By Alex Fine.

Basketball is back. Three weeks after opening night was canceled in the aftermath of Hurricane Sandy, four months after the Knicks let Jeremy Lin slip out of town, 13 years since the Knicks’ fluke run to the NBA finals, and two decades since Pat Riley’s tough-guy team captivated New York in the early years of the Giuliani era, fans in the world’s greatest basketball city care without cynicism again.

The Isiah Thomas era and the Knicks’ failed pursuit of LeBron James are old news. The Nets’ long struggle for big-city relevance got lost somewhere in New York harbor. When the teams squared off Monday night in Brooklyn’s new Barclays Center, the city had plenty to cheer about: real stars, the top two spots in the Atlantic Division standings and the eyes of millions upon us.

“Brooooooklyn,” they sang in the style of Biggie Smalls—the best rallying cry in American sports—when the Nets scored a bucket. “MVP!” they chanted when Knicks star Carmelo Anthony stepped to the free throw line. The crowd was so loud at times it was hard to believe that the 17,000-plus fans weren’t all cheering for the same side.

Mayor Michael Bloomberg was among them, as were Michael Strahan, Charlie Rose, Richard Gere and, of course, Nets part-owner Jay-Z and his wife Beyoncé. By our count, there were 100 members of the press on hand, including representatives from Chinese, German and Italian outlets. ESPN had 12 journalists at the game, in case you were wondering how the sports network gauged its importance.

In the end, Mr. Anthony missed a jumper that would have won the game in regulation, and the Nets outlasted the Knicks in overtime. It didn’t matter, much.

For a night, we could forget that the Knicks hadn’t won a title in 40 years, forget about Bernard King’s balky knees and Patrick Ewing’s shaky nerves, forget about anything having to do with Mr. Thomas.
New York was back where it belonged, as the basketball center of the universe.

New York is a basketball town, God help us. There’s something in the collective DNA that tells us hoops is the most important sport, some vague understanding that there are neighborhoods where a kid can still become immortal on a playground, some distant memory of the days when teams traveled to media and not vice versa, the days when the Garden earned the right to be called Mecca.

So what if it’s an empty boast? So it’s been 40 years since Willis and Clyde led the team to glory, longer still since the city produced a truly elite player. (Best New York City product in the last 25 years is ... Stephon Marbury?) Basketball is the ultimate confidence sport, and New York is the fake-it-till-you-make-it confidence town. Don’t forget the darker days when the city’s greatness wasn’t a given, the days of “It’s a nice place to visit, but I wouldn’t want to live there,” when we could swap tales of Earl “the Goat” Manigault snatching quarters off Harlem backboards—or Willis Reed staggering onto the court for game seven of the 1970 finals, John Starks rising high over Jordan and Grant for a left-handed jam—and recognize a grace and gall and toughness we imagined in ourselves.

Suffice it to say the psychic stakes were high for us Knicks fans setting foot in the Barclays Center on Monday night. Indeed, in the years since Bruce Ratner first broke ground, I often feared that the Knicks’ woes would continue, that the hangover from Mr. Thomas’s tenure, when the team collected overweight players with fatter contracts, would never abate, that James Dolan would remain a pox on the franchise. And that, in the absence of a team they cared about, the fickle masses would give in to the allure of the hottest borough, the newer arena, the team with one owner who’s rich enough to run for Russian president and another who doesn’t simply not suck, but doesn’t suck so much that he’s married to Beyoncé.

Would I blame them? No. Excommunicate? Probably. But something would tear loose from the fabric of my city if New York were no longer a Knicks town.

I can report that a trip to the Nets’ new arena offers temptation enough for a lesser-willed fan to cross over: High ceilings (this is Brooklyn, so exposed ducts, natch) and open sightlines; a thoughtfully curated selection of local food (Spumoni Gardens for the natives, Fatty ’Cue for the arrivistes, Nathan’s for the tourists); instead of the light shows that often mar pregame introductions, a dignified volley of fireworks. Instead of stadium anthems, music that reminds you that Brooklyn belongs to the world. (We have to wonder, though, how big a cut the sound man is getting from Roc-A-Fella Records: with the exception of the periodic Biggie track, it was almost entirely Jay-Z’s catalog.)

Slick Rick played at halftime. He was pudgy, and some of the words were lost in the acoustics, but still, it was a classy nod to New York City’s hip-hop history, and something that’s hard to imagine going down at corporatized Madison Square Garden.

I can also report, happily, that on the evidence of one evening, the fan exodus isn’t happening. Led by Mr. Anthony—reinspired, the sportswriters say, and leaner at the waist after playing alongside Mr. James in the London Olympics—and Tyson Chandler, the biggest man on the court, if not tip to toe, then certainly by the size of his heart, the Knicks have the look of a title contender. Maybe not a favorite, but at least a plausible long shot. It’s not just the fans who think so: the team filled out its roster for this season with veterans like Jason Kidd and Rasheed Wallace, the type of already-rich players lured not by the biggest paycheck but by the best title shot.

