(12-16-2012 07:16 PM)adcorbett Wrote:  

(12-16-2012 04:00 PM)nzmorange Wrote:  The new contract is supposed to be $45 million a school.

No, this is not accurat.e. The TOTAL payouts per school were expected to approach $43 million per school. This includes ALL conference revenue, including national TV contracts, expected B1G Network revenue, bowl payouts, playoff payouts, and NCAA tournament revenue.

also note I forgot to add this above. People asked about the timing of this. Notice the B1G just lined up a new Rose Bowl contract, their share of the OB contract, and they are finalizing the new Playoff payouts. Essentially the B1G is realizing close to $60 million (or more) in new revenue per year. This allows them to expand now, pay their new members close to a full share, and get up to speed for the new TV contract, without it costing current members any of their current money.

Using very basic numbers and terms, let's see the B1G currently distributes $220 million to it's 12 teams. That' an average of $20 million per year (these aren't real numbers, and Nebraska does not get full shares yet, just hypotheticals). Now the B1G has another $60 million to add to that pot, even if you cannot immediately increase your TV revenue (takes a while to expand the B1G Network, and they are not renegotiating thir national TV deal). So now they can distribute $280 million to its now 14 members, and the current members can still get their $20 million.

Interesting.

Notice the difference. The big ten uses the new money to finance further growth. The big twelve wont expand because they all want to keep the extra money. Think it's easy to tell why one is more successful than the other.

Also to note, YES isn't doing anything for free or for money. YES being leveraged does not cost them a penny. I can't really exain it any better. The two negotiations are separate. Just like YES doesn't cost Fox News any money. Regardless of the B1G network or not YES pretty much gets the same price. However the cable company won't get to buy it unless they spend more to buy the b1g network. Also remember the nets own a portion too, and just became a lot more valuable with the move. So now cable companies are put in a pinch of they can have access to Yankees or Brooklyn nets games. They'll be forced to buy it in due time, barring arbitration.

If they were getting $2.50 a subscriber before, they'll still get $2.50. If they also get say $.50 per subscriber for the B1G, it doesn't meant that they could have gotten $3.00 for YES by itself. Thats what you are saying, and thats not how it works. Cable companies would fight that increase much harder than they would fight adding the B1G since it Is actually a separate network . You have to remember raising the carriage rate for yes also affects the negotiations of sny (mets) and MSG (Knicks and rangers). They would fight much much harder against that.

I see what you are saying, but it doesn't work that way.

(12-16-2012 10:44 PM)adcorbett Wrote:  If they were getting $2.50 a subscriber before, they'll still get $2.50. If they also get say $.50 per subscriber for the B1G, it doesn't meant that they could have gotten $3.00 for YES by itself. Thats what you are saying, and thats not how it works. Cable companies would fight that increase much harder than they would fight adding the B1G since it Is actually a separate network . You have to remember raising the carriage rate for yes also affects the negotiations of sny (mets) and MSG (Knicks and rangers). They would fight much much harder against that.

I see what you are saying, but it doesn't work that way.

That's not quite what I'm saying, though. If they could get $0.50 for the BTN after YES is leveraged with the BTN, then YES could have gotten $2.50 + ($0.50 - the value of the BTN), which would be less than $3.00, but at least $2.50. The rates for SNY would have to be raised in the sense that if the ACC gets a boost in TV money, then the BIG EAST/SEC also gets a boost. Yes, there is a correlation because they are in the same industry. Generally speaking, if one is doing well, then the odds are that the other is doing well. But, they are separate. If something happens and one loses passion/viewers, their rates will go down (see BIG EAST), even though the other's rates go up (see ACC). Conversely, if one attracts a lot of passionate viewers relative to the other, then their rates will increase much fater (see SEC v. ACC). Anything to the contrary would result in free money, which doesn't exist (at least not in my experience).

