Source
March 8, 2005
The Dolan family power struggle that has enveloped Cablevision could have a positive ripple effect on sports fans who have been increasingly frustrated by the way Madison Square Garden's teams and its cable networks have been managed.
The influence of Garden chairman James Dolan, under whose stewardship the Knicks and Rangers have collapsed and MSG Network and Fox Sports New York have lost their key assets -- Yankees and Mets rights -- appears to have been greatly diminished.
Not only could James Dolan emerge with far less control of the Garden and its entities, sports business and media experts suggest, but the time also may be fast approaching that Dolan's father, company founder Charles Dolan, and a revamped board of directors will carve up the company and put the cable system, arena and the teams on the auction block.
That could be fabulous news for discouraged fans and viewers who have watched the Knicks' payroll rise to a league-high $103 million without a chance to contend seriously for years. It could be equally good news for Rangers fans, who have watched a team mired in a seven-year playoff drought. The Rangers' payroll crept past $76 million last season to the second highest in the NHL before it was pared in a late-season player purge.
Last Thursday, Charles Dolan replaced four members of the Cablevision board in an effort to keep his Voom satellite company alive, and apparently to consolidate his power base. It certainly seemed that James Dolan had a sense of foreboding when he told curious Knicks beat writers last month that he knew of no shift in his role at the Garden but acknowledged that the company "is clearly going through changes." He also indicated he would fight to maintain his status.
Although the revamped Cablevision board met yesterday and made no announcement afterward, observers were reading the tea leaves. After all, two of the new board members are former executives whose conglomerates controlled the Garden: ITT's Rand Araskog and Viacom's Frank Biondi.
"In the best interest of stockholders and fans, the best thing you would hope is that the Garden could be sold and put into better hands," said Bob Gutkowski, CEO of Criterion Sports and Entertainment Inc. and a former Garden president. "Short of that, maybe it would be a better fit if [Araskog and Biondi] kept an eye on Jimmy."
Another sports business executive, who asked not to be identified, agreed, saying, "Rand and Frank are around to rein in Jimmy."
That, however, seems to some to be an interim step. Cablevision appears to be preparing to cleave itself into three parts: the satellite business, the cable systems and the Garden.
Cablevision took 100 percent control of the Garden, Radio City Music Hall, the Knicks, Rangers, Liberty and the two sports channels last month in a deal with News Corp., which held a 40 percent stake.
The Garden was sold for slightly more than $1 billion in 1994, but the teams have lost some value because of their consistent losing and the NHL lockout, and the networks have as well. According to industry estimates, 75 percent of the value of a regional sports network is derived from baseball rights.
"Nobody in their right mind would buy the teams without the media component, but the mainstays, the Yankees and Mets, are gone, and it's tough to have a regional sports network with only winter teams," said Leo Hindery, a former chairman of YES who has formed InterMedia Advisors, a private media investment firm.
Still, it is the Garden, and if the "For Sale" sign were out, numerous bidders would surface. The one hitch in this dream scenario: the possibility that sports-loving James Dolan himself would try to buy the place for his own.
March 8, 2005
The Dolan family power struggle that has enveloped Cablevision could have a positive ripple effect on sports fans who have been increasingly frustrated by the way Madison Square Garden's teams and its cable networks have been managed.
The influence of Garden chairman James Dolan, under whose stewardship the Knicks and Rangers have collapsed and MSG Network and Fox Sports New York have lost their key assets -- Yankees and Mets rights -- appears to have been greatly diminished.
Not only could James Dolan emerge with far less control of the Garden and its entities, sports business and media experts suggest, but the time also may be fast approaching that Dolan's father, company founder Charles Dolan, and a revamped board of directors will carve up the company and put the cable system, arena and the teams on the auction block.
That could be fabulous news for discouraged fans and viewers who have watched the Knicks' payroll rise to a league-high $103 million without a chance to contend seriously for years. It could be equally good news for Rangers fans, who have watched a team mired in a seven-year playoff drought. The Rangers' payroll crept past $76 million last season to the second highest in the NHL before it was pared in a late-season player purge.
Last Thursday, Charles Dolan replaced four members of the Cablevision board in an effort to keep his Voom satellite company alive, and apparently to consolidate his power base. It certainly seemed that James Dolan had a sense of foreboding when he told curious Knicks beat writers last month that he knew of no shift in his role at the Garden but acknowledged that the company "is clearly going through changes." He also indicated he would fight to maintain his status.
Although the revamped Cablevision board met yesterday and made no announcement afterward, observers were reading the tea leaves. After all, two of the new board members are former executives whose conglomerates controlled the Garden: ITT's Rand Araskog and Viacom's Frank Biondi.
"In the best interest of stockholders and fans, the best thing you would hope is that the Garden could be sold and put into better hands," said Bob Gutkowski, CEO of Criterion Sports and Entertainment Inc. and a former Garden president. "Short of that, maybe it would be a better fit if [Araskog and Biondi] kept an eye on Jimmy."
Another sports business executive, who asked not to be identified, agreed, saying, "Rand and Frank are around to rein in Jimmy."
That, however, seems to some to be an interim step. Cablevision appears to be preparing to cleave itself into three parts: the satellite business, the cable systems and the Garden.
Cablevision took 100 percent control of the Garden, Radio City Music Hall, the Knicks, Rangers, Liberty and the two sports channels last month in a deal with News Corp., which held a 40 percent stake.
The Garden was sold for slightly more than $1 billion in 1994, but the teams have lost some value because of their consistent losing and the NHL lockout, and the networks have as well. According to industry estimates, 75 percent of the value of a regional sports network is derived from baseball rights.
"Nobody in their right mind would buy the teams without the media component, but the mainstays, the Yankees and Mets, are gone, and it's tough to have a regional sports network with only winter teams," said Leo Hindery, a former chairman of YES who has formed InterMedia Advisors, a private media investment firm.
Still, it is the Garden, and if the "For Sale" sign were out, numerous bidders would surface. The one hitch in this dream scenario: the possibility that sports-loving James Dolan himself would try to buy the place for his own.
