CSN

It means that nobody will be looking to buy out fledgling sports networks. Gotta make nice for the FCC to approve all these super-mergers.

 

Thought you might find this interesting/relevant. While the use of the word "malpractice" is probably misplaced here, the point is the same whether it's Comcast in Houston or Time Warner in LA. Teams rely on these broadcasting partners to provide the parameters of these deals (upon which they base their decision to get involved in the first place) and then go negotiate carriage. In both instances, the broadcast company overstated price and was unable to negotiate carriage effectively in the market.


http://sports.yahoo.com/news/10-deg...-mlb-s-biggest-disappointments-053835872.html

A metaphysical question, with a slight twist: If a baseball game is played and no one can see it on TV, does the baseball game really count?

The standings say yes. The statistics agree. And yet to the greater Los Angeles area, 70 percent of whom cannot watch the Dodgers in the comfort of their homes, they might as well not exist. The most expensive team money can buy is also the most expensive mistake in the short history of wildly overpriced, patently absurd local-television-rights deals.

For an estimated $8.3 billion, Time Warner Cable bought the rights to the Dodgers and created SportsNet LA. Time Warner then suggested to cable and satellite providers that they pay at least $4 a month to carry the channel, a fee they would pass along to subscribers. Every one of them kindly told Time Warner to suck a lemon, and so here we are, with the most popular baseball team in the game's second-biggest media market practically blacking itself out on account of its own efforts to fatten its pockets.

And let's not twist this any other way: This is a Dodgers issue and a Time Warner issue, and any effort to spin it otherwise is revisionism. When you have a product like the TV rights to a baseball team, and the value of those TV rights is an ever-moving and nebulous dollar amount, it is incumbent on the parties paying those dollars and receiving those dollars to ensure they will recoup those dollars one way or another.

Everybody in the television business agrees: DirecTV, the satellite giant, sets the standard with sports programming – and should continue to do so even after its purchase by AT&T over the weekend. When it agrees to a carriage deal, the rest of the providers fall in line and do the same. For Time Warner to promise the Dodgers an average of more than $330 million a season for the next 25 years without even a soft carriage agreement in place with DirecTV is malpractice, a monster bet on an audience it clearly did not understand.

Were cancellation orders flowing in on account of the Dodgers' invisibility, surely DirecTV would reconsider its tack, much as it did when the Lakers launched their own network and fans cried foul at its absence on satellite. More than a quarter of the 2014 baseball season has passed, and DirecTV is firm as ever in its stand, which is frightening for the Dodgers, because it reinforces a troublesome truth: By chasing every last dollar and choosing Time Warner, a direct competitor to DirecTV and other providers, they failed to protect their greatest asset. Not a TV contract but a team.
Naturally, the buck-passing is starting, cracks in the unified Dodgers-Time Warner front apparent. Peter Guber, one of the Dodgers' co-owners, recently told the Los Angeles Times: "We sold the rights to a gigantic corporation, it's their job to market the rights and get the distribution. We are not happy that they haven't been able to get the full distribution in our own market that they promised. That's their job. They made the bet."

Actually, this bet was two-fold. The Dodgers bet on Time Warner to fulfill its duties, fully aware that an inability to do so would render them mute in a Los Angeles sports scene that thrives on noise.

 

Third time's a charm, hopefully this thread won't end like the others.

 

I'd be interested to know if Time Warner insisted on a Most Favored Nation clause like what happened here with Comcast here in Houston. Asking for that clause is a clear indicator of no rate guarantee. If I were the Astros or Rockets, the first question would be... "Why does there have to be a MFN clause if you are guaranteeing a specific rate?" We have also heard nothing from the Rockets about this either.

That said, the teams being owners in these RSN's and having a say in carriage rates makes getting deals done much tougher. Partners turning on each other is bad business too. Both situations in LA and here are tough to watch (pun intended).

 

I don't think it played any role at all, really. This has been going on for like 20 months or so. It likely predates the talks.