Bottom line: Even if you are correct, and there is a causal relationship between YES going up in value and SNY and MSG going up in value, I think that your understanding is still flawed. Correct me if I am wrong, but under your understanding, bundling the BTN with YES (even if they are negotiated separately) allows Fox, the common owner of the two networks, to get more out of YES (they would be getting their share of the houses that get the BTN because they want YES times the carriage rate for the BTN). And, if you are right that value derived from YES has a causal relationship with value derived from SNY and MSG. Wouldn't that cause the owners of SNY and MSG to want more money to match YES' increase in value? I understand that they might be under contract for the time being, but as soon as those contracts expire, wouldn't they be there with their hands out? There is no way that they are not sophisticated enough to see that YES is pulling more value out of the cable company. H*ll, if that's how the world works, we see it, and I can't speak for you, but I'm just some bum on an internet sports forum monday morning quarterbacking a multi-billion dollar industry.

I think that you're wrong, but good debate
I'm pretty sure that we bored everyone else on the forum, but I'm having a good time.

"The two negotiations are separate."
Yes, but that doesn't mean that they are relateed. For example, if I am a manufacturer, and I sub out a significant part of my product to an unreliable contractor, then my product is going to be faulty and I am going to have a bad reputation, so I won't be able to see my product at a high price. Similarily, if the cable comapnies get screwed in this package this go around, then they are going to assume that YES is going to screw them after the next negotiations, so they will adjust accordingly. It's like game theory in the sense that the parties are constantly reacting to each other, so relationships and reputations matter. The contracts might be separate, but the relevant parties do not act in a vacuum.

(12-16-2012 10:41 PM)adcorbett Wrote:  ...YES being leveraged does not cost them a penny. I can't really exain it any better. The two negotiations are separate. Just like YES doesn't cost Fox News any money. Regardless of the B1G network or not YES pretty much gets the same price. However the cable company won't get to buy it unless they spend more to buy the b1g network. Also remember the nets own a portion too, and just became a lot more valuable with the move. So now cable companies are put in a pinch of they can have access to Yankees or Brooklyn nets games. They'll be forced to buy it in due time, barring arbitration.

Whoa there!
Economics 101 - a basic tenet of buying & selling - customers expect bundles have to be cheaper than the sum total of a la carte. Agreeing to buy 2 things for full price when you really only want 1 of them IS an added cost. This is the very reason why cable companies are already bucking this sort of thing, and I think it probably will end up in arbitration at some point.

(12-17-2012 12:06 AM)nzmorange Wrote:  That's not quite what I'm saying, though. If they could get $0.50 for the BTN after YES is leveraged with the BTN, then YES could have gotten $2.50 + ($0.50 - the value of the BTN), which would be less than $3.00, but at least $2.50.

Adn that is what I am saying is innacurate. You are looking at it in a vaccuum and won't work that way. I'll give you another example. Fox will also use Fox News Channel to leverage BOTH YES and the BTN. IT's not costing them money on Fox News to do that, but they use it as leverage. Keep in mind, the timing of these deals usually comes up during what would be the off season for baseball. So while YES overall is good leverage, it may not be the best instant leverage since they can take YES off the air from November thru MArch and few will care. But you can;t take Fox NEws off the air in NYC. So all across the country, they leverage Fox news and the local RSN (which they own one in many cities), to ensure favorable deals for F/X, Speed, Fuel, Fox Business, Fox College Sports, National Geographic, etc. You don't get one, without coming to deals with all of them. But most of these channels are not wholly owned by Fox, so the individual assignment of value does matter. When you leverage one channel with the others, it doesn't mean you devalue one channel to over value another, it just forces the two sides to negotiate the "lesser" channels before anyone makes any money.

(12-17-2012 12:06 AM)nzmorange Wrote:  , if you are right that value derived from YES has a causal relationship with value derived from SNY and MSG. Wouldn't that cause the owners of SNY and MSG to want more money to match YES' increase in value?

