Dolan Family Requests More Than 300 Municipalities Review Altice's Management of News 12
NEW YORK, Jan. 15, 2019 /PRNewswire/ -- In a letter dated January 15, 2019, Charles F. Dolan is requesting that more than 300 municipalities in New York, Connecticut, and New Jersey review their cable franchise agreements with Altice N.V.
Because of significant cutbacks at Altice-run News 12 Networks, the letter recommends that each municipality should review its agreement with Altice to insure compliance in terms of protecting jobs and maintaining the quality of local programming.
Local government officials should also ask themselves whether Altice remains committed to meeting the needs of the local communities and is willing to fully support News 12's award-winning coverage of issues of local importance, according to the letter.
Each municipality has authority for the franchise of cable TV services in its area. Therefore, the letter says they should be aware of a lawsuit against Altice that raises concerns about past and future downsizing in News 12 staff and the resulting deterioration of News 12 programming quality. The letter states that Altice's actions may have breached commitments in their local franchise agreement and neglected its obligation to meet the public interest needs of the communities it serves.
This request comes on the heels of news last week that the Dolan vs. Altice lawsuit is heading for its first hearing on January 28. The lawsuit was filed last September to enforce Altice's legal obligation not to reduce News 12's workforce for five years and to preserve the integrity of its programming.
The hearing will take place in the Court of Chancery, State of Delaware. This first court appearance seeks a temporary restraining order that shields News 12 employees from further cuts and opens the door for discovery. This initial proceeding is expected to lead to a more comprehensive hearing on the request for a preliminary injunction and sets the stage for subsequent court action.
Charles F. Dolan Background
Charles F. Dolan launched Cablevision in 1973 and led it until its sale to Altice for $17.7 billion in 2016. He owns controlling stakes in AMC Networks and Madison Square Garden and is active on many boards and not-for-profit healthcare and educational organizations. Mr. Dolan signed the letter requesting the municipal review, because he cares about News 12 being operated as agreed to by Altice in 2016.
Excerpts from the Dolan Letter to the Municipalities
"Our family has sued Altice USA ? a provider of cable programming services in your area ? for failing to preserve the quality of local news coverage offered to your residents by News 12, as well as for not protecting the jobs of News 12 employees.
"Altice made these solemn promises to protect employees' jobs and the quality of programming in the merger agreement by which Altice acquired News 12.
"As the local franchising authority for cable TV services, you should be aware of these actions and consider whether Altice has breached similar commitments to you in your local franchise agreement or otherwise.
"Also, we urge you to evaluate how your community might be negatively affected if Altice were allowed to continue eliminating jobs and reducing local programming. You may want to determine whether Altice, as steward of News 12 and the local franchised cable operator in your area, is fully committed to meeting community needs and willing to cover issues of local importance."
Comments by Patrick Dolan
Patrick Dolan, who was president of News 12 at the time of its sale to Altice USA, commented, "Both of these actions ? requesting a review by the municipalities and the lawsuit we have initiated ? have one overarching goal: to protect News 12's award-winning staff and the quality of the unique hyper-local programming they deliver.
"Altice USA management has shown it's willing to put profits ahead of good people and good journalism. That's unacceptable. It is imperative to maintain News 12's rich legacy as one of the topmost local television operations in the U.S."
Background on Lawsuit Filed September 4
A lawsuit and request to permanently enjoin Altice USA was filed September 4 in the Court of Chancery of the State of Delaware by the Dolan Family against Altice USA (NYSE: ATUS) for failure to abide by promises Altice made in a 2016 merger agreement and for equitable fraud, among other claims.
The lawsuit targets Altice USA and alleges that the company ignored commitments made as part of its merger with Cablevision Systems Corporation (Cablevision). The merger of Altice and Cablevision closed in June 2016 for a value of $17.7 billion.
Plaintiffs in the lawsuit are: Charles Dolan, founder and former CEO, Cablevision; Helen Dolan; James Dolan, former CEO of Cablevision; Patrick Dolan, president of News 12 at the time of the sale; Colleen McVey, current employee of and news anchor with News 12 Networks; and a second long-serving anchor, Danielle Campbell.
This lawsuit was filed to protect current employee jobs and programming quality at News 12, which operates a group of local news television channels throughout New York, Connecticut, and New Jersey.
