ITT/Cablevision's $1.1B purchase of Madison Square Garden
and its strategy to make a return on its investment with two
struggling teams is examined in the NEW YORK OBSERVER by Nick
Paumgarten. Paumgarten writes "there are few people other than
the buyers and the bought who won't tell you that [Cablevision's
Charles] Dolan and ITT overpaid by $400M, if not more." Noting
recent ticket price increases for both teams, Paumgarten writes
"critics say that the damn-the-torpedoes, hike-those-prices
approach is emblematic of a new arrogance creeping into the way
business is done at the Garden." Meetings with MSG President
Dave Checketts have reportedly been held on the subject of ticket
price-hikes already. There has also been talk on the future of
the teams, as "they need to restore competitiveness and bring in
a couple of fresh stars." Ownerships other challenge is to
"parlay the recognition into a more profitable operation,"
according to SportsCorp. President Marc Ganis. Ganis: "It's not
readily apparent that they've taken up the challenge yet." But
Paumgarten writes management "may have its eyes fixed on new,
untapped revenue streams," as ITT's purchase of WNYC allows for
the creation of an over-the-air superstation devoted to business
and sports. Some envision the new station carrying a few Rangers
and Knick games on free TV, which would in turn allow ITT and
Cablevision to turn MSG Network into a premium pay channel. Fans
"would pay more for their games, whether they go to the Garden,
or the Garden comes to them." Paumgarten: "But $1.1B? Ladies and
gentleman, children of all ages: You do the math" (NEW YORK
OBSERVER, 6/9 issue).
