Monday July 22, 2019

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Cablevision Faces Problems Amid COO Rutledge’s Departure, Continues Speed War Aganist Verizon

Five industry analysts, recently downgraded Long Island based cable carrier Cablevision’s stock last month in the wake of the surprise resignation of longtime chief operating officer Tom Rutledge, according to Crain’s NY Business. Rutledge left to become chief executive of Charter Communications, after reports that he’d had enough of working for Cablevision scion James Dolan

Cablevision’s stock price, which took a major hit in October, is down 57% from a year ago. That compares with a decline of 4% for Time Warner Cable’s share price and an increase of 8% for Comcast Corp.’s over the same period.  The news has sparked speculation over whether Cablevision will be sold, taken private or left to muddle along in a marketplace that has put pressure on the cable industry overall. “It’s tough out there, and I don’t think there will be an improvement in the fundamentals anytime soon,” Vijay Jayant, a cable analyst at ISI Group Inc, told Crain’s NY Business.“And [Cablevision’s] leadership is gone.”

Problems for the company extend beyond the departure of Rutledge and the weak housing market, which has cut into subscriber growth across the industry. The company also faces stiff competition from Verizon FiOS, which is available across nearly half of Cablevision’s footprint, Crain’s NY Business reports.

Meanwhile, the ad war between Verizon and Cablevision is stepping up. Cablevision recently unveiled a new marketing campaign spoofing Verizon’s “eye-rolling” ads. They claim “Optimun Online download speeds are actually faster than basic Verizon FiOS.”

The ads say that Federal Communications Commisions’s data indicates that Cablevision delivers higher average speeds over a 24-hour period than FiOS Internet service. The new spots began airing in the New York market on Jan. 6.

“Surprised? So is Verizon, we’ll bet,” the voiceover says in the “eye-popping” ad.

The ads come after Cablevision sued Verizon last month over ads claiming that an August 2011 FCC study revealed that Cablevision delivered 59 percent or less of advertised speeds during peak periods. Cablevison argued that more recent data showed it had improved its performance. The companies settled the suit for undisclosed terms.

Crain’s NY Business

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