With the stock market swooning, Cablevision Systems emphasized the strength of its financial balance sheet and customer gains, waving off questions about corporate restructuring in a Thursday presentation to the Goldman Sachs Communacopia XVII Conference.
Earlier this year, the New York-area diversified cable giant told shareholders it was open to remaking the company to boost shareholder value, such as possibility selling or spinning off its cable-networks unit.
When asked about restructuring the company, Cablevision president and CEO James Dolan said, “I think my answer probably is different [today] than even a month-and-a-half ago” in the wake of the credit-market meltdown.
He did say that the company’s most mature networks would be at the top of any for-sale list. Its Rainbow Media Holdings unit owns AMC, Sundance Channel, The Independent Film Channel and WE tv.
But with capital markets in turmoil, Dolan said Cablevision is currently focused on holding a steady course. He added that the company’s credit lines and cash flow are sufficient to refinance $1.7 billion in maturing debt, saying, “That’s an important position to maintain right now.”
Cablevision chief operating officer Tom Rutledge said competition for video subscribers from Verizon Communications’ FiOS TV is not a game-changer, positioning FiOS as a typical overbuilder with trajectory pointing to a 15% maximum penetration. “They’re still in single-digits,” he added, saying Verizon slowed expansion because large patches of its footprint need physical plant upgrades to introduce FiOS.
Rutledge added that Cablevision has an opportunity to grow its revenue serving the 600,000 businesses in its footprint now that its infrastructure handles voice and high-speed data. In the past, the physical plant was geared strictly for video.
A year ago, a bid to take the company private by the controlling Dolan family was voted down by shareholders, and Dolan said Thursday that in the aftermath, Cablevision shifted to a growth strategy, as the scuttled buyout meant that the company didn’t pile on more debt.
Asked if another family buyout bid is in the offing, he said, “I would never completely rule it out. But at this time, it’s not really on our radar screen.”
