A Rare Q&A With James Dolan: Viacom’s Weakness, MSG’s Strength and Why He’s Not Worried About the Knicks

A version of this story first appeared in the April 24 issue of The Hollywood Reporter magazine.

Ask James Dolan what he’d call himself and he’ll likely say, “musician.” But the guitarist and singer in JD & The Straight Shot does a lot more than play 30 to 40 yearly gigs with his band, occasionally opening for the Eagles. Dolan, 59, is one of the most active (and sometimes polarizing) entertainment moguls in New York. He runs Cablevision Systems Corp., the country’s eighth-largest cable and broadband provider, which was started by his father, Charles (who lives next door to James in Oyster Bay on Long Island), and has more than 3 million subscribers in the tristate area and 15,000 employees.

He’s also a content producer and network owner via his spot on the board of AMC Networks, the family-run public company that includes AMC, SundanceTV and IFC Films. He’s a player in live music and sports via The Madison Square Garden Co., owner of the city’s biggest venue (MSG grossed $1.6 billion in 2014), which also runs Radio City Music Hall and L.A.’s renovated Forum and has partnered with manager and executive Irving Azoff on a new company to better match talent to those venues. And Dolan owns the NBA’s Knicks and NHL’s Rangers, making him fodder for tabloids (except his own, Newsday), especially as the Knicks endure a horrible season after paying team president Phil Jackson $60 million. Add to that a prickly personality — he’s suing Viacom, claiming the company violated antitrust laws by bundling big channels with barely watched ones; he has clashed with unions at venues; and he recently exchanged nasty emails with a 72-year-old Knicks fan, suggesting the fan is an alcoholic.

 

Dolan, married with six sons, ages 6 to 27 (two with second wife Kristin, who works at Cablevision), also has a charitable side, co-producing with his friend Harvey Weinstein (whose new musical, Finding Neverland, Dolan has invested in) the 2012 benefit concert for Hurricane Sandy relief. On top of that, MSG (which soon will split into two companies) now owns half of the Tribeca Film Festival, which runs April 15 to 26, and Dolan says his goal is to grow it into a world-class event. He agreed to a rare interview with THR and revealed his thoughts on over-the-top digital rivals, why Viacom is weak and his intent to close the Ziegfeld Theatre.

You are at the center of the video business. Where will it be in five years? Dominated by over-the-top services?

No. Nothing changes that rapidly in this business. There’s still somebody, somewhere, with a black-and-white TV. The whole over-the-top piece is really about content on demand — also selection. That’s what consumers really want. You’re going to see a slide to over-the-top, and it’s being driven by price and by availability and by selection. At Cablevision, our mantra is to do what we call “ride the wave.”

Is that behind Cablevision’s willingness to sell HBO Now, its digital service, when other cable companies are refusing?

That’s part of it, but what it really is saying is, “Look, we want to be your company. We don’t want to tell you what to watch.” We’re not going to say, “Well, if we can trap this group to buy all these channels because we’re going to attach this or that to it” … that’s old-school thinking, and it’s monopoly thinking.

You said the “M” word. Should Comcast be allowed to buy Time Warner Cable?

I would never comment on that. (Laughs.) They’re both friends of mine.

“There’s plenty of venues in New York. There’s only one Madison Square Garden,” says Dolan, downplaying a rivalry with Barclays Center. He was photographed March 19 courtside before a Knicks game.

Friends or frenemies?

No, they are friends, and if they want to get married, more power to them.

Do you consider these new OTT services to be friends or enemies?

Neither. They’re alternatives. They have to use our cable to get to the home, so from that point of view, they’re a friend. What’s interesting about OTT services is, anyone could do one. You could do an OTT service! Just rent space, make deals with programmers. There’s no big capital investment required.

Sounds like you think you will lose video subs in the next five years. How much? Ten percent? Twenty percent?

Somewhere between one and the other, most likely.

You reportedly offered $1 for the New York Daily News. Who do you think ultimately will get it?

I don’t think the question is who. The question is, will anyone? Can they find a buyer? We’re looking, but it’s not the kind of property that you have to have.

