Madison Square Garden Co.’s sports networks won’t be available for Time Warner Cable Inc. subscribers in 2012, meaning New York Knicks and Rangers games apparently will not be available on Time Warner Cable systems in the New York area.
The unusual inability to come to terms is significant.Contract disputes are normal in the video distribution business. But such disputes, though often getting close to the point where a “blackout” might occur, normally get resolved without service interruption.
This is the first case I can recall when a major network and a major distributor actually were unable to come to terms, meaning an actual programming blackout for a full year. If the deal is not somehow reached later, it might represent a watershed in the video subscription business.
Though programmers and content providers obviously would prefer to be paid more, every year, for access to their content, distributors are in a bind as programming costs continue to drive retail end user prices higher, reducing demand for the product.
And since sports programming generally is considered to be a principal driver of programming cost increases, the carriage discussions have an added significance. Apparently, as important as Knicks and Rangers games are in the New York market, Time Warner Cable is “drawing a line in the sand” against what it sees as ever-higher programming costs. Programming cost squeeze
The gamble is not without risk. Few cable, satellite or telco video distributors would be willing to risk losing anchor programming such as ESPN, considered a staple of video service packages. On the other hand, regional or “specialized” sports packages, at least in this case, are viewed by Time Warner Cable as a place to start changing the conversation. Some might argue the conversation is long overdue. Sports programming costs an issue
