MSG, Altice battle keeps Knicks' New Year's night game vs. Jazz off Optimum

MSG Networks disappeared from the screens of Optimum TV subscribers at 12:01 a.m. on Wednesday, but the first major impact was not felt until 19 ½ hours later.

When the Jazz and Knicks tipped off at Madison Square Garden shortly after 7:30 p.m., the game was nowhere to be found on Optimum.

The question now is how long Knicks, Rangers and Islanders games will be blacked out as MSG and Altice, Optimum’s parent company, discuss contract terms.

These carriage disputes, as they are known in the business, can be unpredictable, but as of Wednesday afternoon, there was no optimism on either side for a near-term resolution.

A carriage dispute is a disagreement over compensation between the distributor, which is Altice, to carry a channel from the provider, which is MSG Networks.

MSG’s contract with Altice expired at midnight New Year’s Eve, after a couple of days of statements from both sides.

Each essentially accused the other of being unreasonable. The talks center on the usual factors – the price Altice will pay per subscriber per month for MSG and the programming tier on which MSG will be carried.

The tier is a key point.

A source familiar with MSG’s stance said that the network on Tuesday offered to allow MSG to be placed on a higher tier than it currently is on — similar to a deal it has in place with another major area carrier — as well as to extend the deadline to continue negotiations.

“We offered Altice a number of fair and reasonable proposals that called for Altice to pay us less than last year,” MSG said in a statement.

But Altice’s position is that MSG should be on a specifically sports-centric tier to save customers who do not watch MSG from having to pay for it.

That would require a fundamental rethinking of how cable television bundles have worked for decades.

But Altice spokeswoman Lisa Anselmo said the company wants to protect the interests of people who never watch sports channels.

Sports programming is the most expensive thing in the traditional cable bundle, which makes it a prime target for companies looking to cut costs.

Carriage disputes are as old as cable TV, but they have become more fraught as customers gain more options and as cord-cutting puts pressure on both cable companies such as Altice and regional sports networks such as MSG.

In the absence of games on Optimum, fans of the Knicks, Rangers and Islanders can stream games on the direct-to-consumer Gotham Sports app or get them through Verizon Fios, DirecTV, DirecTV Stream or fuboTV.

Both MSG and Altice have set up websites and phone numbers to help fans find other ways of accessing the Knicks and the local hockey teams.

Altice’s most recent statement even offered to help defray the cost of ordering the Gotham Sports app. For MSG programming, the app costs $29.95 per month or $9.95 per game. Anselmo declined to offer specific details of that offer.

For Altice, as with all cable companies, the biggest risk in this sort of situation is losing customers for its internet service, where profit margins are high. The margins for video services such as sports networks and other TV programming are much lower.

Again, none of this is new.

In 1988-89, a tiering dispute between Cablevision and MSG kept an entire Knicks and Rangers season and half a Yankees season off the air.

In 2002, a tiering dispute between Cablevision and the then-new YES Network kept an entire Yankees season off the air.

Both stalemates were resolved thanks in part to pressure from politicians.

By Neil Best

neil.best@newsday.com@sportswatch

Neil Best first worked at Newsday in 1982, returned in 1985 after a detour to Alaska and has been here since, specializing in high schools, college basketball, the NFL and most recently sports media and business.