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The ongoing dispute between Yankee Entertainment & Sports Network LLC and Cablevision Systems Corp. over distribution of a new channel took a litigious turn Monday as YES filed a seven-count antitrust lawsuit against the cable company. Surrounded by pictures of his network’s championship team, YES Chairman and CEO Leo Hindery told reporters at his office on the 38th floor of New York’s Chrysler Building Monday of the retention of antitrust litigator du jour David Boies and his Boies, Schiller & Flexner team to pursue charges alleging that Cablevision violated Sherman, Clayton, and Donnelly Act provisions by denying YES distribution on its systems. YES seeks injunctive relief, monetary damages and a declaratory judgment on its suit. Bethpage, N.Y.-based Cablevision responded to YES’ allegations in a statement, saying: “This lawsuit is entirely without merit, and is the YES Network’s latest ploy to pressure Cablevision into accepting an expensive, ‘take it or leave it’ demand … “ Before Monday, the tussle had been little more than a nasty, public incarnation of the traditional operator-programmer war. The issue centers on YES’ desire to be carried as part of a basic or expanded basic package on Cablevision systems, making it available to all the cabler’s nearly 3 million subscribers. Cablevision instead wants to place YES on a premium tier and charge only subscribers who want the Yankee games. Filed in U.S. District Court for the Southern District of New York, the suit claims that Cablevision has engaged in anti-competitive behavior by acquiring systems that not only position it as the New York market’s dominant distributor, but also aid in creating a regional sports programming monopoly for its Madison Square Garden and Fox Sports New York networks. Judge Deborah Batts will hear the case. “They’re trying to drive us out of town,” Hindery said, using his target’s new “This is our town” advertising campaign to illustrate his point. “This stopped being about Cablevision the company a long time ago. This is about protecting MSG and FSNY.” Among the suit’s allegations is that Cablevision violated the U.S. Federal Communications Commission’s Cable Act of 1992 by offering to carry YES only if cable exclusivity, or the denial of YES programming to satellite competitors, was granted. The suit also claims that offering YES on a premium tier limits its ability to compete for advertising. Hindery says being shut out of Cablevision’s systems has cost YES “well more than half the advertising dollars in the DMA.” And while Cablevision charges on average $1.85 per subscriber for its content-comparable sports networks, its offer of $0.50 per subscriber for YES is unreasonable, according to the suit. YES believes its pricing is fair given that some 30 cable operators have agreed to its fee. YES would have to renegotiate its agreements with other operators to reflect a lower-priced contract with Cablevision. With no talks scheduled between YES and Cablevision, Monday’s move can be construed as a way to bring the parties together. “It’s more of an emotional and political salvo than a real merit-based one,” said Paul Hammer of the Los Angeles-based international investment bank Houlihan Lokey Howard & Zukin. “Cable companies have always had the right to choose their programming, with the assumption that their subscriber base educates them on what they want.” Copyright (c)2002 TDD, LLC. All rights reserved.

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