“Cablevision Slims Down to Beef Up Profits”
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Get Help Now!Why did Dolan decide not to reduce customer service staff in the cable operation?
How did the company’s sinking stock price affect its financial management?
Why couldn’t Cablevision simply borrow $600 million to close the cash flow gap?
Visit the investor information section of Cablevision’s website, http://www.cablevision.com, and check out the financial news. How has the company performed financially in recent quarters?
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Why did Dolan decide not to reduce customer service staff in the cable operation?
Dolan decided not to reduce customer service staff in the cable operation because that would have directly impacted the revenues of the company and the losses of the company would have increased faster than what they did. The customer service staff reduction could have led to an influx of its workers to its competitors and a fall in the morale of the workers. Newsday says tomorrow is “D-Day for the Dolans,” with two major decisions expected that will have significant impact on the future of the Dolan family and the Cablevision empire: “In one decision Thursday, the Metropolitan Transportation Authority is to announce whether Cablevision, the Jets or longshot energy concern TransGas will get to develop a 13-acre site on the West Side of Manhattan. Thursday also is the day an agreement expires between Charles Dolan, 78, and the board of directors to keep alive the Voom high-definition satellite TV service.”Oh, and if that wasn’t enough, Cablevision is also mulling over whether to seek a merger with bankrupt cable operator Adelphia Communications.
How did the company’s sinking stock price affect its financial management?
The company’s sinking stock price affects its financial management in several ways. First, the company is forced to depend more on debt event though the debt equity ratio is very unhealthy. Second, the creditors clamored for payments making its precarious current ratio of 0.56 and quick ratio of 0.26 under further pressure. Third, the debtors smelling a collapse of the company delayed payments and the banks smelling a wounded deer set stricter terms and tough lending terms for lending.
Cablevision has already lined up two blue-chip Wall Street investment banks – Morgan Stanley and Lehman Brothers – to advise on a buyout offer from the Dolan family. In addition, Cablevision’s board has formed a special committee to evaluate the offer. In June, the Dolan …
