Losing broadcast rights to the New York Yankees cost Madison Square Garden $12 million in third-quarter revenue, a 9 percent decline to $116.7 million, from lower ad rates and affiliate fees.
The Yankees this year moved their games to their own YES Network, which MSG parent Cablevision Systems Corp. refused to carry on its cable systems because of a pricing dispute. But irrespective of that imbroglio, the Yankees-less MSG Network, a unit of MSG, was not nearly as successful.
MSG third-quarter cash flow, however, rose to $16.5 million from a $32.5 million loss last year, which arose from paying off New York Knicks players who suffered career-ending injuries.
For the full year, Cablevision predicts MSG cash flow will reach $90 million to $95 million, up from $82.6 million in 2001. The prediction does not include a $30 million accounting gain related to the reversal by the NBA of the Knicks' 2001 luxury tax, an amount that had already been recorded in 2001. The 2002 estimate also does not include a $12 million charge related to Knicks player Antonio McDyess' season-ending injury, James Dolan, Cablevision chief executive, told a conference call with investors and analysts last Thursday.
Madison Square Garden includes MSG Network, Fox Sports Net New York, the New York Knicks, the New York Rangers, the New York Liberty, the MSG arena and Radio City Music Hall.
Dolan said he did not expect News Corp. to exercise a put option that would require Cablevision to buy News Corp.'s 40 percent interest in Cablevision's regional sports programming businesses as well as other operations that include MSG. News Corp. contractually could exercise the put in December, but Dolan, echoing comments made by News Corp. Chairman Rupert Murdoch, said he expected the situation to be solved amicably.