That is exactly why saying that what YES + BTN could get would be equal to what YES could get on its own is inaccurate. Now make no mistake about it, YES is far more valuable than the other two, not only because they Yankees have more drawing power, but they do carry the Nets too, for whatever that is worth. But this very notion is why it is a much easier sell for Fox to leverage YES to also get BTN favorable placment, then to say that YES could have just negotiated that much more money. It is one one thing to force someone to buy a new product (which the cable company could concievably make money on due to ad sales), but it is harder to simply force someone to pay more for the same product, especially since you sell it to everyone else for less. Plus when when MSG and SYN are up for renewal, you have a harder time fighting against an increase from them, who do also have some leverage. Note that if MSG were owned by a larger corporation, they too would have this same power. But MSG Network is owned by MSG, and no longer owned by Cablevision.

By the way, if the PAC 12 were smart, they would sell half of their network to Fox for this reason. Fox owns cable stations in LA that broadcast the Dodgers, Kings, Clippers, and Angles. Think that would have provided levergage for a Pac 12 Network?

(12-17-2012 05:29 AM)Hokie Mark Wrote:  Whoa there!
Economics 101 - a basic tenet of buying & selling - customers expect bundles have to be cheaper than the sum total of a la carte. Agreeing to buy 2 things for full price when you really only want 1 of them IS an added cost. This is the very reason why cable companies are already bucking this sort of thing, and I think it probably will end up in arbitration at some point.

But this is not economics 101. If a customer desires to buy more than initially offered, he can expect a discount on retail price. If a seller has a very in demand product, he can demand that you buy all of his products to get his most popular one. It's a take it or leave it. Doesn't mean you get a discount. The world of entertainment cannot always be applied to regular "real world" scenarios.

The best I example I can give is that 20 years ago, if you wanted to buy University of Louisville season basketball tickets, you also had to buy season football tickets. There was no discount given, it was full price (and for some basketball seats, you had to buy premium football seats), but the demand was so high for basketball seats, they were leveraged to build the football program. That no longer goes on, but from about 1985 - 1997 that was the case. One high demand item was leveraged against a lesser demand item. If you want one, you buy them both.

(12-17-2012 11:41 AM)adcorbett Wrote:  

(12-17-2012 05:29 AM)Hokie Mark Wrote:  Whoa there!
Economics 101 - a basic tenet of buying & selling - customers expect bundles have to be cheaper than the sum total of a la carte. Agreeing to buy 2 things for full price when you really only want 1 of them IS an added cost. This is the very reason why cable companies are already bucking this sort of thing, and I think it probably will end up in arbitration at some point.

This is not econimics 101. If a customer desires to buy more than initiall offered, he can expect a discount on retail price. If a seller has a very in demand product, he can demand that you buy all of his products to get his most popular one. It's a take it or leave it. Doesn't mean you get a discount. The world of entertainment cannot always be applied to regular "real world" scenarios. The best I example IC an give is that 20 years ago, if you wanted to buy University of Louisville season basketball tickets, you also had to buy season football tickets. There was no discount given, it was full price (and for some basketball seats, you had to buy premium football seats), but the demand was so high for basketball seats, they were leveraged to build the football program. That no longer goes on, but from about 1985 - 1997 that was the case. One high demand item was leveraged against a lesser demand item.

I stand corrected.

(12-17-2012 11:21 AM)adcorbett Wrote:  

(12-17-2012 12:06 AM)nzmorange Wrote:  That's not quite what I'm saying, though. If they could get $0.50 for the BTN after YES is leveraged with the BTN, then YES could have gotten $2.50 + ($0.50 - the value of the BTN), which would be less than $3.00, but at least $2.50.

Adn that is what I am saying is innacurate. You are looking at it in a vaccuum and won't work that way. I'll give you another example. Fox will also use Fox News Channel to leverage BOTH YES and the BTN. IT's not costing them money on Fox News to do that, but they use it as leverage. Keep in mind, the timing of these deals usually comes up during what would be the off season for baseball. So while YES overall is good leverage, it may not be the best instant leverage since they can take YES off the air from November thru MArch and few will care. But you can;t take Fox NEws off the air in NYC. So all across the country, they leverage Fox news and the local RSN (which they own one in many cities), to ensure favorable deals for F/X, Speed, Fuel, Fox Business, Fox College Sports, National Geographic, etc. You don't get one, without coming to deals with all of them. But most of these channels are not wholly owned by Fox, so the individual assignment of value does matter. When you leverage one channel with the others, it doesn't mean you devalue one channel to over value another, it just forces the two sides to negotiate the "lesser" channels before anyone makes any money.

