MSG Matches Yankees Offer

MSG Matches Yankees' IMG TV Deal

Dispute likely to continue over deal

New York, November 17, 2000 - MSG Network the carrier of New York Yankees' games for over the last decade, agreed to match a one-year, $52 million TV rights fee offer presented to the Yankees by IMG. But the battle over long-term rights has not yet been resolved.

According to the N.Y. Daily News, MSG and the team also agreed to continue discussions on a long-term deal, but if the negotiations are not successful, MSG made it clear that it could still go back to court. The dispute has been over a 'right of last refusal' clause" for the right to match any offer made to the team following the 2001 season [click here for background].

Before this agreement, the team had agreed to a one-year, $52 million television contract with Trans World International, a creation of the team and International Management Group (IMG). Cablevision Systems Corporation's Madison Square Garden Network (MSG) had seven days to match the offer, under the terms of its 12-year, $486 million TV agreement with the Yankees that expired after last season. By going with a one-year deal with no right of refusal, the Yankees would gain the freedom to negotiate whatever contract they wanted for their rights starting with the 2002 season.

Cablevision head Charles Dolan will enjoy at least one more profitable year of Yankee telecasts, but then, it is not unlikely that MSG will lose the rights forever.

MSG has gone to court twice in the past to enforce the right-of-first-refusal. The Yankees and TWI agreed in July to a 10-year contract that would have created a network 95 percent-owned by the team. It would have guaranteed the Yankees about $900 million during the next 10 years. MSG sued, saying that it must be given the chance to match a contract for 100 percent of the team's TV rights. New York Supreme Court Justice Barry Cozier issued an injunction on July 31 that blocked the contract. On Sept. 8th, the Yankees told MSG they intended to form their own network, and said Morgan Stanley Dean Witter projected the network's value to the team at $2.4 billion over 10 years, or $1.3 billion in present-day dollars, not accounting for inflation. MSG sued again on Oct. 18 and the team withdrew that proposal, according to (Long Island) Newsday.

Sources close to the situation said on November 9th that MSG "is most likely to take the Yankees to court again." Another industry source said that MSG "would have a good chance at being able to convince a judge again that the Yankees' latest move is simply another attempt to frustrate MSG's right to match," according to Hollywood Reporter.

Trans World International is a division of IMG, the world's largest sports marketing company. IMG is said to be forming its own network and landing the World Champions would certainly get them started in the right direction. However, TWI does not currently have its own network so it would likely have to resell the rights to another network.

Nate Allen