James L. Dolan

Introduction

James L. Dolan was born in 1956, being the son of Cablevision founder Charles Dolan. He is one of the six Dolan children (Siegel, 2005). He, however, did not take after his father. During his upbringing, he was a combustible child who enjoyed rock music. In essence, everything he could do revolved around rock music. During his school days, he wafted through two colleges before finally arriving at SUNY-New Paltz (Siegel, 2005). While there he took guitar lessons from a gifted musician, though this did not look much of a future to him, especially in the light of his father’s growing business (Siegel, 2005). As a result, he decided to switch majors to communications (Siegel, 2005).

Following his graduation, the younger Dolan went to work with the family business. The man has gone through a ground-floor-up education (Siegel, 2005). In this regard, he sold advertising time, peddled cable subscriptions, and even sought for clientele among delinquent customers and all that (Siegel, 2005). He was later to be dispatched to Cleveland, where he was to launch an all-sports radio station. In essence, he was a hands-on man (Siegel, 2005).

In 1995, his father made him the CEO of the company with him keeping the chairmanship post. He is now the President as well as the CEO of Cablevision Systems Corporation. Dolan is also the Chairman of Madison Square Garden (Siegel, 2005). He also serves as the Chairman, CEO and President of New York Knicks. Dolan oversees CSC’s telecommunications and entertainment businesses, as well as cable television offerings, high speed broadband internet access, national television program networks, and the Clearview Cinema (Siegel, 2005).

 

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James L. Dolan’s Ethical Business Decisions

One of the most grueling battles Dolan has fought involved taking on the New York Mayor, Bloomberg, over the football stadium. Dolan could not fathom the audacity of the mayor, in conjunction with his deputy, Dan Doctoroff, on the idea of proposing to build a publicly subsidized stadium for the Jets (Siegel, 2005). This was to be built just a couple of blocks west of the Garden. According to Dolan, if the project was to be a private one, he would have no option but to live with it. Otherwise, he wonders how he could be subjected to a competition with one’s own government (Siegel, 2005).

Even as Bloomberg was preparing to maneuver the stadium through a series of political loopholes, there was a response from Cablevision. Cablevision decided to respond with a torrent of badgering ads (Siegel, 2005). It eventually crashed the party with its own plan for the establishment of the site. Consequently, the whole project was thrown into doubt, eventually turning the mayor to be Dolan’s adversary. In many ways, Dolan argues that the stadium threatens the showplace of America, the Madison Garden Square (Siegel, 2005).

In the ads, Cablevision tied the $600 million of public investment in the project to subway fare hikes as well as shortfalls in money spent on education (Siegel, 2005). By and large, the ads attacked Bloomberg where he is politically the most susceptible (Siegel, 2005). For instance, some of the ads involved hardworking waitresses as well as firefighters. This sent across the message that the affluent mayor was simply crushing the concerns of the common people.

After spending almost $22 million on ads as well as lobbyists to fight the stadium, Dolan was actually successful in plunging Bloomberg and Doctoroff’s plans in disarray. Eventually, the proposal to build the west side of the stadium for the New York Jets football team did not see the light of day. As a result, the Madison Square and Dolan’s New York Knicks, as well as the New York Rangers remain the only ticket to live sports in the entire New York Metropolitan area (Siegel, 2005).

As the Executive Chairman of The Madison Square Garden Company (MSG) James L. Dolan is responsible for managing the firms several entities. This includes professional sports teams, historic showplaces, sports as well as entertainment networks and the world famous arena complex. At the MSG, Dolan has the responsibility of overseeing the general development strategy of the firm, as well as managing all its operations. Dolan is also the governor of the National Basketball Association as well as the National Hockey League. He takes these responsibilities on behalf of the New York Knicks and Rangers.

In order to ensure the standing of the firm’s premier venues, Dolan has carried out a number of restoration projects all through his tenure. For instance, under his watch, the MSG Arena has gone through an absolute makeover. This makeover will significantly enhance the experience of workers, athletes, entertainers, partners as well as suit holders. His influence has also seen the restoration of MSG’s Beacon Theatre. One of the most significant achievements of James Dolan as the Chairman of MSG is the multimillion-dollar restoration of Radio City Music Hall. This had the effect of restoring the national attraction and MSG centerpiece to its inventive magnificence.

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Additionally, Dolan has also been instrumental in expanding MSG’s entertainment properties. This is inclusive of The Chicago Theater, which was established in early the 20s as one of the most affluent motion picture houses. Furthermore, under his watch, MSG also extended its music business, leading to its acquisition of a minority-equity interest in the Front Line Management.

