Network nixes programming as carriage stalemate continues

In a dramatic turn to a vitriolic carriage dispute, MSG Network pulled its programming from Time Warner Cable at midnight Saturday after the two sides remained stalemated over fees.

They remained far apart on terms until the end, with Time Warner Cable saying it offered a 6.5% increase while MSG insisted on a 53% hike.

“New York area sports fans will miss exclusive local live coverage of the Knicks, Rangers, Islanders, Devils and Sabres,” said MSG in a statement over the weekend. “What does that say to New York sports fans?”

“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 after last year’s rates,” countered Mike Angus, senior VP for content acquisition at Time Warner Cable. “Perhaps after renovating the Garden they are looking for New York sports fans to fund renovations of the Forum (which they) recently purchased in Los Angeles. Who knows? That’s what banks – not our customers – are for.”

MSG noted TW Cable’s recent “record-setting $5 billion investment in the Los Angeles Lakers” as a sign that the New York-based cable operator was evidently not hurting for cash and disposed to invest in local sports, at least, MSG said, in Los Angeles.

Angus claimed the two sides had reached an agreement for a 6.5% hike earlier in the year but then MSG reneged, asking for the much higher rate.

“We hope fans will remind MSG that in these economic times no one can afford to pay 53% more for their channel,” Angus added.

MSG has reiterated throughout the two-year dispute that TW Cable has “grossly mischaracterized our position” and claims the cable operator is only trying to get premium programming on the cheap. Their contract expired Dec. 31.

“We are disappointed,” said Michael Bair, president of MSG Media. “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.

The decision is particularly dramatic since the NBA season, hobbled by a strike, started only last week and ratings for the Knicks and Rangers have been up sharply.

TW Cable noted that all is not lost with “nearly 40%” of the remaining Knicks games, most NBA playoff games and the NBA All-Star game still viewable on its systems, as well as nearly 30% of Rangers games, nearly 20% of Sabres games and some Devils games.

The scuffle was significant as evidence of increasing tension over the cost of sports rights as MSOs need to pass the costs on to subscribers who are increasingly tapped out financially. But, of all programming, sports tends to deliver consistent, healthy ratings.

Dish Network, the nation’s No. 2 satellite provider, dropped MSG networks in 2010 in a fight over fees.

It was also notable that MSG, which is closely affiliated with another New York area cable operator, Cablevision, expended lots of effort urging TW Cable subs to switch to competing satellite or telco services like DirecTV and Verizon’s FiOS – which are fierce rivals of Cablevision. MSG was part of Cablevision until it was spun out into a separate public company; they share the same chairman in James Dolan.

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