Would it upset you if Rupert Murdoch got it?

Not at all. It makes sense for him. It makes sense for us. If Rupert got it, maybe we’ll do something together. I like the Post, and I like The Journal.

Does Newsday make money?

Newsday does make money. Not a lot, but it does.

Back to the video space: We’ve seen more cable-carriage standoffs lately —

They’re going to get worse. The retailer is under pressure from things like over-the-top, and their margins are getting squeezed. The retailer needs to be more flexible with their packages. Meanwhile, the programming ecosystem all centers around the big, expanded basic bundle. So many of the important channels are linked to each other in their carriage agreements that you literally tie yourself up into a bundle. The consumer is saying to us, “No, I don’t want to buy every channel you have.”

Viacom is having that problem with a big carrier in the South, which has decided it’s better off without paying for those channels.

It’s like a grocery store. You got your shelves stocked with stuff, and all of a sudden it’s the soup aisle and you don’t have Progresso soup anymore. You find that everyone is still coming to the store, everybody is still buying, then you don’t care whether you carry Progresso soup. I think that’s worth watching.

AMC has had great success but has been criticized in Hollywood for the way it handles talent.

I’ve heard stuff, but that’s really [AMC Networks CEO] Josh [Sapan‘s] area. From my point of view, they’re very successful. The deal they just did for BBC America is very important. BBC creates fabulous content, and I’m surprised the deal was available. I tell them all the time: “Keep investing in the content.”

You run the Ziegfeld Theatre, which is said to be unprofitable. Are you going to close it?

Probably. Yeah. [It] loses a lot of money. The theater business is a tough business.

MSG and Barclays Center are pitted against each other. How do you see that rivalry?

If there’s any rivalry, it’s in the rhetoric more than anything. The Garden really hasn’t seen a downturn of business. We’re still doing great. There’s plenty of venues in New York. There’s only one Madison Square Garden.

Dolan keeps construction hard hats from MSG and the Forum in his office. “I love the ceiling,” he says of the refurbished L.A. venue, run by MSG. “It looks like a UFO.”

Does it annoy you when people say you’re anti-union?

Yes. It’s a well-known tactic of some of these unions to personally go after the people who are running the companies. It doesn’t reflect well on them at all. We hold to our values, and when people want to cooperate and work together to build a business together, both do well. Just go talk to the guys at Local One or a lot of the other unions at Madison Square Garden. They all think they’re doing well. Radio City Music Hall — when we took over, there was one show there, the Christmas show. Maybe about five concerts a year. That place is humming, now. That means everybody who works there is going to be busy, and they’re almost all union people. One squeaky wheel does not make a bad train.

Someone said that during a negotiation, you got out your guitar and started playing a song called “Lockout Blues.” True?

That was during the NBA lockout. I was on the negotiating committee.

 

 

You’re paying Phil Jackson $12 million a year for five years. Still worth it?

You got to believe, baby! I believe, I believe!

Jackson has said he was assured by you that there wouldn’t be any interference. But at what point does the leash get tugged?

I don’t see it happening. Phil is a brilliant basketball guy, and he and Steve [Mills] are working together great.

You enjoy losing?

No, I enjoy being out of the limelight. I enjoy having two experts in there that I trust. I barely have to do a thing. It can stay like that for me forever. As long as we continue to make progress — and I’m sure we will. I believe!

Dolan had gold harmonicas made for The Allman Brothers Band, one of his favorites and a frequent act at his Beacon Theatre before the group split in 2014.

What do you say to fans who want you to sell?

I don’t respond to people like that. I learned a lesson this year about that. I won’t do it again. 

Yes, you emailed a fan and told him off and suggested he might be an alcoholic. Do you regret what you wrote?

I don’t believe what I said was wrong. I believe responding to him was wrong. I believe what I said was absolutely correct. But that’s the thing — why engage with people like that? That was a mistake.

Even when fans wore paper bags to the stadium, that doesn’t get to you?

