MSG Networks and Altice: A Clash of Interests in Regional Sports Broadcasting

The recent carriage dispute between MSG Networks and Altice USA has left subscribers of the Optimum service without access to local sports content, including games of the New York Knicks, Rangers, Islanders, and Devils. As the deadline for a new agreement passed on Dec. 31, both parties have traded barbs, with each side blaming the other for the impasse. The key factors driving this dispute are cost, packaging flexibility, viewership trends, and the evolution of the entertainment industry.

MSG Networks, a pioneer in sports media, owns and operates two award-winning regional sports and entertainment networks (MSG and MSG Sportsnet) and MSG+, a direct-to-consumer and authenticated streaming offering. The networks feature a wide range of compelling sports content, including exclusive live local games and other programming of the New York Knicks, Rangers, Islanders, New Jersey Devils, and Buffalo Sabres, as well as significant coverage of the New York Giants and Buffalo Bills. This content, in addition to a diverse array of other sporting events and critically acclaimed original programming, has established MSG Networks as the gold standard in regional sports.

Altice USA, on the other hand, is a telecommunications company that provides cable television, internet, and voice services to customers in the United States. As a cable operator, Altice seeks to provide its subscribers with the programming they want at an affordable price. The problem, according to Altice, is that MSG Networks is demanding an exorbitant amount in fees to be able to carry its content, and that customers who don't want the content are still being forced to pay for it.



The sticking points in the negotiations between MSG Networks and Altice USA are the cost of the networks and flexibility as to how they are packaged for consumers. Like a number of other cable operators faced with rapidly declining video subscribers, Altice seeks a deal that would allow it to provide consumers with lower-cost programming options without some sports and package more expensive MSG programming separately. MSG Networks, however, has refused to agree to this, arguing that it would force fans to pay more for content they don't want.



The likely outcome of this dispute, if it remains unresolved, is that Altice's Optimum subscribers will continue to be without access to MSG Networks' content, including local sports games. This could lead to subscriber dissatisfaction and potential churn, as sports fans may seek alternative providers that offer these channels. Additionally, Altice may increase prices for subscribers to compensate for the loss of revenue from not carrying MSG Networks, which could further exacerbate subscriber dissatisfaction and potential churn.

In conclusion, the carriage dispute between MSG Networks and Altice USA highlights the ongoing challenges faced by regional sports networks in the face of declining video subscribers and changing consumer behavior. As more viewers cut the cord or switch to streaming services, regional sports networks may struggle to maintain their revenue streams and may be forced to renegotiate carriage agreements with cable and satellite providers. This could lead to further consolidation or closures of regional sports networks, impacting the regional sports landscape. The key to resolving this dispute lies in finding a balance between the interests of content providers, cable operators, and consumers, which may require a more nuanced approach than simply demanding lower fees or more flexible packaging.