Media Watch: Blackout or not, a Sabres network is unlikely

kc kratt

You can chalk up the bitter forty-eight-day dispute between Time Warner Cable and the owner of the Madison Square Garden Network as the price Buffalo Sabre fans had to pay for an educational TV experience.

The major TV lesson that 240,000 Western New Yorkers learned is that they really don’t matter all that much to Time Warner Cable, which has five to six times as many subscribers in the New York City area.

With the help of an overnight international basketball sensation named Jeremy Lin turning on New York City, WNY cable subscribers got Buffalo Sabres games back via MSG on February 17. 

In the process, WNYers learned how secretive companies can be about revealing what cable channels cost. While TWC subscribers got relief, it doesn’t mean this problem won’t resurface when MSG’s owner Cablevision (which also owns the Knicks and Rangers) has to make new deals with DirecTV and Verizon’s FiOS.

During the TWC-MSG battle, some fans were reluctant to leave TWC because their competitors wouldn’t tell them when their MSG deals expire. They feared dealing with this mess all over again.

The rumors that flew during the dispute about what the Sabres could do if a deal wasn’t worked out probably will resurface if DirecTV and FiOS get in a similar dispute with MSG. So with the help of Sabres Team President Ted Black, it is a good time to continue the education of TV fans.   

One popular TV theory during the TWC-MSG dispute had Sabres owner Terry Pegula buying out the MSG contract that expires after the 2016–17 season and the Sabres starting their own network à la the beloved Empire Sports Network.

This theory was fueled by Black’s background running the regional sports network FSN Pittsburgh. In an interview that dealt with more hypothetical possibilities than in any episode of House, Black explained that his FSN Pittsburgh experience provides multiple reasons to avoid starting up a regional sports network.

MSG paid the Sabres the same rights fee—industry sources believe it is between $8 million and $10 million annually—during the dispute. Regional sports networks like MSG generally make money on the monthly subscriber fees paid by cable, satellite, and FiOS. If TWC’s claims about the increase that MSG wanted and how much it already cost were accurate, MSG would have collected about $21 million annually in WNY fees. (However, that seems high.)

The Sabres get the rights fee and keep advertising revenue without taking any risk. Starting a regional sports network requires a significant amount of live content and would come with a huge risk.

“I don’t want people to read ‘aha he is going to do it after his contract is over,’” says Black. “It is very, very expensive to do. It is very risky to do. I want to make it very clear that we are not looking to start a network.”

There is a feeling that Pegula is so rich that he’s willing to lose a lot of money. Can Black disavow that theory? “No, he does have a lot of money,” cracks Black, answering only the first part of the question. However, he adds, “He has not instructed me to lose money intentionally.”

If the Sabres started their own network after the MSG deal expires, the startup costs would be enormous. Besides losing the MSG rights fee millions, the PSN (the Pegula Sports Network) would need to hire an expensive staff. He then would have to deal with distributors to get a per subscriber fee to offset costs. There is no reason to believe that TWC would want to pay PSN anymore than it wanted to pay MSG.

Black confirmed that it is a lot easier to make a regional sports network work in Pittsburgh, which has a TV market twice as large as Buffalo and had 200 events featuring the Penguins, Pirates, and the University of Pittsburgh basketball games, along with shows associated with the Steelers.

The PSN would have the Sabres and ... sorry, University at Buffalo football and basketball just doesn’t cut it.

The final TV lesson is that the chance that the PSN will ever become a reality is about equal to the chance in late February of the Sabres winning the Stanley Cup this season.  



Will Bills kill the radio stars?

In addition to the Time Warner blackout, the Buffalo Sabres also had to deal with a midseason radio issue when WGR—home of the Sabres—announced it had gained the rights to Buffalo Bills football games. The deal has the potential to diminish the attention and promotion the Sabres get from the station.

“I really don’t care who is number one and who is number two,” says Sabres team president Ted Black, who doesn’t believe the Sabres will get short shrift. “Not in the least. You’re a great sports town or you’re not a great sports town. If you ask the average person on the street, they probably have a Sabres tattoo and a Bills jersey, and they want both teams to win championships. As do I.”

WGR general manager Greg Ried gave Black a courtesy call before the Bills deal was announced.  “I thought it was wonderful,” Black says. “I wished him luck and support. It makes their station much more robust and a rising tide will raise everyone’s ship. I think in no way shape or form that it diminishes what we have with GR.”  




Former Buffalo News TV critic Alan Pergament writes, and teaches journalism at Buffalo State College.

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