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MSG Networks, Altice USA Yet to Reach New Carriage Deal Ahead of Expiration

"For the benefit of our mutual customers, we call on Altice to bargain in good faith and to avoid a blackout of MSG Networks…."

Coinciding with the start of the new year, Optimum customers may be losing access to MSG Networks live game programming and broadcasts. Altice USA, the parent company of Optimum, has been unable to reach a new carriage agreement with MSG Networks ahead of the expiration at midnight that could lead to fans being unable to watch local sporting events. MSG Networks, which is owned by Sphere Entertainment, is the broadcast home of New York Knicks basketball, along with New York Rangers, New York Islanders, New Jersey Devils and Buffalo Sabres hockey.

Fans became aware of the dispute on Monday night when MSG Networks began running a crawl on the bottom portion of the screen as the Knicks secured an eighth consecutive victory. MSG Networks implored viewers to communicate the importance of the broadcast channel to Optimum and accused Altice USA of making “unreasonable demands.” In explaining the situation further online, MSG Networks said that it offered the company “a number of fair and reasonable, market-based proposals” to renew the agreement. Moreover, the company said that it has offered to keep its programming on the air while continuing to negotiate.

“We have been attempting to negotiate a fair, market-based deal with Altice to avoid any disruption in service for our customers, and we have even offered to keep our programming on air while we continue to negotiate,” MSG Networks wrote. “Unfortunately, Altice has rejected all of our offers. For the benefit of our mutual customers, we call on Altice to bargain in good faith and to avoid a blackout of MSG Networks….”

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In its most recent quarterly earnings, Sphere Entertainment divulged that MSG Networks reported adjusted operating income of $16.1 million, representing a 36% year-over-year reduction. Distribution revenue also decreased $9.3 million from the previous quarter, attributed primarily to a 13% decline in total subscribers.

Optimum issued a statement on Monday night claiming that MSG Networks is currently “demanding exorbitant programming fees” that could result in increased cable bills for its subscribers. On top of that, the network is requiring Optimum to make its channels available for the majority of video subscribers, something that could force customers to pay for content that they would not watch.

The company pointed out that the Gotham Sports app provides a direct-to-consumer alternative that allows those who wish to view MSG Networks programming to subscribe to monthly or annual plans. MSG Networks partnered with YES Network to launch the direct-to-consumer platform this past fall under the Gotham Advanced Media and Entertainment joint venture.

“This ‘all or nothing’ approach that MSG Networks has taken is anti-consumer, unsustainable, and aligns to a broken and outdated model that they are refusing to deviate from,” Optimum said in a statement. “Regional Sports Networks, such as MSG Networks, represent the most expensive content on television, and as viewership becomes increasingly fragmented across various services and platforms, programmers like MSG Networks are trying to squeeze customers for more money to watch their content.”

According to its third-quarter earnings, Optimum TV has approximately 2.1 million pay television customers, losing more than 227,000 subscribers through the first three fiscal quarters. Altice USA also had a 3.9% decline in overall revenue to $2.2 billion and a diminished residential revenue per user to $135.77, indicative of a 1.9% year-over-year reduction. Optimum also urged MSG Networks to stop utilizing “scare tactics” for its customers and instead look to engage in negotiations to avoid any service disruptions.

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