News Article: MSG looking to unload its regional sports networks in split

[silverfish]

Saw this on the business forum...

http://nypost.com/2015/03/27/msg-looking-to-unload-its-regional-sports-networks-in-split/

Under the current plan, the spinoff company will include the famed arena, the Knicks basketball and Rangers hockey teams and theaters such as Radio City Music Hall.

The media business holds the MSG regional sports networks, which air Knicks and Rangers games. Last year, MSG sold the majority of its stake in music network Fuse to a group led by singer Jennifer Lopez.

Analysts said the slimmed down media business makes it easier to sell the sports networks.

Click to read more...

 

[Megustaelhockey]

Cash grab.

 

[Hire Sather]

Bad news for cablevision suscribers.

Well potentially. One guarantee as a cablevision subscriber is that you will always get MSG, MSG HD etc.

Bad news for everyone really. Just opens the chance for more battles over networks' rights fees. Just opens the chance that networks will be off tv as new rights fees are negotiated. Especially when you see Comcast is involved.

 

[ChrisKreider20]

Interesting. I saw the news on Friday - I work at a money manager, and I was probably the only one who was interested in the deal haha.

You may see a company like Live Nation purchase MSG, and then a company like Time Warner (TWX not TWC), or Fox purchase the Media assets (they already own 80% of YES).

Those assets seem too small alone...

The only risk to the network assets is that depending when the TV rights deal go until, it is conceivable that MSG could choose to sell its local rights to another party or jack up the affiliate fees (they are already ~$6.00 sub per subscriber per month) - which wouldn't be good for the MSG media assets or the cable subscribers in the area who will see their bills go up.

Looks like MSGs management is better than my hometown organization's MLSE, who are looking to buy a bankrupt soccer team in Italy with ~100 million Euro in debt.

 

[Kane One]

Bad news for cablevision suscribers.

Well potentially. One guarantee as a cablevision subscriber is that you will always get MSG, MSG HD etc.

Bad news for everyone really. Just opens the chance for more battles over networks' rights fees. Just opens the chance that networks will be off tv as new rights fees are negotiated. Especially when you see Comcast is involved.

How is it bad news for Cablevision subscribers? MSG was already spun off from Cablevision a few years ago.

 

[Hire Sather]

How is it bad news for Cablevision subscribers? MSG was already spun off from Cablevision a few years ago.

I don't really know enough about it, was hoping people could explain it better in response to my post.

My simple line of thinking is that MSG is sold to Comcast or whatever, meaning Cablevision has to work out a deal with them to carry MSG, and we all know how those battles sometimes go.

 

[ChrisKreider20]

How is it bad news for Cablevision subscribers? MSG was already spun off from Cablevision a few years ago.

The only way it could be bad for Cablevision subs is if Cablevision is being grouped with all cable in NYC/verizon Fios subscribers. It just means that when the network deal with MSG (the live assets) go renegotiate with the media assets for carriage they may be a little bit more ruthless in negotiation.

 

[ChrisKreider20]

I don't really know enough about it, was hoping people could explain it better in response to my post.

My simple line of thinking is that MSG is sold to Comcast or whatever, meaning Cablevision has to work out a deal with them to carry MSG, and we all know how those battles sometimes go.

The deals with Comcast/Cablevision/FiOS/TWC shouldn't be much different today, other than the discounts based on the number of subscribers, where Comcast currently will get the best programming rates.

The real risk is that when MSG's media spinoff goes to renegotiate its sports rights with the NYR/Knicks and takes the Liberty as a throw in, the rate that MSG (live assets) negotiates will be higher because its no longer integrated. That'll be passed on by the Regional Sports Networks, and then the cable companies including Cablevision will try and include the price of your TV package. You'd think the buyer would be cognizant of that though and try and ensure a long term deal is done because MSG and MSG2 are only as valuable as its local sports rights contracts.

In retrospect, spinning off AMC was silly separate from the sports tv media assets was silly. AMC + MSG1 + MSG2 would have been a very marketable package to sell. A media conglomerate would be salivating over it.

Frankly though:

Best sale in my mind is to FOX - they have a number of RSNs and already own 80% of YES.

MSG's media sports assets could be sold to Live Nation as I said before. It would probably generate a lot of shareholder value.

 

[bobbop]

Any sale of the sports network would likely come replete with a long term rights agreement.

 

[ChrisKreider20]

Any sale of the sports network would likely come replete with a long term rights agreement.

Yeah, I agree. Probably even as far as a right of first refusal on upcoming renewals.

 

[RangerBoy]

MSG sells the sports networks to Comcast or Fox. The Garden can get a big rights fee from the purchaser. The Yankees sold YES to Fox. The Steinbrenners kept 20% of the network and they get $85 million per year as the rights fee from FOX. That number will increase every year. Everyone thought the Steinbrenners were planning to sell the team after selling majority interest in the network. They aren't selling the team.

 

[nyrmetros]

Crazy stuff.....