So the Nets fans were more numerous, more conspicuous in their “Fan Since Day One” badges (oh really?) and black-and-white Brooklyn gear. Knicks fans were, if not louder, better at the business of being fans. They chanted “Defense” from the first possession and serenaded Mr. Anthony at the free-throw line. Maybe it was simple sports loyalty, as Spike Lee, the world’s most public Knicks fan, tweeted at Brooklyn Borough President Marty Markowitz: “With All Due Respect I’ve Been A NEW YORK KNICERBOCKERS Devotee Since 1967, Not Gonna Switch.” And as Mike Williams, a Knicks fan from East New York, Brooklyn, told us in the spacious bowels of the arena, “Knicks fans have been Knicks fans forever. The Nets are just a novelty.”

But let’s not overindulge in name-calling, at least not in the afterglow of this happy new rivalry. Who cares if the black-and-white-clad masses remember nothing of the Drazen Petrovic tragedy, the Derrick Coleman disappointment, if they had to read the banners hanging from the rafters to know the Nets won a pair of ABA titles in the days before the merger?

Instead, let’s celebrate for a moment the improbable course that led these two teams to their current exalted status. Nets general manager Billy King, who achieved middling results as the decision-maker for the Philadelphia 76ers, bet that by paying heavily for swingman Joe Johnson, late of the Atlanta Hawks, he could convince Deron Williams, his star free agent point guard, to re-sign with the Nets.

Meanwhile, if the Knicks are as good as their early play has promised, the fans will owe the team’s salvation (or at least, above-averageness) to the last figure they’d expect: current GM Glen Grunwald didn’t just play college ball with Isiah Thomas at Indiana University, he was hired by Zeke on two separate occasions. The Knicks are wont to downplay the relationship between the pair, lest they stoke our suspicions that the former GM is still conspiring to ruin the team. Mr. Thomas isn’t so coy: “I love Glen, he’s one of my favorite people on earth,” he told ESPN Radio last summer.

Who cares? Like players, executives come and go: love and hatred for them are fleeting emotions, and for the moment, Mr. Grunwald’s free-agent signing of shot-blocker Mr. Chandler and installation of defensive-minded head coach Mike Woodson (another one of Mr. Thomas’s Indiana pals), are all anyone needs to know.

The Brooklyn partisans can speak for themselves. Mark Anise, a Brooklyn resident who loves his borough so much he had a Nets ‘B’ tattooed on his right bicep on the ground floor of the Barclays Center, told me: “Basketball was the one sport where I always rooted for the name on the back of the jersey. I always said if Brooklyn got a team, then I’d root for the name on the front.”

Never one to mince words when it comes to his love for his hometown, Mr. Markowitz emailed The Observer, “Our fans are so wild, so over-the-top, so proud and so loud that even residents of the outer borough of Manhattan will hear us cheering for the best team in New York and the best team in the NBA, the Brooklyn Nets.”

On the way down to the postgame press conference, I passed an usher with his hands clasped in the air in the shape of the Roc-A-Fella diamond in an homage to Jay-Z. “We’re coming for you, Spike,” a colleague usher said to Mr. Lee, who wasn’t in the arena, or to no one. Or everyone.

Well, let them come—it’s good to have a rival. The great Knicks team of my youth, Pat Riley’s boys, tapped into the ethos of 1990s New York: tough as Charles Oakley, the man who used to ride an exercise bike to the point of tears, and cocky as John Starks, who played his college ball in nowhere Oklahoma, and believed even then that he was better than any of the anointed kings of the NBA. And so we loved them for it.

In the hearts of the city’s sports fans, they were displaced by Derek Jeter’s Yankees: brilliant hardworking men who made their fortune in New York City, tapped in less to the town’s blue collar roots than to the Wall Street princes who defined a revitalized city.

These Knicks aren’t that tough or that classy, and neither are these Nets. But the city doesn’t need an NBA title. Yet. For the moment, it’s enough to care.

pclark@observer.com

Last season's New York Knicks sensation is this season's New York Knicks departure: Jeremy Lin is gone, off to the Houston Rockets. Jeremy Lin says he would have preferred New York, why New York Knicks owner and president James Dolan says he's feeling hurt and betrayed by the move. Whose side should Knicks fans take? 

The dispute came down to a matter of money: The Knicks didn't want to pay Jeremy Lin the offer handed to him by the Houston Rockets; they felt that he was untested, and not worth his asking price. But is this true? After all, Jeremy Lin brought a whole bunch of fans to basketball and the Knicks who weren't there before, which is besides the fact that his emergence as a global sensation basically solved one of the most bitter cable carrier fee disputes in recent history. Shareholders in Madison Square Garden Entertainment stock certainly don't buy the Knicks' line; the stock has taken a hit since Lin's departure became imminent (and continues to go down through today).

Now, we're hearing from Jeremy Lin and James Dolan, as each air out their own side of the story.

[READ MORE: The Jeremy Lin Effect on $MSG Stock: Jimmy, We're Going Down]

Sports Illustrated's Pablo Torre got an exclusive interview with Lin. Highlights:

Why Lin Left:

"...My main goal in free agency was to go to a team that had plans for me and wanted me. I wanted to have fun playing basketball. ... Now I'm definitely relieved."

