In the Media

In the News

The news was the latest in a string of embarrassments for the Dolan family-controlled operation, which in addition to serving 3 million area homes with cable service also owns Madison Square Garden, the Knicks and Rangers and several cable networks.

Investors, long-accustomed to the company's internal shenanigans, shrugged off the news and instead focused on the stellar performance of the company's cable unit: while the company delayed quarterly earnings, it did release data that showed gains in subscribers and revenue.

In a report yesterday Merrill Lynch analyst Jessica Reif Cohen said, "The company continues to be the country's premier cable operator, which the limited [quarterly] results this morning confirm."

Nevertheless, Cablevision joins a list of more than 80 companies that have disclosed problems in the timing of their stock option grants to executives.

The SEC and other government agencies have been investigating whether companies lied about the timing of stock grants to illegitimately boost the returns for executives.

In a statement yesterday Cablevision said, "In light of published reports concerning the pricing of stock options and the timing of option grants at numerous companies, the company undertook a voluntary review of past practices in connection with grants of stock options."

The company found the pricing of option grants between 1997 and 2002 was manipulated, and it said that it "expects to restate previously issued annual and interim financial statements."

Cablevision's proxy filings during the period show nearly 3 million stock options were issued at strike prices ranging from $14.25 to $76.69.

While it is unclear which executives may be affected by the backdating probe - options were given to CEO Jimmy Dolan as well as several others during the time - a later disclosure shows the company simply setting a new price for options grants that became worthless with the decline in Cablevision's stock price.

In 1999, 2000 and 2001 Cablevision's stock was soaring - at times trading well over $70 per share. But when the stock later tanked, the company repriced all its options grants that had strike prices of more than $20 per share, according to the company's 2003 proxy statement.

The later disclosure of the repricing "doesn't clean up the original problem they had" of backdating, said lawyer Jake Zamansky.