SBJ/October 22 - 28, 2007/This Weeks News

NHL answers MSG’s digital-rights lawsuit

In its lengthy rebuttal to the lawsuit brought by MSG over new media rights, the NHL alleges MSG’s “real gripe” is with a league-imposed $100,000 fine — not the NHL’s effort to migrate MSG’s New York Rangers Web site to a league platform.

The league also dismisses MSG’s antitrust charges in the lawsuit saying, “MSG’s implicit suggestion that the NHL and its Member Clubs have somehow limited the scope of their joint venture to scheduling games and agreeing on limited broadcast rights is absurd.”

A judge is expected to listen to early arguments in the lawsuit on Tuesday during a preliminary injunction hearing. MSG was expected to file additional documents with the court after press time on Oct. 18.

For now, MSG continues to operate its self-produced official team site,, and promote it heavily on the video signage around the arena.

The NHL filed more than 400 pages of statements and exhibits from seven league officials and team executives Oct. 12 countering MSG’s claims that the league’s new media policy eliminates competition between the Rangers and other teams.

NHL Deputy Commissioner Bill Daly wrote, “The Rangers’ complaint amounts to an attack on the fundamental manner in which the league and every other professional sports league is organized and operates. … Granting MSG its requested relief would strip the league of its essential and fundamental structure.”

Daly added that the Rangers popularity stems from playing other NHL teams and that it has benefited by hiring popular players who other NHL teams develop, such as Wayne Gretzky, Chris Drury and Scott Gomez.

The reference to Drury and Gomez was in direct response to a court filing by MSG Chief Operating Officer Steve Mills, who wrote that adding those players to the Rangers roster in the offseason offered a great opportunity to increase traffic on the team’s Web site.

Daly and the league received supportive filings from Washington Capitals owner Ted Leonsis; Minnesota Wild Chairman Bob Naegele; Pittsburgh Penguins CEO Ken Sawyer; MIT economics professor Franklin Fisher; John Collins, NHL senior vice president of business and media; Keith Ritter, president of NHL Interactive CyberEnterprise; and Robert Hawkins, NHL vice president and general counsel.

Leonsis, the vice chairman emeritus of AOL who was on a special committee to develop the NHL’s new media policy, wrote that he was initially reluctant to shift all club Web sites to a common platform, but “came to realize that the current new media initiative is necessary … to optimize the monetization of Internet sponsorship and advertising opportunities.”

Naegele, representing one of three teams that voted against the common platform at a June 2006 board meeting, wrote that the team’s “ability to communicate with our fans through our Web site is better now than ever before.”

Maple Leafs Sports and Entertainment President and CEO Richard Peddie’s name also surfaced in support of the league. Though Peddie did not file a declaration in support of the NHL, an e-mail he wrote to league officials on Aug. 22 was included in the league’s filing.

“I told some of you individually,” Peddie wrote, “but wanted all of you to know that we think the work you are doing in the digital area is really market leading. It is also a nice blend between the league and the local team.”

The league also filed minutes from a June 21, 2006, board of governors meeting when owners reviewed the recommendations of its new media committee.

At the meeting, MSG Chairman James Dolan argued against the committee’s new media recommendations, saying they “would result in substantial financial losses,” according to the minutes. He also shared a letter from Fox Sports Network President Bob Thompson “expressing a concern that the Committee’s recommendations could potentially result in reduced value for Clubs’ local broadcasting rights.”

Commissioner Gary Bettman assured owners that the league was not trying “to usurp a club’s ability on its Web site to provide local content and flavor,” according to the minutes.

He also said that the league explained its plan to Thompson and allayed his concerns.

The board voted 25-3 in favor of the committee’s recommendations, with Edmonton absent and Detroit in abstention.

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