Cablevision Systems, a sprawling cable TV, Internet and media company controlled by the Dolan family, Tuesday said it would explore strategic options, including a dividend and spin-off of assets.
The news was the latest turn in a long-running saga of internal conflict, attempted buyouts and tabloid headlines.
Investors cheered the news, pushing Cablevisions shares up $1.56, or 6 percent, to $27.49 in mid-morning trading.
In a statement, the company, based in Bethpage, New York, said its board of directors has authorized management to evaluate dividends or stock buybacks as well as business spin-offs and other options.
David Joyce, an analyst at Miller Tabak & Co. said the announcement adds substance to hints dropped by Chief Executive James Dolan on the company’s earnings conference call last week where they “did sound more shareholder and debtholder friendly.”
In recent years, the Dolan family, which holds a minority economic interest in Cablevision, but controls about 74 percent of shareholder votes through “super-voting” stock, had sought to take the company private. The family’s offers, including a $10.6 billion bid in 2007, were rejected by the board’s independent directors as insufficient.
The company also was the scene of internecine warfare between founder and Chairman Charles Dolan, who backed the company’s Voom satellite TV service, and his son, James Dolan, who wanted to shutter the money-losing operation. After a board room soap opera, James Dolan gathered sufficient board support to close the short-lived satellite unit.
In a separate development, a federal appeals court reversed a district judge’s ruling that stopped Cablevision from introducing a digital video recorder system where content is stored on the company’s servers instead of hard drives in consumers’ homes.
Media companies, fearful that more viewers would skip through commercials, had maintained that central DVR systems violated their copyrights. Cable companies, meanwhile, see the new systems as a way to rollout DVR services with minimal capital expenditures.
Cablevision, whose cable assets are centered in the New York metropolitan area, is facing fresh competition from Verizon’s FiOS service, which delivers video, voice and Internet through fiber-optic lines.
Analysts have speculated that Cablevision, which last week added the tabloid Newsday to its sprawling collection of assets, might try to unload its Rainbow Media unit, which includes IFC, Sundance Channel and AMC, home of hit show “Mad Men.”
Cablevision also owns Madison Square Garden, Radio City Music Hall, Clearview Cinemas, the New York Rangers and the New York Knicks, whose coach, Isaiah Thomas, was found guilty in a head-line grabbing sexual-harassment lawsuit. The victim was awarded $11.6 million in punitive damages in that case.