# Lawmakers: Cablevision should say YES



## Scott Greczkowski (Mar 21, 2002)

Lawmakers: Cablevision should say YES

By Paige Albiniak
Broadcasting & Cable

Several New York state lawmakers introduced legislation Tuesday intended to force Cablevision Systems Corp.'s hand and make it carry Yankees Entertainment & Sports Network on its basic tier.

Mimicking a federal law that requires cable operators that own programming to carry independent cable programmers on equitable terms, the bill "would give the state of New York the ability to take action when such a dispute arises and federal regulators opt not to intercede," according to a statement.

Two state senators and an assemblyman introduced the bill.

"It is terribly wrong when programming is kept from viewers because of the anti-competitive actions of cable operators that happen to own competing programming," Assemblyman Alex Gromack (D-Congers) said. "In this case, every day, residents in the communities I represent tell me they are deeply saddened and outraged that they cannot watch Yankees games simply because Cablevision does not want the YES Network competing against Cablevision's own sports services, MSG [Madison Square Garden Network] and Fox Sports New York."

The dispute between YES and Cablevision has gotten progressively worse over the past two months, with YES filing an antitrust suit against Cablevision last month.

"The YES Network knows, and can verify, that the only reason the YES Network is not being carried on Cablevision's systems is because Cablevision does not want YES competing with Cablevision's own sports services, MSG and Fox Sports New York," YES chairman Leo J. Hindery Jr. said.

"There is simply no other reason, for every other cable operator in the Greater New York area is today carrying the YES Network in basic," he added.

Cablevision took issue with Hindery's portrayal of the situation. "This is the latest YES Network attempt to pressure Cablevision into forcing all of our customers to pay $72 million per year to watch Yankee games on cable, whether they want to or not," according to a statement. "Not only is this proposed legislation pre-empted by federal law, but it also ignores Cablevision's fair and nondiscriminatory offers to the YES Network that have all been rejected by YES."

And the National Cable & Telecommunications Association took Cablevision's side: "The legislation introduced in New York is an improper intrusion into cable-programming-carriage decisions where Congress has decided that state regulation is inappropriate."


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## Scott Greczkowski (Mar 21, 2002)

God whats next? Laws so that all cable and satellite companies have to carry Al Sharpton's network?

Give me a break! No one should be forced to carry channels they don't want to pay for.


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## lee635 (Apr 17, 2002)

But what about channels that many people want but the incumbent carrier refuses to carry on equitable terms? Cable is still a monopoly and I think it's not a bad thing that legislators respond to angry constituents. After all they're elected to represent us.


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## Mark Holtz (Mar 23, 2002)

> _Originally posted by Scott Greczkowski _
> 
> Several New York state lawmakers introduced legislation Tuesday intended to force Cablevision Systems Corp.'s hand and make it carry Yankees Entertainment & Sports Network on its basic tier.


:thats: Some is definately smoking crack.

Okay, someone show me in the constitution that we have an unalienable right to a particular channel. :rotfl: This was a business decision based upon the high cost of the channel ($1.85 per subscriber) and perhaps a bit of spite over Cablevision's ownership of MSG. It has already been documented in several media stories that Cablevision did make several offers of compromise, but was flatly rejected. Furthermore, Cablevision can demonstrate that they have lost business because of this decision, yet can also point out that an alternative exists in the form of DirecTV.

Why don't they go after Dish as well? After all, they rejected YES as well, and even gave out numbers to competitors.

Here's hoping for a nice, long baseball strike. Then, the fans can picket the ballparks saying that both owners and players are unfair to fans. Maybe this will be the final nail in the coffin that was once America's pasttime.


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## lee635 (Apr 17, 2002)

> _Originally posted by Z'Loth _
> *
> Why don't they go after Dish as well? After all, they rejected YES as well, and even gave out numbers to competitors.
> *


Because Dish isn't the incumbent cable franchise in the area. That's like saying that because we have cell phones, there's no need to regulate land line telephones.

Anyway, I like a good scrap; about time those legislators did something other than go to lunch, scratch each other's backs and collect a check.


