CSN Updates

Most of the blame gets tossed Crane's way because Crane can't accept the reality that he's not getting the money he thinks he deserves. Read his comments about the Mariners in the article. Cranes also the only one running his mouth constantly

 

I would understand that if someone...anyone...could confirm that he's been offered a deal that wouldn't be a colossal loser. If there were some real viable deals he turned down, your point would make sense.

Because the judge has confirmed all the deals brought to the table by Comcast were crappy, I don't understand how you can blame him for not accepting those.

 

Yeah, the only things in this situation I think Crane is to blame for is BS'ing everyone about how close we were to getting a deal done or how he would use MLB Network as well as not apparently doing his homework before he bought the team. Crane comes off as kind of a slimeball but it seems obvious McLane is really the one to blame here. He sold Crane a bill of goods and Crane ate it up like a sucker. It's CSN itself that makes the deals losers. There's plenty of money to be made without CSN. Instead of just taking that FOX Sports deal they shot for the moon and gave us all the shaft, themselves included.

 

I'm not even sure McLane was really to blame (barring any lies he told Crane). He negotiated the veto clause with the other parties when building the network - so he basically built a network that, if it didn't work out the way he wanted, could be blown up and everyone could go their merry ways. Crane bought a network in which he had that right as well. If the terms of the deal held, basically it was a deal that had a lot of upside if things worked out, but relatively little downside if they didn't. No idea why the Rockets/Comcast would agree to those terms, except that it may have been the only way to entice the Astros to join.

Comcast just did an end-around to avoid that clause and now has created a network that doesn't conform to the original terms they agreed to. Even the judge agreed that the original bankruptcy filing was bogus - it was only after the Rockets joined later on that it was sustainable. And in that process, it appears the Rockets may have just screwed themselves out of tens of mlllions of dollars. If this thing is dissolved, they'll be in the same place that would have been in October, except they'll have lost a season of the Rockets on TV and likely will only get a partial payment of the media rights from this season.

 

The truth is, everyone ate it up like a sucker. Remember when this was a license to print money? Then it all changed.

 

According to a motion filed yesterday:

"As of February 4, 2014, the Debtor's books and records reflect that it owed approximately $27,683,693 to the Rockets and $27,898,563 to the Astros."


I'm guessing ALL of that money owed to the Rockets accrued AFTER the bankruptcy filing, as I understand fees are earned in season.

By supporting the bankruptcy and providing it legitimacy by entering as a creditor, they ended up with a year of non-payment for media rights fees they could have potentially obtained from Fox Sports or some other provider for the 2013/14 season.

Like you, I think they're going to regret that. My guess is they believed that, at the very least, Comcast would take care of it all by buying everyone out.

 

The really sad thing is, what little I get to see of the actual CHANNEL itself is actually pretty good, and well done. The Rockets are a good team, very much worth watching, and the Astros finally at least have some glimmer of hope, making them worth an occasional view as well.

And the fans, from all areas of the region, DO want the channel.

The demand is there, the money is there to be made, everything has been sitting here for over 2 years, just waiting for the teams and Comcast to just.. pick it up.

SMH.

Ok, so question as to how things stand at this point:

Hypothetically speaking, suppose this all gets thrown back in Isgur's lap, and the decision is made to blow the whole thing up and let the teams go their separate ways.

What happens then?

Is Fox just sitting there waiting to take them back? Do they even WANT them back? I would assume so, but I have not read anything about that for sure.

Anyone?

 

Fox would probably be happy to take them back, but at what price?

 

If the Astros went back to Fox, couldn't Comcast play hardball and get rid of that channel?

 

Fox tends to group all their channels together giving them greater negotiating power.

 

Could? Yes. Will they? No

 

Plus, I think Comcast is at the low end of the customer loyalty chart. When people who are medium level sports fans lose the Rockets/Astros with a tv service they really like, they might not be very willing to switch to comcast to get to watch. But when those level fans are with comcast, and they lose the games, they would probably be much more willing to move to another provider. I mean honestly, I don't know anyone who "loves" comcast over all the other choices.

And it really is those "medium" level sports fans that matter here. The die hards like myself, will find a way to watch. The percentage of the public that don't give a crap . .well they don't give a crap

 

Yup - and that was as of early February. It was probably closer to $50MM by the end of the season. If they liquidate, they might get a small fraction of that at best as one of the creditors based on whatever CSN's assets are worth. At worst, they get none of it. Astros are in a similar boat, but were paid the first half of last season, so they had the $27MM from last season and then are probably accruing about $9MM/month this season.

