Optimal pulled the plug on MSG in a while after confetti rained down on Instances Sq. to ring in 2025 – and Knicks and Rangers enthusiasts might be left at midnight neatly into the brand new 12 months, The Submit has realized.
The breakdown in talks over a brand new contract with MSG Networks, which expired in the dark Tuesday, is a part of a much broader retrenchment by way of cable operators having a look to slash the excessive costs demanded by way of regional sports activities networks, or RSNs.
The 2 aspects stay a long way aside within the high-stakes negotiations that experience main implications for each corporations, assets on the subject of the location instructed The Submit.
MSG Networks’ broadcast of the Knicks’ New Yr’s Day sport towards the Utah Jazz may not be to be had on Optimal. Mike Watters-Imagn Pictures
On Wednesday, Optimal subscribers flipping to MSG – which additionally announces Islanders and Devils video games – had been greeted with a blue display screen telling them: “MSG Networks is not to be had in your TV lineup.”
The Altice-owned cable operator went directly to tout a QR code and a internet deal with that provide “choices to verify” they don’t pass over any Knicks, Rangers, Islanders or Devils motion.
That possibility is a 30% bargain in the event that they subscribe to the streaming carrier Fubo, which carries MSG Networks, so long as they preserve Optimal’s web carrier.
The blackout right away impacted Devils and Knicks video games scheduled on New Yr’s Day.
Optimal additionally issued a scathing message Wednesday aimed toward MSGN, which is led by way of Knicks and Rangers proprietor James Dolan.
“MSG Networks demanded that we pay an exorbitant quantity in charges so to raise its content material and that consumers who don’t need the content material – who’re the bulk – need to pay for it anyway,” Optimal stated.
Optimal subscribers had been greeted with message Wednesday informing them that MSG Networks is not to be had.
“In spite of this, Optimal presented to soak up their egregious value calls for if lets package deal MSG Networks in some way that might give extra flexibility and keep watch over to our consumers. … MSG Networks stated no and refused more than one provides from us to achieve a deal.”
MSGN issued a rebuttal in its personal New Yr’s Day observation: “It is a natural and easy value gauge from Altice. An try to upload over $10 bucks a month proper to their final analysis. In essence a $10 buck charge building up on most sensible of a 50 % charge building up.”
The corporate additionally stated that it had “presented Altice a lot of honest and cheap proposals that referred to as for Altice to pay us not up to final 12 months. Altice rejected they all, together with our be offering to stay MSG Networks at the air whilst we endured to check out to achieve a deal. We stay able to barter in just right religion.”
In an unusual little bit of irony, the Knicks proprietor is feuding with the corporate based in 1973 by way of his dad, cable pioneer Charles Dolan, after which referred to as Cablevision. It used to be offered, in conjunction with the Optimal logo, to Ecu telecom large Altice for $17.7 billion in 2016. Charles Dolan died final weekend at age 98.
Optimal subscribers, in the meantime, had been livid over dropping get entry to to their cherished groups.
New York Rangers enthusiasts will be unable to peer their crew play on Optimal. Neil Miller
“I truly don’t care whose fault it’s now that MSG has long past darkish on Optimal,” Lou Panico of Manalapan, NJ fumed. “As standard the patron is stuck within the heart between two grasping, cheating entities.”
MSGN used to be prepared to transport from the elemental Optimal tier the place it used to be getting a kind of $10-per-subscriber price in 2024, consistent with a supply on the subject of the negotiations.
That’s about the similar charge that nationwide sports activities large ESPN fees cable corporations.
Get started your day with the newest industry information proper at your fingertips
Subscribe to our day by day Trade Document e-newsletter!
Thank you for signing up!
The transfer from fundamental cable to a premiere tier may just hit debt-saddled MSGN’s final analysis by way of up to 50%, because the majority of Optimal’s kind of 1 million subscribers within the New York Town discipline would not pay for the channel, an RSN govt operating for any other community instructed The Submit.
Optimal does face the danger additionally of dropping subscribers to rival cable corporations like Constitution Communications and Verizon’s Fios, which has a deal to hold MSG on fundamental cable.
Dolan just lately negotiated a brand new maintain a big New York-area cable corporate through which it used to be moved off the elemental tier and accredited decrease total earnings in go back for an extended pact, two assets acquainted with the negotiations stated.
On the other hand, Optimal is the one cable possibility in huge swathes of town, and as soon as the hard-core sports activities enthusiasts leap send it can be in no hurry to go back to the negotiating desk, a supply stated.
James Dolan’s MSG Networks might be compelled out of business if the channel is dropped by way of Optimal, a supply stated. Brad Penner-Imagn Pictures
Altice may just make a decision to play hardball and threaten to drop the channel to extract higher phrases from MSGN.
“Whilst you drop an RSN, you lose about 5% of your consumers however your earnings will increase just about 20% because you lower your expenses by way of no longer paying for that channel,” the RSN govt stated.
The deadlock may just exacerbate the entire development of cord-cutting that has eaten away at cable’s dominance during the last decade.
In 2023, MSGN Networks introduced a streaming carrier priced at $29.99 a month. Final 12 months, it teamed with the YES Community, house of the Yankees and Nets, at the Gotham Sports activities app, which prices $41.99 a month if one combines YES and MSG. Shoppers can nonetheless simply get MSG for $29.99.
MSGN has been in a prolonged standoff with Comcast for greater than two years, impacting subscribers in New Jersey and Connecticut.
However a longer combat with Optimal may just pressure MSGN out of business, assets stated.
The community, which is a part of publicly-traded Sphere Leisure, has been in default on $830 million in loans since October and has a forbearance settlement with its lenders that expires Jan. 10.
New York Rangers enthusiasts in some Optimal areas might transfer to Verizon’s Fios. Charles Wenzelberg/New York Submit
The debt on that mortgage is buying and selling at 5 cents at the buck, the RSN govt stated.
“A complete drop would in the long run bankrupt MSG Networks,” media analyst LightShed Companions stated in a file this week.
MSGN is dropping cash birthday celebration as a result of it’s paying $187 million in 2025 to broadcast Knicks and Rangers video games as a part of a 20-year settlement that leads to 2035, consistent with public filings.
However the earnings MSGN will get from cable suppliers, in offers that experience a lot shorter time frames, is falling.
If MSGN used to be driven out of business, it would renegotiate with the Knicks and Rangers and most likely pay a lot decrease rights charges to replicate the brand new RSN marketplace, the RSN govt stated.
An MSGN chapter would no longer essentially be unhealthy for Dolan, who controls each Sphere Leisure and Madison Sq. Lawn Sports activities, the guardian corporate of the Knicks, Rangers and operator of the Global’s Maximum Well-known Area.
He would take successful from lowered rights charges for the Knicks and Rangers.
However cleaving away MSGN would most likely spice up Sphere Leisure, which additionally comprises the $2.3 billion futuristic Las Vegas tune mecca.
“This might be just right information for Sphere shareholders,” LightShed stated. “Disposing of the $830 million in MSG Networks debt from Sphere’s steadiness sheet must imply an important building up in Sphere’s inventory value.
MSG Networks declined remark about its monetary standing.
