U.S. District Judge Refuses To Grant MSG Injunction Against NHL Over Rangers’ Site
A federal judge denied MSG’s request for a preliminary injunction against the National Hockey League Friday, leaving the Cablevision (NYSE: CVC) unit scoreless thus far in its efforts to block the league from operating the official NY Rangers’ site. (via Sports Business Journal sub. req.) MSG went to court against the NHL and its NHL Interactive Cyberenterprises (NHL ICE) Sept. 28, seeking transfer of the site nyrangers.com and a preliminary injunction to keep the league from using it. MSG alleges anticompetitive practices on the league’s part, even thought it has had a seat on the policy-setting Board of Governors all along.
But U.S. District Judge Loretta Preska U.S. District Court in Manhattan said no to the request, saying MSG’s complaint that it was being forced into a “homogeneous template” was “without support,” that the club’s claims of harms that would be sustained “are wholly irrelevant” since the Rangers’ retain control over local stories and info—and still have traffic directly to the club domain; and that “the Rangers’ declarations are largely irrelevant to the facts presented.”
MSG says it will appeal and will pursue the full case. From SBJ: “This decision is one step in what will be a very long legal process and we look forward to having the opportunity to present the facts, which support our position.”
We’ve all seen the kind of money that can be made when clubs band together; what Preska outlines here is what happens when opposition occurs. Preska noted in her 26-page opinion that the NHL commissioner—now Gary Bettman—and NHL ICE were unanimously granted the “rights to exploit the Member Clubs’ intellectual property on the internet for nearly a decade. ... At no point did the Rangers object to the League’s governing Internet Regulations, and they never contended that such regulations constituted a violation of the antitrust laws.” In late 2005, MSG Chairman Jimmy Dolan turned down the chance to be on the committee that decided in favor of putting the club sites on a common technological platform with a single CMS. The hybrid model put clubs in charge of local content and ad sales. (The Rangers were among those clubs losing money on their new media business, more than $100,000 in 2005-06.) They protested the recommendations when it was announced in 2006, with Dolan calling it a form of “revenue sharing” to help smaller markets. Despite the protest, the league extended the NHL ICE mandate for another 10 years and granted “exclusive ability to exploit various new media rights.”
After failing to find common ground, the Rangers “launched three initiatives violating league rules” (an internet store, live game streaming and virtual advertising/signage) and were fined $100,000 a day for two days. This past June, MSG ordered Rangers’ employees not to provide any content that would aid the migration of the site. Preska outlines NHL efforts to accommodate the Rangers but nothing worked in the face of the club’s insistance it operate the site on its own servers. The league again threatened daily fines of $100,000 as of Sept. 29; the Rangers went to court.
Preska’s decision also shows an outline of how not to make an anti-trust case, especially when you;re a voluntary member of the joint venture. She takes apart the anti-competitive claims, writing, “It is far from obvious that this restraint has no redeeming value.” Then what may be the best unintentional subhed of a ruling: “MSG’s Claims Fail Under the Rule of Reason.”
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