Page 10 The Metropolitan Corporate Counsel May 2002 YES Daniel A. Etna games within the geographic area desig- offers fans complete baseball informa- or customize any particular program- and Irwin A. Kishner nated by Major League Baseball as the tion on the Internet, including up-to- ming or content that has been selected New York Yankees “home television date statistics, game summaries, by such user. territory” (an area generally encompass- extensive historical information, and HERRICK, FEINSTEIN LLP YES On The Air ing all of New York and Connecticut, exclusive features about Major League YES made its television debut on central and northern New Jersey and “A tradition of excellence” is the Baseball events and programs, includ- March 19, 2002. With respect to the northeastern Pennsylvania). YES was guiding principle of the New York Yan- ing on-line ticket sales, baseball mer- 2002 regular season, YES will telecast also granted a limited right to use the chandise, authenticated memorabilia kees. The achievements of individual 130 New York Yankees games. The bal- logos and other marks of the New York and collectibles, fantasy games, radio New York Yankee greats from Babe ance of the New York Yankees 2002 Yankees in connection with telecasts of broadcast of games, pitch-by-pitch Ruth to Derek Jeter, as well as the regular season games will be telecast New York Yankees games and for enactment of games, and video high- unprecedented 26 (and counting) World either over-the-air or on ESPN. related advertising and promotional lights. Series team championships form a large Perhaps the best measure of YES’ activities. In return for the grant of such Copyright Ownership. Control of the part of the fabric of the history of our success is its subscriber base of approx- national pastime. As a result of having rights, YES is obligated to pay the New ownership of copyright rights in tele- imately 5 million households. YES is obtained the right to telecast New York York Yankees an annual license fee that casts of professional sporting events currently available to viewers located Yankees games, the newly created Yan- increases on an annual basis. varies from sport to sport. For example, within the New York Yankees home kees Entertainment and Sports network the ownership of the copyright rights in The MLB Trinity television territory except for sub- (“YES”) has created the bedrock upon telecasts of National Basketball Associ- Law firms representing professional scribers of Cablevision Systems Corpo- which to build a non pareil regional ation games resides with the National sports teams need to be fluent in the ration (“Cablevision”). sports network. Basketball Association, rather than the patois created by the myriad of rules As we go to press, YES and Cablevi- individual teams. The MLB Trinity Yankees Entertainment and regulations imposed on such teams sion are locked in a standoff. Cablevi- requires that each Major League Base- And Sports Network by their respective governing bodies sion is refusing to include YES as a ball club retain ownership of all world- YES is a 24-hour-a-day, 7-day-a- (e.g., Major League Baseball). It is also basic channel, even though all of the wide copyright rights in telecasts of its week premier sports and entertainment important to have established, ongoing other 39 cable operators operating games and all derivative works relating television network. In addition to tele- relationships with the counsel of such within the New York Yankees home thereto. In accordance with industry casts of New York Yankees games, YES governing bodies. Knowing your way television territory have done so. As a custom, the New York Yankees granted telecasts other professional sports teams around becomes crucial when, for result of this standoff, approximately 3 YES during the term of the License a (including, without limitation, minor example, approval of a professional million households in New York, New limited license to exploit certain of the league affiliates of the New York Yan- sports team’s media rights license by its Jersey and Connecticut have no access New York Yankees rights in the kees and the Manchester United Foot- governing body is required (as is usu- to YES unless they switch to a satellite audio/visual archives of New York Yan- ball Club of the English soccer league), ally the case) as a precondition to its television provider. According to news- kees games telecast by YES. collegiate sports teams, classic sports effectiveness. paper accounts, Cablevision has refused Termination Events. The television footage and original biography, inter- The provisions of any Major League to carry YES as a basic channel on the media rights license of each Major view and magazine programs. Baseball club’s television media rights grounds that only people who want to League Baseball club must contain cer- YankeeNets LLC, the parent com- license (including the License) are sig- watch New York Yankees games should tain termination rights mandated by the pany of the New York Yankees (as well nificantly affected by the requirements pay for the service separately as a pre- MLB Trinity. In this regard, each Major as the New Jersey Nets of the National of Major League Baseball. As a general mium channel. Placement of YES on League Baseball club has the right to Basketball Association and New Jersey matter, these licenses are subject to the the basic channel tier enables YES to