(12-17-2012 12:06 AM)nzmorange Wrote:  , if you are right that value derived from YES has a causal relationship with value derived from SNY and MSG. Wouldn't that cause the owners of SNY and MSG to want more money to match YES' increase in value?

That is exactly why saying that what YES + BTN could get would be equal to what YES could get on its own is inaccurate. Now make no mistake about it, YES is far more valuable than the other two, not only because they Yankees have more drawing power, but they do carry the Nets too, for whatever that is worth. But this very notion is why it is a much easier sell for Fox to leverage YES to also get BTN favorable placment, then to say that YES could have just negotiated that much more money. It is one one thing to force someone to buy a new product (which the cable company could concievably make money on due to ad sales), but it is harder to simply force someone to pay more for the same product, especially since you sell it to everyone else for less. Plus when when MSG and SYN are up for renewal, you have a harder time fighting against an increase from them, who do also have some leverage. Note that if MSG were owned by a larger corporation, they too would have this same power. But MSG Network is owned by MSG, and no longer owned by Cablevision.

By the way, if the PAC 12 were smart, they would sell half of their network to Fox for this reason. Fox owns cable stations in LA that broadcast the Dodgers, Kings, Clippers, and Angles. Think that would have provided levergage for a Pac 12 Network?

"Fox will also use Fox News Channel to leverage BOTH YES and the BTN. IT's not costing them money on Fox News to do that, but they use it as leverage."
The problem is that statement is an unsubstantiated conclusion that runs contrary to logic.

"That is exactly why saying that what YES + BTN could get would be equal to what YES could get on its own is inaccurate."
I have never said that. I have actually repeatedly said the opposite of that. The value of YES + BTN is NOT equal to the value of YES. Assuming that the BTN has a positive value, then YES + BTN > YES. I am saying that YES = (YES + BTN) - BTN - transaction cost savings - synergies*

*I think that this value is $0

"It is one one thing to force someone to buy a new product (which the cable company could concievably make money on due to ad sales), but it is harder to simply force someone to pay more for the same product, especially since you sell it to everyone else for less."
1. They aren't just buying a new product. They are overpaying for a new product. It is not easier to get someone to over pay for a new product than it is to get them to over pay for an existing product.
2. If you are correct about the structure of YES's contract, then part of YES' value is that they won't charge different rates. They were compensated for that restriction, otherwise they wouldn't have agreed to it. They are being paid the value of YES, plus a premium equal to the value of the peace of mind that comes with knowing that another network won't get a special deal and have a competitive advantage. By undermining the restriction, they are undermining its value moving forward (i.e. the next round of negotiations). That will adversely affect the carriage rates.

"Plus when when MSG and SYN are up for renewal, you have a harder time fighting against an increase from them, who do also have some leverage."
Why? There is no way that SNY and MSG don't see that FOX and friends are getting more value out of YES. Why does it matter if it is direct (i.e. higher carriage rates), or indirect (i.e. leverage)?

(12-16-2012 02:17 AM)nzmorange Wrote:  

(12-16-2012 02:06 AM)tj_2009 Wrote:  In business, the person or conference in this case that acts first is usually the victor.

Fortis Fortuna adiuvat, not the unwise. There's a reason why conventional wisdom says that they shouldn't expand.

(12-16-2012 02:06 AM)tj_2009 Wrote:  ...you can bet that the B1G will be looking to take advantage of the instability and raid the ACC.

Why? They can raid the ACC whever they want, stable or not. Why would the B1G care about the ACC's stability (or lack thereof)?

(12-16-2012 02:06 AM)tj_2009 Wrote:  I think at this point the Big Ten and SEC are holding all the cards and the ACC is the target.

Why the ACC? Why not the Big XII? There are bigger fish there, and afterall, to bring things back to where I started, fortune favors the bold.

