The New York Yankees-controlled YES Network has flung a beanball at Chuck Dolan, telling a hearing of the N.Y. City Council Sept. 13 that it should consider taking away the franchise of Dolan’s lucrative cable systems reaching about 3 million subscribers in greater New York.
Cablevision Systems Corp., the Dolan-owned operation, is the only major distributor of cable networks that has not struck a deal to carry YES, visiting grief on the Yankee fans among its subscribers.
In a prepared statement delivered in person to the zoning-and-franchises subcommittee of the city council, Leo Hindery, chairman and CEO of YES, said that “should Cablevision continue to refuse to negotiate with YES Network, we would hope you would consider bringing true cable competition to the Bronx and Brooklyn.”
YES’ high-profile attorney David Boies, the lead lawyer in the federal government’s suit against Microsoft four years ago, was even more explicit in his remarks during a Q&A with council members meeting in an ornate chamber of City Hall in Manhattan. “Cablevision is using the monopoly power given to it by the franchise authority in an unfair and discriminatory way,” Boies said. “The government may have to hit Cablevision in the head with a two-by-four to bring it to its senses.”
He said the council should look into the prospect of “drastic action” such as “revoking its franchise and getting real cable competition” into Cablevision’s territories, mostly in the Bronx and Brooklyn.”
James Dolan, president and CEO of Cablevision, dispatched one of his attorneys, Kevin McGrath, to City Hall to read a prepared statement to the council members. At one point, the statement said that Cablevision couldn’t accept the YES Network’s insistence on the stiff monthly fee of $2 a subscriber because YES “has demanded that all of our customers pay for the programming regardless of whether or not they want to see the games.”
But McGrath declined to answer questions from council members, which caused some of them to call his standoffishness disrespectful and insulting to the governmental body and to Betsy Gottbaum, the public advocate and No. 2 official in city government, who made a rare appearance in the role of presiding authority at the meeting.
Boies, while putting forward the prospect of the council’s stripping Dolan of his New York City cable franchise, said such a radical move should come only after “moral suasion and public suasion” have failed to get YES in front of Dolan’s subscribers.
Tony Avella, the City Council member who chaired the hearing, said after the session that revoking Cablevision’s franchise could drag out in the courts for a long time because Dolan would appeal the decision.
“I’ve put out feelers to both sides,” Avella said, “to sit down in my office and go over the issues” that are preventing YES and Cablevision from reaching an agreement. YES accepted the feeler immediately, he said, and “at least Cablevision hasn’t said no.”
YES and Cablevision will soon be exchanging documents and discovery interviews as part of the federal antitrust lawsuit YES has filed. YES charges that the main reason Cablevision has not arrived at a deal is that it’s majority owner of the two competing regional sports channels, Madison Square Garden Network and Fox Sports New York.
Cablevision says the suit is without merit.