The Moment Lin Knew He Might Leave:

"[Former Knicks point guard Raymond] Felton's signing was the first time when I thought, 'Oh, wow, I might not be a Knick,'" Lin said.

Why Houston?

"The Rockets kept saying how sorry they were that that they'd cut him, and how much of a mistake it was," [Jeremy Lin's agent Jim Tanner] said. "They almost said it too many times. They kept acknowledging it."

Why It's Not About The Money:

The notion that Lin has always cared about money above all else, in particular, eats away at him, especially as he sleeps in his childhood home. "If I really wanted to, I could have triple-digit endorsements," Lin pointed out, but he does not. Instead, and in large part because Lin wanted to concentrate on basketball, he declined to cash in on the Linsanity gold-rush -- namely, the mountain of business opportunities in Asia -- and picked only three companies: Volvo, Steiner Sports and Nike.

What James Dolan Told Lin:

"I have plans for you in the future," Lin recalled the owner saying. "This is a long-term investment. Don't rush back."

Lin on Playing in New York City:

"I love the New York fans to death," Lin said. "That's the biggest reason why I wanted to return to New York. The way they embraced me, the way they supported us this past season, was better than anything I've ever seen or experienced. I'll go to my grave saying that. What New York did for me was unbelievable. I wanted to play in front of those fans for the rest of my career."

Meanwhile, Knicks owner James L. Dolan unofficially aired out his side of things via sourcing to the New York Daily News:

The decision was both financial and emotional since Garden chairman James Dolan was upset over Lin restructuring his deal with Houston last week to include a third year salary of $14.9 million. Dolan, according to sources, felt he was deceived by the 23-year-old Lin.

That's it. No interviews, no media statements, nothing else from James Dolan other than the fact that he felt "deceived." James Dolan's relationship with Knicks fans is already tense: There was that nasty streak of letting Isaiah Thomas run the team that didn't work out, which is to say nothing of contracts like those handed to Stephon Marbury, Eddy Curry, Zach Randolph, and so on. He's had an embattled relationship with the sports press, at one point all but completely denying them access to the team. And ticket prices—which have only steadily risen over the years despite the team's lack of serious playoff appearances over the last decade—recently took another hike as box seating was placed lower in The Garden, effectively alienating the socioeconomic majority of fans who even could see the team play even further.

Even as the press files away columns on the matter—like the usually even-handed New York Times ("Dolan Breaks Faith With Knicks Fans Again")—the true test of public opinion will be how Knicks fans react to Lin when he comes back to the Garden to play against the team in Houston next year. He could be booed, or—as was the case with Hideki Matsui, who the Yankees declined to resign after the championship season for which he was awarded 2009 World Series MVP—be embraced.

Either way: Besides the fact that the public financial interest (and thus, faith in him) isn't exactly surging these days, it's pretty clear James Dolan's name will not be worn by fans any time soon.

fkamer@observer.com | @weareyourfek

Let's flash back quickly to February, when Jeremy Lin started making notable appearances on the court for the Knicks:

For a few days, the stock experienced slow, steady gains. And then, as Lin started performing, the rest of the world —(and the markets) took notice:

$MSG stock began to experience spikes and swells, and continued to rally. Despite Lin's injury in March that took him off the court for the rest of the season, there was little speculation that he'd be traded. In May, after the Knicks were ousted from the playoffs, talk of Lin's contract began with a dispute over the nature of his free agency, and whether or not the Knicks could exceed the salary cap in attempting to resign him. In recent weeks, it was made clear that Lin would be talking to other teams. And in recent days, it was made clear that Lin was taking some of these talks seriously.

But at the end of June, the question of how much the Knicks could pay Lin was resolved in their favor. For a moment, things looked up.

And then...

"Lin Withdraws From U.S. Select Team, Citing Free-Agent Status" - New York Times, July 3, 2012

"Knicks Get Kidd and Make Plans to Keep Lin" - New York Times, July 5, 2012

Lin stayed out of the Olympics to deal with his contract negotiation (and not run the risk of injuring himself further, so he could still court offers). Lin also signed a term sheet with Houston that the Knicks would have to begrudgingly match.

Which is when this happened:

Retuers reports:

"I think the gain in MSG shares earlier in the year as well as the Jason Kidd incident/potential Lin loss that hit the shares yesterday and today has already efficiently been reflected in the stock movement," said Miller Tabak analyst David Joyce.

What's perceived by many to be the legendary mismanagement of the New York Knicks by ownership (and is generally reflected in their winning percentage from the last few seasons) proved a decent map to see where this was headed: Regardless of Lin's ability as a player, he is a global fan phenomenon—for nerds, for Christians, for Asian-Americans—especially in New York City. Lin piqued the interest of those who had no interest in basketball prior to his rise. Lin was essentially responsible for ending one of the most bitter cable carrier disputes in recent history.