Among the most remarkable ethical business decision taken by James Dolan is in the way he led the company to respond to local as well as national tragedies across the United States. He was very instrumental in organizing “The Concert for New York City”. This concert generated well over $35 million dollars in aid for the victims and heroes of the 9/11 terrorist attacks.

Additionally, he organized “From the Big Apple to the Big Easy”, an event which generated almost $9 million for Hurricane Katrina relief. Again, Dolan also supports MSG’s commitment to the community, especially through the Garden of Dreams Foundation, a charity organization that closely works with MSG to assist children all over the New York metropolitan area.

James L. Dolan’s Unethical Business Decisions

Decisions against Time Warner Cable

One of the most astonishing unethical decisions taken by James L. Dolan was to stonewall Time Warner Cable to provide live broadcast of his sport channels of his New York teams for viewing especially by Time Warner Cable subscribers (Siegel, 2005). By and large, there has been fear among many investors that Dolan, as the Chairman of Madison Square Garden, has too many agendas up his sleeves.

They have been of the view that these agendas might as well lead him to avoid compromising with company especially on the dispute over the payments for channels. This is inclusive of the regional sports powers MSG as well as the MSG+. In the recent past, these and other reasons have led to the fall of MSG shares. Much to the chagrin of investors and viewers alike, Dolan yanked the services from Time Warner Cable on the New Years Day since the expiry of their carriage contract (Siegel, 2005).

Consequently, the two companies have given each other a wide berth especially on their terms of operations. In essence, this is actually a major risk on the side of MSG. The Time Warner Cable basically accounts for approximately 2.5 million subscribers; this is about a third of its total. As a matter of fact, Times Warner Cable pays about $112 million every year for the channel. This actually amounts to about half of MSG’s estimated cash flow for its current financial year. However, in spite of the severe consequences of Dolan’s decisions, he has been adamant, deciding to show that he is not a pushover (Siegel, 2005).

Over and above, the blues guitarist is well aware of the fact that he will have to kiss goodbye to MSG’s channel Fuse goodbye in case he permits Time Warner Cable to drop it. This is mainly because Time Warner Cable is of the view that it has to be dropped due to the fact that only few people watch it (Siegel, 2005). Dolan’s position as the CEO of Cablevision grants him the opportunity to show his moxie. It is now a known fact that Time Warner Cable has always had the ambition of consolidating its hold on the New York market. This is only possible by taking over Dolan’s cable company.

Many investors have been wondering whether Dolan might as well consider the offer, especially due to the fact that Cablevision has seen its shares plummeting over the past few years (Siegel, 2005). As a matter of fact, its shares fell by well over 56% over the past year due to fears that the company is finding it difficult to expand. This came to the fore after its respected COO, Tom Rutledge, quit Cablevision only to become the CEO of Charter. One wonders whether Dolan needs to show his toughness to avoid a fire sale.

On its part, Time Warner Cable is too eager to dig in its heels. In this regard, the CEO, Glenn Britt, has led the way in encouraging the pay TV industry to charge against the increasing outlays, especially for the sports channels. Britt has declared that he would prefer to offer the services on a separate tier. In his view, this would give a break to cost conscious viewers who do not watch sports. In this way, should Britt cave in to MSG, then he would most likely to have very little leverage when bargaining with powerful programmers like ESPN (Siegel, 2005).

As things stand at the moment, Time Warner Cable risks losing subscribers to a service that offers the games like New York Knicks, since they are MSG’s main attraction. On the sides, MSG has been working hard to motivate the New York Knicks, should they make it to the playoffs. It has been doing this by hosting free viewing parties in the New York City, with the idea that the staffers will greatly assist people to ditch Time Warner Cable. Otherwise, in case the Knicks stumble, then there is a possibility that the MSG investors will have to make a decision on how long they can contribute to witness the firm to lose funds, while they try to figure out whether Dolan is playing for their team (Siegel, 2005).

James L. Dolan’s Opposition to Voom

Dolan was also in opposition to his father’s idea of letting cablevision join the satellite cable business (Siegel, 2005). He ardently opposed his father’s proposal for Voom satellite service. This issue actually became a controversial one that polarized Cablevision’s Board of Directors. In as much as supporters were of the view that Voom was in a position of propelling the company into the emerging future of satellite market as well as a wider customer base, the plan was vehemently opposed (Siegel, 2005).

