It Must Be Spring: YES Makes Noise

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For most teams, Major League Baseball's spring training season is right around the corner. But for Cablevision Systems Corp. and Yankees Entertainment & Sports Network, wrangling over carriage was in mid-season form last week.

A new license-fee proposal by the New York-area regional sports network led to another round of verbal clubhouse jousting with the dominant MSO in New York City's suburbs.

The battle was also playing out in Trenton, N.J., where New Jersey state legislators last week introduced a bill that would force Cablevision to carry the YES Network.

Cablevision balked at carrying the network, which televises New York Yankees baseball and New Jersey Nets basketball games, due to YES's $2-per-subscriber monthly price tag, leaving a 3 million subscriber whole in the network's footprint.

After months of little or no negotiation between the two parties, YES chairman Leo Hindery recently offered a new 10-year deal with a sliding license-fee scale, beginning at 55 cents per subscriber for the first nine months of the year, according to Cablevision.

From October 2003 to March 2004, the fee jumps to $1.25, before it moves to $2.29 next April. At the end of 10 years, Cablevision said it would have to pay YES a whopping $4.55 per sub, per month.

"The Yankees are demanding $1 billion from Cablevision customers over the next 10 years," the MSO said in a statement. "This is a staggering and blatant money grab by the YES Network and its investors."

Hindery responded with his own statement, calling Cablevision's characterization of the deal "erroneous, misleading and disingenuous."

He added that Cablevision subscribers will pay $2 billion over the same period for MSO-owned regional sports networks Madison Square Garden Network and Fox Sports New York, even though the services no longer broadcast the Yankees and the Nets, respectively.

"Cablevision continues to try to deflect attention away from its own usurious and anti-competitive business practices, while continuing to refuse to negotiate with the YES Network, as every other cable company in four states has successfully done," Hindery added.

In another effort to settle the dispute, YES last Friday placed ads in several area newspapers including the New York Post, the New York Daily News, Newsday
of Long Island, N.Y., and The Record
of Hackensack, N.J, saying it would agree to sit down with an independent arbitrator, mediator, judge or panel to find a resolution.

If the MSO doesn't agree to the offer, the ad said Cablevision's "anti-competitive behavior" should be blamed.

"We can only think that if Cablevision doesn't agree to arbitration or mediation, then it is being less than honest about its true motivations and intentions in prolonging this dispute," the ad copy read.

Cablevision officials could not be reached for a response at press time.

Elsewhere, a bill in the New Jersey legislature evidently aimed at prodding Cablevision to carry YES has made progress.

The bill, sponsored by Assemblyman Paul Sarlo (D-Bergen) does not specifically mention YES or its fight with the operator. But it declares that cable companies which own or invest in sports teams or venues may not refuse to enter a distribution agreement with an unaffiliated program provider that offers content with non-discriminatory prices, terms and conditions.

A company that refuses to deal would be in violation of state antitrust law and, under the bill, aggrieved parties could seek an injunction.

Cablevision responded with a statement saying the proposed bill is not only unconstitutional, it's a "transparent attempt by the YES Network to force all Cablevision customers, whether or not they want Yankee games, to pay for the most expensive new network in television history."

The state Assembly Telecommunications and Utilities Committee approved the bill Feb. 3, and it should advance to the full General Assembly.

Linda Haugsted contributed to this story

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