|Jeremy Lin helped end a MSG and Time Warner standoff, but who won?|
Because terms weren't announced, earnings at MSG and Time Warner Cable will begin to reveal the pricing and impact of the deal in coming quarters. Ahead of the dispute resolution it was already clear that both companies needed to end their conflict, albeit for different reasons.As the distributor of the Knicks to millions of New Yorkers, Time Warner Cable represented a big MSG audience and a key to its subscription and ad revenue. In February first-quarter earnings, MSG reported an over 13% drop in revenue from 2011, largely a result of the NBA lockout. Without Time Warner Cable business, 2012 may have felt like a continued NBA lockout, making the impact of a prolonged dispute clear. In contrast, a lack of Knicks and Rangers games posed a more long-term threat of subscriber drain to Time Warner Cable. With the Knicks and Rangers only beginning to show signs of life after a lost decade, one would have assumed that MSG and its shareholders would be panicky. But with Lin in the lineup, MSG seemingly surged to new all-time highs with each victory, as investors speculated that fan excitement would force a high-priced deal, adding to benefits like record TV ratings, ticket price increases and merchandise sales. After the settlement, MSG reported that the first two games against NBA cellar-dwellers the New Orleans Hornets and New Jersey Nets drew in the highest ever regular season T.V. viewership. While wins didn't keep flowing in, a parade of good news continued for MSG. In March, the company said it would lift Knicks season ticket prices by nearly 5% and tickets for the Rangers by nearly 10% for the 2012-13 season. In 2011, MSG asked fans to fork over a 49% Knicks ticket boost and a 23% bump for the Rangers. New carriage deals with Time Warner Cable and Cablevision ( CVC) that escalate in price over the next five years will also give MSG stable revenue growth from cable systems that are nearly two-thirds of MSG's overall TV audience, according to Pyykkonen of Wedge Partners. That media unit should represent roughly 50% of the company's overall sales, giving it stable growth, he adds.