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Mired in yet another mediocre season on the field, the Mets scored a major victory last week in Manhattan Supreme Court. Justice Helen E. Freedman granted a motion for summary judgment filed by the team’s owner, Sterling Mets, in an action initiated by SportsChannel Associates, effectively allowing the team to transfer pay-television rights to Time Warner and Comcast beginning next year. Under the terms of an agreement executed in 1982 and amended in 1991, SportsChannel, which is owned by Cablevision, held the exclusive pay-television rights for Mets games through the 2011 baseball season. The Mets opted out of the contract in May 2004, exercising a $54 million option that terminates SportsChannel’s rights this November, at the end of the current season. SportsChannel, now known as MSG Networks, then initiated the present action, SportsChannel Associates v. Sterling Mets, 603548/04, alleging that the Mets violated the terms of the contract by negotiating with other companies prior to the agreement’s expiration. The agreement prohibited the team from licensing the pay-television rights to “any Mets game” prior to the expiration of the agreement. Specifically, it stated that prior to the termination of the agreement, Sterling Mets “shall not, and shall not authorize any other [p]erson to, grant, transfer, license, sell, produce, distribute or otherwise exploit or use … any Pay TV Rights to any Mets Games.” The sole issue, according to Justice Freedman’s decision, was the definition of “Mets Games.” SportsChannel contended that the term referred to both those games played before the expiration of the contract this November and those to be played after that date. Therefore, the agreement precluded the Mets from entering into agreements regarding next year’s games until Nov. 1. The cable channel sought recision of the Mets contracts with Time Warner and Comcast and either the invalidation of the Mets’ exercise of the buyout option or an extension of SportsChannel’s license. The Mets argued that the only reasonable construction of “any Mets games” is limited to games played before the termination of the agreement. The Mets could not re-license the games already licensed to SportsChannel, the team acknowledged. But once the Mets exercised the option to terminate the agreement, the team gained the right to license games played after it expired, on Nov. 1, the Mets argued. Justice Freedman agreed. “Summary judgment is granted to Sterling because the term ‘Mets games,’ as used in the Covenant, means games that the Mets play while the License Agreement is in effect, and accordingly, once Sterling exercised the Option the Covenant only restricted Sterling from exploiting its rights in Mets games played before November 1, 2005,” she wrote. “Although the definition of ‘Mets games’ in the License Agreement does not specify temporal limitation, it can be added by implication.” TWO-STEP ANALYSIS Justice Freedman undertook a two-step analysis. First she determined that the term was ambiguous, then she concluded that as a matter of law it could only be interpreted to mean games played through Nov. 1. Freedman reasoned that the term “Mets game” was used more than 50 times in the agreement, often with conflicting implications. “If the term ‘Mets Games’ were used consistently throughout the License Agreement to include all games played after November 2005, it would be unnecessary to qualify the term,” she wrote. With its meaning unclear, “Mets games” had to be “construed so as to harmonize” with the contract’s purpose, Freedman held, citing Castellano v. State of N.Y., 43 NY2d 909. She ruled that the only reasonable interpretation of “Mets games” encompassed those to be played before the expiration of the agreement. “It defies common sense that Sterling would pay SportsChannel $54 million to curtail its license term and eliminate its ‘first negotiations/first refusal’ rights for a new license, but also agreed to refrain from making binding arrangements with new broadcasters for Mets games until just before the beginning of the next baseball season,” Freedman wrote. Brian S. Weinstein, Robert B. Fiske Jr. and Eric F. Grossman of Davis Polk & Wardwell represented Sterling Mets. The firm declined to comment. Isaac Greaney, Elizabeth M. Zito and John G. Hutchinson of Sidley Austin Brown & Wood represented SportsChannel Associates. The firm declined to comment. “We’re disappointed with the judge’s decision and are currently exploring all of our options,” said Eric Gelfand, a spokesman for MSG Networks. According to a written statement released by the Mets, “The Mets are very pleased that the Court has ruled in its favor rejecting Cablevision’s claims. The launch of [a] new network, which will feature Mets games, is set for the spring of 2006.”

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