Extra innings on tap for MSG: stall to greet latest Yankee pitch

Cable World, Nov 20, 2000 by Mike Reynolds

The New York Yankees have made a third pitch for their local and regional TV rights. The question is now whether Cablevision Systems' Madison Square Garden Network will watch it go by, swing or foul it off.

The Yankees reached a one-year, 852-million rights agreement with International Management Group (IMG) for the 2001 season Nov. 8, but MSGN, under its 12-year, $493 million contract that expired with the 2000 campaign, held the right to match the offer. However, the IMG deal does not contain any matching renewal option, meaning the ball club would be free to negotiate with an outside party following the 2001 season.

At presstime, MSGN had yet to make its call.

People familiar with the plot say MSGN has three options: Let the contract go to IMG (watching the pitch); accept the deal (swinging at it) and take a shot at forging a longer pact with the Yankees; or litigate (fouling it off), further delaying the proceedings.

Those scoring at home know this is only the latest entry in this extra-innings affair.

In July, IMG would have paid the Bronx Bombers $900 million over 10 years as part of a regional sports network that would have subsequently included the NBA's New Jersey Nets and the NHL's New Jersey Devils, both of which are owned by the world champion's parent, YankeesNets. A New York State judge declared that plan couldn't be matched under the MSGN contract.

In September, the Yankees asked MSGN for either 81.3 billion upfront or $2.4 billion over a 10-year period, rates the regional deemed excessive. The Yankees withdrew that offer.

Should MSGN elect to pass, some observers wonder about its future, claiming it could fold without its summer anchor, while telecasts of its other significant TV properties, the Cablevision-owned New York Knicks (NBA) and Rangers (NHL), could be transferred to Fox Sports New York, in which the MSO also has a stake.

Others question the option situation.

"On paper, there are no strings attached," says Mike Trager, president-SFX television and entertainment. "But if IMG does just a one-year deal, I'm betting it's the last TV deal they ever do."

Some feel the longer MSGN can stall an arrangement, the greater its leverage, because IMG would encounter more difficulty in securing distribution. One can only imagine the hardball negotiations should Cablevision strike out against Yankees owner George Steinbrenner.

Brian Schecter, a sports analyst at Paul Kagan Associates, doesn't believe a closer will be called from the bullpen just yet.

"Cablevision has shown every indication it will not go down without a further fight. They have a lot of time. There are plenty of examples where sports teams didn't strike deals until the last minute," he says, citing protracted negotiations involving the NBA's Houston Rockets and Minnesota Timberwolves.

But Rockets and Timberwolves ain't da Bombers, and the stakes aren't nearly as high.

Still, I agree with Schecter. I expect another foul ball from MSGN.