And yet: An investment in a consistent, larger fanbase, let alone the potential for Lin's play on the court to elevate the team notwithstanding (which, to an extent, was arguably proven) didn't prove enough for the brass at The Garden to resign Lin. Whether or not it was a good play or not has yet to be seen; given the track record at hand for the team, however, the very least that could be said about the move was that it's not unexpected. Not necessarily because Jeremy Lin wants to make as much money as he possibly can so much as that the Knicks seem to do whatever will further alienate fans and spectators as a matter of course.

Or as New York Post columnist Mike Vaccaro:

If the Knicks themselves asked you to look at [Jeremy Lin's numbers, comparable to his inflated asking price], you might wonder where the catch was. The Tappan Zee Bridge couldn’t span that credibility gap. And somewhere in the murky waters below rests the Knicks’ benefit of the doubt. Even if they happen to be right.

It looks like that credibility gap might extend to the fleeting glory of a high-tide share price as well.

fkamer@observer.com | @weareyourfek

A few weeks ago we took note of Steinbrenner Syndrome, wherein a New York City sports player or team is only as loved as their last great performance. It's the disease embedded in the genetic code of New York City's sports media and fans. Now, as far as Linsanity's concerned, we can consider ourselves relapsed.

In today's New York Times, Howard Beck lays it bare in his headline: "Linsanity Has Left The Building," and who notes in his second paragraph that it's "the end of Linsanity as we know it." The primary case concerns the resignation of coach Mike D’Antoni, and his replacement, Mike Woodson, whose style of coaching (veterans over rookies, isolation play) doesn't favor Jeremy Lin (a rookie who thrives on the pick-and-roll offense). All this, even as Beck admits:

Despite his recent struggles, Lin remains wildly popular at the Garden, and with fans around the world, who were captivated by his incredible, come-from-nowhere rise. Lin is beloved by most of his teammates, who appreciate him for reviving their season with a seven-game winning streak and what seemed like a million uncanny clutch plays. But circumstances have changed, and Woodson cannot afford to be sentimental.

Beck, a revered sportswriter, is probably correct in his predictions. That doesn't make the headline any less sensational, nor the case of Steinbrenner Syndrome any less prevalent.

Mind you, a brief timeline of Linsanity:

Feb. 7th: The Times' first mention of "Linsanity," as written by Howard Beck.

Feb. 15th: The Times declares in a photo essay that Linsanity has "returned" to the Garden. Where did it go? Away games, obviously.

Feb. 16th: The Times goes to Harlem to ask people in Harlem about Linsanity. Elsewhere in the Times, "Knicks Win Again, Yawn" goes one blog headline. By our count, there are twelve separate articles published by the Times on the 16th with a mention of "Linsanity."

Feb. 18th: The Times notes Linsanity as "in full force" at the Garden.

Feb. 23rd: Linsanity, according to the Times, may be "peaking."

March 1st to March 7th: 0.71 seperate mentions of Linsanity over a one-week period. Compare this to February 10th - February 16th, when the Times averaged 5.571 separate articles per day with mentions of Linsanity. In New York City, Linsanity literally disappeared from the Google Trends chart at the end of February.

Compare that to Taiwan, where it hung on at a higher rate for a longer period:

And there might be a case to be made. But the fact is, Jeremy Lin is still filling seats at the Garden, because of Jeremy Lin fans (Knicks fans, less so). Linsanity is a wider phenomenon than New York and New York Knicks fans. The New York Times, while not normally prone to such pronouncements—unlike, say, the New York Post, the New York Daily News, and occasionally, ourselves—is as criminal in perpetrating a nuance-lacking hype-cycle as anyone else, and like anyone else in the hype-cycle perpetrating game, is bent on controlling it by making grand pronouncements concerning it. After all, if their most revered sportswriters aren't immune to taking part in it, who in New York's media isn't?

Howard Beck's concern is to be taken seriously in one regard: If Knicks owner James Dolan's replacement for D'Antoni does, in fact, decide to diminish the spotlight of Jeremy Lin—the most exciting thing to happen to the Knicks in ages—paired with the bi-polar nature of Knicks media and fans (who have apparently all but abandoned him), the fact is that Lin's fanbase will exist wherever he goes. And he might already be scouting new places to take it. Or as we explained a few weeks ago:

The fact is, New York City is a fair-weather town. Lin has a one-year contract with the New York Knicks. If he continues to be a sensation, he’ll soon have plenty of options deciding where to play. But will Lin flee the hot zone, and find a home free of that malady of the spoiled sports fan?

[Photo by Chris Trotman/Getty Images]

fkamer@observer.com | @weareyourfek

While you're at it, pity poor Larry Brown, and poor Lenny Wilkens, and poor Don Chaney, and poor Jeff Van Gundy. 

Isiah Thomas, who lead the Knicks to basketball hell (and tabloid newspaper glory) before D'Antoni came aboard in 2008, however, will never, ever deserve any of your pity.

These poor souls (once again, save for Zeke, that swine) have had to deal with an ever-changing roster of has-beens and never-will-bes, a fanbase and a media base that would praise you just as fast as they would tear you from limb to limb, and an owner who is, well, just the absolute worst.

