MSG Networks, Optimum dig into long fight as Knicks game blacked out: sources

Optimum pulled the plug on MSG shortly after confetti rained down on Times Square to ring in 2025 — and Knicks and Rangers fans could be left in the dark well into the new year, The Post has learned.

The breakdown in negotiations for a new contract with MSG Networks, which expired at midnight Tuesday, is part of a broader pushback by cable operators looking to cut the high prices charged by regional sports networks, or RSNs.

The two sides remain far apart in the high-stakes negotiations, which have major implications for both companies, sources close to the situation told The Post.

On Wednesday, Optimum subscribers browsing MSG — which also broadcasts Islanders and Devils games — were met with a blue screen telling them, “MSG Networks is no longer available on your telecast.”

The Altice-owned cable operator went on to tout a QR code and URL offering “options to ensure” they don’t miss any Knicks, Rangers, Islanders or Devils action.

That option is a 30% discount if they subscribe to streaming service Fubo, which carries MSG Networks, as long as they keep Optimum’s internet service.

The blackout immediately affected Devils and Knicks games scheduled for New Year’s Day.

Optimum also issued a scathing message Wednesday aimed at MSGN, which is run by Knicks and Rangers owner James Dolan.

“MSG Networks required us to pay an exorbitant amount of fees to carry its content, and for customers who don’t want the content — which is the majority — to pay for it anyway,” Optimum said.

“Despite this, Optimum offered to absorb their outrageous price demands if we could package MSG Networks in a way that would give our customers more flexibility and control. … MSG Networks said no and rejected several offers from us to reach a agreement.”

MSGN issued a rebuttal in its own New Year’s Day statement: “This is a price gauge from Altice pure and simple. An attempt to add over $10 dollars a month right to their bottom line. In short, a $10 price increase on top of a 50% price increase. “

The company also said it had “offered Altice a number of fair and reasonable proposals that encouraged Altice to pay us less than last year. Altice rejected them all, including our offer to keep MSG Networks on the air while we continued to try to reach an agreement. We remain ready to negotiate in good faith.”

In a strange bit of irony, the Knicks owner is feuding with the company founded in 1973 by his father, cable pioneer Charles Dolan, then called Cablevision. It, along with the Optimum brand, was sold to European telecom giant Altice for $17.7 billion in 2016. Charles Dolan died last weekend at the age of 98.

Optimum subscribers, meanwhile, were furious about losing access to their beloved team.

“I really don’t care whose fault it is now that MSG has gone dark at Optimum,” said Lou Panico of Manalapan, NJ. “As usual, the consumer is caught in the middle between two greedy, dishonest entities.”

MSGN was willing to move from the basic Optimum tier, where it was charged about $10 per month. subscriber in 2024, according to a source close to the negotiations.

That’s roughly the same rate national sports giant ESPN charges cable companies.

The move from basic cable to a premiere tier could hit debt-ridden MSGN’s bottom line by as much as 50%, as the majority of Optimum’s roughly 1 million subscribers in the New York City area would no longer pay for the channel, an RSN executive works for another network told The Post.

Optimum also faces the risk of losing subscribers to rival cable companies such as Charter Communications and Verizon’s Fios, which have an agreement to carry MSG on basic cable.

Dolan recently negotiated a new deal with a major New York-area cable company, moving away from the basic tier and accepting lower overall revenue in exchange for a longer pact, two sources familiar with the negotiations said.

However, Optimum is the only cable option in much of the city, and once die-hard sports fans jump on board, it may not be in a hurry to return to the bargaining table, a source said.

Altice could decide to play hardball and threaten to drop the channel to get better terms from MSGN.

“When you drop an RSN, you lose about 5% of your customers, but your revenue increases almost 20% as you save money by not paying for that channel,” the RSN boss said.

That impasse could exacerbate the overall cord-cutting trend that has eroded cable’s dominance over the past decade.

In 2023, MSGN Networks launched a streaming service priced at $29.99 per month. Last year, it teamed up with the YES Network, home of the Yankees and Nets, on the Gotham Sports app, which costs $41.99 a month when you combine YES and MSG. Customers can still just get MSG for $29.99.

MSGN has been in a long-running standoff with Comcast for more than two years, affecting subscribers in New Jersey and Connecticut.

But a prolonged battle with Optimum could force MSGN into bankruptcy, sources said.

The network, part of publicly traded Sphere Entertainment, has been in default on $830 million in loans since October and has a forbearance agreement with its lenders that expires Jan. 10.

The debt on that loan is trading at five cents on the dollar, the RSN director said.

“A full decline would ultimately bankrupt MSG Networks,” media analyst LightShed Partners said in a report this week.

MSGN is losing cash because it will pay $187 million in 2025 to broadcast Knicks and Rangers games as part of a 20-year deal that ends in 2035, according to public filings.

But the revenue MSGN gets from cable providers in deals that have much shorter time frames is falling.

If pushed into bankruptcy, MSGN could renegotiate with the Knicks and Rangers and likely pay much lower rights fees to reflect the new RSN market, the RSN executive said.

An MSGN bankruptcy wouldn’t necessarily be bad for Dolan, who controls both Sphere Entertainment and Madison Square Garden Sports, the parent company of the Knicks, Rangers and operator of the world’s most famous arena.

He would be hit with reduced rights fees to the Knicks and Rangers.

But removing MSGN would likely boost Sphere Entertainment, which also includes the $2.3 billion futuristic Las Vegas music mecca.

“This would be great news for Sphere shareholders,” LightShed said. “Removing $830 million in MSG Networks debt from Sphere’s balance sheet should mean a significant increase in Sphere’s stock price.

MSG Networks declined to comment on its financial status.