Well I hope they do it. If they do, as usual, it will be with somebody elses money. Merrill Lynch and Bank of America will be happy to raise the money for FEES. I will bet that it won't be their money at risk.
I nearly died laughing when I read excerpts from Cablevisions letter proposing the deal. I quote, "not constrained by the public markets tendency to focus on the short term results...will better enable the cable company to meet its competitive challenges." This company has been losing money for well over 20 years and has an accumulated deficit of $3,445,000,000. Would they have been a better company if the deficit was $20 billion over sixty years?
You are correct to point out the cost per subscriber premium. But it is worse than that. When a company or an industry can not meet the standard metrics (net income for example) they have to come up with a new metric to confuse investors. Value per subscriber is similar to "page views" or "mouse clicks" used during the internet bubble and we know how that turned out. What difference does it make how much you value each subscriber for if you don't make any net income per subscriber?
Finally, the remaining public company "Rainbow Media will most likely continue to lose the public's money. Would you like to own a piece of the Knicks or the Rangers? Will they ever play professional hockey again
I covered my CVC short some time ago. I made money. The Dolans are for the most part unpredictable, however, I think it is safe to say that they will NEVER pay a dividend to their shareholders. Unlike NPK!