It took a mad outbreak of Linsanity to rouse a fickle and passive segment of New York’s sports fandom to the reality they can’t watch Knick games on TV. This is actually good news. It likely will increase pressure on the MSG network to restore its signal to the homes of 2.31 million Time Warner Cable customers.
MSG’s failure to extract a sizable rate increase from Time Warner led to the blackout of Knicks, Rangers, Islanders and Devils games the first of the year.
Thirty-percent of the MSG Network’s 7.7 million subscribers get MSG through Time Warner. Some have no choice in signal carrier. Many city dwellers can’t get DirecTV because of building bans on dishes.
It was only after Jeremy Lin’s game-winning three-point shot at the buzzer in Toronto Tuesday night that frustration over the blackout went from a murmur to a shout.
Both sides in the dispute refuse to disclose the per-subscriber rate they’re aiming for to make a deal. The secretive aspect of this is maddening to the guy at home trying to understand what’s at stake. The two corporations at odds here keep channel rates quiet to protect the multitude of carriage deals each already have on the books – plus the ones they’ll make down the road.
Representatives from both Time Warner and MSG appeared on Francesa’s show Wednesday. While only three of every ten MSG homes are dark, the impact is much bigger if you leave outer-fringe markets out of the equation.
Francesa said going in it would be futile to broker a deal on-air but he likely couldn’t have anticipated what a complete dolt the Time Warner rep turned out to be. Director of Communications Eric Mangan came on the program via telephone and failed to expound on the stalemate beyond basic talking points advanced in a press release issued when the signal was yanked six weeks ago.
Ninety minutes later, MSG sent its president of media Mike Bair into the WFAN studio. The appearance of an articulate, high-ranking executive on the show stood in stark contrast to a Time Warner flack stammering through a slogan-filled crib sheet.
Bair rejected Mangan’s claim that MSG is demanding a 53-percent increase in the per-subscriber rate set in the now-expired deal struck in 2005. Like Mangan, Bair wouldn’t tell Mike what the monthly rate was when MSG turned off the signal. All Bair would say is that the rate MSG is seeking from Time Warner is no more than what it’s getting currently from other providers like DirecTV and Comcast.
After it was over, Francesa was exasperated. While he believes the onus in this dispute is on Time Warner because it’s the entity that has a direct business relationship with the home subscriber, Francesa feels like it‘s difficult to know who‘s telling the truth on where the negotiations stand. “You put ‘em on to see if you can nudge the two sides to the middle. I understand they’re both full of beans. It’s not pleasant.”
I actually lean toward thinking the burden is on MSG right now. Bair was awfully smug in saying Linsanity and the success of the Rangers gives his side leverage. Why the boast when genuine fans are getting screwed? A Thursday report written by the Post’s Claire Atkinson says MSG is in fact seeking a 53-percent hike on top of a current rate in the neighborhood of four bucks a head. I get the sense MSG is playing a brand of hardball that has taken this disagreement to a place beyond one that leads to compromise. The tens of millions of dollars gained annually from an extreme position needs to move to the middle. It’s unfortunate we don’t know what the middle is. Bair needs to square his claim MSG will give Time Warner a deal at or below terms it has with DirecTV and/or Comcast with what is now a protracted and painful period of zero progress in negotiations.
A few other bits:
-Mangan said there will be no cable bill rebate for MSG’s lost time on Time Warner. He also said the number of customers who cancelled service as a result of the dispute is “insignificant.”
-Citing data from the research firm SNL Kagan, Marketwatch reporter Sam Mamudi says MSG is paid an average of $2.63 for each of its 7.7 million total subscribers. To reconcile this information with Richard Sandomir saying the number is $4.91 (same source), I can only assume the latter figure applies to the rate for those in New York City. It’s likely that different regions on the Time Warner service map pay different rates depending on the level of demand for New York sports. The half-dozen or so news outlets that have attempted to report numbers would lead one to believe MSG was getting four bucks and change per NYC subscriber before the first of the year – and wants at least another buck or so a month going forward. Should MSG win its fight with Time Warner, it’s possible their per-subscriber rate would exceed what ESPN gets from cable and satellite firms (estimated to be about $5 a month).