I don't think it makes it any easier to get carriage deals done with CSNH. I'm not sure how big a player the new company becomes but maybe they decide to buy the Network out of bankruptcy court auction at a low price.

I'm assuming that the CSN H Comcast carriage deal comes with the Network if ATT buys it. ATT gets the Network on the cheap and plugs in DTV/ATT customers to get much greater market share. They won't have as much invested as Comcast did and won't have to pay partners with veto power in the Network.

It would be interesting to see of the Comcast/TWC merger means TWC customers are added to the Comcast/CSN H carriage deal too. That would mean ATT could purchase the Network and have ATT/DTV/Comcast/TWC all signed up without having to pay the teams as partners in the Network. The teams would get their agreed upon media rights and that's it.


As Max has suggested, there will likely be legal haggling over transferring the media rights.

 

I agree this would be an effective solution. However, there's a major timing problem here - both the Comcast/TWC and ATT/DTV deals are going to go through fairly long and extensive regulatory processes. I'm not positive, but I assume they will go into 2015 before anything is settled. I don't think CSN-H can sit in a holding pattern that long.

 

This is #4

 

Exactly... and nobody is going to make a move to acquire CSN-H, even in its current mangled state, while they're trying to play nice for anti-trust/FCC approval reasons. Plus it could change parameters of any merger.

The Comcast-TWC pending merger likely played a role as to why Comcast mysteriously backed out of their pre-supposed plans to buyout the team's shares.

 

meh...what's another year?

 

I dont think ATT or DTV for that matter would be prohibited from doing this type of transaction while the regulatory process is going on.


This would be much different for DTV than Comcast buying it. Comcast has to worry about securing large carriage deals and DTV at worst could add it's own customer base to Comcast's right away. I'm saying DTV since they have Sports Networks already in place.

 

I think, in a general sense, neither party is going to engage in acquisitions or the like because it complicates the valuation of the two entities for the sale. That's just my guess - even if regulators don't stop them, I think both ATT & DTV generally pause on any major changes to their companies until their merger is complete or rejected. That said, maybe acquiring a CSN-H is such a small blip for them that it doesn't matter.

 

Article below discusses the regulatory pressure all these deals will get. I doubt any new acquisitions are done until the dust settles... If anything, they'll all be looking to cut dead weight and lower prices to play nice.

Also interesting to note that DTV is $20 million dollars in debt, that would get bought out by ATT. Not sure why they would go further into debt to bail out a struggling sports network, and face potential legal ramifications if the teams decide to fight the unprecedented reassigning of their media rights, and loss of veto power.

http://nyti.ms/1p7OE8r

 

Please make my misery go away and end this thing. I would really like to be able to watch the 'stros play right now!

 

I would hope that it was just a small blip for them and this lead to some widespread carriage model right after the sale. If it goes up for auction, I can't see no one buying it for dirt cheap.

 

<blockquote class="twitter-tweet" lang="en"><p>Judge Isgur sets <a href="https://twitter.com/CSNHouston">@CSNHouston</a> status conference for June 12. Not many updates recently, so interested to see if there's anything new.</p>&mdash; David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/469154660407054337">May 21, 2014</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>

 

Awesome. In 3 weeks they'll get together to talk about it all some more.

 

Anybody think Isgur is an attention ho ?

 

http://blogs.houstonpress.com/hairballs/2014/05/csn_houston_broadcast_footprint.php

How the CSN Houston Broadcast Map Dooms the Network

By John Royal Thu., May 22 2014 at 6:00 AM


It was just a little over 30 days ago that Houston Astros owner Jim Crane said he wanted the CSN Houston matter settled within 30 days. That didn't happen.

The parties still await a ruling from a Judge Lynn Hughes on the Astros appeal of Judge Marvin Isgur's ruling that put the network into bankruptcy. Judge Isgur, the bankruptcy judge assigned this case, still makes the necessary rulings that are keeping the network on the air and the employees and vendors compensated. The Astros and Rockets are still not being paid the dollars due to them under their media rights deals with the network. Additionally, at some point Judge Isgur will make a ruling as to whether he has jurisdiction over the fraud suit filed by Crane against Comcast and former Astros owner Drayton McLane. (For those really interested, there is a status conference before Judge Isgur schedule for June 12).