Perhaps it is out of character to expand too soon but the Big Ten TV contracts are up for re-negotiation in 2016 so having a solidified product with more markets will help to get a larger TV deal.
Very true that they probably could get anybody in the ACC at anytime other than the North Carolina schools. The ACC is a better target than most schools in the Big XII for the Big Ten conference because of the population base in the east. For the Big Ten conference they need more people to sell their Big Ten network to. I think Texas is happy where they are because they have their own network plus the grant of rights.

(12-17-2012 02:53 PM)nzmorange Wrote:  

(12-17-2012 11:21 AM)adcorbett Wrote:  

(12-17-2012 12:06 AM)nzmorange Wrote:  That's not quite what I'm saying, though. If they could get $0.50 for the BTN after YES is leveraged with the BTN, then YES could have gotten $2.50 + ($0.50 - the value of the BTN), which would be less than $3.00, but at least $2.50.

Adn that is what I am saying is innacurate. You are looking at it in a vaccuum and won't work that way. I'll give you another example. Fox will also use Fox News Channel to leverage BOTH YES and the BTN. IT's not costing them money on Fox News to do that, but they use it as leverage. Keep in mind, the timing of these deals usually comes up during what would be the off season for baseball. So while YES overall is good leverage, it may not be the best instant leverage since they can take YES off the air from November thru MArch and few will care. But you can;t take Fox NEws off the air in NYC. So all across the country, they leverage Fox news and the local RSN (which they own one in many cities), to ensure favorable deals for F/X, Speed, Fuel, Fox Business, Fox College Sports, National Geographic, etc. You don't get one, without coming to deals with all of them. But most of these channels are not wholly owned by Fox, so the individual assignment of value does matter. When you leverage one channel with the others, it doesn't mean you devalue one channel to over value another, it just forces the two sides to negotiate the "lesser" channels before anyone makes any money.

(12-17-2012 12:06 AM)nzmorange Wrote:  , if you are right that value derived from YES has a causal relationship with value derived from SNY and MSG. Wouldn't that cause the owners of SNY and MSG to want more money to match YES' increase in value?

That is exactly why saying that what YES + BTN could get would be equal to what YES could get on its own is inaccurate. Now make no mistake about it, YES is far more valuable than the other two, not only because they Yankees have more drawing power, but they do carry the Nets too, for whatever that is worth. But this very notion is why it is a much easier sell for Fox to leverage YES to also get BTN favorable placment, then to say that YES could have just negotiated that much more money. It is one one thing to force someone to buy a new product (which the cable company could concievably make money on due to ad sales), but it is harder to simply force someone to pay more for the same product, especially since you sell it to everyone else for less. Plus when when MSG and SYN are up for renewal, you have a harder time fighting against an increase from them, who do also have some leverage. Note that if MSG were owned by a larger corporation, they too would have this same power. But MSG Network is owned by MSG, and no longer owned by Cablevision.

By the way, if the PAC 12 were smart, they would sell half of their network to Fox for this reason. Fox owns cable stations in LA that broadcast the Dodgers, Kings, Clippers, and Angles. Think that would have provided levergage for a Pac 12 Network?

"Fox will also use Fox News Channel to leverage BOTH YES and the BTN. IT's not costing them money on Fox News to do that, but they use it as leverage."
The problem is that statement is an unsubstantiated conclusion that runs contrary to logic.

"That is exactly why saying that what YES + BTN could get would be equal to what YES could get on its own is inaccurate."
I have never said that. I have actually repeatedly said the opposite of that. The value of YES + BTN is NOT equal to the value of YES. Assuming that the BTN has a positive value, then YES + BTN > YES. I am saying that YES = (YES + BTN) - BTN - transaction cost savings - synergies*

*I think that this value is $0

"It is one one thing to force someone to buy a new product (which the cable company could concievably make money on due to ad sales), but it is harder to simply force someone to pay more for the same product, especially since you sell it to everyone else for less."
1. They aren't just buying a new product. They are overpaying for a new product. It is not easier to get someone to over pay for a new product than it is to get them to over pay for an existing product.
2. If you are correct about the structure of YES's contract, then part of YES' value is that they won't charge different rates. They were compensated for that restriction, otherwise they wouldn't have agreed to it. They are being paid the value of YES, plus a premium equal to the value of the peace of mind that comes with knowing that another network won't get a special deal and have a competitive advantage. By undermining the restriction, they are undermining its value moving forward (i.e. the next round of negotiations). That will adversely affect the carriage rates.

