MSG’s Dolan Sues State Liquor Authority Over Its Threat to Pull Liquor Licenses

Does the owner of Madison Square Garden have the right to block lawyers from the Garden and other venues just because they are suing him? The owner, James C. Dolan, says he does and that the State of New York has no right to use its “gangster-like governmental” power to stop him.

Dolan’s stand, which the New York Post described as going “scorched earth,” came in a weekend filing in State Supreme Court, shoving back on the State Liquor Authority for threatening his license to serve booze at The Garden and his other venues, Radio City Music Hall, The Beacon Theatre and the Theatre at Madison Square Garden.

This shoot out on thirty-third street stems from a decision by Madison Square Garden Entertainment to deny admission at these venues to lawyers who are suing MSG, or even to lawyers who work for the firms but aren’t directly involved in the cases.

MSG has added an extra layer of creepiness to the whole debate by using facial recognition technology to spot and stop the lawyers from entering.

One of those lawyers was barred from joining her daughter’s girl scout troop on a visit to Radio City, which was when the MSG policy became a cause celebre among Manhattan pols, whose differences with Dolan include everything from his general politics and the unpredictable performance of the Knicks to their desire to get him to move Madison Square Garden–or at least pay the $41 million state property tax tab that he has heretofore been exempted from paying.

After the Radio City incident, the State Liquor Authority, at the urging of State Senator Liz Krueger, notified MSG it was considering revoking the liquor licenses of the organizations venues, alleging that their ban on the lawyers violated the license requirement that the venues be “open to the public.”

The SLA demanded a response by the Ides of March. Instead Dolan, who disclosed the SLA demands in his lawsuit, slapped back, saying he would not let the government bully him or his customers.

“This gangster-like governmental organization has finally run up against an entity that won’t cower in the face of their outrageous abuses,” said Dolan, who is Executive Chairman and CEO of MSG Entertainment, which owns the venues, and is also head of the separate MSG Sports, which owns the Knicks and Rangers. “While others that have been subject to this harassment may have been forced into submission or silence, we are taking a stand on behalf of our fans and the many small businesses who have long been subject to the SLA’s corruption.”

MSG argued both that “open to the public” was not actually a rule but that in any case the exclusion of hostile lawyers affected only a tiny fraction of the companies five million annual customers. Moreover, the lawsuit accused the SLA of singling MSG out when many other licensed establishments had “far more exclusionary policies” based on everything from looks and dress, to the gender mix of a group.

“The law doesn’t permit this sort of selective and malicious prosecution,” MSG said.

“To bring charges against MSG Entertainment outside the scope of the SLA’s authority is outrageous. The SLA’s threats to revoke the liquor licenses at all MSG Entertainment’s New York venues–The Garden, The Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre–is a direct assault on the millions of fans who attend events at these venues each year by threatening their ability to consume beer and wine at all MSG Entertainment events.”

In its statement, MSG said the Liquor Authority had overstepped its authority.

“The SLA’s mandate is ‘fostering and promoting temperance’ in the consumption of alcoholic beverages. The idea that MSG Entertainment’s policy regarding attorneys pursuing active litigation against the Company is within that mandate is absurd. The policy has nothing to do with the alcohol distribution, and certainly has no impact on underage drinking, or alcohol-related violence.”

The SLA had criticized the policy banning the lawyers because it was “not for reasons to do with responsibilities under the (liquor) license, but because such persons have pending lawsuits” against MSG.

In a statement, the SLA said it stands ready to defend itself “vigorously” but has not yet seen the suit. “As the agency has not been served in this suit at this time, we cannot comment on it directly, but we stand ready to vigorously defend our processes, actions, and dedicated staff,” a spokesman said.