Despite Cablevision Systems Corp. chairman Chuck Dolan's suggestion that he might buy ailing direct-broadcast satellite service Voom from his company and keep it running, Cablevision is selling Voom's satellite to EchoStar Communications Corp.
The owner of DISH Network, EchoStar says it will buy Voom's core Rainbow DBS (RDBS) assets, a satellite, 13 frequencies and rights to 11 additional frequencies.
EchoStar already has a satellite in a nearby location, and will acquire ground facilities and related assets in Black Hawk, S.D. The transaction is subject to review by the Federal Communications Commission and other regulatory agencies.
The deal follows a flurry of speculation triggered by an internal memo that leaked.
Fulcrum Capital analysts Richard Greenfield published what he believed to be an internal memo to employees fearful of losing their jobs." We love the Voom project,'' said Dolan and his son, Thomas, in the memo. "It is our expectation that RDBS will be offered for sale as an operating business. Potential bidders for RDBS include members of the Dolan family"
Cablevision did not return a call seeking comment.
Cablevision’s board wanted to pull the plug on Voom, a direct broadcast satellite service emphasizing HD content that threatened to eat up more than $1 billion in cash even if it’s ultimately successful. The company is likely to sell Voom’s sole satellite.