"Plus when when MSG and SYN are up for renewal, you have a harder time fighting against an increase from them, who do also have some leverage."
Why? There is no way that SNY and MSG don't see that FOX and friends are getting more value out of YES. Why does it matter if it is direct (i.e. higher carriage rates), or indirect (i.e. leverage)?

I am not so sure the minority shareholders of YES would agree to take less money even if FOX the majority shareholder says they should. Its always tricky when it is not a completely 100% owned subsidiary.

(12-17-2012 02:53 PM)nzmorange Wrote:  2. If you are correct about the structure of YES's contract, then part of YES' value is that they won't charge different rates. They were compensated for that restriction, otherwise they wouldn't have agreed to it.

Not at all. It was a requirement of most of the carriers to ensure they did not sell it cheaper to another provider. Thus if they sell YES cheaper to anyone else, it voids the contract. I really could not decifer the rest because it was hard to tell where my quotes ended and yours began reading it on my iphone. I'll have ot try and reread later.

But the major point is you are trying to argue a point that is not there. Fox using YES or Fox News to leverage signing another network, does not have any effect on its individual value, no matter how many times you try to make it true.

(12-17-2012 04:43 PM)adcorbett Wrote:  

(12-17-2012 02:53 PM)nzmorange Wrote:  2. If you are correct about the structure of YES's contract, then part of YES' value is that they won't charge different rates. They were compensated for that restriction, otherwise they wouldn't have agreed to it.

Not at all. It was a requirement of most of the carriers to ensure they did not sell it cheaper to another provider. Thus if they sell YES cheaper to anyone else, it voids the contract. I really could not decifer the rest because it was hard to tell where my quotes ended and yours began reading it on my iphone. I'll have ot try and reread later.

But the major point is you are trying to argue a point that is not there. Fox using YES or Fox News to leverage signing another network, does not have any effect on its individual value, no matter how many times you try to make it true.

In an arm’s length transaction, when a party gives up rights, then they get something of equal value in return. If you disagree with that, then we have irreconcilable differences. However, I will say that Uncle Sam (via the federal court system and the IRS) agrees with me. I quoted them. And, I will also say that the IRS is pretty good at analyzing transactions and getting their money.

So, correct me where I am wrong:

1. YES gave up a legal right to negotiate different prices with different carriers. (smaller carriers value this because it keeps them on the same terms as their competition. This allows them to slightly "overpay," because they don't need to have quite as much of an RoI, because they are less likely to get undercut by their competition (risk must match reward, so if risk decreases, reward can also decrease – the cable companies have less risk, so they can afford to pay more and have less of a reward, but YES takes on more risk, so it has to get paid more so that it’s “reward” for its owners goes up)

2. choosing what channels are on what tier is worth value. Channels will take a pay cut in carriage rates if they know that they are on basic, and that they are one of the few channels on basic. They will take the pay cut, because they know that they will make it up with increased advertising money that is the result of 1) more viewers having access to the channel, and 2) less competition. By adding more channels that won’t increase subscribers by more than the previous per channel share, then the advantage to having less competition per subscriber is diluted.

3. Using one channel to improve the terms of another channel's contract is the logical and financial equal to improving the terms of the first channel and keeping the second channel's terms the same, or mildly improving both channels.

4. if the YES + BTN bundle gets the BTN on a better tier than the tier than the BTN would have otherwise occupied, then the cable companies gave up their right to exclude those channels from that tier. (unless otherwise compensated, cable companies lose value here, because adding an undeserving BTN artificially dilutes the advantage of being on a low tier)

5. by combining #1, #3, and #4, YES devalued the clause in #1, because they are shifting risk back to the cable companies. The decrease in value of that clause will then decrease the overall value of the contract by the same amount (provided that the loss in value isn’t offset somewhere else)

If that happened, then value changed hands between (YES + BTN) and the cable companies, and the BTN and YES. Unless cable companies are in a charitable mood, then they will recover their lost value from the (BTN + YES) package via a decrease in carriage charges against what they would have otherwise gotten (it may be in the next round of negotiations, though). And, if the cable companies recover their value from the BTN + YES package, then, unless the non-Fox owners of YES are charitable, the non-FOX owners will recover their lost value from the BTN.

