MSG, MSG Plus Now Dark on Time Warner Cable Systems

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MSG Network and MSG Plus went dark on Time Warner Cable systems as the new year dawned.
The contract between the regional sports networks and the nation's No. 2 cable operator expired at midnight and the parties couldn't bridge their differences relative to license fees.
As such, the two RSNs are now unavailable to some 2.3 million Time Warner Cable subscribers in the New York DMA and in upstate New York. They will miss upcoming coverage of the retooled NBA New York Knicks and the NHL's New York Rangers and Islanders, as well as the New Jersey Devils and the high-rated Buffalo Sabres, plus other sports fare.
"We are disappointed that MSG and MSG Plus will be dropped from Time Warner Cable's lineup," said MSG Media president Michael Bair in a statement Saturday night. "All we have asked is for Time Warner Cable to value our programming in the same way as other TV providers -- nothing more, nothing less. Unfortunately, they rejected every offer we made to them for almost two years. In the end, they were simply not interested in conducting serious negotiations on behalf of their customers and instead spent their time grossly mischaracterizing our positions to the public. We certainly hope Time Warner Cable returns to the negotiating table and reconsiders our good faith proposals. Until that happens, we encourage Time Warner Cable subscribers to switch providers by calling 888-keepmsg (533-7674) or visiting keepmsg.com."

Time Warner Cable returned fire with the following statement: "The decision to remove their programming from our lineup rests entirely with MSG. By making that decision well in advance of the deadline, MSG has again shown that they are more interested in holding New York sports fans hostage than in negotiating a deal. Rather than engage in a war of words, they should come back to the table and get a deal done."

At around 8:30 p.m. on Dec. 31 during MSG's coverage of the Knicks-Sacramento Kings game, the RSN began airing messages and announcer-reads noting the service would go dark on Time Warner Cable at midnight, while directing those subscribers to alternate providers.

MSG Media, in its announcement, again pointed to Time Warner Cable's acquisition of long-term Los Angeles Lakers media rights, as the famed NBA franchise will serve as the centerpiece for a pair of southern California RSNs the MSO will tip off later this year.
"Given Time Warner Cable's reportedly record-setting $5 billion investment in Los Angeles Lakers rights, we expected that they would be eager to continue to deliver top New York sports programming to their customers, who are unfortunately caught in the middle of this dispute," noted Bair. "And they've stated publicly that they're committed to broadening their investment in local sports. Yet they're about to drop some of New York's most popular sports programming - what does that say to New York sports fans?"

The parties have been publicly at odds since mid-December. On Dec. 16, Time Warner Cable dropped MSG Media's national music service Fuse from 8 million of its homes. The MSO, which bills Fuse as a "lightly viewed," said its carriage had become tied to the RSNs.

Time Warner Cable has averred that MSG Media sought a 53% monthly per subscriber price hike. That rate, it claims, would make MSG the most expensive sports service in the country. MSG has labeled the calculation as "grossly inaccurate" and that the MSO is "greatly mischaracterizing" its asking price.
SNL Kagan estimates the average monthly subscriber fee for MSG and MSG Plus at $2.48 and $2.17, respectively. MSG said it has some 11 million subscribers in inner and outer markets. With some 2.3 million subscribers in the New York City DMA and upstate New York, including an estimated 330,000 in the Buffalo area, where MSG televises the Sabres games, Time Warner Cable says it is MSG's largest non-affiliated distributor. MSG Media was spun off from Cablevision, which has some 3 million video subscribers in the New York DMA, during February 2010.
The RSNs and Time Warner Cable have been operating under a contract that was signed in 2005, retroactive to 2004. That deal for a reported $4 combined monthly subscriber license for the two RSNs was brokered in part by then-New York Attorney General Eliot Spitzer.
For its part, Time Warner Cable said the parties during the first week in December were within half of a percentage point of a deal turning on a 6.5% increase, before MSG upped the license fee ante.
Time Warner Cable vowed on Dec. 18 that it wouldn't disconnect MSG. In virtually all license fee disputes, such moves are initiated by the programmer.

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