Cablevision 2013 Annual Report Download - page 31

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and administrative actions may materially adversely affect our business or results of operations. New
requirements giving third parties access to our network or other assets, for example, could materially
affect our ability to compete. Changes to regulations from which we benefit and on which we depend to
run our businesses also could materially affect our operations. Any action with respect to these or other
matters by the courts, Congress, the FCC, the states of New York, New Jersey, Connecticut, or concerted
action by local regulators, the likelihood or extent of which we cannot predict, could have a material
adverse effect on us.
On January 10, 2014, the United States Supreme Court decided to hear a case involving Aereo, a
company that streams broadcast signals over the Internet for a monthly fee. Petitioners in the case
(mainly, the major broadcast networks) are raising arguments that, if accepted, would weaken the legal
underpinnings of a 2008 Second Circuit decision upholding the legality of the Company's remote storage
DVR (currently branded as "Multi-room DVR"). We believe that the Supreme Court's ultimate decision
in the Aereo case will not undermine the legality of the Company's Multi-room DVR, however, if it did
so, the Company's business would be adversely affected.
Our current franchises are non-exclusive and our franchisors need not renew our franchises.
Our cable television systems are operated primarily under non-exclusive franchise agreements with state
or municipal government franchising authorities, with the latter in some states also subject to approval of
state regulatory authorities. Consequently, our business is dependent on our ability to obtain and renew
our franchises. Although we have never lost a franchise as a result of a failure to obtain a renewal, our
franchises are subject to non renewal or termination under some circumstances. In some cases franchise
agreements have not been renewed by the expiration date, and we operate under temporary authority
routinely granted from the state while negotiating renewal terms with the franchise authorities. As of
December 31, 2013, our ten largest franchise areas comprised approximately 48% of our total video
customers and of those, two franchises, Newark, New Jersey, and the Town of Hempstead, New York,
comprising an aggregate of approximately 147,000 video customers, are expired. We are currently
lawfully operating in these franchise areas under temporary authority recognized by the States of New
Jersey and New York.
A portion of our workforce is represented by labor unions. Collective bargaining agreements can
increase our expenses. Labor disruptions could adversely affect our operations.
As of December 31, 2013, approximately 500 of our full-time employees were covered by collective
bargaining agreements. In addition, approximately 255 of our technician workforce in Brooklyn, New
York are represented by the Communication Workers of America ("CWA"). Negotiations to reach a
collective bargaining agreement with the CWA are ongoing. Collective bargaining agreements with the
CWA covering this group of employees or agreements with other unionized employees may increase our
expenses. In addition, any disruptions to our operations due to labor related problems could have an
adverse effect on our business.
Our Newsday business has suffered operating losses historically and such losses are expected to
continue in the future.
Newsday suffered operating losses of $71.1 million, $47.0 million, and $31.7 million for the years ended
December 31, 2013, 2012, and 2011, respectively, which included impairments of intangible assets of
$37.5 million, $13.0 million, and $11.0 million in 2013, 2012 and 2011, respectively. Operating losses
are expected to continue in the future. In connection with the formation of a company through which we
have an approximate 97.2% interest in Newsday, its subsidiary, Newsday LLC, incurred $650.0 million
of indebtedness under a senior secured loan facility, and $630.0 million of the proceeds of these
borrowings were paid to Newsday's former owner, Tribune Company. Borrowings under Newsday's
credit facility (under which $480.0 million was outstanding at December 31, 2013) are guaranteed by
CSC Holdings. In addition, at December 31, 2013, Newsday Holdings LLC held $611.5 million