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MSG and TWC Chats Need an Interpreter

BUFFALO, NY - FEBRUARY 23:  New Buffalo Sabres...

Terry Pegula

It is time for The Interpreter again.

I can’t get spokespersons for MSG and TWC to chat with readers as the Buffalo News did Friday.

But the spin from TWC’s Joli-Plucknette-Farmen and MSG’s Daniel Ronayne and some of the comments from questioners cried out for some interpretation and explanation.

It wasn’t so much what the spokespersons said as what they didn’t say. They didn’t lie. They just didn’t tell the whole truth as they tried to spin their organization’s take on who is the villain that is keeping Buffalo Sabres games off the air.

Here are some of the questions that were left unanswered.

Why don’t cable programmers want cable systems to allow subscribers to pick the channels they want a la carte and allow Sabre fans to buy MSG?

Plucknette-Farmen correctly noted that cable programmers don’t want a la carte. She didn’t explain why. The cable industry’s position is that allowing a la carte would mean the end of numerous channels and prevent any new startups. Programmers get fees from how many subscribers cable systems have, not from how many subscribers watch their channels.

Some subscribers pay big money for all the sports channels like ESPN even if they don’t watch them. Some subscribers pay big money for the entertainment channels like USA Network, FX, Bravo, E!, TNT and TBS and don’t watch them. If only those subscribers who watched paid, it is cable’s position the money to invest in sports, movie and series programming would be severely reduced. And it would be tough to start new channels. If subscribers had a vote, there probably wouldn’t be any new channels.  I mean do you think we really needed the Oprah Winfrey Network (OWN)?

And guess who owns some of the big cable channels? Time Warner, which spun off former subsidiary Time Warner Cable a few years ago. Time Warner also owns TNT and TBS, which have some of cable’s most expensive sports and entertainment programming. And it owns CNN.

There is some push to put sports packages on tiers paid for only be those subscribers who watch them and it is being done. But sports league resist being on tiers because they lose the money from subscribers who don’t watch them.

How much is MSG asking TWC to pay per subscriber?

Plunkette-Farmen said the industry estimate is that systems pay about $5 a month for MSG and MSG plus and added MSG is asking for a 53 percent increase. She wouldn’t say what that amounts to, but the math is easy. She is suggesting that Time Warner is asking at least $2.50 more monthly per subscriber, which would amount to more than $6 million a year in Western New York alone and much more in the metropolitan New York City area. Ronayne disputed the 53 percent figure but wouldn’t reveal another number. Cable usually is very secret when it comes to rates. But if MSG is asking for an extra $2.50, TWC would have to find a way to make up the extra $6 million here. You know what that means. Another rate increase next year.

Will Sabres Owner Terry Pegula eventually start up his own sports network like the former Empire Sports Network with the help of Team President Ted Black, who has expertise in the area?

That’s a popular theory from hopeful fans. But MSG’s deal with the Sabres doesn’t end for five years. Ronayne wouldn’t answer when asked if there was an out clause. Even if there were, the startup of a regional sports network in Buffalo would be very expensive. As a sports market, Buffalo isn’t Pittsburgh, where Black came from. Pittsburgh is a much bigger market and has a major league baseball team and has popular major college football and basketball teams in addition to a NHL and NFL team. You must remember that Empire was started by the former owner of the Sabres and Adelphia, John Rigas. He essentially paid himself (Adelphia) a per subscriber fee to carry his own team’s games before Adelphia closed the network in 2005. Even if Pegula eventually started his own network, he would have to negotiate with cable and satellite providers for a subscriber fee to carry it. Do you think TWC would be any easier with him in negotiations than it would be with MSG?

What happened to the subscriber fee that Empire got from Adelphia?

Adelphia kept the money and put the NFL Network on the channel as a replacement. Shortly after TWC bought Adelphia, it dropped The NFL Network without returning any money to subscribers. The NFL Network remains off of TWC.

When do the MSG deals with DirecTV and FiOS expire so subscribers can judge if they would be safe switching to those channels?

