Cablevision Systems Corp. Chair Charles Dolan announced
Cablevision's effort to increase ownership in MSG and its
teams, the Knicks and Rangers, at a press conference held
Friday, according to Elizabeth Sanger of NEWSDAY. Dolan was
flanked by Gov. George Pataki and Sen. Alfonse D'Amato.
Cablevision agreed to buy ITT's stake in MSG for $650M in
cash and options and $115M in assumed debt (NEWSDAY, 3/8).
NEWSDAY's Craig Gordon notes that NY Attorney General Dennis
Vacco's office is reviewing the MSG deal, and a Justice
Department spokesperson said some federal review "is
likely." But "several antitrust and cable experts" said
they "didn't expect any" federal or state moves to block the
deal (NEWSDAY, 3/9). Dolan said that Cablevision's Rainbow
Programming Holdings unit has arranged an $850M credit
facility with Chase Manhattan Bank to pay for the deal. He
also said the Garden's $92M in cash flow would help cover
payments (Fatsis & Robichaux, WALL STREET JOURNAL, 3/10).
NBC ON BOARD? Dolan said he "would consider" bringing
in a partner in MSG, and NEWSDAY's Elizabeth Sanger notes
"that may happen sooner than many think." Cablevision Vice
Chair Marc Lustgarten said NBC is "close" to buying a
minority stake in Cablevision's Rainbow programming unit,
and since MSG is owned through Rainbow, NBC will then own a
piece of MSG (NEWSDAY, 3/8). The POST's Jon Elsen adds that
NBC and Time Warner are both considered candidates for
increasing their stake in Cablevision, along with Fox and
Liberty (N.Y. POST, 3/10).
PROGRAMMING NOTES: In N.Y., Richard Sandomir notes that
Dolan said he "would act rapidly" to merge SportsChannel New
York, which Cablevision owns, into the MSG Network, putting
all teams in the same system. He will follow that by
"instituting pricing changes" that would take some games
from the basic cable tier to premium and PPV levels (N.Y.
TIMES, 3/8). NEWSDAY's Sanger notes that Dolan said some
games from all seven area pro teams, whose rights are held
by his two RSNs, would be available on free broadcast TV,
but he will "move teams and games around to give viewers the
most options," including offering games on basic cable,
additional matchups on a premium cable channel and games
bought individually on a PPV basis. Ad agencies said
Cablevision's increased control "should not affect
advertisers much" (NEWSDAY, 3/8). Former MSG President --
and current Marquee Group President -- Bob Gutkowski expects
Dolan to keep games exclusively on cable to give his company
"an edge" over competing services, such as DBS. Gutkowski:
"Dolan won't allow competition to come in the marketplace
and get the rights to these games" (NEWSDAY, 3/8). The N.Y.
DAILY NEWS' Feiden & King note that Dolan "could end up the
most hated" figure in N.Y. sports because "viewers will pay
through the nose" (N.Y. DAILY NEWS, 3/8). The POST's Elsen:
"New York sports fans should get ready to shell out more
money to see their teams play on TV" (N.Y. POST, 3/8).
REAX: NEWSDAY's Craig Gordon: "For Dolan, it's a hard-
headed business decision that fits into a broader strategy
of fortifying his cable empire in his all-important home
market by locking up some of the most desirable programming
in town: New York sports teams" (NEWSDAY, 3/9). The TIMES'
Harvey Araton: "The bottom line for the local sports media
is that Dolan should be dragged into the big stage, like it
or not. He should get the Steinbrenner treatment" (N.Y.
TIMES, 3/9). NEWSDAY's Joe Gergen: "Now, after more than a
generation of corporate control, MSG will be associated with
an individual. There won't be any doubt about where the
buck stops" (NEWSDAY, 3/9).
