Legendary fund manager Mario Gabelli thinks that price for the Cablevision Systems Corp. (NYSE: CVC) buyout is way too low, and he has some independent backing. According to The Wall Street Journal, ISS Governance Services, one of the leading proxy advisory firms to institutional investors, said in a report Friday that "the theoretical target price for Cablevision, by a number of analysts, is much higher than the current offer price."

Gabelli's funds own over 8% of Cablevision. While the company's shares trade below $35, Gabelli says they are worth $50.

The fight between the powerful fund manager and the Dolan family, which founded Cablevision and plans to take it private, is going to get messy and will probably end up in court. Gabelli probably has one of two goals in pushing the Dolans on the deal's price. The first would be to get them to increase their buyout offer. The other would be to bring a third party like Comcast Corp. (NASDAQ: CMCSA) to the table to make a higher bid of its own.

The Dolans have tried to take the company private twice before. Each time the deal has floundered on price.

The founding family may have a card up its sleeve. The value of cable companies has fallen sharply in recent months on increased competition from satellite TV and broadband and video offerings from the big telecom companies. Shares in Comcast have fallen from $30 earlier this year to $24.

For the Dolans, an interesting defense of their bid goes like this: the value of cable companies is falling, so actually we are overpaying to take our company private.

Douglas A. McIntyre is a partner at 24/7 Wall St.