That is, James Dolan, the "swaggering" vocalist of JD & The Straight Shot, head of Cablevision (his father Charles Dolan hired him for the position) and the miserable-looking fellow who can be found sitting  courtside at Madison Square Garden, appearing as though he is waiting for his turn to tell his sobriety group how his week went. This is the man who calls the shots in the supposed "Mecca" of basketball.

For the past ten years, those shots have been really, truly, absolutely shitty.

He has brought in head coaches with Hall of Fame pedigrees and New York City roots:  Lenny Wilkens,  the pride of Bedford Stuy and the one-time winningnest coach in the NBA's history (Don Nelson, another former Knick coach, now has that title), and Larry Brown, another Brooklyn-born Hall of Famer who is widely considered one of the all-time great basketball minds.

Both men came with great fanfare, expected to turn around a sputtering franchise that never seemed to regain its swagger since losing to the Indiana Pacers in the 2000 Eastern Conference finals.

Both men left in what has become a familiar exit: fired midseason and with a losing record (Knicks were 17-22 at the time of Wilkens' firing, and 23-59 when Brown was tossed).

So surely Mr. D'Antoni, the offensive guru who turned Steve Nash and the Phoenix Suns into one of the most exciting offenses in the past decade, knew what he was getting himself into when he signed a 4-year, $24 million deal to coach the Knicks?

For in Dolan's world, having a revolutionary offensive system means bubkes in the scheme of things. In Phoenix, Mr. D'Antoni had a mainstay at the point guard position. In New York, he had Stephon Marbury and Nate Robinson and Jamal Crawford and Chris Duhon and Toney Douglas and Sergio Rodriguez and Raymond Felton and Chauncey Billups.

Then a miracle happened.

Jeremy Lin, the Harvard-educated scrub who was called up as a bench fill-in, eventually became that mainstay the offensive guru so desperately needed to survive in this town.

And for a brief, rapturous run, Mr. Lin and the Knicks did the unthinkable: They won, they became likable, and they were actually fun to watch (at least, only after Mr. Dolan and co. finally resolved their dispute with Time Warner Cable in February and New Yorkers could, you know, watch their hometown team on TV).  They won while Carmelo Anthony, the marquee player who Dolan overturned a promising roster for (say what you will, but Felton-Fields-Gallo-Stoudemire-Mozgov had character), sat out.

But then Anthony returned, he largely played his own style of basketball instead of D'Antoni's, and the Knicks lost. A lot.

Then yesterday, amid growing reports that the Anthony-D'Antoni rift was destroying all the goodwill  that "Linsanity" had built up, Mr. D'Antoni resigned.

Like his predecessors, he left with a losing record (121-167 overall record) and a lot of money. He also left amid reports that he had argued with Dolan about trading Anthony for New Jersey Nets point guard Deron Williams, a move that made some basketball sense.

"Basketball sense" has never really mattered to Dolan. There are more important matters afoot.

Madison Square Garden is currently transforming itself from the "World's Most Famous Arena® " into a state-of-the-art arena, reportedly at a cost of $850 million. In Dolan's mindset, having a balanced basketball roster (which wins) is not going to pay for the Garden's facelift. Stars like Anthony will. He hiked the average price of a ticket by 49 percent after he traded for Anthony in 2011, and raised it again by 4.9 percent last week. 

But the gloom surrounding D'Antoni's departure was short-lived. With newly-installed head coach Mike Woodson at the helm, the Knicks throttled a listless Portland Trailblazers team and D'Antoni, the mustachioed maverick, was an afterthought.  Stoudemire even slagged off his former Suns and Knicks coach by saying that "everyone wasn't buying into his system."

And why should they? There is no such thing as a system in the Dolan-owned Knicks. It's not about winning basketball games. It's about hiring coaches and bringing in players whose basketball pedigrees and New York City roots lure our sorry asses into the Garden. Marbury of Coney Island, Anthony of Red Hook (but really of Baltimore), Wilkins and Brown of Brooklyn... it works. We buy into the idea that a NYC-native will save this woeful franchise.  (Everyone was wrong: A California native turned out to be our team's savior).

So, the next question is: Why root for the Knicks? Why buy a Knicks t-shirt with, say, Timofey Mozgov's name on it if the fella is just going to end up getting traded the next day?(Editorial note: That happened to me) Why root for Dolan, who refuses to speak to the press (save for a brief statement yesterday), jacks up our ticket prices and laughs all the way to the bank while we read the Daily News and groan?

Because it's basketball. And because we still have Lin... unless Lin, like his old coach, gets the eff out of this circus.

drosen@observer.com 

The New York Times' New York Knicks reporter Howard Beck just Tweeted out: "Knicks and Jeremy Lin will be coming back to Time Warner cable customers soon. Agreement reached." Times TV sports columnist Rich Sandovir notes: "Seven week impase resolved, with input from Gov. Cuomo and AG Schneiderman."

We've reached out to representatives from Time Warner-Cable and MSG Network; we'll update if they return with quote. The Times story, now up, notes Governor Andrew Cuomo's involvement in the dispute:

Cuomo’s intervention in the past 24 hours with James L. Dolan, the executive chairman of Madison Square Garden, and Glenn Britt, the chief executive of Time Warner Cable, accelerated the agreement.

