National Basketball Association

Lin fever could affect TWC-MSG dispute

Published Feb. 14, 2012 12:00 a.m. ET

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You can't find a No. 17 Knicks jersey anywhere in New York City. Sold out. Gone, because of the sweeping popularity of New York point guard Jeremy Lin.

The Knicks are on a six-game winning streak and every sports writer east of Philadelphia has credited Lin, an undrafted Harvard economics major, for the wins.

But it's not only Lin's jersey you'll have trouble finding. If you're a Time Warner Cable subscriber, you won't find him or the Knicks on your television set.

On Jan. 1, Time Warner Cable dropped MSG Network over a renewal negotiations battle. MSG carries 60 percent of the Knicks' games. TWC says MSG is demanding a 53 percent hike in affiliate increase to carry the sports network. MSG sources tell me that 53 percent number is a "gross mischaracterization" and that other carriers such as FIOS, Comcast and DirecTV all have renegotiated similar new deals with little or no complaint. Time Warner Cable basically has said forget it, and there have been no meaningful discussions between the two sides since Dec. 16.

Not much of this mattered to anyone outside of these two publicly traded companies until a fateful day in February — Feb. 4, to be exact.

That was the day a virtually unknown Taiwanese-American player named Jeremy Lin came off the bench during a game against the New Jersey Nets to spark the Knicks to victory with 25 points, five rebounds and seven assists. Two days later, Lin started against the Utah Jazz and — before anyone could even come up with the term "Lincredible" for a New York Post headline — he once again led the team to victory with 28 points and eight assists.

Three wins later with similar performances, New York was in a frenzy — but not just over Lin.

Two million New Yorkers have Time Warner Cable and when New Yorkers get annoyed, you'll hear about it. But are they upset enough to drop their TWC service? TWC tells FOX Business it hasn't seen a dramatic number of customers switch, but some analysts believe that could change if Lin continues to lead the Knicks to wins.

Cable analyst Craig Moffett of Sanford Bernstein says, "Jeremy Lin couldn't have come at a better time for (Madison Square Garden Executive Chairman) Jimmy Dolan. There's no question that (Lin's) arrival has turned up the heat on Time Warner Cable."

The heat is searing when it comes to viewership. MSG was more than happy to release its latest ratings to me. The jump in viewership since Lin hit the basketball court is stunning. According to MSG, through the four games in which Lin has been the starting point guard, the Knicks' average household rating on MSG Network has increased 70 percent compared to the previous 20 games. The winning streak also has jumpstarted a 71 percent increase in the average season-to-date household rating compared to the first 24 games on MSG Network last season.

"There's a level of interest in Knicks games that we haven't seen in years. At the end of the day, this is a business negotiation about the value that Time Warner Cable believes its customers place on the Knicks and the Rangers. If that value has gone up, it makes the prospects of a deal a little more likely," Moffett says.

But Moffett also says don't be so sure all two million TWC subscribers are sports fans with big wallets.

"Time Warner Cable is trying to hold the line on rising consumer prices, and that means holding the line on sports," he says. "Time Warner Cable wants Knicks fans to pay for the Knicks by insisting MSG be put on an opt-in tier. MSG wants everyone to pay for the Knicks whether they care about the Knicks or not. If you want to point to a single reason why your pay-TV subscription starts at $80 per month, pointing at sports networks like MSG would be a pretty good place to start."

Cable analyst Thomas Eagan of Collins Stewart believes that while the Lin Effect is a force to be reckoned with, Time Warner Cable still has home-court advantage because some Knicks games still can be seen on other networks — such as ABC and TNT — that Time Warner carries. Besides, Eagan says, TWC has the luxury of being able to absorb the shock of lost customers. "We estimate TWC should be willing to lose upwards of 60k subscribers before it would comply with increasing its affiliate fee to MSG," Eagan says.

FOX Business knows of at least two of those lost customers, and they happen to play for the New York Rangers. We've learned that goalie Henrik Lundqvist and defenseman Mark Staal, both Manhattan residents, switched from TWC to FIOS after their families no longer could see Rangers games on MSG because of the dispute.

That's right; this isn't purely a basketball story. Hockey plays into it as well. MSG Network carries 70 percent of New York Rangers games and 80 percent of Buffalo Sabres games. Those teams have rabid fan bases and, word is, apartment building presidents around Manhattan have started to hear complaints from tenants that they'd like their so-called "one-provider" buildings (complexes with only one cable choice) re-wired for more options. FIOS and RCN no doubt are rubbing their hands together at the prospect of newfound Knicks fans demanding the switch.

For now, MSG remains blacked out on Time Warner Cable. But if Jeremy Lin continues to crush it on the court, the question is, will he serve as the vise grip that forces TWC to flip the switch back on?