MSG says that the Forum, which it bought in 2012, will reopen January 15, 2014 with a performance by The Eagles following the upgrade. “Since we first explored the opportunity to acquire the Forum and expand The Madison Square …
Execs at marginal cable channels who want to know how determined pay TV operators are to clear away what they consider programming deadwood should keep an eye on the carriage spat between Madison Square Garden and Time Warner Cable. They’re engaged in the season’s hottest battle over programming costs as they negotiate renewal terms for their current contract that expires on December 31. Per usual, there’s a lot of noise about who’d be most responsible for inconveniencing consumers if there’s in impasse — with most of the focus on the possible loss of popular regional sports channels MSG and MSG+, which carry the New York Knicks, Rangers, Islanders, Devils, and Buffalo Sabres. MSG has a hotline (1-888-keepmsg) that encourages Time Warner Cable customers to jump to another pay TV provider. “As excitement builds for the return of the NBA, Time Warner Cable is threatening to pull MSG Networks from its systems,” the programmer says. The cable company says that “the ball’s in MSG’s court, so these channels will come off only if MSG pulls the plug.”
But the most important issue is whether the No. 2 cable company will be able to drop MSG’s music video channel Fuse from its lineup — potentially resulting in $10M a year in lost revenue for MSG. “Fuse is watched by fewer than one-tenth of one percent of the customers who have it available — that’s just 4,000 customers out of more than 7.4M,” says Mike Angus, Time Warner Cable’s SVP Content Acquisition. MSG’s effort to package the music service with its popular regional sports channels “is nothing more than a tax on New York sports fans.” MSG says that Fuse “appeals to a growing audience of a desirable demographic and its unique partnership with MSG Entertainment ensures it offers programming, access, and promotion that no one else can.” The average pay TV provider pays about six cents a month for each customer who receives Fuse, SNL Kagan estimates.
UPDATE, 8:10 AM: MSG CEO Hank Ratner told analysts that he can’t say much about the lockout “in light of (NBA) league restrictions.” But it has created problems. “We are exploring opportunities to bring other live events to the Garden” to replace the lost games, he says. It’s been tough to do so at the last minute, though. Ratner has scheduled two performances and adds that “we’re going to use the influence that we have as Madison Square Garden to schedule as many dates as we can.” Can companies that have bought suites at the Garden cancel them? The company says not to worry — but won’t give specifics. Season-ticket holders can get refunds, including for the eight Knicks home dates that have been lost. MSG is required to send the cash out within 10 days and include a 1% annual interest rate payment retroactive to October 1. The company says the lost games won’t cause its sports TV channels to run afoul of its cable and satellite affiliation agreements. The deals have provisions for work stoppages; hockey and Knicks-related programs will fill in for some of the lost games. MSG Media President Mike Bair says that “the vitality of the market for hockey has been better than last year and better than our plan.” Meanwhile the company continues to upgrade the Garden, and says the total bill should come to $980M.
PREVIOUS, 5:42 AM: We’ll have to wait for the company’s quarterly conference call with analysts to find out what how badly the NBA lockout might hurt the owner of the New York Knicks, MSG regional sports networks, and the Madison Square Garden arena. There was no mention of it in this morning’s earnings report. But the disruption follows a strange quarter as the company closed Madison Square Garden and the Theater at Madison Square Garden for upgrades. MSG reported net income of $21.3M, up 10.5% vs the same period last year, on revenues of $177.6M, down 6.9%. The revenue figure was well ahead of the $173.88M that analysts expected. And earnings, at 28 cents a share, zoomed past the 10 cents the Street anticipated.
The mind-numbing network of interlocking corporate relationships at Live Nation — the No. 1 concert promoter and owner of Ticketmaster — just became much more complicated with the announcement that Jim Dolan is joining its board of directors. He’s a power in live entertainment in his role as executive chairman of Madison Square Garden — a major owner of concert venues (Radio City Music Hall, The Beacon Theater, The Chicago Theater), sports teams (New York’s Knicks and Rangers) and media outlets (MSG network and music channel Fuse). Dolan’s also CEO of Cablevision Systems, a director of AMC Networks, and a Live Nation client in his role as lead singer and guitarist for blues band