New York Knicks Owners Sue Altice USA Over News Channel Layoffs

(Bloomberg) -- The billionaire Dolan family that controls the New York Knicks and Madison Square Garden sued Altice USA, accusing the cable provider of laying off employees at a local TV news channel in violation of a sale agreement two years ago.

Altice broke its “solemn promise to protect News 12’s legacy, including its employees,” according to a lawsuit filed Tuesday in Delaware Chancery Court.

The Dolans sold Cablevision, which provides phone, TV and internet service in New York City’s suburbs, to Altice for $17.7 billion. They also sold News 12, a group of local channels that reach about 3 million homes in New York, Connecticut, and New Jersey. As part of the sale, Altice agreed to maintain at least 462 full-time employees at News 12 and their salaries through at least the end of 2020, even if it meant incurring up to $60 million in losses.

Altice violated the agreement by cutting about 70 employees at News 12 last year and planning to fire “dozens more” starting as soon as this week, according to the Dolans, who are asking a judge to stop the layoffs. News 12 has been profitable, the suit says.

“This lawsuit is completely without merit and we will defend against it vigorously,” Altice said in an emailed statement. “Our News 12 team is comprised of the most talented journalists and staff in the news business, and Altice USA remains committed to offering meaningful news coverage, enhancing our news product for our local communities and growing our audience.”

The Dolan family said in a statement Tuesday that it “intends to hold Altice accountable for commitments Altice made.” They said in the complaint that the job cuts “threaten to irreparably harm the quality of the local news content that News 12 creates.”

Defendants

The suit names Altice USA, which sells service under the Optimum brand name, and its European parent company, Altice Europe NV, controlled by Patrick Drahi. Shares of Altice USA, the fourth-largest U.S. cable company, are down 40 percent since it went public in June 2017.

The Dolans are cable-TV pioneers in the New York area. Family patriarch Charles Dolan founded Cablevision in 1973.

Plaintiffs in the lawsuit include Patrick Dolan, who was president of News 12 at the time of the sale, and Colleen McVey, an anchor for News 12 who has worked at the network for more than 30 years and claims she has been targeted for the next round of firings.

If News 12 does reduce staff again, it would mark a further shrinking of the news landscape across the New York City area. Last week, the Village Voice, the famous New York alternative newsweekly co-founded by Norman Mailer, said it was shutting down. In July, the New York Daily News, owned by Tronc Inc., cut about half its editorial staff. DNAinfo, a key source of neighborhood news in New York, closed last year.

Planned Cuts

In an interview, Patrick Dolan said the planned cuts at News 12 include shortening some hour-long programs to half an hour and converting two-person teams of reporters and cameramen into one person who will both film and report the news.

Dolan also said the News 12 sports department “will be greatly affected,” including the loss of a producer and a camera person.

“There will no longer be a serious attempt at covering the local sports scene,” he said.

Patrick Dolan said his family made offers to Altice to take back control of News 12, but declined to say more.

The case is Charles Dolan v. Altice USA, No. 2018-0651, Delaware Chancery Court (Wilmington)

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