Arbitrator rules for YES in cable dispute Yankees games to go basic tier on Cablevision By Steve Zipay Staff Writer
March 24, 2004, 9:25 AM EST
Cablevision subscribers will be able to watch Yankees games this season as part of expanded basic cable service and not as part of a pay-sports tier.
In a major victory for the YES Network, a three-man arbitration panel has voted unanimously that the games should be shifted to the widest possible audience for six years.
Cablevision and YES officials received copies of the contract this morning, and were not immediately available for comment.
In 2002, Cablevision had refused to carry YES, saying that the monthly subscriber fee of $2 per month per subscriber was too high and that its 2.9 million New York and New Jersey area customers should be allowed to choose. Yankees games were blacked out, and thousands of subscribers fled to DirecTV.
Last year, in an 11th hour deal before Opening Day, Cablevision agreed to carry YES for a year and charge $1.95 per month for YES or $4.95 a month for a package that included MSG Network and Fox Sports Net New York, which televise Mets, Knicks, Rangers, Islanders and Devils games. But the sides also agreed to submit to binding arbitration.
About 1.5 million Cablevision customers chose to subscribe to YES.. This ruling will almost double that figure.
The YES Network must be carried on Cablevision's expanded basic tier for six years, an arbitration panel decided unanimously yesterday, executives informed of the ruling said.
The decision is a victory for YES, the network formed by YankeeNets, which is carried as an expanded basic tier throughout the New York region but could not persuade Cablevision to do so.
Cablevision refused to carry YES in 2002, citing the monthly subscriber fee of $2 as excessive. In a deal brokered by state Attorney General Eliot Spitzer on opening day last season, Cablevision agreed to offer YES for one year to those subscribers who already received premium packages as a stand-alone channel for $1.95 a month, or with the MSG Network and Fox Sports New York for $4.95 a month. Cablevision has about 1.5 million YES subscribers.
But the arbitrators apparently accepted YES's argument, which was based on how other regional sports networks are carried and how they are priced, and ruled that Cablevision must carry YES on expanded basic and to guarantee payments to the Yankees' cable network based on 90 percent of its subscribers.
In ruling to put YES on Cablevision's expanded basic, which has about 2.5 million customers, the executives said the arbitrators reduced the monthly subscriber fee Cablevision will pay for it. They retroactively cut last year's monthly subscriber fee from $2.12 a month to $1.85. This season, the fee to Cablevision will be $1.93, not about $2.28 as YES wanted.
The arbitrators' ruling is through March 31, 2009, and if other large cable operators, like Time Warner and Comcast and the satellite service DirecTV, trigger clauses in their agreements with YES, they can get the lower rate the arbitrators decided on. If that happens, YES will presumably have to rebate money to those companies because of overpayments last year.
Officials of YES, Cablevision, the Yankees and Goldman Sachs and Providence Equity, the investment bankers that own stakes in the network, were unavailable for comment.
Also yesterday, the shareholders of YankeeNets signed the definitive agreements required to dissolve the corporation, which was formed four years ago. Once the restructuring of the company is finalized, it will be renamed Yankee Global Enterprises, and the holding will be primarily the Yankees and a majority stake in the YES Network. http://www.nytimes.com/2004/03/24/sports/baseball/24SAND.html