VOOM: Dolan Eyeing DISH Deal?

[Gregg Lengling]

Even more details are surfacing concerning Cablevision, its VOOM satellite TV service and attempts by Chairman Charles Dolan to take over the struggling satellite TV service.

A letter sent Thursday to Dolan by Victor Oristano, on behalf of independent directors and class A shareholder directors, detailed how Dolan planned to approach EchoStar to negotiate an arrangement in which the Rainbow-1 satellite supporting VOOM's service could be "brought" together with the VOOM business outside of Cablevision. "For our part, we agreed to support a delay in the shutdown of VOOM for a short period while you engage in those discussions and that if you are able to negotiate such an arrangement with EchoStar on terms satisfactory to us, we would be prepared to renew discussions with you for a sale of the VOOM business," the letter sent to Dolan stated.

It's unclear how Dolan would gain use of the Rainbow 1 satellite, if he could get access to the satellite at all, or even if a deal was actually discussed between the Cablevision chairman and EchoStar.

Cablevision released the contents of the letter through a Securities and Exchange Commission filing. EchoStar has a deal in place with Cablevision to buy the satellite and other assets for $200 million, and Dolan has been working to gain the other VOOM assets through an entity he set up called VOOM HD.

Cablevision suspended plans to shut down VOOM at the end of the month a day after Dolan appointed new Cablevision board members.

The letter also took issue with a new Web site - http://www.voomllc.com - that apparently is helping with the enrollment of new VOOM customers. "These efforts - likely to deceive new subscribers and the public into believing that VOOM is still an authorized going business of Cablevision - are in direct contradiction to the action taken by the board ... because they are an expansion rather than a shutdown of the business," the letter stated.

The Web site was still accessible Thursday night, but contained a message stating its services were temporarily unavailable.

Also, Cablevision revealed Thursday that the Securities and Exchange Commission is conducting an informal inquiry into the trading of its securities, and has requested information concerning the suspension of its Rainbow Media spin-off and agreement to sell certain Rainbow DBS assets to EchoStar.