Courtesy Media Post

(January 16, 2009) ESPN's owned-and-operated New York radio outlet has re-upped to carry New York Knicks and Rangers games--a deal that had a "loss leader" dynamic when first inked five years ago. In 2004, ESPN Radio 1050 reportedly agreed to carry the teams' games for free, receiving no payment to air them and ceding all ad time to MSG Media to sell.

The new deal has the station involved in some of the ad selling and able to take some portion of those revenues. "The deal is a revenue share; it's the right time to do it in an evolving media business," said Tim McCarthy, president and general manager of the station.

Representatives of ESPN and MSG Media declined to provide details. Cablevision owns MSG Media, the Knicks and Rangers and Madison Square Garden, where the teams play.

Beyond sales, one facet of the arrangement is an exchange of promotional opportunities that could include ESPN 1050 receiving some signage in Madison Square Garden--where the two teams play--and promo spots on MSG Media's TV networks, such as MSG and Fuse.

MSG, in turn, may get opportunities to promote its teams and networks and upcoming concerts in Madison Square Garden--which it owns--on the ESPN station.

The initial 2004 agreement was re-upped for the first time in 2007, and the new one runs through the teams' 2010-2011 seasons. If the Knicks are able to lure top-flight free agent LeBron James by then, the ratings could jump markedly.

ESPN was willing to make the 2004 deal with no revenue intake, hoping to establish itself as a viable challenger to the New York leader in sports radio WFAN. ESPN 1050 hoped the games would have a halo effect; listeners who tuned in for the games might stick around for post-game shows--where the station owned the ad time--and/or throughout the day.

By giving MSG Media such a favorable deal in 2004, ESPN was able to pry the games away from WFAN, which indicated that any sort of matching deal would not be financially prudent. WFAN had given MSG Media the ad time to sell, but reportedly received a payment to carry the games.