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Thursday, December 9, 2010

How John Harrington made the Red Sox what they are today

Like everybody else I am a little stunned by what Boston has done the past 5 days but not really surprised. The Red Sox created a monster in 2001 when they decided to switch NESN from a pay service of $10-12 a month to basic cable.

These 3 articles give background

http://www.forbes.com/forbes/2002/0415/092.html

http://www.sportsbusinessdaily.com/article/10513

http://books.google.com/books?id=tHF...s88c&hl=en&ei=


When the Red Sox were put up for sale in late 2000, they knew NESN was the sleeping giant in the sale especially because Charles Dolan was at the door waving $$$$$. Harrington and Dolan despised each other dating back to when NESN was born in 1984.

Dolan owned SportsChannel ( which in many markets is now FOX Sports xxxxx )

Dolan bought SportsVision in Chicago for little money as the White Sox simply wanted out of a losing money fiasco and Dolan knew what would happen when Chicago finally was fully wired for cable. At the same time he also bought PRISM which was Philly based and was a HBO type service that in Philly and Boston showed movies and sports. (Boston it was the Celtics)

In New York he paid the Yankees 50 million for a 10 year deal around 1983 for half the games to move from WPIX to cable and brought back Mel Allen.

He then tried to buy the rights to the Red Sox and Bruins but Buddy LeRioux and Jeremy Jacobs decided to launch their own channel (NESN) instead that was similar to what the Tigers had in Detroit with PASS. NESN was at first 60% owned by the Red Sox, 20% by the Bruins and the other 20% by Viacom (which owned WSBK-TV and had the over the air rights to the Red Sox and Yankees)

Dolan was not happy and he refused to even offer NESN on his Massachusetts cable systems (Cablevision) which included Boston. This went on for almost three seasons as Dolan was trying to break NESN.

(The NY Daily News wrote about this in 2002 when Dolan tried to stop YES)

The Mayor of Boston finally told Dolan in 1986 he would revoke his Boston franchise unless he got the Sox on his TV that night (remember the Red Sox were the surprise team that year)

So for almost 15 years NESN was $10 a month or $15 if you added Sportschannel (Celtics-Whalers)

Dolan kept offering to buy and Harrington said no. Dolan tried to buy Viacom's 20% but the Red Sox had the right to match it.

When Harrington decided to move NESN to basic the cable companies balked at first but in a master stroke he gave Comcast first option to buy the channel if they ever decide to sell it. Comcast added NESN to basic and Time-Warner, Cox and Charter did the same. Harrington made one major mistake, he assumed since NYY was locked into a long term deal with Dolan's MSG channel he couldn't counter. Ooops.

Steinbrenner quickly figured out he had to do the same and quickly formed YES and even paid Dolan a huge fee to break the contract.

The Mets followed a few years later with SNY which is really CSN but since Comcast is not a player in the cable market of NYC they allowed the SNY name.

CSN of course now has started sports channels in many markets and Dolan's FSN is hurting.

The problem is team owned cable only works in a few markets....Minneapolis and Kansas City tried and they were disasters and the Indians STO only exists because the Indians owner can't stand Charles Dolan ( who is family LOL)

I expect in Chicago within 5 years you will see at least 2 sports channels... Bulls/White Sox and Cubs/Hawks going at it.

Bottom line - NESN going to basic started this madness.

and now NESN has launched
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which is available in North Carolina, South Carolina, Florida and Michigan with more to come.

http://www.nesn.com/nesn-national-channel-listings.html

The rich get richer