 

I should have added George Postolos to the perpetrators list. That guy seems to have run it all.

 

I know, I know, another John Royal opinion piece...just some food for thought.

http://blogs.houstonpress.com/hairballs/2014/04/astros_csn_houston_talk_deal.php

Jim Crane Wants the CSN Houston Matter Settled, and He Means It

By John Royal Thu., Apr. 24 2014 at 8:30 AM


Jim Crane met with the members of the Astros media on Monday before the team's win over the Seattle Mariners. Topics of discussion included his disappointment with the team's start and the progress toward a new spring training facility. But it's his comments regarding the continuing CSN Houston saga that were of most interest.

Stating that bankruptcy judge Marvin Isgur has the ability to move things along quickly at the speed of light and that Isgur has the leeway to do just about whatever he wants, Crane sounded pessimistic about the outcome and about progress in mediation. And that said, he wants this situation wrapped up quickly.

"So I would like to see something resolved within 30 days, one way or another," he said. "He (Judge Isgur) could make that happen -- it could linger longer than (that), but it's certainly not good for us, and it's not good for the Rockets. I don't think it's having any big-term effect on Comcast."

Not being in Seattle on Monday, I didn't have the ability to ask any questions. And I've got lots of questions, but the primary question is this: is he dropping his appeal of Judge Isgur's bankruptcy ruling? The judge might posses the power to make things happen at light speed, but he has minimal powers while the case in on appeal -- he can make orders keeping the network lights on, make sure employees get paid, etc., but he has no real power over the actual bankruptcy because he and the parties are still waiting for Judge Lynn Hughes to rule on Crane's appeal.

But Crane's 30 day wish leads to some conclusions. First if he is dropping the appeal, that does put Isgur back in charge of the bankruptcy. Isgur's not been sympathetic to the Astros arguments, and it's likely the network reorganization plan would not be one to Crane's liking. There's also the likely possibility that Judge Hughes has told the parties how he plans to rule regarding the appeal and that the case will soon be returning to Isgur, with likely the same dissatisfactory results for the Astros.

There's also another possibility, that the parties are close to settling things. They would need Isgur's blessing on any deal, but Isgur can bless such a deal quickly. Crane stated he didn't know if there would be further mediation sessions. But while he didn't sound thrilled at how the sessions have gone, it did sound as if progress has been made.

"You try to get everybody to lean into the middle and hopefully get something done," he said. "You know, we thought we gave in quite a bit and gave a fair deal."

Crane further mentions difficulties from this being a 20-year deal and the long-term consequences of the disaster that is the network and how this complicates settling the matter. Especially as how he still wants the TV deal to fund players like Seattle's TV deal funds the Robinson Cano contract. But then he mentions other, possibly shorter deals.

"It's a 20-year deal, and some of the offers have been for less than that," he said. "We're weighing those, and it'll be back in court here pretty quick."

This furthers my belief that a deal's close, and that they'll be in court asking the judge to approve the reorganization plan. And my guess would be the plan involves the Astros being bought out of its network ownership stake with the team getting a new media rights deal giving it more money per year. It sounds as if the Astros would still like a 20-year deal, but that the other parties want a shorter deal.

What Judge Isgur would be asked to bless probably goes along these lines. The Astros give up its ownership of the network in exchange for a new media rights deal in which it gets more money but has no role in running the network. The Rockets and Comcast probably remain as co-owners, with my guess being the Rockets get majority ownership and management control with Comcast handling the daily operations of the network. The Rockets can make any and all carriage deals. The plan will probably detail heavy short-term financial losses, but without the Astros ownership monetary demands to handle, the path to profits might be easier to achieve.

The caveat here is the same as always. I'm just reading the quotes, reading the documents, and extrapolating from there. So I could be totally wrong about everything, and I probably am. And the other caveat is none of this guarantees that any carriage deals will ever be reached with DirecTV, U-Verse, or the cable system of your choice. What such a deal would do is guarantee the Astros get paid, and that's probably the most important things as far as some parties are concerned.

 

You didn't even address my point. My point was it appears Crane still thinks he can get Mariners like money out of this deal.