Settlement May Lead To Yankees Channel
By MIKE REYNOLDS and R. THOMAS UMSTEAD -- Multichannel News, 4/29/2001 8:00:00 PM
Madison Square Garden Network last week settled litigation related to the TV rights for Major League Baseball's New York Yankees for the 2002 season, a move that appears to open the door for the baseball team to form its own regional sports network.
Under terms of the settlement, Cablevision Systems Corp.-owned MSGN was granted the right to televise 85 regular-season games in 2002 at no charge, while the club holds the rights to the remaining contests.
But through a 60-day period ending May 22, the Yankees have two choices: Pay MSGN $30 million to repurchase the rights to those games, or sell 65 additional regular season games to MSGN for $37.5 million.
If the club chooses the former option, it would have local-telecast control and could establish its own regional sports network, a gambit most observers expect it to pursue.
Under the latter scenario, MSGN would have the rights to 150 contests and maintain its strong, year-round live pro sports programming lineup.
Should the Yankees elect to forge their own network, the club or its representatives would have to ink carriage deals with Cablevision to retain its distribution presence in the New York DMA.
"MSG Network has enjoyed a long and successful relationship with the New York Yankees," said Madison Square Garden CEO David Checketts. "The settlement allows more time to negotiate. I'll expect further discussions."
Officials with YankeeNets, which owns the Yankees, did not return calls by press time.
Paul Kagan Associates sports analyst John Mansell said he believes that despite the $30 million price tag, YankeeNets will exercise its buyback option to control all of the regular-season rights, which he values at somewhere between $80 million and $100 million.
Mansell said the proliferation of digital cable — especially in the New York DMA through Time Warner Cable — could make it easier for YankeeNets to gain carriage for a new sports channel next year. He also said there's "potential for the YankeeNets to offer the service for a premium by offering the games exclusively to cable operators to repel competition" from direct-broadcast satellite.
The settlement, which upholds MSGN's "right of last refusal" for Yankees rights, stems from attempts last year by YankeeNets and International Management Group to launch a channel dedicated to the Bronx Bombers.
Last November, MSGN and the Yankees agreed to a one-year, $52-million pact for the 2001 season, following a similar offer from IMG.
