Has this been confirmed? Is this how they've handled their other carriage deals for other MLB teams that currently have comcast channels? (Cubs, Giants, Phillies).
Seems like the Astros and Rocket got dupped into a sucker deal. The Astros and Rockets thought of themselves like heavy weights - because they are billionaire owners. Now they find out that Comcast held all the cards to force them into submission. It seems that Comcast Cable (NBC) doesn't care if Direct TV, Dish Network, etc carries the games - They'd rather people change from Direct TV, Dish Network, etc. Comcast Houston is a channel which is it's own little venture. If it fails, Comcast cable isn't going to get affected - companies like that are made of money (with as much lobby power in Washington which Comcast has, they'd recoup losses in no time). Here Comcast used the Astros and Rockets own greed to request the most expensive fee to watch the channel. I could imagine the Astros and Rockets counting their chickens before they hatched - dreaming of billion and billions of dollars. Now the Astros and Rockets know that they are in hot water, because Sports isn't a religion in Houston. Here the Astros and the Rockets wanted to milk the Houston fans for more money. They both already had their stadiums and arenas. So they went for the big price, they went for all of the T.V. revenue.
You don't know who is blocking any potential carriage deals. It could be Comcast, or the Astros, or both. I read that in order for there to be a carriage deal, it has to be a unanimous vote. So the Astros, Comcast, or the Rockets have the ability to block any deal. It would be interesting to know what's really going on behind the scenes, I would think that something will leak out at some point. Right now all we doing is making a guess.
Correct, we don't know who is blocking. We do know that the Astros are either trying or gave Comcast reason to believe they were trying to get OUT of CSN. If they are trying to leave CSN it's kind of hard to believe they are nixing carriage deals.
Doesn't have to just be about that. If CSN isn't paying the Astros their rights fee, under the guise that everybody needs to share the losses equally, that's enough for any team to want to get out of the deal. Crane has also gone on record (via himself, or via Ryan) to say that they're not going to just take the first deal that comes along... that any deal they take has to be viable not just now, but for the life of the contract. I could see them having been on board with the nixed deals... as long as they were still getting the rights fees (which if they get that in full, leads to the Forbes article saying how profitable they are). The channel itself has value (presuming coverage)... and word is now that CSN is going to recommend to the judge that they would be open to taking ownership of the entire company. (Link: http://blog.chron.com/sportsupdate/2013/09/csn-houston-faces-total-gridlock-comcastnbc-wants-bankruptcy-trustee-to-oversee-troubled-network/)
Interesting. If Comcast is holding up the carriage deal, I don't think they'd offer to buy the network. I wonder if the amount of money the Astros get is dependent on the amount of the subscriber fees and not just a set amount regardless of how much they can get from providers. That gives Crane plenty of incentive to hold out on a carriage deal. In fact, Comcast said in one document filed Saturday that if the bankruptcy court sees fit, it would be willing to buy the entire network and continue in business under the CSN Houston name. The Astros currently own about 46 percent of the network, the Rockets own about 31 percent and Comcast/NBC Universal owns 22 percent.
If Comcast buys them out, the company can then either choose to negotiate with carriers on their terms (or not at all). Comcast also would have to continue to pay the teams a basic rights fee... but the teams get nothing else (ie - pretty much the same deal they had with FSN). On the flip-side, if the teams area allowed to get out of the deal... I'm not sure they would continue to operate as a tandem. Then, they're either crawling back to FSN at a significantly lower rate than they had before... or they try to make their own RSN with another company (they were in negotiations before with DirecTV), with the risk of this happening all over again. I don't see this ending well for either team... unless they figure out a business model that all sides can agree on, and allows them to keep ownership stake.
More details and quotes from the filing here: http://blog.chron.com/sportsupdate/...nkruptcy-trustee-to-oversee-troubled-network/ Of particular note: “The question before this court is by no means who is ‘right’ or ‘wrong’ in the various disagreements that have arisen among the parties,” the petition continues. “This bankruptcy filing is not an effort to have this court adjudicate any such dispute … (but) to preserve the going concern value of the network.” Another section of the petition refers to disputes that have created “total gridlock” for the network. CSN Houston has a four-member board – one representative each from the Rockets and Astros and two from Comcast/NBC Universal – and all parties must agree for deals such as carriage agreements to be reached. But the disagreements among the parties are so sharp, the petition said, that they “go beyond mere acrimony” and that the board “will continue to be working at ‘cross-purposes’” unless a trustee is appointed by the bankruptcy court to oversee CSN Houston while the parties sort out their differences. “It is clear that the network cannot operate its business or preserve itself as a going concern under its current corporate governance structure, which has resulted in an irreconcilable impasse,” the petition said. Basically, the combo of the Astros, Rockets, and Comcast is completely dysfunctional.
If Comcast is the bad actor in this situation, it would seem a little odd that they would be e ones seeking the intervention of a federal court.
Depending on which judge drew this case, there is a chance that a trustee will be appointed. That trustee would then make the carriage agreements.
You seriously think Crane has a desire to compete at an average payroll level? What have you been smoking? The first and only two things Crane has done to date are 1/ cut the payroll to the bone, and 2/screw up TV coverage not only for the Astros but also for the Rockets. Crane reminds me of Bottom Line Bud. There aren't any good guys in this scenario. The one thing you don't want to do is take your business to Comcast. That's caving in to the partnership's greed. Quit Comcast now, stop buying tickets to Astro and Rockets games, listen to the radio until these clowns come to their senses and make a reasonable deal with DirecTV, AT&T, etc. Their demand of about $3.50 per month for each and every viewer, even those who never watch sports, is both shameful and disgusting.
Not if they think the Astros were going to pull the plug on it anyway. It may be a "salvage what's left" approach....and that's why they're saying, "oh..and by the way, we'll buy the station and/or all of its assets, too!" I'm interested in hearing a response from the Rockets.
Wait...help me understand this. Do some bankruptcies get filed with NO trustee appointed? I've never been around any bankruptcy proceeding where there wasn't a trustee appointed. Isn't this before Isgur? He taught me bankruptcy in law school, actually.
actually there is a difference. drayton is a billionaire who could afford to have Astros losses against his personal wealth. crane is a guy who shouldn't have bought a team because he can't afford to lose a dollar. this barely making it is the biggest problem with the owner
Crane isn't THE owner...there are a lot of owners. Crane doesn't own anywhere near the percentage of the Astros that McLane did.
Most Chapter 11 cases do not have a case trustee appointed. The U.S. Trustee is involved in every case, but in more of a oversight role, referring bankruptcy crimes to the US Attorney and making sure that there are no habitual problems with creditors or attorneys. In a Chapter 11, the UST will preside over the creditors' meeting and will be involved with the plan, but they usually do not administer the estate. Under Section 1104, a trustee can be appointed to administer the estate and, in corporate cases, step into the shoes of management. In fact, the appointment of a case trustee in Chapter 11 is an extraordinary remedy. Judge Isgur is, I believe, more likely to grant it than some other judges would be. He is a no nonsense kind of guy and will apply the law in what he sees is the most efficient manner. If the Astros were planning on pulling the plug on an impracticality clause in the contract, the actions of the trustee could result in the network becoming solvent (at a lesser rate than the team wants, but still solvent). That would arguably remove the impracticality and throw the team right back into breach should they try to bolt.
