THE BUSINESS AND POLITICS OF SPORTS
There is nothing better than a fight between a cable television multiple systems operator and a television company when it comes to signing a new "carriage" deal. In New York and Philadelphia, News Corp-FOX Rupert Murdoch's boys (Channels 5 and 9 in New York, Channel 29 in Philadelphia and three of Murdoch's cable networks) are in the red trunks while Chuck Dolan's guys (Cablevision) are in the blue gym shorts. But neither will even get hit with a glancing blow. It will be the Cablevision consumer who will be the one who absorb the punches.
On October 16th, Murdoch's WNYW and WWOR in New York along with Philadelphia's WTXF could disappear from Cablevision's lineup which would deprive Cablevision subscribers of New York Giants, Philadelphia Eagles and NFL games and would sadden the lives of daytime viewers in the New York area who need a daily fix of luminaries such as Wendy Williams, Dr. Oz and those staged for TV court shows featuring Nancy Grace, Jeanine Pirro, Joe Brown, Harvey Levin and Levin's journalistic effort, TMZ. In Philadelphia, Judge Judy, Judy Alex and Divorce Court aficionados would have to find something else to do along with Wendy Williams, Nancy Grace and Harvey Levin fans.
The subscribers in both areas would also lose the "news" (and miss seeing murder, mayhem, entertainment, sports and weather reports). If things get really sticky, Cablevision viewers will also lose the Major League Baseball Playoffs, the National League Championship Series and the World Series and prime time shows such as "The Simpsons," "24" and "Glee."
Cablevision isn't the only provider of FOX programming. A consumer can always buy an antenna and pull in the Channel 5 and 9 signals in the New York area and the Channel 29 signal in the Philadelphia area. There are also satellite and phone alternatives and for those worried about losing the NFL, there is always DirecTV's Sunday football package.
All is not lost for the over-the-air stations viewers of WNYW, WWOR and WTXF. Nor is it the end of the world for Cablevision subscribers who are fans of FOX Deportes, Nat Geo Wild and the FOX Business Channel. Cablevision subscribers who are so infuriated can look for a different delivery system and Murdoch's people are letting those people know that they have alternatives.
Murdoch's scare tactics for those who cannot remove themselves from their position in front of the TV includes having a website (just like the Disney propaganda sites against Cablevision and Time Warner earlier this year in carriage fights---Disney apparently got what they wanted from the multiple system operators and it will be reflected in higher cable TV fees) that asks people to sign a petition to keep FOX properties on Cablevision.
Keepfoxon.com also includes testimonies from people who are irate about the prospect of losing FOX programming on Cablevision and are telling stories about how they have switched to other sources in the titanic showdown.
To make a long story short, Murdoch and Dolan have been business partners — in 1997 Murdoch picked up 40 percent of Dolan's Rainbow Media Sports Holdings for $850 million. The deal gave Murdoch part ownership of Dolan's National Basketball Association's New York Knicks and the National Hockey League's New York Rangers and have a history of working together to make money for one another. Neither is really concerned about the consumer although Dolan always puts out some nonsense about protecting consumers. In 1998, Dolan's Cablevision "partnered" with Murdoch's News Corporation and Liberty Media and "rebranded" Sports Channel New York as Fox Sports New York (FSNY). Dolan's Madison Square Garden Network also became a part of the FOX Sports Network.
In 2005, Dolan and Murdoch ended their alliance because Dolan had some bills he could not pay. Dolan's Cablevision took full ownership of the Garden and the teams, including the Knicks, Rangers and the WNBA's Liberty, as well as MSG Network, Fox Sports New York, FSN Chicago and Radio City Entertainment and 50 percent of FSN New England. Murdoch's News Corp., which held a 40-percent stake in the joint venture, got full ownership of two Fox Sports Net regional sports channels in Ohio and Florida and the two network's advertising operations.
They are not really foes although Dolan beat out Murdoch to buy Long Island's Newsday a couple of years ago. But if there is to be a fight, Dolan and Murdoch are certainly in the heavyweight division.
Both have the right political connections and both can go the distance.
Dolan is a pesky opponent. After losing the New York Yankees cable TV rights, Dolan decided that the Yankees new YES Network was too pricey to be put on Cablevision in 2002. New York State elected officials stepped into the YES Network-Dolan dispute and arranged a temporary cease fire that put the YES Network on Cablevision systems in 2003. Dolan and the Yankees signed a long term agreement in 2004.
Earlier this year, Dolan and Scripps Network Interactive engaged in an 18-day scrap that kept the Food Network and HGTV off of Cablevision systems between January 3 and 21. Then there was the Cablevision-Disney contract battle in March when Disney pulled WABC TV off of Cablevision systems the day of the Oscar presentation show. Cablevision and Disney reached a deal and the Oscar program was restored some 15 minutes after the Academy Awards show started. Dolan and Disney faced some political scrutiny with New Jersey Senator Frank Lautenberg chided the two entertainment companies.
Disney extracted money from Dolan for the right to carry WABC on Cablevision systems. Dolan, of course, passed on the cost to consumers.
The high end News Corp/FOX-Cablevision drama will probably end with a whimper. Murdoch will get what he wants, Dolan will get what he wants and the consumer, the third party in this heavyweight face off will have to pay the price.
The consumer has little choice if they want cable TV. They are stuck in a system that gives them little choice in what they want to purchase thanks to the 1984 Cable TV Act passed by both the House of Representatives and the Senate on Capitol Hill and signed into law by President Ronald Reagan. The law allowed multiple system operators to bundle struggling networks such as ESPN, the Weather Channel, CNN and CNN Headline News onto a basic tier (which was anti-consumer and probably violates antitrust laws) and sell the package as one on a basic expanded tier. Cable TV is an all or nothing business. You buy basic, you buy basic and basic expanded and throw in digital. But you cannot buy an individual sports package or news package. Giants, Eagles, NFL fans along with baseball fans probably don't have to lose too much sleep over the Murdoch-Dolan spat. It will be resolved and if the two heavyweights can't agree, someone in Albany or Trenton or Harrisburg or Washington will get a solution in place very quickly. After all, it is election season and someone will probably want to claim victory for TV viewers.