Time Warner Cable: MSG Offered No 'Credible Explanation' For License Fee Hike


Updated at 10:50 a.m. on Jan. 1

Time Warner Cable, maintaining that a deal had been in reach before the programmer demanded a "whopping" increase and refused to negotiate further, is offering its subscribers a month-long freeview of its sports package in the wake of the removal of MSG and MSG Plus from its lineup.

The nation's No. 2 cable operator and MSG Media couldn't reach a new license fee agreement as their contract expired at midnight on Jan. 1 and the two regional sports networks, which carry New York Knicks NBA games, as well as the NHL's New York Rangers and Islanders, New Jersey Devils and Buffalo Sabres, are not currently available to Time Warner Cable's 2.3 million video customers in the New York DMA and in upstate New York.

"Despite agreeing to the asked for 6.5% price increase on rates that MSG themselves deemed as fair market rates just last year, MSG reneged on the deal and instead, demanded a whopping 53% increase and refused to negotiate further," Mike Angus, senior vice president, content acquisition, for Time Warner Cable, in a statement.

"We hate that our customers have been put in this terrible position, and MSG has offered no credible explanation as to why they suddenly need a 53% increase over last year's rates. Perhaps after renovating the Garden they are looking for New York sports fans to fund renovations of the Forum they recently purchased in Los Angeles. Who knows, but if they have substantial new funding needs, that's what banks - not our customers - are for. We hope the fans will remind MSG that in these economic times, no one can afford to pay 53% more for their channel."

In announcing the disconnect on Dec. 31, MSG Media president Mike Bair expressed his own disappointment.
"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."

MSG Media, whose national music service Fuse was dropped by Time Warner Cable on Dec. 16 during these contentious negotiatons, is encouraging the cable operator's subscribers to switch providers, via 888-keepmsg (533-7674) and keepmsg.com."

For its part, Time Warner Cable, pointing customers to www.twcconversations.com/MSG, says that nearly 40% of the remaining Knicks games, most NBA playoff action and the NBA All-Star affair, 30% of Rangers, 20% of Sabres and some Devils contests, as well as the majority of the puck sport's playoffs, will be available on other outlets.

MSG questioned the MSO's math about the game count and its perception of fan interest.

"Sports fans are passionate about their teams, they do not want some of the games, they want all of the games. They want pregame show, postgame show, and award-winning MSG coverage of games," said an MSG spokesman.

For instance, the RSN will televise 16 Knicks games in January. TNT has exclusive coverage of the team's Jan. 12 contest against the Memphis Grizzlies, while the Jan. 27 game against the Miami Heat will run on both ESPN and MSG. The remainder of the NBA squad's games this month will air only on the RSN.

The MSO is also making Time Warner Cable Sports Pass, a package of more than 15 sports-oriented channels that includes NBA TV and the NHL Network and normally retails for $5.95 per month, available for free from Jan. 1-31.