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Marketwatch looks into the whole VOOM mess

SAN FRANCISCO (MarketWatch) - Cablevision shares declined Thursday after the cable operator announced the ouster of three board members and disclosed that securities regulators are investigating trading activities related to its satellite business.

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Various published reports had said in recent months that Chairman Dolan had disagreed with his son James, the company's chief executive, and several board members about what to do with Voom, which was a significant money loser. Charles Dolan was said to favor keeping the business alive, while James and certain board directors wanted to shut it down.

Some analysts have viewed Charles Dolan's zeal for Voom as an indication that he is no longer interested in the cable business, and may therefore consider a sale of the company. Time Warner (TWX: news) is seen as the most logical suitor for the Cablevision, as it has cable systems in New York that would fit well with Cablevision's systems.

On Tuesday, Cablevision said it intended to close Voom after it couldn't agree to terms with Charles Dolan, who had intended to buy the Voom assets that were not included its January deal with EchoStar Communications (DISH: news).

That Jan. 20 transaction had been hailed by analysts and investors who had been hoping Cablevision would abandon Voom, which had lost $75 million in last year's third quarter alone, and never seemed to catch on with subscribers.

The company had originally intended to spin Voom off, along with its Rainbow cable network assets networks AMC, Women's Entertainment and the Independent Film Channel. That spinoff, first announced in the fall of 2003, was postponed several times, then finally suspended indefinitely last December 21.