I hate Cablevision / a few great quotes on pensions & Social Security
I was looking around this morning for something that I felt passionate enough about to write on. After looking around for a while and not seeing anything that really caught my eye. Wham there is was. Cablevision (CVC). Man I hate Cablevision. Perhaps it stems from them charging me an arm and a leg for television for all of these years. Or perhaps it harkens back to when they deprived me and millions of other subscribers from our beloved New York Yankees for the bulk of a season years ago. I think that it mainly has to do with the fact that nepotism has turned what should be a cash cow into a laughingstock of a company.
Cablevision recently made a series of good moves by canning Isaiah Thomas, who in his post playing career has turned every single thing that he has touched into mush, as President and coach of the New York Knicks and replacing him with the well respected Donnie Walsh as President and the fairly successful Mike D'Antoni as coach. Furthermore, Barron's had a bullish write-up on the company this weekend. When I heard these pieces of news, I said to myself wow perhaps the world's absolutely worst CEO, James Dolan, may have done all of the damage that he can possibly do to a company that should be able to print money.
Well...maybe not. According to this morning's New York Times, Cablevision has offered $650 million to purchase a so so company in a dying industry...New York Newsday...from the Tribune Company (TXA) (see article: Cablevision Offer Baffles Wall Street (again)). What?!?! Newscorp (NWS) and Mort Zuckerman, the owner of the New York Daily News, bowed out of the bidding with final offers that were $70 million less than Cablevision's. And these are fairly successful news organizations people, not some newspaper rookie like CVC. Can anyone explain the logic of how overpaying for a so so newspaper benefits Cablevision's shareholders?
This offer comes on the heels of the company purchasing the "Sundance Channel" for a staggering $500 million! Has anyone out there ever even seen this channel? I know that I certainly haven't. James Dolan was recently quoted as saying something along the lines of shareholders pay him to grow the company...ahhhhhhhhh no they don't dummy. They pay you to spend their money WISELY and to enhance the value of their company, not destroy it with a string of idiotic decisions.
I know that this company's stock has been beaten down quite a bit and that its core cable business generates a tremendous amount of money, but for me no price is low enough as long as James Dolan is in charge. This guy has to be one of the absolute worse CEOs in the entire world. He has been milking me with overpriced cable television for years. I cannot wait until Verizon (VZ) Fios is available in my area so that I can show Cablevision what I think about their company and how it's run.
As I mentioned in a previous blog post. I recently purchased a new book called While America Aged by Roger Lowenstein. Here we have a legitimate author who has written highly successful books like When Genius Failed and Buffett, not some alarmist kook, sounding the alarm that the United States could be in for a world of pain if something is not done to repair its damaged pension and Social Security systems. I haven’t had a chance to read it yet, but here are a few great quotes that I was able to pull from it by just skimming it for a few minutes. You tell me if this sounds like a recipe for a strong U.S. dollar in the long run.
"America currently has approximately 38 million senior citizens....By the year 2030, it is projected that one in every five Americans will be over sixty-five."
"In the private sector, employers' pension funds are, cumulatively, an astounding $350 billion in debt."
"So many pension plans have gone bust already that the federal agency that insures pensions itself is in trouble. This agency, the Pension Benefit Guarantee Corporation, is responsible for the pensions of 1.3 million people whose plans have failed. Thanks to a spate of recent costly failures (ninety-four sponsors collapsed in 2006 alone), the PBGC is now $19 billion in the red, and could eventually require a tax-payer bailout."
"Even worse, the states and localities, which have promised pensions to millions of present and future retired policemen, teachers, clerical workers, and others, are hundreds of billions of dollars behind on their payments to state pension funds. This money is owed by the taxpayers - and under the state constitutions, the debts must be paid; pensions can never be defaulted upon. Thus the deficits will require a combination of layoffs, service cuts, and higher taxes in the majority of states for decades to come. In the case of some of the worst offenders, such as New Jersey, West Virginia, and Illinois, the cuts will likely be draconian. Thanks to their grossly underfunded pensions, these states are essentially insolvent"
"Currently there are 3.3 workers for each recipient of Social Security; by 2032 that ratio will drop by a third to 2.1 workers per each beneficiary."
No position in CVC in real life, short it in CAPS