CSN

Comcast sucks all around, but there's nothing with what they are doing here. If the terms of the deal change - even if caused by Comcast's actions - it's basic due diligence for Comcast to have time to evaluate it. They are one of the three major creditors here. The real delays were over the last year or so, many directly caused by Comcast's silliness. But at this point, it's everyone's right to properly evaluate the current deal and make sure it's not unfairly screwing any particular partner over. If it IS an unfair deal, then the network being liquidated should be an alternative option that is considered, and every party should have an opportunity to make their case there.

That said, passing the deal or liquidating should be the only two alternatives available at this point. If Comcast feels the deal is unfair for major creditors, it's incumbent on them to show that liquidating would be a better alternative for many of the creditors. We're in the last stages of this, but an artificial deadline of the Rockets season shouldn't really be driving the process.

 

Yeah, but the way I read that article is that they redid the re-org plan strictly because of this arcane bankruptcy code that doesn't actually change the amount of money that Comcast will recoup on their loan, just delays it in a way to delays the reorganization. But if the judge rules in favor of reorganization per the plan...what does that really accomplish for Comcast? From a money standpoint, it would be better for them to get the full amount now instead of as part of a lien, right?

I feel like I'm probably misreading some of that.

 

Yeah - I have no idea the inner workings of this. I wonder if there's some other benefit of having the lien in place? No real idea there.

 

I'm not JR so I'm not going to post a bunch of David Barron tweets in here (not really sure how to do that) but I just went and read his twitter summary of the meeting this morning and it sounds like on Monday (and possibly Tuesday) they will exclusively deal with the issue of what value will be assigned to the Comcast $100MM loan. Maybe he is hoping that if the teams win out on that front then Comcast will drop this issue of trying to get it paid back as part of a lien. Don't know.

 

http://www.houstonchronicle.com/spo...hp?cmpid=twitter-premium&t=c9584ef2c48cb15e6e

CSN Houston's collapse a cautionary tale for regional sports networks

By David Barron

October 5, 2014

As Comcast SportsNet Houston approaches perhaps its final days, it will be remembered as a cautionary tale of poor timing, questionable decision-making, hundreds of millions of dollars in lost revenue, tens of millions of dollars in legal bills and untold quantities of squandered goodwill and lingering ill will.

It will be, by all accounts, the biggest, most expensive collapse in the 35-year history of regional sports networks, which for years have been viewed as a sure-fire path to prosperity for programmers and franchises.

"Every major team will continue to explore and develop RSNs and RSN relationships, including the Astros and Rockets, as the regional television marketplace will continue to be a very valuable and important one," said Lee Berke, president of LHB Sports, which has advised several teams regarding TV opportunities. "However, Houston will serve as a reminder that RSN models have to be carefully structured. The partnership, pricing, structure, expectations - all of it has to be balanced to meet everyone's needs over the long haul."

Structure, balance and financial success all were found wanting for CSN Houston, which was launched in October 2012 by a partnership that included the Astros (46.5 percent ownership), Rockets (31.5 percent) and Comcast (22 percent).

Valued initially at $700 million, the network had goals of focused coverage of the Rockets and Astros and other local topics, financial dividends for the teams and a potential windfall should the Astros and Rockets eventually sell their equity back to Comcast, as the Yankees did with their YES Network in partnership with Fox.

Quality was high - CSN Houston won five regional Emmy awards last year and is nominated for 16 this year - but the bottom line was catastrophic.

Beginning Monday, 53 weeks after the Houston Regional Sports Network partnership entered Chapter 11 protection, Bankruptcy Judge Marvin Isgur will decide whether to accept a proposal reorganizing the network into a new partnership owned by AT&T Teleholdings and DirecTV Sports Networks.

Under the plan, which is supported by the teams and opposed by Comcast, the buyers will rebrand the network as Root Sports Houston and provide carriage on U-verse and DirecTV, which refused for two years to carry CSN Houston across Texas, Oklahoma, Louisiana and Arkansas.

Root Sports Houston will drop most non-game programming, and 96 of 141 CSN Houston employees will be laid off. The teams will lose their equity and will be unable for now to recover about $125 million in rights fees.

However, the teams support the plan because it will provide increased carriage - perhaps 750,000 additional households in the 20-county Houston area and 3.7 million across Texas and three other states, plus another 1.3 million next year if the Comcast-Time Warner Cable merger takes place.

"The key is to make sure fans can see the games," said Rockets CEO Tad Brown. "We've got great players, engaging players. We want to make sure our fan base has every opportunity to engage with us at every level, and our broadcasts are a critical element of that."

Several factors worked against CSN Houston. It was a new entry in a vast market (at more than 440,000 square miles, Texas, Oklahoma, Arkansas and Louisiana are almost as large as the 18 states from Maine to Tennessee and North Carolina) that for years had only one RSN, Fox Sports Southwest, airing Astros, Rangers, Rockets, Mavericks and Spurs games.

Carriers were willing to carry CSN Houston in the Houston area for a monthly subscriber fee in the $4 range, but they refused to do so across the region, even at fees ranging from less than $1 to less than $3 per month.