This is another question that Ronayne avoided answering. The underlying question is whether DirecTV and FiOS subscribers should feel safe that the Sabres game would continue to air on those providers for years to come. I don’t know the answer. But both providers have more reason to keep the Sabres on without an argument like this one. DirecTV wants to keep its reputation as where sports fans want and need to go. FiOS wants to build its subscriber base here. Diehard Sabres fan who can’t live without them probably should head to DirecTV or FiOS and they’ll get The NFL Network as a bonus.

Is MSG preventing the Sabres from streaming the games live?

The Sabres told stilltalkintv two weeks ago that was the case and told the Buffalo News the same thing last week. Ronayne claimed that MSG doesn’t have the right to stream the games. So either the Sabres were wrong or MSG’s spokesperson is making a Clintonesque statement. So I asked Sabres spokesperson Mike Gilbert. Sure enough, Ronayne was being Clintonesque. Gilbert asked Ted Black, who wrote: “MSG has the right to stream, subject to NHL rules. NHL promulgated rules, but MSG hasn’t reached an agreement with the NHL to exercise rights. We asked MSG if we could get the rights back and deal with the NHL. MSG refused.”

What is TWC doing with the $5 month per subscriber fee it said the industry estimates it had been paying for MSG?

It is keeping it. It is offering a month-long preview of a package of sports channels that cost $5.95 a month on the MSG channel. Raise your hand if you’d rather get the $5.95 than the preview. I know I would. I canceled the sports package after TWC raised its rates again.


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9 responses to "MSG and TWC Chats Need an Interpreter"

  1. Bob says:

    This $5.00 fee when mentioned yesterday really threw me.
    I do not get it – is MSG one of the highest paid on cable already?
    That fee seems WAY out of the ballpark from what I believed.
    Where did Plucknette-Farmen pull this number from?

    Just figure it this way:
    I get “60″ basic cable channels.
    If I was paying $5.00 per each two channels that would be $150.00 a month for basic cable.

    I can’t believe this $5.00 fee is accurate – is MSG getting more cash than ESPN? USA? MTV? Etc…
    Personal note – I will always side with anyone except the cable companies.

    • It’s two channels: MSG and MSG Plus. Each draw about $2.50 a piece. MSG+ only airs here to accommodate the Knicks games (as, for some odd reason, Buffalo’s in Knicks territory despite being closer to the Cavs and Raptors) airing at the same time as the Sabres, and MSG (owning the Knicks and all) want to push Knicks games here. MSG Plus is otherwise useless here, since their primary properties (Islanders and Devils) are blacked out here because of league rules. They’re probably insisting both channels be carried– and paid for in full, despite not getting most of what MSG+ offers.

      And yes, that is about the norm for a regional sports channel. However, other than ESPN, most cable networks charge a dollar or less. (ESPN’s suite costs a hair over $5 overall.) Most of the digital channels are part of package deals and only cost a few pennies. The networks also carry home shopping and a couple of infomercial channels to subsidize the costs (this is a strategy DirecTV uses extensively– their lineups are loaded with infomercial channels these days).

  2. Bob says:

    I read on a recent blog (elsewhere) that FIOS has a 15 year contract with some of their channels (Including MSG) so they probably will not be effected by contract negotiations as often as TW and some of the other providers. I don’t know if this is true, just that this info comes from a FIOS employee.

  3. Chris says:

    Time Warner Cable is not a “subsidiary” of Time Warner, who owns cable networks such as TNT and TBS. TWC is a completely separate, independent company with no affiliation with Time Warner except the shared name (which the cable company licenses the use of from TW).

    The cable operations split from TW almost 3 years ago.

  4. Gman says:

    Let people who want sports programming pay for it on a special tier. And let movie lovers do the same. They get charged $6.00 a pop for a movie now. I’d gladly pay for the entertainment that I want. Almost like ala carte, but divide it into tiers.

  5. Pergy's friend says:

    Pegula should just buy-out the deal with MSG, and then make a deal with a local broadcast station for the Sabres games.

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