Unless there are gifts or makets that aren't efficient, then everything must balance. You cannot contract market forces in the long run* (which is what I think that you are trying to argue is going on). Eventually the market forces will always prevail. Contracts can only prolong the time between market corrections.
*The Asians tried to do that in ’98, and look what happened.

(12-17-2012 04:43 PM)adcorbett Wrote:  

(12-17-2012 02:53 PM)nzmorange Wrote:  2. If you are correct about the structure of YES's contract, then part of YES' value is that they won't charge different rates. They were compensated for that restriction, otherwise they wouldn't have agreed to it.

Not at all. It was a requirement of most of the carriers to ensure they did not sell it cheaper to another provider. Thus if they sell YES cheaper to anyone else, it voids the contract. I really could not decifer the rest because it was hard to tell where my quotes ended and yours began reading it on my iphone. I'll have ot try and reread later.

But the major point is you are trying to argue a point that is not there. Fox using YES or Fox News to leverage signing another network, does not have any effect on its individual value, no matter how many times you try to make it true.

In an arm’s length transaction, when a party gives up rights, then they get something of equal value in return. If you disagree with that, then we have irreconcilable differences. However, I will say that Uncle Sam (via the federal court system and the IRS) agrees with me. I quoted them. And, I will also say that the IRS is pretty good at analyzing transactions and getting their money.

So, correct me where I am wrong:

1. YES gave up a legal right to negotiate different prices with different carriers. (smaller carriers value this because it keeps them on the same terms as their competition. This allows them to slightly "overpay," because they don't need to have quite as much of an RoI, because they are less likely to get undercut by their competition (risk must match reward, so if risk decreases, reward can also decrease – the cable companies have less risk, so they can afford to pay more and have less of a reward, but YES takes on more risk, so it has to get paid more so that it’s “reward” for its owners goes up)

2. choosing what channels are on what tier is worth value. Channels will take a pay cut in carriage rates if they know that they are on basic, and that they are one of the few channels on basic. They will take the pay cut, because they know that they will make it up with higher valumes, and increased advertising money that is the result of 1) more viewers having access to the channel, and 2) less competition. By adding more channels that won’t increase subscribers by more than the previous per channel share, then the advantage to having less competition per subscriber is diluted.

3. Using one channel to improve the terms of another channel's contract is the logical and financial equal to improving the terms of the first channel and keeping the second channel's terms the same, or mildly improving both channels.

4. if the YES + BTN bundle gets the BTN on a better tier than the tier than the BTN would have otherwise occupied, then the cable companies gave up their right to exclude those channels from that tier. (unless otherwise compensated, cable companies lose value here, because adding an undeserving BTN artificially dilutes the advantage of being on a low tier)

5. by combining #1, #3, and #4, YES devalued the clause in #1, because they are shifting risk back to the cable companies. The decrease in value of that clause will then decrease the overall value of the contract by the same amount (provided that the loss in value isn’t offset somewhere else)

If that happened, then value changed hands between (YES + BTN) and the cable companies, and YES and the BTN. Unless cable companies are in a charitable mood, then they will recover their lost value from the (BTN + YES) package via a decrease in carriage charges against what they would have otherwise gotten (it may be in the next round of negotiations, though). And, if the cable companies recover their value from the BTN + YES package, then, unless the non-Fox owners of YES are charitable, the non-FOX owners will recover their lost value from the BTN.

Unless there are gifts or makets that aren't efficient, then everything must balance. You cannot contract market forces in the long run* (which is what I think that you are trying to argue is happening). Eventually the market forces will always prevail. Contracts can only prolong the time between market corrections.
*The Asians tried to do that in ’98, and look what happened.