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Cablevision Spinning Off Voom, Nets, Chuck Dolan

In a huge surprise move, Cablevision Systems Corp. is spinning off not just its cash-hungry start-up Voom direct-broadcast satellite service, but also its three national entertainment networks: AMC, The Independent Film Channel and WE: Women’s Entertainment.

Further, founder and chairman Charles Dolan will exit the cable company and become the chairman only of Rainbow DBS.

The plan is dramatically different from Cablevision’s initial plan to isolate Voom from its cable systems.

Under fire from investors who saw the HD-heavy DBS service as a cash drain, Cablevision announced last summer that it would spin Rainbow DBS off to shareholders, tucking in its small, ailing movie-theater unit along to make the transaction tax-free. Now the company is detaching more lucrative properties worth around $1.8 billion from its cable systems.

Dolan’s son, president and CEO Jim Dolan, will become chairman of the MSO. But Chuck Dolan will continue to have a near-controlling financial interest in Cablevision.

Cablevision, however, has not set a date for the separation. Just a week ago, Chuck Dolan reiterated that the company planned to spin off Rainbow DBS by year-end. Now, the company would only say it expects the spinoff "as early as possible in 2004."

The separation shows clearly where Chuck Dolan’s interests lay and raises the question of whether he is now finally ready to sell Cablevision’s cable systems.