In coming with the Voom venture, the senior Dolan had the idea of catapulting Cablevision into the futuristic world of satellites, in such a way that the company would be able to reach every customer (Siegel, 2005). In his view, the senior Dolan saw this as a crowning achievement of his long career. Of course, there is no right thinking son who would stand on the way of his father’s success (Siegel, 2005). However, the younger Dolan, including other opponents, was of the view that the plan was very expensive to implement and that there would be no expense relief for the foreseeable future (Siegel, 2005).

According to Dolan, he has never been a big fan of the satellite project. In his view, he doesn’t have to be a big fan of all that is done by the company (Siegel, 2005). Rather, he believes that his responsibility is to make sure that the company does the best job that can be done. Eventually, the younger Dolan had his way and Voom was closed down. To many analysts, this was a very instrumental occurrence in the life of James, since he was able to emerge from his father’s shadow (Siegel, 2005).

Dolan’s rejection of his father’s desire to keep Voom actually came as a surprise to many people since he has never been seen to be particularly independent. In many ways, his role on the Board of Directors has never been very clear (Siegel, 2005). The friction actually drew lines on the board between supporters of the younger Dolan against those of the senior Dolan. As a matter of fact, two of Charles Dolan’s sons, Patrick and Thomas Dolan, sided with him (Siegel, 2005). They have often lined up with their father against James L. Dolan. Thomas Dolan, who is the Executive Vice-President of Cablevision Systems, was actually poised to take over as the Chief Executive of Voom (Siegel, 2005).

Dolan insisted that it was not a personal war with his father, but just a mere difference of opinion among honorable businessmen, who happen to be a son and a father (Siegel, 2005). He reiterated that satellite was actually not a bad idea, but that there were already two other satellite-TV services. In this way, being in competition with them would turn out to be very expensive (Siegel, 2005). 

Purchasing New York Newsday Newspaper

Immediately the majority of Cablevision took over the ownership of Newsday’s 1,100 member strong union, there was a demand for a 10% pay cut by some stakeholders. This led to an unnecessary friction between the management and the employees (Long Island Press, 2010). In many ways, the employees were squeezed into contentious arguments with employees facing longer work weeks as well as the loss of a week’s vacation. Additionally, delivery drivers were slapped with a 15% bite. This was amid speculations of rounds of layoffs (Long Island Press, 2010).

On its part, Dolan’s Cablevision justified the deep cuts. As a matter of fact, members of the editorial team estimated that the company was losing close to 23% of its revenue, which was approximately $12.6 million dollars in that financial year (Learmonth, 2008). According to the employees, the purchase of firm by Cablevision led to a financial hemorrhage which adversely affected the way it has managed its news coverage over the past few years (Long Island Press, 2010). As a result, its coverage has become worse, thus limiting its ability to take on large projects. This is mainly as a result of the firm being forced to reduce the number of its staff. Most of the employees were actually of the view that Newsday is just a pale shadow of what it used to be (Long Island Press, 2010).

In one incidence, the Dowdy incident actually resulted in the editor, John Mancini, having to leave the newsroom for almost a week as a result of the covering of the Knicks (Long Island Press, 2010). Most of the employees thought that this was actually meddling in the actual contents of the paper. This came as a result of the dispute with Cablevision over the contents of the paper (Long Island Press, 2010). Many people are of the view that Newsday stopped being an actual paper, especially after it was bought by Cablevision. This is because the moment a paper can no longer provide some value, it automatically stops serving the public, and instead serves the interests of a few individuals (Long Island Press, 2010).

According to Newsday employees, their hands are tied while in the newsroom. This is with regard to what they can print as well as the news stories (Long Island Press, 2010). Due to the competition that is in the cable industry, every story has to pass through the hands of the management. In actual sense, there is no Freedom of the Press on key issues (Long Island Press, 2010).

It is no longer a secret; Cablevision does not permit Newsday to run ads of competing telecommunications company Verizon (Long Island Press, 2010). Furthermore, employees are always facing possible terminations. Over the same period, behind a pay wall, Newsday employees were of the opinion that Cablevision’s redesigning of the newspaper’s website was another slap in the face of the employees, who are already fighting pay cuts (Long Island Press, 2010).

Conclusion

In conclusion, it goes without that James L. Dolan is actually unethical in the way he does business. For the sake of credibility in the business industry, the US is in need of people who will stand by the truth and play by the rules of the game. In this economic dispensation, the shrewd unethical ways of doing business ought not to be practiced. Dolan and his colleagues ought to straighten their ways in order to compete fairly.