MSG, TW Cable in sports battle

Time Warner carriage deal ends Dec. 31

MSG Network and Time Warner Cable seem ready to duke it out to a bitter year-end deadline, with New York sports fans pawns in the battle between the host of the Knicks, Rangers, Sabres, Islanders and Devils and the New York area’s major cable operator.

The two sides have “not had any recent, meaningful discussions” MSG Media president Mike Bair said in a statement Wednesday; their carriage deal expires Dec. 31.

A Time Warner Cable rep said “negotiations are ongoing and we are still hopeful.” But insiders acknowledged that while the two sides talk every day, contact hasn’t been fruitful.

Pressure is high as the NBA’s long-suffering Knicks finally look like a team to cheer about and there’s pent-up demand for basketball in particular with the start of the season having been delayed by a players’ strike until last weekend.

The fight also comes amid a growing clamor over the cost of sports rights and the dynamics of how they get passed down the chain from programmers to operators to consumers. News Corp. chief operating officer Chase Carey commented recently that the pricetags on sports “make you swallow hard”; a prime example is the multiyear deal signed by Fox, NBC and CBS with the National Football League earlier this month worth nearly $28 billion.

The only winner here may be Verizon’s FiOS service, a rival to TWC, which has a strong and growing New York regional presence and carries MSG Networks. MSG itself, in the war of words, has been urging subscribers to dump TWC in favor of other video services, including FiOS, DirecTV and RCN.

A spokesman for Verizon declined to comment on any uptick in sales from the current dogfight but noted, “We continue to sign up new customers each day.”

Smaller satcaster Dish dropped MSG networks in 2010 after its own spat over carriage fees.

“Sooner or later Verizon and DirecTV will have to renew their deals” too, warned a person close to TWC — meaning that switching providers may not be the solution longer term.

The question is whether it could be one short-term answer for subscribers who want to see the Knicks play the Toronto Raptors on Jan. 2 — the first game of the new year.

MSG claims that Time Warner Cable has “rejected every one of our fair proposals for nearly two years and are unwilling to value our programming in the same manner as other distributors or even engage in good faith negotiations on behalf of their customers.”

Time Warner Cable says it won’t pull the channels, but neither will it pay a 53% rate hike MSG demands. The cabler said it’s willing to abide by a previously discussed 6.5% increase while the two sides continue to talk. If the network goes dark, TWC insiders have indicated, it will be MSG pulling the plug. The cabler has said that the requested increase would make MSG the costliest sports network in the country — above even Disney’s mighty ESPN.

MSG has insisted that TWC “grossly mischaracterized its demands.”

Bair noted Wednesday that “early ratings have already shown tremendous enthusiasm for the Knicks, the Rangers have one of the best records in the league, and there are passionate fanbases for the Sabres, Islanders and Devils. Given the approaching deadline of Dec. 31, we continue to urge fans to find alternate providers so they won’t miss their favorite teams.”

MSG lamented Time Warner Cable’s recent deal with the Los Angeles Lakers, said to be worth as much as $3 billion, to launch several regional sports networks. It makes a good rallying cry. “They spent billions to acquire the Lakers’ rights. In New York, their own backyard, they don’t seem to value the Knicks as they do the Lakers,” said a person close to MSG.

MSG was very unhappy as well when the cabler yanked MSG’s music network Fuse from its lineup this month. Fuse’s contract had expired, and TWC refused to bundle it into current negotiations for the sports nets.

But “Fuse is a footnote to the conversation,” an MSG rep said. “This is really about sports and Time Warner Cable not willing to value MSG sports programming the way all the other operators do. Nothing more, nothing less.”