Time for Hardball? YES Says Yes

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Yankees Entertainment and Sports Network added another MSO to its roster last week, and then tried a public squeeze play to fill the big hole left in its distribution lineup.

Last week, the fledgling sports channel — which will carry 130 New York Yankees games this season — signed a basic-cable carriage pact with Comcast Corp. It then went public with its battle to secure placement on Cablevision Systems Corp., the major cable holdout in the New York metro area, with 3 million subscribers.

It's three weeks before opening day, and YES has yet to reach a carriage deal with Cablevision, which feels the network's $2-per-subscriber license fee is too expensive for its basic tier.

YES, which launches on March 19, ran ads in major newspapers throughout the DMA last week. In them, CEO Leo Hindery encouraged Yankees fans who subscribe to Cablevision to consider switching to DirecTV Inc., which has a carriage deal with the network.

The YES ads complemented aggressive marketing efforts by DirecTV that also hail the availability of Yankees games, formerly the province of Cablevision-controlled Madison Square Garden Network.

In an open letter to fans, Hindery noted that Cablevision is the only MSO that has yet to reach an agreement for YES and offered a toll-free number for subscribers to call to get DirecTV.

Hindery defended the ad and its intent to sway public opinion. He said the network has negotiated with Cablevision since September, but has been unable to come to terms, while other MSOs in the market have signed deals.

"My responsibility is to the viewers and fans of the Yankees," Hindery said. "The most credible companies in the cable industry have embraced us, and DirecTV has joined them, so I don't feel like we've been anything but fair."

PRESSURE EFFORT

Cablevision senior vice president of media and community relations Charles Schueler lashed back at YES, calling the ad "an obvious attempt to put pressure on Cablevision to accept an expensive deal that is not in the interest of all of our customers."

The MSO is continuing to negotiate with YES, but Schueler reiterated that Cablevision customers should have the opportunity to purchase the new network.

The YES ad comes on the heels of the network's distribution deal with Comcast. Though financial terms were not disclosed last week, sources said Comcast would ante up $2 per household to offer its 900,000 New York-area subscribers YES on basic.

"We are pleased to be able to continue to offer the Yankees games our customers want for years to come," said Comcast Eastern division cable unit president Mike Doyle.

U.S. Cable is also close to reaching a deal to distribute YES to 5,500 subscribers on its Paramus and Hillsdale, N.J., systems.

YES has also not come to distribution terms with EchoStar, although spokesman Marc Lumpkin said the satellite provider is negotiating with the upstart network.

"The rates that YES is asking for are high, and we want to make sure we don't pass that onto our customers," Lumpkin said.

YES recently signed pacts with Time Warner Cable and overbuilder RCN Corp. But without Cablevision on board, YES won't be available to many suburban and outer-borough Yankees fans. And premium carriage would shoot a big hole in the network's plans to reach advertisers.

It also means the Bronx Bombers won't be seen on cable in the Bronx, as Cablevision holds the sole franchise for that borough.

STARTING ON D.L.

Some observers, like Kagan World Media sports analyst John Mansell, believe YES will start the season on Cablevision's bench, or on the disabled list. Others — like Neal Pilson, principal in sports consultancy Pilson Communications — suggest a deal could be struck at the eleventh hour.

For his part, Hindery wouldn't say if YES would take out additional ads in newspapers or other media in the near future, but the network and DirecTV have begun grass-roots efforts to entice Cablevision subscribers to purchase DBS systems.

The network is trotting out high-profile personalities to make appearances in Cablevision-served communities. YES announcer Michael Kay appeared at the Nanuet Mall in Rockland County, N.Y., while former Yankees and YES broadcasters Bobby Murcer and Paul O'Neill were scheduled to make appearances and talk up the network last weekend at malls in Long Island and Westchester County, respectively.

Meanwhile, YES is working with DirecTV to tout the satellite service's carriage of the network. DirecTV has launched a major radio and print campaign, and is distributing door hangers, mostly to Cablevision subscribers on Long Island.

"We want to make sure that our customers and prospective customers know they can get the Yankees on DirecTV," senior vice president of programming acquisitions Michael Thornton said.

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