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## Kevin (Mar 27, 2002)

If a cable/satellite provider doesn't want to carry a channel, they don't have to! There's nothing in the Constitution or any law that says that it's a natural right to have Yankees games available at no extra cost. I have a feeling that this court case will get nowhere at all!


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## Chardo (Apr 11, 2002)

> _Originally posted by Kevin _
> *If a cable/satellite provider doesn't want to carry a channel, they don't have to! There's nothing in the Constitution or any law that says that it's a natural right to have Yankees games available at no extra cost. I have a feeling that this court case will get nowhere at all! *


Of course it's not in the Constitution, but we do have antitrust laws banning anticompetitive practices. Cablevision owns 2 regional sports networks (MSG + Fox Sports NY), and is refusing to air a competitor. Also, YES is controlled by YankeesNets, which also owns the Nets and Devils. YES Network will be airing these teams when their current broadcast contracts (with Cablevision-owned FSNY) end. Cablevision owns the Knicks and Rangers. By not carrying YES, they are refusing to air the games of the teams they don't own, in favor of the ones they do own. It's not just sports, either. They refuse to carry Robert Redford's Sundance Channel because they own Independent Film Channel.

Here's what makes Cablevision's practices illegal. They take the networks that they own (in particular, MSG, FSNY, AMC and Bravo) and mandate that other cable companies carry them on basic. When the shoe's on the other foot (YES mandating the same thing), they say that would be unfair to their customers.

They complain that it would be unfair to raise everyone's bill to carry YES when some people wouldn't want the channel. Meanwhile, customers of Time Warner, Comcast, and all other carriers have to pay for Bravo and MSG even if they don't want them. They say that a $1.85 increase would be unfair, yet they have raised rates without abandon for years, presumably because they have to pay for all of that programming they are forced to carry.

That is a blatant violation of antitrust laws.

While I'm venting, I have to say that everything the Dolans (Cablevision's controlling family) touch turns to s***. Charles Dolan is a true pioneer who helped create the cable business. But that was a long time ago. He created HBO, which in the early days was the main reason people got cable. Back then, HBO had no competition. There was no Blockbuster to rent movies. Heck, there were no VCR's yet. If you missed a movie in the theater, you had to wait for the networks to show it. HBO changed all that, and HBO became synonymous with cable. Dolan built an empire around HBO and Cablevision. Then he sold HBO. Things haven't been the same since.

Here's their track record in recent years:

They bought Madison Square Garden, the Knicks, the Rangers, MSG Network, and Radio City Music Hall. The arenas themselves are solid investments (even though they did overpay). They let son/heir James Dolan run the sports teams. The results are embarrassing. The Rangers have the league's highest payroll, yet have missed the playoffs for the past 5 years. To turn things around, he is hiring a new coach, Bryan Trottier, who was a legendary player for the Islanders. Rangers fans hate the Islanders more than they hate Bin Laden. Brilliant PR move, Jim.

The Knicks have gone from contenders to jokes in just 2 years, thanks to a series of awful trades and contracts that have left them with salary cap problems that will take years to fix. They just completed their first of what will be numerous non-playoff seasons.

Their MSG Network had the broadcast rights to the Yankees, the most lucrative regional broadcasting property in the world. When the contract was expiring, they were offered a renewal deal. They thought it was too expensive, so they passed. They expected a counter-offer. Instead, the Yankees said they would form their own network. The rest is history (actually, it's current events).

They introduced digital cable to great fanfare, spending millions to do so. Then they had massive delays in getting enough digital boxes to hook up customers. Once they finally got it going, the customers found software glitches that would render the things useless. This on top of paying an extra $30 per month for the digital service. Customers have returned their boxes in droves. Almost half the customers that went digital have cancelled.

They bought the bankrupt Wiz chain of electronic stores, hoping they could use it to sell their products. It continues to lose millions.

They paid millions at auction for cellular phone licenses with the intent to introduce cellular services. This in the most competive and oversaturated market in the country. Needless to say, they haven't proceeded.

There are other anecdotes, but you get the point. Proof is in the pudding--stock price continues to hit new lows. This is a company headed toward serious financial trouble.


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## cnsf (Jun 6, 2002)

It seems (according to a Dish rep. last night) that YES should be coming to Dish by the All-Star break. No details on charges, but it's the first hint of such I've heard.

