Cablevision CEO Jim Dolan is either a glutton for punishment — or has no choice in his timing due to notification requirements — by setting himself up for a drubbing by customers after shareholders shot down his buyout offer on Wednesday.
Capping a hard week in which a majority of institutional investors and other independent shareholders voted to reject a bid by CEO Dolan and family to take Cablevision private, the company announced its 2008 "price adjustment" or rate hike.
Cablevision will increase the cost of its average iO TV video package next year by 4.7%, a figure the company attributes to higher programming costs, which have risen nearly 13% this year, and higher operating costs.
Cablevision’s cheapest basic "lifeline" level of cable TV service will remain unchanged. Pricing for its standard high-speed Internet service, Optimum Online, and digital phone service, Optimum Voice, will remain also stable, with no increases planned for 2008.
The 4.7% video increase would boost the cost of Cablevision’s Family Cable package from $47 a month to $49.20 a month next year.
In comparison, Verizon — which has been riling Dolan and his management team by aggressively marketing in its footprint — increased its FiOS TV video rates by 7.5% in January, to $42.99. Its 2008 pricing has not been announced and may remain unchanged.
Cablevision’s new 2008 iO TV pricing will start showing up on affected customers’ bills in December and January, depending on the market and subscribers’ billing cycles.