CSN Houston's carriage woes came against the backdrop of growing concern over rising costs of sports programming, including the new Dodgers-owned network in Los Angeles. Carriers are taking a harder line on RSNs, and with Rockets games limited by the NBA to a sliver of Southeast Texas and the Astros struggling through a third consecutive 100-loss season, the teams and network could not persuade viewers in large numbers to demand the channel from DirecTV, Suddenlink, Dish Network or U-verse.

That limited the network's revenue - documents indicated CSN Houston had fewer than 700,000 subscribers providing about $33 million in annual subscriber fees, far less than the approximately $100 million that Comcast had committed to the Astros and Rockets in annual rights fees.

Viewership for Astros and Rockets games plunged to record lows, including three 0.0 Nielsen ratings for Astros games. An AT&T executive said last year that "it was very clear that the viewership intensity … was low, and therefore we didn't need to pay the rates that were asked."

CSN Houston ran through a $100 million secured loan granted by Comcast for startup costs in less than a year, and two cash calls to investors were not enough to keep the network out of the red. When the Astros threatened to pull their rights in September 2013, Comcast threw the network into bankruptcy.

Now, more than a year later, the best option for the Astros and Rockets will, in effect, give the network free and clear to AT&T and DirecTV in return for a token $5,000 investment, and the agreement, according to Astros owner Jim Crane, to pay rights fees that are relatively close to those promised under the Comcast agreement.

Monday's hearing, which could last three or more days, will begin with what Isgur has described as its "core issue" - the value of the assets securing Comcast's $100 million loan and how much Comcast should receive.

The teams believe Comcast should receive only $16 million to $23 million; Comcast, citing the value of its affiliation agreement, which will be boosted by the Time Warner Cable merger next year, wants the full amount.

Isgur's decision will be critical, since the teams plan to pay the loan as part of their pledge to give AT&T and DirecTV a lien-free network. If the judge requires a larger payment, the deal could fall through.

The teams hope Root Sports Houston will be in place for the Rockets' Oct. 29 home opener. However, Isgur would not promise he will rule immediately on the value of the Comcast loan, and he said other elements of the plan to which Comcast objects could require him to delay the hearing's final phase.

Even if the reorganization plan is approved, the CSN Houston legal saga will continue. Crane's Houston Baseball Partners have sued Comcast and former Astros owner Drayton McLane over network-related issues, and the teams could sue Comcast to recoup unsecured network-related debts - more than $116 million for the Astros, more than $101 million for the Rockets.

A handful of RSNs have failed over the years, and one went out of business because its parent company went into bankruptcy, but analysts say no RSN collapse approaches CSN Houston in terms of financial losses or number of employees affected.

Even when the CSN Houston case is settled, the dispute over sports costs will continue. David Carter, director of the Sports Business Institute at USC, said the sports TV business will become even more complicated as teams, leagues and networks adjust to new technology and new markets.

"What we see in Houston and Los Angeles is the beginning of substantial growing pains in identifying and monetizing media rights," Carter said. "There may have been some miscalculations here and in Houston.

"Carriers are questioning the demand for the channels and how the costs pencil out. Everyone has to be concerned about viewers getting content elsewhere, including stealing it (through unauthorized Internet streams). There is a point where consumers get fed up. And this will all get the attention of politicians and sports fans."

 

 

 

Should this be taken seriously, seeing as how it's coming from a DTV exec?

If so, my days with Dish may be numbered...

 

It wouldn't be surprising.

If Comcast maintains MFN status (which I haven't seen anything saying otherwise), it would be even more difficult to get a deal done with Dish.

 

Wow. That sucks. East Texas folks, my thoughts are with you.

 

Okay, well.......I have some time off later this month....looks like one of those days will be spent waiting on the DTV guy.....

 

so I'm screwed with Dish Network

Direct TV prices are ridiculous, looking into getting ATT UVerse instead....

 

If it comes to it, you won't regret it. I switched from Dish to DirecTV two years ago and IMO DirecTV beats Dish in all categories outside of price. It's a tad bit more expensive over the span of a two year contract.

If you switch, just remember to PM me so that you can list me as a referral and we both can save $10 a month off our bills.

 

My Uverse bill is crazy high, even with 40 bux a month knocked off. I think it was cheaper when I had DTV.

 

Use a BBS referral for DTV and you save an extra $10 a month for the first year.

It's not ridiculous.

 

Just call and whine a bit. Talk about the economy, how Comcast is offering a certain $ amount package and keep calling until you get the on rep who will help out.

I have U450, all Premiums, all sports channels and Palladia, fastest internet speed available (29 down I believe) and I pay $140/month not including taxes. I've actually had the same bill for almost 3 years now. I'm due again this month, I'll call with the "I love Uverse so much, but Comcast is offering me a certain plan and thy have faster internet, if you could just keep me on the same plan at the same price I won't waste our time, just sign me up for another year." Always works.

 

↑ ↑ ↑

:grin:

 

Back at it again tomorrow!