the next big thing. The 79-year-old founder and chairman of Cablevision has long been held as one of the most innovating executives in the delivery of television. He pioneered the notion of premium cable networks, created the first regional sports packages and built Cablevision out of a 1,500-subscriber backwater. Urban legend has it that Dolan wasn’t above crawling around under the streets of New York to lay out the company’s infrastructure.
Voom was the brainchild of Charlie Dolan, whose son James, Cablevision’s CEO, was apparently not willing to let the cable company absorb Voom’s losses. Analysts are not speculating about the Dolans’ future with the company. A report from Rich Greenfield, an Doc Horn at Fulcrum, said the Dolan family’s control of Cablevision "could be viewed as a concern."
