Dolans reselling value proposition


Here they go again. Shares of Cablevision Systems soared 14% on Thursday after the Dolan family that controls the cable operator said it is again looking at alternatives to unlock the company's true value.

After Cablevision reported solid second-quarter results, CEO James Dolan said that management wants to close the gap between the firm's strong operating performance and its market value.

"We are considering and actively exploring alternatives that may close this gap and want to assure investors that we will listen to their thoughts," Dolan said.

While he declined to specify likely options, he mentioned stock buybacks and dividends as possibilities. Wall Street analysts also cited options that the Dolans had looked at before, such as a possible spinoff of cable networks unit Rainbow Networks and another buyout attempt to take the company private.

Wall Street has been somewhat wary, however, as the Dolans have in recent years suggested moves without following through on them.

"Investors will be rightly skeptical of the Dolans' commitment to this — or other — shareholder value creation paths," Sanford C. Bernstein analyst Craig Moffett said. "Nevertheless, Dolan's words today indicate some potential for unlocking the significant value we believe exists in Cablevision shares today."

Cablevision posted a 69% decline in second-quarter profit to $98.3 million from the year-ago period. Revenue rose 9.2%. (partialdiff)