Cablevision Faces Mets Setback

Cablevision (CVC - Cramer's Take - Stockpickr) went scoreless in the first inning of its lawsuit against the New York Mets.

But the game is only getting started.

On Thursday, a judge denied Cablevision's request for a temporary restraining order against the Mets' plans to pull their games from Cablevision's MSG Networks starting in the 2006 season.

Cablevision sued the Mets Wednesday, saying the ball team violated its current contract by forming a Mets-anchored regional sports network with Comcast (CMCSA - Cramer's Take - Stockpickr) and Time Warner's (TWX - Cramer's Take - Stockpickr) cable subsidiary.

Comcast, Time Warner Cable and the Mets announced the formation of the still unnamed network on Oct. 12.

The new channel's formation, as well as Cablevision's lawsuit, spotlight the value of sports -- home-team sports in particular -- to cable and satellite operators. While cable operators have sought to reign in sports programming costs, they have traditionally accounted for a major portion of cost increases.

In court papers, Cablevision argued that though the Mets have exercised their right to get out of their agreement with MSG, the baseball team is not allowed to negotiate with other parties regarding Mets telecasts until the agreement actually expires on Nov. 1 of next year.

Among the irreparable harms Cablevision says it is sustaining is the loss of a contractually mandated opportunity to explore a new rights agreement with the Mets while the Mets are prohibited from talks with other possible partners.

Calling the lawsuit "entirely without merit," the Mets said in a statement Thursday that when it terminated the agreement with Cablevision in May, the team stated publicly that it would "actively explore all options" concerning Mets telecasts in 2006 and beyond.

"This was no surprise to Cablevision, which had every opportunity to strike a deal with us," said the Mets. "Having failed to do so, they chose to file a disingenuous and vindictive lawsuit."

A hearing on a preliminary injunction to restrain the Mets' move is scheduled for Nov. 17.

Cablevision is slated to spin off its Rainbow Media satellite and programming subsidiary as a separate, publicly traded company. But MSG will remain with Cablevision, which had hoped to complete the spinoff in the third quarter but has fallen behind schedule.

Cablevision's shares rose 31 cents Thursday to $20.52, while Comcast rose 13 cents to $29.60 and Time Warner was up 9 cents to $16.48.