Cable Operators

In Spat, N.Y. Sports Nets Yanked

3/13/2005 7:00 PM Eastern

It’s deja vu all over again for New York-area Time Warner Cable customers as Cablevision Systems Corp. last week pulled Madison Square Garden Network and Fox Sports Net New York from the MSO for the second time within a year.

After meeting last Thursday, both sides remained at odds on carriage-renewal deal terms for the networks. They’re also squabbling over to how to rectify the situation.

ARBITRATION DISPUTE

Cablevision wants binding arbitration to settle the score; Time Warner wants to keep negotiations to the two parties.

Cablevision last Tuesday pulled MSGN and FSN New York, plus the Metro Channels and three Fox College Sports networks, from Time Warner’s 2.3 million New York-area subscribers after a March 8 deadline passed. The two parties had twice reached tentative accords — once last August, restoring the two networks after Cablevision pulled the signal for nearly 10 days, and again last December, when last week’s deadline was set.

The blackouts mean Time Warner Cable’s New York-area subscribers could potentially miss the final month of telecasts of the National Basketball Association New York Knicks, owned by Cablevision, and New York Mets Major League Baseball games.

Time Warner replaced MSGN and FSN New York with NBA TV and College Sports Television, respectively. It also will provide $2 in monthly rebates while the regional sports networks remain black.

The March 10 meeting failed to resolve the now 15-month-old dispute. A Time Warner spokesman would not reveal specifics, other than to say the MSO requested that Cablevision restore the channels while the two parties negotiate.

“Time Warner has welcomed continuing discussions and hope those discussions can take place while the signal is returned,” said MSO spokesman Mark Harrad.

MSGN officials, in a statement, continued to insist on binding arbitration.

“Time Warner Cable presented an even lower offer and appears to be acting in bad faith,” said MSGN. “We await a constructive proposal or acceptance of our offer of binding arbitration, which is the fair and reasonable way to settle this dispute and will get the games back on television for Time Warner Cable’s New York viewers.”

Cablevision has asked for $4 per customer for both MSGN and FSNY, an increase over the $2.90 monthly subscriber fee paid to Cablevision under a previous deal.

Time Warner calls that fee too high, given that MSGN and FSN have lost such marquee programming as MLB’s New York Yankees and basketball’s New Jersey Nets to the upstart Yankees Entertainment and Sports Network.

The New York Mets will also leave MSGN at the end of the 2005 season to launch a regional sports network, backed by Time Warner and Comcast Corp.

MSGN last week kicked off an aggressive marketing campaign via newspaper ads in major dailies and spots on the two networks, urging the public to get behind its request for binding arbitration.

MSG LOGS 10K CALLS

An MSG spokesman reported the network received 10,000 calls demanding that Time Warner restore the services.

“We are still prepared to live by the decision of an arbitrator and call on Time Warner Cable to agree with us to binding arbitration and give the fans back their games,” the statement read.

A Time Warner spokesman said binding arbitration would set a bad precedent for the cable industry.

“Binding arbitration has proven to be the fuel contributing to the skyrocketing costs of professional sports,” he said. “It would be irresponsible to for us, our customers and our shareholders.”

Arbitration last year ended the bitter Cablevision/YES carriage dispute. The ruling held that Cablevision would carry YES on expanded basic for the next six years, but cut YES’s licensing fee to affiliates from above $2 to around $1.81.

DirecTV Inc. also is developing plans to saturate the New York area with ads touting carriage of MSGN and FSN New York, a DirecTV spokesman said.

March