It's The Most Wonderful Time Of The Year: MSG, Other Broadcasters Play Hardball With Cable Operators

A group of people representing Madison Square Garden is showing defense against a rival team.

And the funny thing is, the NBA season has yet to get underway.

No, I’m not talking about the New York Knicks, whose season tips off on Christmas Day against the Boston Celtics at Madison Square Garden. I’m talking about an entity known as MSG Media, which controls networks including MSG Network and MSG+, which carry live games involving the Knicks, all three local NHL franchises (Rangers, Devils, Islanders) and other area teams. MSG Media is controlled by Cablevision, one of the major cable operators in New York, which up until last year, wholly owned the Knicks for more than a dozen years.

And now, MSG Media (Cablevision) is in the midst of a contract dispute with another major cable operator in New York, Time Warner Cable. MSG is asking for an increase upwards of 50% for the right to carry the sports networks – which is, by far, a huge difference from the “6.5 percent rate increase” a Time Warner Cable spokesperson claimed MSG was “in agreement” with, until they regened the deal earlier this month, and implored Time Warner to “pay fair and reasonable rates that are consistent with what other providers pay for our programming.” MSG argues that the current contract with Time Warner Cable was signed back in 2005, and given recent Knicks player signings including Carmelo Anthony, plus the recent renovation of the Madison Square Garden arena, whatever Time Warner Cable currently pays MSG is “way below what is currently market rate for our product.”

If the two sides cannot come to an agreement by January 1, Time Warner Cable may not deliver games featuring the aforementioned teams to the New York metropolitan area, plus Sabres hockey to upstate New York subscribers.

It doesn’t help matters that Time Warner has discontinued carrying Fuse, a MTV-knockoff (except that it actually airs music programming most of the time) which is operated by MSG Media. Time Warner reportedly paid as little as eight cents per subscriber per month for Fuse, whose popular programs include “Video On Trial” and “The Hip Hop Shop.” It also doesn’t help that MSG is running advertisements encouraging viewers to cancel their subscription with Time Warner Cable, and sign up with another area cable operator to ensure that they will continue watching Knicks and Rangers contests.

But what will happen when MSG’s contracts with other area cable operators is near expiration? Yep, they’ll more than likely run the same dog and pony show again – all at the expense of the cable subscriber.

The fact that a broadcast or cable network is demanding higher rates – usually retransmission fees, in the case cof broadcast networks – from a cable operator or satellite provider is nothing new. That these contracts usually go into effect on January 1 and expire on December 31, makes these skirmishes a familiar practice around New Year’s Eve. Just last year, Time Warner was involved with a contract negotiation dispute with the Sinclair Broadcast Group; the year before saw Time Warner go toe-to-toe with Fox, jeopardizing subscribers with the possibility of not being able to watch NFL playoff games, as well as other Fox network staples such as “Family Guy” and “New Girl.”

Cablevision is no stranger to these battles themselves. This past fall, they, too, were engaged in a dispute with Fox that threatened to black out World Series games to Cablevision customers. And in the spring of 2010, there was the infamous war between Cablevision and ABC/Disney, which led to ABC flagship station WABC in New York yanking their signal from Cablevision at around 12 midnight on March 7, 2010 – the day the annual Academy Awards telecast was scheduled. Right before pulling their signal, WABC ran a scroll on the bottom of the screen under the show it was airing, “Lost,” that was actually visible to all viewers of the station. “Cablevision has betrayed you again,” the scroll read. “First HGTV and Food Network, now you’ve lost ABC7.” The Cablevision/ABC skirmish came on the heels of another dispute, this one pitting the cable operator against Scripps Networks, owner of the two networks referred to in the WABC on-screen scroll. The Cablevision/Scripps squibble led to HGTV and Food Network being absent to Cablevision subscribers for three weeks starting on New Year’s Day 2010; the WABC outage lasted no more than 24 hours, as a deal was reached prior to the Academy Awards broadcast on March 7, 2010 (Philadelphia-area Cablevision subscribers were also affected by this episode, as the ABC station in Philly, WPVI, like WABC, is also an ABC owned-and-operated station).

As time passes and the ever-expanding cable universe gets even larger, and the cost of carrying sports content also increases, broadcasters will waste no time demanding an amount of money from a cable operator for their product, an amount which the operator, and usually its subscribers, deem an unfair and astronomical price. And while the operator may announce that they would not give into the broadcaster’s outrageous demands because it is not in the best interest of the subscriber, putting subscribers in the position of seeking a new operator to continue watching live sporting events is also not in their best interest.

That’s what makes the MSG/Time Warner Cable dispute so interesting – because MSG is owned by Cablevision. So we’ve got two cable giants going at it over the holiday season. And when the iconic ball drops in Times Square on January 1, we should know by then if both sides reach an agreement, or if either of them drop the proverbial ball.

Subscriber be damned.

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