Might have been a low-level rep., but he was a Yankee fan too.

Hopefully, it won't affect the overall cost to non-Yankee fans.


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## Kevin (Mar 27, 2002)

> _Originally posted by cnsf _
> *It seems (according to a Dish rep. last night) that YES should be coming to Dish by the All-Star break. No details on charges, but it's the first hint of such I've heard.
> 
> Might have been a low-level rep., but he was a Yankee fan too.
> ...


I wouldn't believe that CSR. They aren't supposed to release any details about a pending deal until the deal is official (it's under the contract). I hate to be pessimistic but I don't think Dish subs are going to see the Yanks at all this season.


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## Adam Richey (Mar 25, 2002)

I can't believe that the government is getting involved in deciding what programming we do and do not get. In my opinion, this is something they shouldn't get involved with. It's a money issue between YES and Cablevision, NOT between anybody else.


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## cnsf (Jun 6, 2002)

The impression I got is that the CSR slipped and definitely wasn't supposed to tell me. Who knows? Since I was already upgrading to the Everything pack, there was no need for him to divulge the info. 

Kevin, I hope you're wrong, but still have a gut feeling you may be right. I'm trying to take it with a grain of salt, but you can't help but get your hopes up if you're a true fan, but dont have tons of cash to set up both and subscribe to E* and D*.

As for the government intervention comment, I agree on principal to a point. When it's the subscribers that end up being the only ones suffering, the government has to intervene if it appears there is an impasse, just like a strike situation. Give them a chance to work it out, but if they're affecting a number of people that are innocent in the process, they should jump in.

Just my 2 cents.


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## Chardo (Apr 11, 2002)

> _Originally posted by DBSOgre _
> *I can't believe that the government is getting involved in deciding what programming we do and do not get. In my opinion, this is something they shouldn't get involved with. It's a money issue between YES and Cablevision, NOT between anybody else. *


As it stands now, 3 million Cablevision customers are being denied a fair opportunity to pay for and watch Yankees games. They are being denied this opportunity due to monopolistic and anticompetitive business practices that are in violation of antitrust laws. As such, government intervention is appropriate.


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## Scott Greczkowski (Mar 21, 2002)

Chardo,

These Cablevision people have choices so that they can see the Yankees games. Cablevision is not the only game in town.

Therefore the Government should keep its nose out of matters like these.

I mean I love White Castle Hamburgers, but there are no White Castle Resturants in Connecticut, does that means I should sue the state so that they open a White Castle here?

The lines are owned by Cablevision, they choose which channels they want to carry. If customers do not like their selection nothing is keeping the customer from using another service.


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## cnsf (Jun 6, 2002)

Point understood, but you've omitted the fact that the New York area is a very mountainous/hilly region and many, many customers cannot get a line of sight to the SW. 

In addition, many renters in the area do not have the option of installing D* or E*, especially in buildings.

If your comment applied towards all customers, I'd agree, but they don't.

The gov't needs to protect those numerous individuals who have no choice.


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## Chardo (Apr 11, 2002)

Scott, I agree to an extent. In fact I am one of the people who have switched to D* from Cablevision (largely with the help of these forums).

Cablevision takes the networks that they own, and insists that other cable carriers air them on basic cable. YES is doing the same thing, but Cablevision is saying that's an unfair demand. You can't have it both ways. That constitutes an unfair business practice that justifies government intervention.

Frankly, I am no longer a Cablevision customer, so I don't really care about the outcome. I hope it drags on, and (barring a baseball strike) thousands more people switch to satellite. For me, it's been 2 weeks and I get happier every day.

And you _should _ sue to get a White Castle. The Declaration of Independence itself calls for the unalienable right to life, liberty, and the pursuit of happiness. In other words, what you crave!


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## cnsf (Jun 6, 2002)

Agreed. I gotta have the square burgers & onions!!!!!!!!

You can also get the frozen ones, but it's not the same....


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## Scott Greczkowski (Mar 21, 2002)

While I understand that many folks can not switch to a dish I still say the goverment should not be forcing cable companies to carry channels they dont want or can afford.

Thats like me coming to your house with a new Lexus and demanding you to pay me for it even though you don't want a Lexus. 