terminate its television media rights Devils of the National Hockey League), various (i) agreements having general reach the maximum number of potential license, without liability, if on at least owns approximately 60 percent of YES. applicability to Major League Baseball cable television viewers. two occasions the telecast of any of its The balance of YES’ equity is owned by clubs (e.g., the Major League Constitu- Cablevision, presumably acting in games or the signal of any such telecast Goldman Sachs & Co. which acquired tion); (ii) rules and regulations of Major response to pressure from its irate sub- is retransmitted by any means to more such interest in September 2001 for League Baseball (e.g., the Major scribers, just prior to the start of the than 200,000 households located out- approximately $340 million. League Baseball local telecast regula- New York Yankees 2002 regular season side such Major League Baseball club’s Until YES, the owners of the televi- tions) and (iii) actions of the Office of offered to carry YES under an arrange- home television territory and such sion media rights of professional sports the Commissioner of Baseball and other ment whereby YES would set the price Major League Baseball club reasonably teams generally realized value from entities engaged in media-related Major to be paid by Cablevision subscribers such rights by licensing them to televi- expects that future telecasts will be so League Baseball activities (collectively, and retain all revenue received on sion stations and cable system opera- retransmitted on a recurring basis. In the “MLB Trinity”). The areas of a account thereof. YES rejected the idea, tors. YES represents a stark departure order for this termination right to be Major League Baseball club’s television labeling it undemocratic and unfair. from this practice. The principals of exercised, however, the Major League media rights license in which the MLB Given the popularity of the New York YES, in a textbook example of “think- Baseball club must be directed to do so Trinity has its most profound impact are Yankees, YES believes that telecasts of ing outside the box,” trail blazed a new by the Office of the Commissioner of (i) scope of the television media rights New York Yankees games should be source of value through the creation of Baseball and the offending retransmis- granted, (ii) copyright ownership and made available on cable television to YES. sions must in the aggregate have more (iii) termination events. the largest possible viewing audience. than a de minimis impact on the other A License To Telecast Scope of Rights. The MLB Trinity According to newspaper accounts, Major League Baseball clubs. Yankees Games restricts Major League Baseball clubs the impasse between YES and Cablevi- The MLB Trinity also requires that Under the television media rights from granting the right to telecast their sion may be driven by factors other than any right granted by a Major League license (the “License”) entered into by games by means of “On-line Media.” pricing. Prior to the formation of YES, Baseball club under its television media the New York Yankees and YES, the “On-line Media” is defined by the MLB New York Yankees games had been rights license to telecast its games by New York Yankees granted YES the Trinity as the Internet or any other on- telecast over a network owned by means of “Interactive Media” be ter- right to telecast New York Yankees line system or computer network, now Cablevision. In addition, in 1998, or hereafter devised, regardless of the minable upon 30 days notice at the Cablevision was allegedly close to buy- means of delivery. Major League Base- direction of the Office of the Commis- ing 70% of the New York Yankees, but ball has reserved unto itself (through sioner of Baseball. “Interactive Media” Daniel A. Etna and Irwin A. Kishner, the deal fell apart over issues regarding MLB Advanced Media, L.P.) the On- is defined by the MLB Trinity as any Corporate Partners at Herrick, Fein- control. stein LLP, are actively engaged in the line Media rights of the New York Yan- medium now known or hereafter representation of professional sports kees and every other Major League devised (including, without limitation, Conclusion teams. They represented the ownership Baseball club. broadcast television, broadcast radio, Notwithstanding the current impasse of the New York Yankees in the licensing MLB Advanced Media, L.P. man- cable television and wireless, between YES and Cablevision, the YES of the television media rights of the New ages the official Major League Baseball microwave or cellular service, but structure cannot be overlooked. We York Yankees to YES. Mr. Kishner is website (www.mlb.com) and each of the specifically excluding On-line Media) envision that the YES structure will be also Co-Chair of Herrick, Feinstein 30 individual Major League Baseball through which both (i) programming or eagerly embraced as a template by other LLP’s Corporate Law Department and club websites to create the most com- other content is transmitted to a user and professional sports teams. Indeed, in a member of Herrick, Feinstein LLP’s prehensive Major League Baseball (ii) user input is communicated that this instance imitation would be the best Executive Committee. resource on the Internet. MLB.com enables the user to create, enhance, alter form of flattery.

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