Madison Square Garden Media still hasn’t come to terms with Time Warner Cable over increased fees for MSG and MSG+ sports networks. MSG Media yanked the networks early New Year’s Day from TWC systems in New York City and the Buffalo vicinity. BTIG analyst Rich Greenfield noted in his blog today that the last time the two feuded over rate increases back in 2005 the battle lasted two months. Meanwhile, MSG has been holding viewing parties for TWC customers to watch Knicks, Rangers and Sabres games and directing them to alternative providers such as Verizon FiOS. Greenfield notes that Time Warner Cable is about to launch its own expensive sports network venture in Los Angeles after acquiring rights to the Lakers and Major League Soccer’s Galaxy in Southern California and co-investing in a Mets venture in New York. Additionally, TWC expects eventually to bid against Fox Sports Net for rights to Los Angeles Dodgers games. Fox Sports, which has rights to Dodger games through the 2013 season, is fighting a bankruptcy court battle with the Dodgers to prevent new bids from taking place before this fall.
One of cable’s most irksome long-running battles isn’t over yet: Cablevision is appealing an FCC order that requires MSG — which the cable operator controls — to offer HD feeds of its two New York regional sports channels to Verizon FiOS and AT&T U-verse. That announcement followed a statement from Verizon today saying that it had “a home-team win in overtime” and promising to offer HD versions of MSG and MSG+ in December to FiOS TV customers in all service packages except FiOS TV Local. The HD feeds are a big deal to fans of the New York Knicks, New York Rangers, New York Islanders, the Buffalo Sabres and the New Jersey Devils.
Cablevision’s appeal continues a dispute that began in 2009 – and that seemed to have reached an end last week. The FCC formally approved a decision from its Media Bureau requiring MSG to deal with FiOS and AT&T, and the federal Second Circuit Court of Appeals refused Cablevision’s request to stay the FCC order. But Cablevision says it is returning to the court for a stay while it seeks a review of the FCC’s orders. “We continue to believe that an unbiased review of the data can only result in one conclusion: that there has been no competitive harm to the nation’s two largest phone companies,” Cablevision says. “In a highly competitive marketplace like New York, a forced sharing of offerings only deters companies from investing and innovating, which hurts both fair competition and consumers.”
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.