No. The Knicks fans, by the way, have been great this year. The majority of them understand we’re in a rebuild, we’re moving as fast as we can and they see our opportunities as being huge. I think they are, but it’s all in Phil’s hands.

Is there a dream asset that you don’t own?

One of Eric Clapton‘s classic guitars. (Laughs.) The media assets that are poised to do very well are the Netflixes, HBOs of the world. HBO is another company that produces great content. Showtime, Starz, too. All the pay services now look a lot better than they did.

Starz might be available. Chris Albrecht seems to want to get John Malone to sell.

Yeah, well, John Malone is a very smart guy. There won’t be any fire sales over there, I guarantee you that.

How did your partnership with Irving Azoff come about, and what do you talk about?

Helping him conquer the world! (Laughs.) We’ve been talking about the global music-rights business. The underlying philosophy is one I really love: It’s taking care of the artist. I’m an artist myself, although I don’t make money like those other artists do. But I do feel that artists are underpaid. This shift from CDs to the Internet has hurt the artist, and there are other people who are doing well because of the shift, and they’re not sharing with the artist.

Kazoos from the “kazoo challenge” Dolan led for ALS during a September show with the Eagles. About 7,900 kazoos played simultaneously, he says.

Does Irving show you his nasty letters to YouTube before he sends them?

No. Irving runs this business. We talk all the time, but I have no approval rights. This is his ball to run with. We’re just good friends. The partnership works for that reason. The comedy business that we’re in is great. It’s doing well. It’s growing by leaps and bounds. He continues to work the management side of the equation. He’s always knocking that out of the park. I invested in Irving’s company back when Barry [Diller] owned it. Barry was his partner, and then Barry sold over to Live Nation as part of the Ticketmaster deal. I went and I just carried my interests over, and then finally when Irving left Live Nation I said to him, “We just got to do something on our own.” He agreed, and we started, and he’s been going gangbusters ever since. 

You’re in business with another friend, Harvey Weinstein.

Well, Harvey and I are partners on Finding Neverland and a few other, smaller plays, but Neverland is the big partnership. Neverland is going to knock it out of the park. I love it. 

 

 

You’re known for having a very strong personality, but you’re also in business with friends who also have very strong personalities. Are there ever conflicts?

Sometimes (Laughs.) There has to be mutual respect, right? As long as that’s there, I don’t get flustered by passion and neither do those guys. 

What advice would you give Time Warner’s Jeffrey Bewkes or other media moguls?

Jeff can stay right where he is and do just fine. He’s focused on content and programming, and when you look at their suite of channels and content, compared to say, for instance, Viacom, there’s really not a bad asset in Jeff’s group. You can’t say the same thing for Viacom. Viacom’s got assets that are channels that nobody watches.

Who are you rooting for in the next presidential election? Do you like Hillary?

I like Hillary. I don’t think there’s a bad candidate out there. … [But] I can understand why there would be a shift to conservatism. The country has probably gone too far to the left and needs to center itself a little. Whether it needs to go all the way back to the right … (Laughs.) I’m not much of a politician. As we get close, we’ll probably support somebody, but it’s too early to start now.

Following his appointment as NBA commissioner in 2014, Adam Silver sent Knicks owner Dolan a signed ball.

What percentage of your life is devoted to music?

A hundred percent. No, no. I go in spurts. I’m playing this weekend. We’re opening for Nitty Gritty Dirt Band. I’m back in the studio; I’m going to make another record. I carry my music-writing materials with me wherever I go. I do my vocal exercises every day.

Why did you get involved with Tribeca?

Because it’s in New York, and the Tribeca Film Festival has an opportunity to grow into a festival at least as big, if not bigger than, Toronto. This is our first year where we’ve been able to start to add resources, so this year they have a home for the first time. The venues are going to be better.

You’re a guy the New York papers follow. Who has run the worst photo of you?

The Daily News. They’ve been horrible. Mort Zuckerman wanted to do a deal where his new printing plant would print Newsday. He [said,] “If you do this deal with me, then you don’t have to worry about anything. We won’t write anything bad about you in the paper.” And I was like, “Write whatever you want.” And he did.