From where I sit, the NHL's legal battle with Madison Square Garden over online marketing rights seems to have been going on forever. But while the dispute is simple -- MSG and the Rangers want to maintain control over online businesses that the league believes the member clubs have ceded to its collective control -- the legal details are pretty esoteric. To keep it simple, here's Skip Oliva of the Voluntary Trade Council:
Madison Square Garden, owner of the New York Rangers, sued the National Hockey League last year, claiming league rules regarding joint website marketing violated the Sherman Act. It's a strange argument. The NHL is, by definition, a form of "collusion" among the 30 member clubs. MSG's argument is that this collusion is legal when it likes the outcome of the league's decision-making process, but it's illegal if it doesn't. In other words, anytime a sports franchise is on the losing side of a league vote, it should be allowed to reverse the outcome under the antitrust laws.Thanks to Skip for putting the legal dispute into terms everybody can understand. But the next thing everybody has to understand is that the NHL has filed a counterclaim against MSG alleging breach of contract and is asking the U.S. District Court for the Southern District of New York to allow the league to proceed with internal disciplinary proceedings against MSG. That's an action that could result in termination of MSG's franchise rights to the Rangers. To read the complaint, which includes a letter to Cablevision Systems Chairman James Dolan describing potential disciplinary proceedings and possible outcomes, click here.
Now, does this really mean that the NHL is on the brink of taking the Rangers away from the Dolan family?
In procedural terms, if the court agrees, the answer is yes. But in practical terms, the answer is probably not. What we have here is a signal from the folks at NHL HQ that enough is enough, and it's time for MSG to end the nonsense and come to some sort of agreement with the league.
And while the league has provisions in place for revoking franchise rights, don't think for one second that it's a path it wants to travel. Taking the Rangers away from MSG -- an effort that could drag on for years -- is just the sort of legal and PR nightmare the league doesn't want or need.
And from the outside looking in, you can understand why the league has to stand its ground against MSG. What we really have here is one of the league's most valuable franchises insisting that it can nullify collective decisions anytime it wants. The Rangers want it both ways -- to be able to challenge the league constitution now, even though in the past they've invoked it to preserve their rights.
That's exactly a point the league made in today's filing, reminding the court that when the Colorado Rockies relocated to New Jersey and became the Devils, the Rangers extracted a $9 million payment from the franchise in exchange for violation of the team's territorial marketing rights and loss of potential television revenue.
So no, the league won't be taking the Rangers away from MSG anytime soon, as much as that prospect might cheer fans of the team who can't stand Dolan. But what it does mean is that the league has had enough, and is prepared to use whatever hammer they have to in order to get MSG to drop the suit.
Let the high-stakes game of chicken continue. For a complete historical rundown of the case, click here.
