Thursday, June 19, 2008

Could Cablevision lose ownership of the Rangers?

For some New York Rangers fans, the idea of anyone owning this Original Six franchise other than Cablevision may be welcomed. For others, they may not care. It could depend on whether or not you're a satisfied season ticket holder or the Average Joe having the full access to watch the Rangers at the arena or readily on television at Cablevision's control.

But that debate is for another day. One way or the other in the present term, the fifth largest cable company in the United States is at war with the National Hockey League.

Madison Square Garden (a Cablevision property since 1997) filed a lawsuit last summer against the NHL in a claim that the league had overstepped their legal authority to oversee the 30 NHL teams in their operation and marketing practices, including advertising and merchandise sales.

The heart of the dispute lied with the use of the Rangers' official web site. MSG's lawsuit claimed they should not have had to turn over control of their then-alternate site "" to, couldn't sell branded merchandise in its own way online and that they couldn't provide games to Optimum Online subscribers via streaming video on its Web site. Madison Square Garden also disputes the NHL's ban on virtual advertising during MSG Network broadcasts.

But earlier today, Street & Smith's Sports Business Daily reported that the NHL had filed a countersuit against MSG. NHL commissioner Gary Bettman formally asked yesterday in a drafted letter for a New York district court to judically give him permission to discipline the Rangers and MSG internally for violating the league constitution.

"By calling into question the League's ability to market and exploit various rights on a collective basis, MSG has also damaged the League in its dealings with third parties and the Member Clubs in their dealings with third parties and/or prospective purchasers in an amount not present known," the NHL's letter to the court stated.

In final weeks of last summer in preparation for the 2007-2008 season, the NHL had re-branded all 30 team web sites to a more uniformed look, including the content of each site. They threatened the Rangers with a fine of $100,000 per day if the team did not turn over their official team web site to the league and end their own use of selling NHL-licensed merchandise independently from the NHL. MSG's lawsuit sought to prevent the NHL from collecting on those fines. After a November 2, 2007 court ruling that went against MSG, the Rangers web site had the style platform online in uniform with the NHL's other 29 teams.

If the court grants the NHL's request to proceed in leving sanctions against Madison Square Garden, this legal fight could really get nasty. The worst case scenario presents the possibility that NHL could go as far as suspending or terminating Cablevision's ownership of the Rangers.

MSG is already accusing the NHL of using "bullying tactics" in order to get their way from a business standpoint.

"Not surprisingly, the NHL is once again proving why an independent judge must address our claims," MSG spokesman Barry Watkins said in a statement to the Associated Press. "Despite trying to resolve our differences privately, the league has responded with excessive fines and now threats that have nothing to do with the merits of our position."

What's interesting about this dispute is that under the league constitution, owners aren't allowed to drag the league into court based on team operation issues. Either way, the local media and the fans will be keeping an eye on how this standoff plays out in the weeks and months ahead.

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