Cablevision Systems Corp.'s recent agreement to spend more than $100 million to help build a proposed ice hockey arena in Hoboken, N.J., is the latest example of media companies' quest to secure sports programming.
Whether by buying the team or gaining leverage through arena finance, media concerns are employing various strategies to tie up local sports programming, experts say.
Cablevision (NYSE:CVC) earlier this month agreed to finance half of a proposed $206 million arena with New Jersey Devils owner John McMullen. The media company would then manage the new facility.
"I couldn't possibly imagine [Cablevision Chairman Charles] Dolan going in partnership with this arena and then having McMullen selling the cable rights to some other party," said Ed Snider, chairman of Comcast-Spectacor, the sports unit of cable company Comcast Corp. (Nasdaq:CMCSA).
Cablevision already owns the Rangers, so it could not buy the Devils because of NHL regulations. But the arena deal will ensure that a rival regional sports network does not snare the broadcast rights to the Devils.
As part of the financing agreement, the Devils are required to agree to a long-term extension of their cable deal with Cablevision's Fox Sports New York. The Devils would not disclose the terms of the current contract.
While there are no other regional sports networks in New York, there could be one soon. The new company formed by the pending merger of the New York Yankees and New Jersey Nets may seek to launch a rival network to Cablevision's Madison Square Garden Network and Fox Sports New York, or the new YankeeNets could sell their broadcast rights to another firm like Turner Sports or ESPN.
Cablevision, which also owns the Knicks, broadcast rights to the Yankees and Mets and Madison Square Garden, would not be the first media company to help build a facility for a team it does not own.
News Corp.'s (NYSE:NWS) Fox is a partner in the Staples Center, where the Los Angeles Kings, Lakers and Clippers will play.
The proposed New Jersey arena still has hurdles to overcome. Hoboken's mayor is against the project, and Gov. Christine Whitman would prefer to see the Devils and Nets play in a new arena in the Meadowlands, where they play now.