Personally I would like to see baseball FOLD for a few years. Let people forget about it for awhile. Let all the big names go and retire. In a few years restart baseball, but instead of big contracts and high tecket prices have it become the fan friendly GAME that it should be. The league, the owners and the players are ALL being too greedy. Baseball should be a "game" It should be fun, the fans should be able to afford to watch it.


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## Scott Greczkowski (Mar 21, 2002)

Stop cnsf, you are making me hungry. 

BTW Welcome to DBStalk.COM :hi:


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## Chardo (Apr 11, 2002)

> _Originally posted by cnsf _
> *Agreed. I gotta have the square burgers & onions!!!!!!!!
> 
> You can also get the frozen ones, but it's not the same.... *


Forget the frozen. "Sliders" must be fresh from the griddle, bought after midnight, and served up by a large African-American woman with an attitude. Otherwise, they don't count.


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## cnsf (Jun 6, 2002)

Thanks for the welcome. 

I've been watching the posts for a while and get a lot of value out of these discussions. You also do a great job with this group.

Agreed on the baseball issue, but I think it's the same for all pro sports right now, unfortunately. I have to rely on corporate box/skybox invites to go to games these days.

We're the one's who will lose out in the end, regardless. It's a real expense to be a fan....especially a Yankee fan. Figure $150 for a day at the park with the family....very tough. It's that price just for a Knicks game set of tix, before concessions.

Has anyone followed YES suing Cablevision? CV is supposedly giving a "two year" prep threat. Very unlikely to hold ground with a federal judge.

P.S. A spanish flair with the burgers is nice too....not to mention the shootings in line.....


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## Chuck W (Mar 26, 2002)

> _Originally posted by Scott Greczkowski _
> *While I understand that many folks can not switch to a dish I still say the goverment should not be forcing cable companies to carry channels they dont want or can afford.*


Actually I think that is part of the governments point. Cablevision CAN afford to carry YES. They have more money than most every cable company in the NYC area, yet they are the ONLY ones not carrying it?

It's a nice coverup argument, but I don't believe it for a second. Stop and think how much money they are SAVING by not carrying the Yankees on MSG. Don't forget to include the rights fee, as well as production costs/salaries of announcers/crew and such. While they will lose some advertising dollars, they can just pawn some of them off to their OWN networks and Mets games.

No, Cablevision is lying thru their teeth on this. The only reason they don't want to carry it is it will compete with their precious stations.

That is what is against the law.

BTW, there are ALOT more people, than you think that cannot realistsically add a Directv Dish to the living qtrs, since this is NYC, land of the highrises.


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## cnsf (Jun 6, 2002)

Quick FYI...the reason Cablevision is not carrying YES is because they're still smarting over the fact that YankeesNets decided to go off and create their own network rather than YN replying with a counteroffer on the rights fees. Also, Cablevision charges about $1.80 per sub for MSG....a number they're saying is unreasonable for YES to charge.

Although Cablevision clearly holds more blame, YankeesNets aren't the angels here either. Their demand to provide YES on basic is a nice gesture for fans, but is somewhat unreasonable. 

For the extra $2/motnh, if you're a fan, you should pay for it....even if you are paying for their $10/month 2-13 basic option. You want the Yanks, fork over $2/month and don't drink that extra latte each day.....

What I don't understand is Ergen's fee of $4 per subscriber when YES has publicly acknowledged a request of $1.82/subscriber...


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## lee635 (Apr 17, 2002)

> _Originally posted by cnsf _
> *What I don't understand is Ergen's fee of $4 per subscriber when YES has publicly acknowledged a request of $1.82/subscriber... *


That $1.82 is only to acquire rights to YES, not to cover satellite, csr, and other costs. Look at it this way, if Ergen negotiated this way with every program provider, there would be no money available to cover the costs of the birds, the 800 number, etc.

It's not a good idea to get into the "we lose money on every sale but make it up on volume" thinking.


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## Mark Holtz (Mar 23, 2002)

> _Originally posted by cnsf _
> *What I don't understand is Ergen's fee of $4 per subscriber when YES has publicly acknowledged a request of $1.82/subscriber... *


Besides the obvious rights fees and the profit margin, there is also the cost of getting the feed from Net York to the uplink center the Wyoming.


