Yankees Advancement May Bring Fox Fodder in Fight With Cablevision on Fees

Yankees fan Dave Wadsworth is considering the options if he can’t watch his team in the World Series on cable provider Cablevision Systems Corp. He doesn’t like the idea of installing a rooftop antenna to get Fox’s broadcast of the games or going to a neighbor’s house to watch.

“I could get killed or hurt falling off the roof,” said Wadsworth, who lives about 50 miles north of New York City in Central Valley. “But if I go to my neighbors I have to listen to their kids howling at each other, sit on a lumpy couch and avoid their dog racing around high on sugar.”

Wadsworth is one reason Fox-owner News Corp. may be pulling for the New York Yankees to beat the Texas Rangers in the American League playoffs, said Brad Adgate, director of research at Horizon Media Inc. If the Yankees advance, Cablevision will get more pressure from its 3 million customers in New York and Philadelphia to reach a deal with News Corp. to restore Fox programming cut off in a fee dispute, he said.

“Texas in the World Series just isn’t as exciting,” said Adgate. A Philadelphia Phillies victory in the National League playoffs would also help News Corp. to a lesser extent, he said.

Scott Grogin, a Fox spokesman, declined to comment. Charles Schueler, a spokesman for Cablevision, said if News Corp. agreed to binding arbitration, which would restore Fox’s signal while the two sides negotiate, the question of who gets to the series becomes “moot.” Fox has refused arbitration, saying direct negotiation is the only way to resolve the dispute.

The Yankees trail the Texas Rangers three-games-to-two in the American League Championship Series and need a win tonight to stay alive in the best-of-seven series. The Phillies are also down three-games-to-two, to the San Francisco Giants. Fox will start airing the World Series Oct. 27.

Subscriber Losses

News Corp. started blocking Fox broadcast signals on Cablevision Oct. 16 after the two sides failed to reach a deal on how much the cable company should pay for the programming. The stalemate has already caused the longest-lasting blackout for a major broadcast network for a million or more people in at least a decade.

Sports, especially local sports, are the No. 1 reason consumers continue to subscribe to pay-TV services, according to a survey by finance firm BTIG LLC last month. Cablevision could lose subscribers to rivals such as DirecTV or Verizon Communications Inc. if it can’t show the New York team play for the championship, according to BTIG analyst Richard Greenfield.

“If the Yankees win the ALCS, the World Series on Fox will lead to brutal sub losses at Cablevision,” Greenfield, based in New York, wrote in a research note to investors.

The Yankees have a 22 percent chance of returning to the World Series, according to RJ Bell, president of Las Vegas-based Pregame.com, the largest handicapping information website compliant with U.S. laws.

‘Hell to Pay’

Bell’s projection is based on Las Vegas betting lines for today’s Game 6 in Arlington, Texas, and a possible Game 7. If the Yankees force a decisive seventh game, they would face Rangers pitcher Cliff Lee, who is 7-0 all-time in eight career postseason starts.

Customers have taken to Twitter Inc. to express their frustration at the companies’ inability to strike a deal.

“There’s going to be hell to pay if the Yankees make it to the World Series and we can’t watch,” Daniel Jalkut, a Cablevision subscriber in Brooklyn, New York, tweeted this week.

Cablevision has a history of playing hardball in fee negotiations, said Chris Marangi, an analyst at Gabelli & Co. in Rye, New York. In 2002, the cable operator kept YES Network, the local sports channel owned by the Yankees, off its system for a season until New York’s then-Attorney General Eliot Spitzer got the two sides to make a deal.

Politicians are pushing both sides to reach a deal this time too. This week, Julius Genachowski, chairman of the U.S. Federal Communications Commission, called on the chief executive officers at both companies to come to an agreement.

Reaching a Deal

Back in Central Valley, New York, Dave Wadsworth is considering calling John Hall, a local Democratic congressman, to put pressure on the two companies to reach a deal.

“But do I really want to ask for a favor when I want to vote him out of office this November?” Wadsworth said. “I’m going to have to make a decision if the Yankees keep winning.”

To contact the reporter on this story: Kelly Riddell in Washington at kriddell1@bloomberg.net

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net.

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