Gov. Cuomo's statement:

"I applaud both Mr. Dolan and Mr. Britt and their companies. I thank them for being responsive to the needs of New Yorkers."

Thrilling stuff.

New York attorney general Eric Schneiderman tried to get involved early in the dispute to no avail, as did city comptroller Jonathan Liu and as of this morning, City Council speaker Christine Quinn.

fkamer@observer.com | @weareyourfek

The dispute over licensing fees between Time-Warner Cable and Madison Square Garden Entertainment—which owns the New York Knicks and MSG TV—has blacked out the majority of Knicks coverage for New Yorkers since the beginning of 2012. In January, talks had completely stalled out.

The Observer has now learned that MSG Entertainment chairman James Dolan and Time-Warner Cable chairman Glenn A. Britt finally returned to the negotiating table earlier this week.

A source with intimate knowledge of the talks explained that Mr. Dolan and Mr. Britt "met Monday, and discussions have continued since then." That said, the source explained, "Don't get overly enthusiastic about it. The talks have yet to yield anything fruitful."

Regarding the renewed talks, representatives for Time-Warner declined to comment, and representatives for MSG have yet to return a request for comment. In this situation, however, some news is better than no news.

There's been no indication on who returned to the table first, but to call MSG's motivation to return to the table "renewed" would be to wrongly assume they had that much motivation to be there to begin with.

As the company held out through January, their stock ticker kept rising. Now that Jeremy Lin has exploded as an international sensation, what difference could Time-Warner's 2.8 million subscribers in New York City do for the network?

Quite a bit, actually. New York City is one of the most affluent sports markets in the country, and the MSG Network—whose stock has shot up since the Linsanity sensation started—could ratchet up advertiser fees with the renewed interest in the network's star franchise, which is to say nothing of Time-Warner's subscriber fees paid to MSG from each customer that they're still missing on their balance sheets.

Time-Warner's incentive to return to the negotiating table may be less urgent than MSG's. There aren't any readily available loss rates, but the idea of customers going through the pain of switching cable providers en masse to see one channel for one player on one NBA team—even if it is the market's home team—isn't very likely, and if it is, it likely wouldn't represent a majority mass of Time Warner's subscribers so much as supremely annoyed, die-hard Knicks fans. Even then, they'd have some hurdles to climb over, like happening to live in a building equipped for Verizon FIOS (not all of them are) or a south-facing wall they can use to mount something on (like, say, a DirectTV dish).

Linsanity isn't likely to go away any time soon. Whether or not 2.8 million New Yorkers will be able to participate in it before then remains to be seen. Here's hoping this is a good sign, however, and the first of many to come.

fkamer@observer.com | @weareyourfek

On Monday, we looked into the publicly-held MSG Entertainment's stock price increase since the New York Knicks' winning streak—and Linsanity—has taken hold.

It looked like this:

And like this:

On Monday, $MSG had closed at $32.28. Trading closed today at $31.91, down from a morning rally that took it to a new high at $32.92. Even at the stock's closing price today, however, the gains made off of Jeremy Lin's entry to the team and their brand new (but already mythologized) winning streak is still great news for $MSG. How great?

Charles F. Dolan—the founder of Cablevision and Madison Square Garden Inc., the director of the company, and father of MSG Chairman and Cablevision President James L. Dolan—holds 6,298,253 shares of common stock in $MSG.

That 11.189% increase the stock gained over the last week has resulted in the value of his holdings increasing by $19.78 Million. James Dolan, by comparison, holds 1,174,092 shares of common stock in $MSG, netting himself a gain of about $3M

The other largest holders and their gains, via Standard & Poor's:

• Southeastern Asset Management, Inc. $18.65M
• T. Rowe Price Group, Inc. $17.00M
• GAMCO Investors, Inc. $10.04M
• Clearbridge Advisors, LLC: $8.92M
• The Vanguard Group, Inc. $8.59M
• Burgundy Asset Management Ltd. $7.63M
• Ariel Investments, LLC $7.16M
• River Road Asset Management, LLC $7.15M
• Dolan, Helen A. (Former Director) $6.12M
• BlackRock, Inc. (NYSE:BLK) $5.89M

 
In light of all that new Knicks money, a reminder of just how much Jeremy Lin is going to make this season from the New York Knicks:

$762,195, or the minimum for an NBA player in his second year.

fkamer@observer.com | @weareyourfek

Mr. Wilson was one of about 2.8 million people who found themselves unable to watch the Knicks game on their usual platform, Time Warner Cable. With his legions of techie followers, he’d found a work-around. He was one of the lucky ones.

The cable provider, which is the largest in New York City, is currently locked in a licensing fee dispute with Madison Square Garden Entertainment, the company that owns the New York Knicks, New York Rangers, Madison Square Garden, and the MSG Channel, among other holdings.

The dispute involves the channel. In its most simple distillation, MSG wants Time Warner to pay a certain amount of money per subscriber to carry it, what’s known as a “licensing fee.” Time Warner wants to pay less than what MSG is asking. Ever since the previous licensing contract expired on January 2 without a new deal in place, Time Warner subscribers who have clicked over to MSG have found, well, nothing. Time Warner offered up a month of their $5.95 sports package to compensate.