Spokesmen for DirecTV, AT&T, and SuddenLink reiterated last week that while they would like to carry the network, the amount requested by CSN Houston is too much and not in the best interest of the company owners and their subscribers. Thus time passes, and the network remains unavailable to most of the city/state/country. Jobs and livelihoods remain in jeopardy, and companies worry about whether they'll ever be paid all their owed by CSN Houston.

The populace is sick of the whole matter and has basically placed a pox on all houses. But while the proceedings drag along, perhaps it's time to revisit what is perhaps the main issue preventing the network from achieving full carriage: the size of the CSN Houston broadcast footprint.

The footprint of CSN Houston encompasses more than the Houston area. It includes the entire state of Texas, Oklahoma, and parts of New Mexico, Arkansas, and Louisiana. It's the same footprint established years earlier by Fox Sports Southwest, and it uses the same boundaries defined by MLB as the home territory for the Astros -- those areas in which MLB games are blacked out on the Extra Innings and MLB.TV packages.

It's a huge footprint, and one the Astros, one of the network owners, wants very much to keep. But there's a slight problem. The NBA defines its markets a bit differently. It divides Texas into three markets split between the Rockets, Spurs, and Mavericks. The state of Oklahoma gets the Thunder, and to Louisiana goes the Pelicans. While Astros games can air over the entire footprint, the Rockets are essentially limited to a sliver of the map along the coast of Texas -- even with games airing on a different regional sports network than that of the Mavericks or Spurs, Rockets games may not be broadcast into their territory -- unlike with MLB where the Astros and Rangers share the map and can air in the other's market.


This is not the projected CSN Houston map, but it's not too far off
Thus the statements from DirecTV saying it's not fair to make the people of San Antonio pay for a product (the Rockets) they can't watch. There has been discussion in the past about CSN Houston adopting tiered-pricing that would have the people in the outer regions pay less for the network than those in Houston, and there was supposedly some talk that the Astros were amenable to this. But that aside, why would, why should people in El Paso be required to subsidize a network with a primary focus on sports centered on Houston and the immediate area around Houston?

For it's faults -- a Dallas-centric focus -- Fox Sports Southwest is able to offer continuous programming to most of its map that features the pro teams that have been assigned to that market by the leagues. So El Paso gets to watch Phoenix Suns games. Laredo gets the Spurs, Tulsa the Thunder. All markets get the Rangers and the Dallas Stars, and a steady diet of Big 12 sports. But CSN Houston can offer only the Astros, Dynamo, select C-USA, AAC, and Southland Conference college events while the Rockets are blacked out for most of the footprint.

The Astros essentially need carriage by all providers across the entire network for there to be a chance at economic success. And the network needs to be on the same basic cable channel tier as the ESPN stable of networks, the Turner Networks, Fox Sports Net, the NFL Network, and the MLB Network, but it can't offer the reach and depth of programming as those networks. ESPN was able to get carriage for The Longhorn Network by offering it at a very-low cost, and with the costs for carriage of the other ESPN networks subsidizing its losses -- FOX had to do much of the same thing to get carriage for Fox Sports 1. But there is no other affiliated network that can make up for offering CSN Houston at a highly-discounted price or that could be used to leverage a provider into carrying the network on a basic tier.

CSN Houston offers an ill-advised, poorly-conceived network footprint that makes absolutely zero sense for its product. Yet the Catch-22 is that, for the network to come close to any success, it needs carriage across this entire nonsensically designed footprint at non-highly discounted carriage rates to come close to success. The result is bankruptcy, lawsuits, fans in the core of the market who are shut out from viewing, and worse, the loss of interest of the casual fan.

 

Are they really? I thought I saw an article talking about how huge of a cash flow DirecTV had