New York -- Cablevision Systems Corp. said it plans to cut about 7 percent of
its staff, trim capital spending by at least $450 million off 2002 levels, sell
movie theaters, close 26 consumer-electronics stores and take other steps to
meet funding needs.
Facing an expected $550 million funding shortfall next year, Cablevision said
the actions it announced Thursday, combined with existing borrowing power,
should be able to meet 'currently projected funding needs' in 2003.
Cablevision said it reworked its relationship with digital set-top supplier
Sony Electronics to 'substantially' reduce purchase commitments, achieving some
of the capital expenditure savings.
Lightpath, the company's telephone subsidiary, will curtail planned
expansions, trimming capex to $80 million to $90 million in 2003 from $130
million this year.
Northcoast Communications, a wireless telephone start-up, will suspend a
previously announced New York City pilot program, and Cablevision 'intends to
maximize the value of this asset through a sale or strategic partnership.'
The Wiz, the electronics retail chain Cablevision bought out of bankruptcy,
will sell 26 unprofitable stores and retain 17 profitable ones.
At the same time, Cablevision said it would speed up availability of digital
TV and high-speed data, projecting 3.8 million high-speed data capable homes by
the end of 2002, up from 3.6 million previously forecasted; and 3.4 million
digital video capable homes by the end of 2002, up from a forecast of 2
million.
On Monday, Cablevision said it was buying back publicly owned tracking-stock
shares in Rainbow Media Group, its programming subsidiary.
That would add Rainbow's borrowing capacity to parent company Cablevision's.
Some analysts had speculated that the Rainbow rollup would make it easier to
sell networks such as Bravo, Independent Film Channel and AMC, but no such plans
were announced Thursday.
Thursday morning, Cablevision chairman Charles Dolan, CEO James Dolan and
other executives made a presentation to investors and analysts in New York,
discussing second-quarter results and the spending cuts.