The MSG Channel shows about 60 percent of the Knicks and Rangers games New York-based fans could watch; the remainder Time Warner claims, can be found elsewhere on its channel lineup. That still leaves Knicks fans in the dark most nights.

Such showdowns are not uncommon in the cable industry: Viacom (MTV, VH1, Comedy Central, Nickelodeon), the NFL Network, Starz!, and soccer channel GOL TV have all been involved in heated negotiations with TWC at one point or another.

The disputes tend to follow a familiar pattern: First, media stories about contracts expiring begin appearing. Then dueling ads turn up in print media blaming the other party for viewers’ deprivation of beloved programming and attempting to spark a deluge of phone calls. A local government official will usually condemn both parties and push the talks forward. Eventually, the dispute is resolved, stations flicker to life, and the earth spins on.

There have been a few other wrinkles this time around. Since the blackout started, MSG has been holding “viewing parties” at Manhattan bars, replete with free drinks, snacks, the MSG Network, and of course, staffers armed with iPads, directing attendees to sign petitions condemning Time Warner Cable via the website KeepMSG.com, which also suggests alternative cable providers. They even gave out T-shirts. In the run-up to the blackout, MSG began publishing full-page ads in local newspapers (which tend to be the beneficiaries of such battles).

What makes this particular licensing smackdown particularly interesting is the person on the opposite side of the negotiating table from Time Warner Cable: New York Knicks owner James Dolan.

Mr. Dolan is a well-known character. Tales of “his drug-and-drink-addled past, his volcanic temper, his shifting moods” were “legendary,” according to a Sports Illustrated profile that appeared in 2007, the same year he was successfully sued for $11.6M as a defendant alongside then-Knicks GM Isaiah Thomas in a sexual harassment complaint. He’s said to have instituted policies blacklisting any reporter or outlet critical of the New York Knicks, a motivation reportedly behind his firing of legendary Knicks sportscaster Marv Albert. He pulled a reported $1M. in advertising from The Village Voice in 2009, after this writer made an off-color remark about him on the newspaper’s website.

Mr. Dolan and MSG President Michael Bair did not respond to requests for comment for this article. An MSG spokesperson told The Observer that there has been “no meaningful dialogue between MSG and Time Warner Cable” during the continued negotiations.

Mr. Dolan is not only the president of the New York Knicks and MSG Entertainment, but he also happens to own Cablevision, a cable provider just like TWC, albeit with a much smaller market share. As such, he has been involved in licensing-fee disputes from both sides of the table: in his role as the president of MSG Entertainment, and as the president of Cablevision.

In one case, Cablevision subscribers in New York City and Philadelphia lost the ability to watch ABC the Sunday night of the 2010 Oscars. Service was restored at 8:50 PM, almost an hour into the ceremony. In October, subscribers lost access to all Fox-owned channels for 14 days, at which point Cablevision acquiesced to Fox’s demands “in principle.” By then, the Long Island-based cable provider’s subscribers had already missed the American League Championship Series—which the New York Yankees lost, by the way—and the first two games of the World Series.

Incidentally, Mr. Dolan was also front-and-center as one of the chief owners’ negotiators during the recent NBA lockout.

During TWC’s 2005 two-month contract dispute with the MSG Network, The New York Times called Cablevision, which then included MSG, “the G. Gordon Liddy of corporations, willing to hold a hand to the fire to maintain its principles.” Cable licensing-fee battles have been going on for three decades now. As detailed in James Andrew Miller and Tom Shales’ oral history of ESPN, Those Guys Have All The Fun, the first such beef happened in the early ’80s, when cable providers feared the entire industry was on the verge of collapse. Stocks were falling, and fledgling networks were dying off. ESPN decided to seize the moment and tap a new revenue stream by charging cable operators a fee. Their first target?

Cablevision.

“They all got really pissed,” then-ESPN lawyer Andy Brilliant recalled of the Dolan family in the book. “There was a lot of walking out of the room and throwing stuff around.” James Dolan’s father, Charles—then-CEO of Cablevision—“kind of sat there,” ESPN CEO Bill Grimes recalled.

Eventually, Cablevision caved to ESPN’s demands, forking over ten cents per household to continue carrying the fledgling sports channel. Had the elder Mr. Dolan held out, the industry might look very different today. ESPN may not exist at all, and hard as it is to imagine, cable itself may have gone the way of Betamax. Instead, the new revenue model was born—along with a series of contract squabbles that bedevil us to this day.

So how much money is at stake? According to BusinessWeek, in 2011, ESPN charged $5.06, a 7.88% uptick from the year before. So what could MSG—which is certainly no ESPN—be charging for its own rate increase?

In an investor relations statement issued by TWC on New Year’s Day, the provider’s vice president of content acquisition Mike Angus stated, “We had a deal within reach earlier this year. Despite agreeing to the asked for 6.5% price increase on rates that MSG themselves deemed as fair market rates just last year, MSG reneged on the deal and instead, demanded a whopping 53% increase and refused to negotiate further.”