The lawsuit, as amended to include plaintiffs Colleen McVey and Danielle Campbell, can be found here: https://www.scribd.com/document/389966322/Dolan-et-al-v-Altice-et-al-Verified-First-Amended-Complaint.
Altice is no stranger to lawsuits. Records show that 126 lawsuits have been filed within the last three years against Altice.
2016 Agreement Conditions
To induce the sale of Cablevision in 2016, Altice USA unambiguously agreed to operate News 12 substantially in accordance with the News 12 Business Plan through at least the end of 2020.
The Business Plan provided that News 12 would employ full-time equivalent headcount of 462 people throughout this five-year period.
Altice expressly recognized, accepted and agreed, in adhering to the News 12 Business Plan, to incur cumulative losses of up to $60 million, which has not occurred, in the operation of News 12 over the period to maintain the network's existing employee base, as well as the quality and legacy of News 12.
2016 Merger Agreement
A key provision of the 2016 merger agreement was the requirement for Altice to operate News 12 in accordance with News 12's Business Plan through at least the end of 2020 and support News 12 employees who were responsible for making the network unique among local television stations.
Altice agreed to these nonstandard provisions in a transaction of this type, because Altice knew that continuing the legacy of News 12 was an important consideration for the Dolan Family and a necessary inducement to the merger.
These covenants were so material to the merger, Cablevision intentionally disclosed these protections to public shareholders.
Altice Breached the Merger Agreement
Turning its back on its prior representations and promises, in 2017 Altice eliminated approximately 70 News 12 positions ? in direct violation of News 12's agreed-upon Business Plan incorporated into the merger agreement.
Altice has since informed the Dolans that Altice is on the verge of terminating dozens more News 12 employees, including Ms. McVey and Ms. Campbell; these threatened actions by Altice would irreparably harm the quality of the local news content that News 12 creates, the livelihoods of News 12's employees, and the legacy that the Dolan Family protected through explicit merger agreement provisions.
In targeting two women anchors ? both dedicated 30-year veterans of News 12 ? Altice may be engaging in age and/or gender bias, as well as thinning News 12 staff.
Lawsuit Overview
Plaintiffs' lawsuit requests, in sum, that the Court enter judgment in favor of plaintiffs, enjoining Altice USA from:
Terminating employment of any current employee of News 12, other than in the ordinary course of business to replace such individual for obvious cause with another person with equivalent qualifications;
Taking any action that would cause News 12 to cease to operate in substantial compliance with the News 12 Business Plan; and
Taking any action that would, in any way, violate or breach the merger agreement.
The lawsuit further requests ordering Altice USA to operate News 12 in substantial compliance with the News 12 Business Plan through at least the year 2020.
The plea for injunctive relief targets Altice USA, because Altice ignored the commitments it made to attain its $17.7 billion merger with Cablevision.
The primary purposes of the lawsuit are to protect News 12 employees, consistent with the promises made by Altice in the merger agreement; to continue News 12's rich legacy of journalistic integrity featuring hyperlocal coverage; and thus, to preserve the standing of News 12 as one of the topmost local television stations in the U.S.
About News 12
News 12 is a group of cohesive, regional cable news television channels serving nearly 3 million households in New York State, Connecticut, and New Jersey including two boroughs of New York City and most of Long Island.
News 12 provides news coverage 24 hours a day, and focuses on providing award-winning, hyper-local, in-depth news coverage that is rare in the United States, particularly with respect to the region it serves.
The Dolan Family deliberately and methodically built News 12 as the foremost hyper-local news source for the edification of Long Island, Bronx, Brooklyn, and other communities.
Due to the pre-merger journalistic freedom provided by Cablevision's ongoing financial support, the employees of News 12 were able to pursue important stories addressing significant local issues relevant to millions of individuals residing in the coverage area.
No news station would have otherwise had the resources to uncover and report these vital stories.
News 12 was and is of singular importance to the Dolan Family, News 12's employees, and the viewers within News 12's coverage community.
About Altice
Altice USA (NYSE: ATUS) is a Delaware corporation. Altice Europe is a Dutch company. Altice Europe is successor in interest to Altice N.V., and thereby bound to the terms of the 2016 merger agreement.
Altice USA is one of the largest broadband communications and video service providers in the United States, delivering broadband, pay television, telephony services, proprietary content and advertising services to approximately 4.9 million residential and business customers across 21 states through its Optimum and Suddenlink brands.
SOURCE The Dolan Family
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