When YES Really Means No - Multichannel

When YES Really Means No

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Just two days before the start of the Major League Baseball season, Yankees
Entertainment & Sports Network's place on Cablevision Systems Corp.'s lineup
was in jeopardy.

An interim agreement by the parties reached earlier in the month broke down,
leaving both sides pointing fingers and YES and Cablevision again at an impasse
Friday.

The parties had reached a one-year interim carriage agreement March 12,
mediated by New York Mayor Michael Bloomberg, former AOL Time Warner Inc.
chairman Gerald Levin and former Time Warner Cable New York City president
Richard Aurelio.

That accord put a temporary halt to what had been a 15-month impasse -- one
that had kept the regional sports network from Cablevision's 3 million
subscribers in the New York DMA.

Cablevision was expected to pay YES $2.12 for each subscriber who received
the regional sports, regardless of whether it is part of a basic, tier or à la
carte offering.

The impasse with Cablevision stemmed from YES seeking expanded-basic
positioning and about $2 per month, per subscriber.

Cablevision -- which owns Madison Square Garden Network, the channel that
held the Yankees' game rights before YES -- had held out for premium-service
treatment.

Early Friday afternoon, Cablevision issued a statement pointing a finger at
Yankees owner George Steinbrenner and YES investor The Goldman Sachs Group
Inc.

"It appears that George Steinbrenner, on behalf of the Yankees, and Richard
Friedman, on behalf of Goldman Sachs, have decided to renege on this agreement
because it doesn't guarantee them enough money and because it could have
required the YES Network to show its financial records and resulting
profitability to an independent arbitrator," Cablevision president James Dolan
said in a prepared statement.

YES chairman and CEO Leo J. Hindery Jr. said the deal fell apart because
Cablevision refused to sign finalized versions of the March 12 draft documents,
large portions of which were handwritten and required board approval, as had
been provided for.

"We really don't know why Cablevision has walked away from this deal, which
reflected compromises on both sides of the table," Hindery said in a prepared
statement. "After a series of meetings with the facilitators, we thought we had
a framework on March 12 for the final agreements, and in good faith, we
participated in a press conference announcing the tentative deal."

He continued, "YES delivered to Cablevision fully executable versions of the
draft documents on March 14 and requested a meeting to close the deal. For the
following week, there was no response from Cablevision, despite repeated written
requests and follow-up telephone calls, toward finalizing the draft documents of
March 12."

Hindery said talks resumed March 25, but Cablevision refused to sign the
agreement and set a deadline of Thursday at midnight for the negotiations to
conclude.

At a late-Friday-afternoon New York press conference, Hindery said he is open
to negotiating with Cablevision through Sunday night, adding that it would only
take three hours to get the service on the MSO's systems.

Cablevision did not return calls seeking a response to Hindery's comments by
press time.

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