Comcast Corp. and Time Warner Cable are talking with Cablevision Systems Corp.'s-owned Madison Square Garden Network and Fox Sports New York services about moving to a premium sports tier as early as this summer, sources close to the situation said last week.
While current deals for the two regional networks don't expire until next year, sources said both Comcast and Time Warner want to renegotiate so that they can tier the channels by July 1— the same time Cablevision officially moves MSGN and FSNY to a sports tier for all of its non-digital subscribers.
$5-$7 price possible
The new deal would place FSNY and MSGN on a sports tier that would most likely retail between $5 and $7, said sources. It would also allow the two services to be sold on an a la carte basis.
Representatives from the networks and the MSOs would not comment on the matter.
The agreement could be similar to the one Yankees Sports & Entertainment Network struck with Cablevision in that the MSOs would pay MSGN and Fox Sports for about 51% of their subscribers.
But the MSOs could keep 100% of all revenue generated from the networks once penetration levels exceed a certain threshhold — which sources peg at around 65%.
Currently, Time Warner and Comcast pay about $3.50 per subscriber per month for both MSGN and FSNY, but that rate would jump at least $1 more for the ability to be tiered or for a la carte carriage, said sources.
The negotiations come on the heels of Cablevision chairman Charles Dolan's testimony before Congress two weeks ago calling for more flexibility in distributing high-priced, sports networks.
The discussions also follow Cablevision's decision to move YES, MSGN and FSNY out of its basic "Family Cable" package in all of its systems by July 1. About 300,000 to 500,000 of the MSO's 3 million subscribers currently receive the two networks on basic, sources said.
Cablevision subscribers who opt for certain premium packages or who purchase the MSO's iO digital package receive the three networks as part of their service.
Sources added that both Comcast and Time Warner are examining the "most favored nations" clauses within their respective YES deals to see if that regional sports network — currently offered on expanded basic — could also be added to the tier.
A YES spokesman, though, said its Cablevision agreement does not trigger operator such clauses.