News

YES Sues Cablevision

4/29/2002 10:43 AM Eastern

Yankees Entertainment & Sports Network turned to the courts Monday in its
carriage battle against Cablevision Systems Corp., filing a federal antitrust
lawsuit that accused the MSO of keeping the upstart network off its systems for
anti-competitive reasons.

The suit, filed in U.S. Southern District Court of New York, stated that the
MSO is illegally monopolizing the area's regional sports business through its
ownership of regional sports networks Madison Square Garden Network and Fox
Sports New York, as well as holding available cable rights to all other major
professional-sports teams in the market, sans the Yankees.

As a result, Cablevision is deliberately keeping YES off its systems to
maintain its competitive advantage, according to attorney David Boies of law
firm Boies, Schiller & Flexner LLP, who is representing YES.

In addition, Cablevision violated Federal Communications Commission rules by
initially asking YES to offer the service exclusively to cable operators instead
of allowing direct-broadcast satellite services like DirecTV Inc. to carry the
games.

YES is seeking unspecified injunctive relief and monetary damages, as well as
a declaratory judgement that Cablevision's conduct violates antitrust laws.

Boies added, however, that YES is not asking for a preliminary injunction to
get the network on Cablevision systems.

'We hope to get an early hearing and an expedited trial,' he said.

In a prepared statement, Cablevision said the lawsuit is without merit.

'The [lawsuit] is the YES Network's latest ploy to pressure Cablevision into
accepting an expensive, `take-it-or-leave-it' demand that is not in the best
interest of all of our customers,' the statement said.

YES chairman and CEO Leo J. Hindery Jr. said the action is not indicative of
all operators in the area, but rather of YES' inability to make inroads with
Cablevision.

As per its deals with other area MSOs, YES wants its network carried on a
basic tier, while Cablevision wants the $2-per-subscriber service offered on a
pay tier.

'We're very disappointed, but we feel that there's no alternative,' Hindery
said.

Even with the legal action, Boies said, the dispute could drag through Major
League Baseball's All-Star break in July.

Hindery said Cablevision hasn't negotiated in good faith since the network
turned down the MSO's offer of cable exclusivity last fall.

Cablevision countered by saying that it has made fair and reasonable
proposals to YES, including offering the network a channel on all systems on
which YES can set its own price and keep all revenues.

But in the filing, YES said the offer was made 'in bad faith,' adding that
the proposal 'is not a viable economic model for regional sports
programming.'

Hindery said that while the network can sustain itself financially without
Cablevision, it has taken a 'substantial' revenue hit from lost licensing fees
and advertising revenues without the MSO's 3 million
subscribers.

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