Hoping to avoid a cash crunch looming next year, Cablevision Systems Corp.
is overhauling its operations, laying off 7 percent of its corporate staff,
slashing capital spending, selling its movie theater operation and shuttering 60
percent of its Wiz consumer-electronics stores.
Cablevision's stock has sunk in part because the company has surrounded its core cable system and network businesses with an array of money-losing, capital-hungry or lame businesses, such as buying an already-ailing New York consumer-electronics retailer and a cellular phone company that was readying an expensive launch in the New York market.
Cablevsion CEO James Dolan said that in previous years investors expected fast furious growth and capital investment.
'Now it's about discliplined growth, it's about risk aversion,' he said.
Dolan projected that the moves will allow Cablevision to begin generating
positive free cash flow by 2004 -- actual cash after the interest expense and
capital spending excluded from the commonly used measure of operating cash
So to cut the company's cash obligations, The Wiz will close 26 unprofitable units, out of 43 stores.
Owning The Wiz was seen as a key part of Cablevion's sales of cable-modem
services, pushing the equipment to consumers without requiring an installer to
make a home visit.
The 59 theaters in the Clearview Cinema chain, which barely breaks even, will be put up for sale.
CEO James Dolan envisioned Clearview as supporting and promoting Cablevision's cable products.
Northcoast Cleveland PCS phone operation will be sold or handed off to a partner, but a planned rollout in the New York DMA will be shelved.
Cable capital spending in 2003 will be cut 35-45 percent from an expected $1
billion down to $550 million-$650 million.
That will come both from the completion of system rebuilds to what looks like
a slowdown in expected deployment of digital cable.
That includes scrapping an agreement that committed the company to but a
million digital converters from Sony and for that company to be the sole