Cablevision falls after COO announces resignation
SAN FRANCISCO—Shares of Cablevision Systems Corp. fell Friday after the company announced the departure of its chief operating officer, who had been with the company for over a decade.
THE SPARK: Late Thursday, Cablevision said that COO Tom Rutledge informed the company that he is resigning this month. The company gave no reason for his departure in a statement, and a company spokesman said Cablevision wouldn't comment on the change.
The company has started a search for an executive to oversee the cable operations.
Rutledge, 58, joined Cablevision in 2002 as president of cable and communications and became COO in 2004. In that job he had responsibilities for Rainbow Media, which is now a separate company called AMC Networks, and for Local Media properties including Newsday, a daily newspaper in New York.
Bethpage, N.Y.-based Cablevision sells cable television, Internet, and voice services in the New York area. Its Optimum West subsidiary serves four Western states.
In October, the company reported that third-quarter net income fell 65 percent and it continued to lose video subscribers, although at a slower pace than analysts expected.
THE ANALYSIS: In a note to investors Friday, Brean Murray Carret & Co. analyst Todd Mitchell called the announcement a surprise, calling Rutledge "one of the most respected cable executives" and speculated that his exit is related to a "falling out" with the Dolan family. Charles Dolan founded Cablevision in 1973 and is currently company chairman; his son James Dolan is president and CEO. A number of other Dolan family members work as Cablevision executives and serve on its board.
Mitchell thinks that this could have stemmed from the Dolan family wanting to sell the company, or Rutledge considering a move to the CEO post at competitor Charter Communications Inc.
Mitchell rates the stock "Hold."
Cablevision spokeswoman Kim Kerns said the company does not comment on rumor or speculation.
SHARE ACTION: Cablevision shares fell $1.96, or 14.1 percent, to $11.97 in afternoon trading. The stock traded as low as $11.57 earlier in the day -- its cheapest price since July 2009.