A bump like that, particularly in this economy, would explain why TWC balked. But the figure has been disputed by MSG, which nonetheless declined to offer a number of its own.

Some insight into MSG’s tough negotiating stance may be found in Time Warner Cable’s decision to drop the Fuse Network in December. Fuse, a music network owned by the Dolans, hasn’t had much success as of late: the network, which the New York Post called James Dolan’s “baby,” was also dropped by the Dish Network in 2010.

Maybe Mr. Dolan is harboring a bit of a grudge.

Earlier this week, MSG and Time Warner Cable returned to the table at the request of New York Attorney General Eric Schneiderman. Meanwhile, New York City comptroller John Liu has attempted to capitalize on the public outrage by asking the Department of Information Technology and Telecommunications to seek a $5.95 montly reimbursement for Time Warner customers who’ve lost out on the channels. “The least they could get is a break on their cable bill,” he fumed in a statement.

Despite taking a dip in October, Time Warner Cable stock has only risen since the onset of the dispute.

And although Cablevision was downgraded by five major bank analysts in December, it’s stock is beginning to gain on a two-point drop in October. Perhaps some investors were persuaded by a recent story by Matthew Flamm in Crain’s, which floated the notion that “Cablevision could peel off Time Warner subscribers in areas where the companies overlap.”

None of this will be any consolation to local Knicks fans, of course. By the way, they won last night. ’Melo looked great out there.

If only you could’ve seen it.

fkamer@observer.com | @weareyourfek

Jimmy Dolan: MSG Entertainment chairman, Cablevision president, New York Knicks owner, JD & The Straight Shot bandleader.

IT'S ENOUGH TO GET ONE'S KNICKERBOCKERS IN A TWIST. The MSG Network and Time Warner Cable—handily the largest cable provider in the five boroughs—are currently embroiled in heated negotiations. They're fighting over what the cable provider is willing to pay per customer for the MSG Network, which carries the New York Knicks' and New York Rangers' games. If both sides fail to come to an agreement, New Yorkers with Time Warner Cable won't get their Knicks and Rangers fix.

So the MSG Network has started a campaign, with wonderful posters like this:

But what kind of increase is the MSG Network asking for of Time Warner Cable? WNYC reports:

"We were very close to an agreement for a 6.5 percent price increase," said Eric Mangan, a spokesman for Time Warner Cable. "However, about two weeks ago, MSG reneged on that offer and is now demanding a whopping 53 percent increase."

That seems awfully high! Would the MSG network have any other potential motivations to put the squeeze on Time Warner Cable other than that of pure profit?

Funny you should ask.

• Madison Square Garden Entertainment owns the MSG Network, the Knicks, and the Rangers. The MSG Network carries the New York Knicks and the New York Rangers games.
• In 2010, Madison Square Garden Entertainment was spun off from Cablevision, who owned them.
• Cablevision is a cable network. As a cable network, they are a potential competitor of Time Warner Cable.
• James L. Dolan is the chief executive of both Cablevision and Madison Square Garden Entertainment (which includes the Knicks, and the MSG Network).
• Because James L. Dolan oversees Knicks, the channel carrying the Knicks, and a cable company that competes with other cable companies, he can apply the same costs to his own cable company for the MSG Network as he can other cable companies. [If he applied different costs, that'd be price gouging.] So he and MSG can just make the price high for everyone, including Cablevision.
• And if that high price is too much for anyone other than his own cable company (and a few others, maybe) to pay for, well, that's their problem. It's not like most of them can't switch to a different cable provider. Like Cablevision.

 
But the Knicks and their owners love New Yorkers and Knicks fans, right? And doing such a thing could be construed as a monopolistic practice, maybe, if they were still the same company (which they're technically not, but categorically—as in, "run by the same guy"—are). They'd never to that to anyone! It's not like there's precedent for this.

Except, there is.

From the New York Times, around the time when Cablevision spun off MSG Entertainment:

....Another potential reason for Cablevision to consider selling the Garden unit [is] namely the new Justice Department investigation into its monopolistic practices as reported in The Times last Saturday. Justice is supposedly acting on complaints by Verizon that Cablevision is improperly preventing them from buying sports shows and other programs that the cable companies produce. If you are a Verizon Fios TV subscriber, you won’t see Rangers and Knicks games in HD, programming that Cablevision reserves for its own customers and proudly trumpets in promotional materials.

And what did MSG have to say about any of this? Again, via WNYC:

MSG did not respond to inquiries about the dispute, but in a statement, Michael Bair, the president of MSG Media, said, "We have been attempting to negotiate a new agreement with Time Warner Cable for close to two years, and are simply asking them to pay fair and reasonable rates that are consistent with what other providers pay for our programming – nothing more."

Except, perhaps, a subscription to Cablevision. Which, for the record, again, totally spun them off last year around the same time they were being investigated for monopolistic practices, though they're not the same company, even though they have the same chairman whose interests in pricing out Cablevision/Optimum's competition like Time Warner are intrinsically interconnected.

fkamer@observer.com | @weareyourfek