Business Management Unit 5 Individual ProjectEssay Preview: Business Management Unit 5 Individual ProjectReport this essay1. 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 didnt 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 companys 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 couldnt 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.
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 Rainbows 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 Dolans big move and Cablevision has become one of the nations leading telecommunications and entertainment companies to serve the New York area
”a). We expect that net income to return to about $9.4 million in FY11 and $11 billion in FY12. The revenue is projected to be around $12.9 billion, while average costs have risen by $4.6 million, compared to $4.7 million. Total operating earnings per share were $4.35 and cost per share were $3.51, versus net costs. We expect average operating cost to fall by about $1.3 billion over the 3-year period, driven by increased cost from our core services business and increased cost of programming revenues to the third quarter, net cost of programming income, and the return on capital and operating income, including additional operating, administrative, and outside income as well as cost and operating expenses. Overall, the operating results of all four major companies had similar or higher operating results per share at $1.18 or $1.02, compared to $0.65 or $0.40 in FY02. In other words, they were the better performers. We also expect them to retain revenue, including at least two new revenue streams as well as their new operating growth. Our key findings for us: 1. The Company experienced strong first quarter results and continued profitability, and the performance could exceed earnings per share expectations. 2. As of September 30, 2005, Cablevision’s earnings were significantly better than the fourth quarter sales of over $300 million. Our primary objective was to produce high-growth, high technology, high value and high quality telecommunications services for the local community. We learned some lessons regarding our business during 1999. While the second quarter results have improved significantly as the company has experienced a return in full to where it was in 1999, our results do not necessarily match those of our first quarter results. 3. The Company’s business has grown considerably in recent years. We have introduced wireless technology that is more cost effective during an outage, while also having more success on high-speed broadband, improved customer experience in high-complexity and low-complexity fiber optic network, and better reliability to address customer needs. As a result, we are confident that our new product will produce a strong second quarter results. 4. The company has benefited from a strong portfolio of new, high-capacity commercial infrastructure and technology investments. We have continued expanding our infrastructure to provide more data and provide expanded coverage to the public. Our expansion included our New York division in the city of New York, as well as additional local businesses located in the Bay Area, Philadelphia Area, Los Angeles and Washington DC. 4. The company is very competitive and we need to continue to optimize our business to grow. We should conclude this quarter that our new high-speed broadband products, the new high-speed fiber optic systems will significantly provide more data and provide higher quality data coverage in a broader spectrum of areas. Our success in achieving an overall good showing is reflected in the lower expenses in our business than would be possible if we were to increase our existing competitive position. Further information about the Company’s current business can be found on the Company’s website: http://www.cablesvision.com, at: www.cablesvision.com/investments/corporate, and at the Corporate Headquarters: http://www.cablesvision.com/store, at: www.cablesvision.com/app, on: www.corporation.com, on: http://com.cablesvision.com/online/business, on: www.cablesvision.com/www.networks.com, and at: www.louis.com/about-com. Contact: http://www.cablesvision.com. About the Corporation: Cablevision, Inc. ( www