Saturday, January 17, 2015

Monopolies?

By Matthew Dunn

                During Andrew Cuomo’s re-election campaign, he said that public schools were one of the remaining few public monopolies.  Since being re-elected he has made it clear that he intends to reorganize the public schools in New York State for this reason.  These recent statements make it clear that Governor Cuomo believes that things that in private hands are run better than those run by the public sector.  I propose that Governor Cuomo test his hypothesis by having one of his largest campaign donors, run a school: James Dolan. 
                For those who have been fans of the Knicks for the last fifteen years or so, the name James Dolan might send shivers down your spine.  James Dolan is the CEO of Cablevision, a large cable and internet provider in the tri-state area, and also is Executive Chairman of the Madison Square Garden Company, which not only owns the teams that play in Madison Square Garden (the Knicks and Rangers) but also a host of other entertainment venues in New York City, including the famous Radio City Music Hall.  Dolan’s company Cablevision was one of Cuomo’s largest campaign donors in the 2014 election, donating a sum of $354,097 to the state Democratic Committee during the last election cycle.  Dolan’s companies are very profitable, so perhaps Governor Cuomo would like to have this titan of industry show the public school monopolies how to run things.  So let’s take a look at the great results of Dolan’s business practices.
                As Chairman of the Madison Square Garden Company, Dolan has been the primary owner of the New York Knicks.  In the last 15 years, the New York Knicks have largely been the laughing stock of the NBA.  They have consistently had among the highest payrolls in the NBA, and have produced some of the worst results.  This current season, may turn out to be the most embarrassing for the Knicks as they are currently are the worst team in the NBA, and have lost 16 games in a row at the time of this writing.  In addition to this, the Knicks have become infamous with high ticket prices while putting out a terrible product.   We will also have to overlook the management structure at the Knicks which a few years back under Dolan and Isaiah Thomas, created an environment so hostile to women, that former Knicks vice president Anucah Browne Sanders was able to win $11.6 million in damages in a sexual harassment lawsuit against the organization.  With this information as well as Dolan’s history of substance abuse, we can gather that he probably isn’t the best person to work for. 
                Alright, well that’s just his sports team.  Surely that’s not the only aspect of Dolan’s business abilities.  Cablevision, is a billion dollar cable and internet provider that is surely a better example of the wonders of Dolan’s management.  On an online survey site entitled consumeraffairs.com, Cablevision was received a rating of 1.5 stars out of a possible 5.  As you read through the website at the customer comments you see that the complaints usually are about the costs and the poor service that Cablevision offers, which is the complaint that most people have about their cable and internet providers.  So why if the service they provide is considered poor at best, are they able to be so successful?  Simple, Cablevision is a near monopoly on the cable market in the places that it operates.
                Cable companies operate largely by acting like drug cartels.  Generally, they take over a territory and are able to take over exclusive rights to serve an area.  On Long Island, Cablevision is one of the two main internet and cable providers.  In Nassau and Suffolk, other big players in the cable market such as companies like Time Warner and Comcast, do not operate.  In return, Cablevision does not try to gain a foothold in New York City, which it leaves to these other companies.  Therefore, anyone wishing to use the internet or watch cable television in the Long Island market has the choice to use either Cablevision or its only competitor, Verizon, hardly a choice involving any form of small business.
                In addition to cable and internet service, Cablevision owns Newsday and News 12 on Long Island.  These media outlets are considered the main print and tv sources of news for people living on Long Island.  With the exception of local town papers, and Verizon’s local news station, there really is no other source of news on Long Island.  So if you couple the fact that Cablevision owns most of the provision of cable and internet service on Long Island, with the fact that they own the majority of the information that is released, coupled with their interests in sports and entertainment through the Madison Square Garden Company, you see quite a media empire.  One might even go so far as to call it a, dare I say it, a monopoly. 
                James Dolan of Cablevision and Governor Andrew Cuomo are truly kindred spirits.  They both had very successful fathers, and it seems that both of them are now trying to live up to the expectations of their dads.  Governor Cuomo also seems as though he would like to open up what he calls a public monopoly, and turn it into more of a private monopoly like James Dolan has with Cablevision.  As James Dolan’s companies have shown, he is a master of creating a profit by offering a very terrible product.  As much as people like Governor Cuomo, complain about the mismanagement of schools, having a businessman like James Dolan run schools, would hardly be any better.  But maybe giving Dolan a chance to run schools will defy expectations. However, if Cuomo engaged in this kind of experiment it would probably make the parents and teachers at schools feel just like Knick fans, consistently disappointed.


-          If you are more interested in James Dolan, and other horrible owners of sports teams, read Dave Zirin’s excellent book Bad Sports: How Owners Are Ruining the Games We Love.  In this book he gives a detailed explanation of Dolan’s practices as owner of the Knicks, as well as discussing some of the other worst owners in professional sports.  

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