Business Management Unit 5 Individual Project

1. Why did Nolan decide no to reduce customer service staff in the cable operation? Nolan decided not to reduce customer service staff, because Cablevision was already in hot water with New Yorkers for not carrying the Yankee games. He didn't want to loose more customers then he might have already lost. He also wanted to keep existing customer service members to handle the high call volumes they expected due to inquires.

2. How did the company's sinking stock prices affect its financial management?

Cablevision relied heavily on the sales of its own stock as a source of cash and as a collateral for loan if they needed to borrower money. With the massive tumble their stocks took, it left the financial management scrambling for money that they counted on from stocks and active loans in the past.

3. Why couldn't Cablevision simply borrower $600 million to close the cash flow gap? Cablevision relayed on stocks as a source of financial support if they needed to borrow money and through the years they had fallen back on their stocks to support their borrowing. Borrowing enough money to close the gap would be tough given the sinking stock-collateral value and the fact that they were $7 billion in debt after acquiring business units over the years.

4. How has the company performed financially in recent years? Cablevision has continued to grow since the fall in 2002. They have had six consecutive quarters of basic subscriber gain and also released a statement on November 8, 2005 about third quarter results saying "Cablevision Systems Corporation reported financial results for the third quarter ended September 30, 2005. Consolidated net revenue grew 11% to over $1.2 billion compared to the year-earlier period, reflecting strong revenue growth in Telecommunications Services; Madison Square Garden; and AMC, IFC and WE networks, offset in part by lower revenue in Rainbow's Other Programming businesses. Operating income increased 8% to $107.2 million and adjusted operating cash flow ("AOCF")* increased 3% to $378.6 million." They have been very successful since Dolan's big move and Cablevision has become one of the nations leading telecommunications and entertainment companies to serve the New York area