It came as a shock to the broadcast world - east coast based Cablevision (CVC) systems, selling the for nearly $18 billion to France’s Altice. Many in the industry felt the Dolan family, who founded and controlled the company, would never sell their prized asset.
The question for media analysts is whether the sale is signaling something bigger happening in the cable industry. The business model is under threat, and big media shareholders must be asking what’s next for the industry.
Yahoo Finance’s Mike Santoli believes Cablevision’s sale was the right thing to do, and even the Dolans had to know that.”The Dolans know more intimately what basically everybody knows, which is that the cable business has probably seen its best days,” he says in the attached video. “It's obviously not a growth business anymore in the broad sense.”
While “cord-cutting” as a trend has been around for a few years now, it’s not the reason why Cablevision was sold at this time - it was also about timing. “[Cablevision has] been in play at least conceptually for a very long time, the fact that the Dolans pulled the trigger now does tell you that they got landlocked, because Time Warner Cable (TWC) was always considered to be the likely buyer, and Time Warner is now being sold to Charter (CHTR) - which took it off the table.”
Luckily for Cablevision shareholders, there was a big European buyer in Altice that was desperate to have a marquee asset in this country. Consolidation has been coming to the broadcast and cable industry for some time now, as companies try to bulk up in order to deal with falling cable subscribers. At least for Cablevision (and several other operators) it invested in broadband services.
As for the Dolans, they also have a stake in the Madison Square Garden company (MSG), which is itself being separated into the media business entity (dubbed MSG Networks), and the sports teams and arenas in the other. Analysts surmise the Dolans will dump their stake in MSG Networks and keep the remaining portion of the Madison Square Garden company.
“Unfortunately perhaps for New York sports fans, all [the Dolans] are left with are the Knicks and Rangers,” Santoli wryly concludes.
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