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## Mark Holtz (Mar 23, 2002)

> _Originally posted by cnsf _
> *Quick FYI...the reason Cablevision is not carrying YES is because they're still smarting over the fact that YankeesNets decided to go off and create their own network rather than YN replying with a counteroffer on the rights fees. Also, Cablevision charges about $1.80 per sub for MSG....a number they're saying is unreasonable for YES to charge.*


IIRC, the Yankees paid a nice fee to MSG for early termination of the carriage contract.


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## cnsf (Jun 6, 2002)

quote:
--------------------------------------------------------------------------------
Originally posted by lee635 

That $1.82 is only to acquire rights to YES, not to cover satellite, csr, and other costs. Look at it this way, if Ergen negotiated this way with every program provider, there would be no money available to cover the costs of the birds, the 800 number, etc. 

It's not a good idea to get into the "we lose money on every sale but make it up on volume" thinking. 
--------------------------------------------------------------------------------

I agree on your theory, but it doesn't apply in practice. 

The overhead should be built into our monthly fees already (CSR, maintenance of link, the birds, etc.). 

Where your point is more relevant is the setup cost of carrying the network. That type of cost is usually amortized over a number of years (up to 40, depending on the method of accounting chosen). At over $2 overhead per subscriber, I find it hard to justify the number. Even if they took the one time hit on the cost, at $4 per subscriber they wouldn't take long to recoup the costs and I highly doubt they would then lower the fee.....


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## lee635 (Apr 17, 2002)

You're getting into the "marginal cost" trap.

By your argument, E* earns the same level of profit whether a customer subscribes to AT50 or the Everything Pack. I don't agree with that assertion.

I do agree with you, however, that a $2 overhead rate seems steep. By that argument, assuming no acquisition costs, the AT 50 should cost $100? 



> _Originally posted by cnsf _
> *quote:
> --------------------------------------------------------------------------------
> Originally posted by lee635
> ...


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## cnsf (Jun 6, 2002)

I see what you're getting at, but I think we're both making a few assumptions. Does anyone know out there how the pricing scheme works in definite terms?


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## pmichael (Mar 25, 2002)

Am I the only one who has stopped caring what happens to YES or Cablevision? It's a battle between crybabies, and I as a DISH subscriber have hardly missed the Yankees. 

The Cablevision lawsuit might have some merit if Cablevision refused carriage of the channel under any circumstances. But as I understand it, Cablevision has made several offers to add the channel as a non-basic channel all of which have been rejected by YES. Because of this, I consider the lawsuit frivolous and unlikely to succeed. If YES were to succeed here, what would stop other channels from suing for the right to be carried at the expense of program distributors.

YES is selling a commodity, and so far DISH and Cablevison have decided that their businesses would be better off by not offering the channel under YES's contract terms. One thing I haven't heard is any attempt by YES to change the terms of the agreement to make it more likely the channel is carried. It seems unlikely any court would force a program distributor to carry a channel at a price solely determined by the channel's owners. In short, the lawsuit is a desperate attempt at making Cablevision look like the only "bad guy", but one which is not likely to suceed in forcing carriage of YES on Cablevision's systems(IMO).


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## cnsf (Jun 6, 2002)

I don't think anyone disagrees in that they're both at fault, however, the balance of nastiness definitely swings in the direction of Cablevision.....


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## RichW (Mar 29, 2002)

If the government forces a carrier to supply a channel, they should also force the channel to offer a reasonable ala carte rate so that folks who doen't want the channel won't have to pay for it.


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## jegrant (Mar 24, 2002)

I think the only thing Cablevision, or E*, or any multichannel video provider (MVPD) should be required to offer YES or any other network is this:
We will lease you a channel at a fair, reasonable rate, and you can put your programming on it free of charge, or charge whatever you want for it.

Cablevision and E* have gone beyond this, IIRC, saying to YES that they could have a channel free, and charge whatever they want, and keep it all.

I am not in favor of must-carry for any network that requires payment for its service. If there is going to be money involved, it ought to be a matter of retransmission consent and/or statutory leased access.


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