I've dealt with my fair share of business acquisition contracts and they don't tend to contain promises as to speculative future revenue streams. There is no way for even Comcast to know what specific carriage deals CSN will get. The contracts also contain integration clauses specifying that nothing is promised except for the representations and warranties specifically written into the contract.
I don't know what representations were made. But I'm certain that the Comcast revenue streams factored considerably into the purchase price. What representations Comcast made in that, I do not know. Remember, Comcast wouldn't have been a partner to the purchase agreement for the Astros. Integration clauses in that deal wouldn't matter except with regard to what McLane represented. However, there would be written agreements between the McLane Astros and Comcast which would have been assigned to Crane's group. I don't know what representations were made then. I don't know what Crane specifically was relying on. But if Comcast were out there telling him that they were gonna get $X while Crane was kicking the tires, then he wouldn't be limited to an integration clause because those would be comments made before the McLane Astros/Comcast deal was assigned to him and his group. Those representations wouldn't even need to be specific...just enough for Crane's group to rely on which factored into his purchase price for the team.
Awful Announcing is a blog that covers sports media http://www.awfulannouncing.com/2013...ng.html?utm_source=dlvr.it&utm_medium=twitter The mess that has been going on with CSN Houston in the year it's been active has included less than half of the households in the Houston area receiving the network, absurdly high carriage fees, a bankruptcy filing, and now, accusations of Comcast fabricating the bankruptcy filing to bully the Astros into doing what the cable behemoth wants. The Houston Chronicle had a very interesting update to the story, featuring quotes from the Astros claiming that not only did Comcast try to buy out the team's ownership stake in the network, but that the club also lent the fledgling network money in May and June to keep it financially solvent. Astros owner Jim Crane claims that the club was supposed to receive roughly $50 million in rights fees from CSN Houston this year, but ended up receiving less than half of that. Crane and Astros general counsel Giles Kibbe also claimed that the only creditor the network has is the team, and that Comcast made the filing without speaking to the Houston Regional Sports Network (which controls the rights for both the Astros and Rockets) about the debts owed. Here's where things get interesting: because the Astros hadn't been paid rights fees in three months, they should have been able to acquire their rights back from Comcast and go in a different direction to distribute their games. The bankruptcy filing has blocked the Astros' attempt to do that, and has put them between a rock and a hard place, leading to their motion to dismiss the bankruptcy filing. The arguments to dismiss will be held on October 28th. What a mess. Crane's mindset is that the bankruptcy filing is a ploy for Comcast to take over full control of the network and reach agreements that aren't beneficial to the Astros going forward. With the way TV rights fees have increased in recent years, Crane's viewpoint makes sense, especially when you consider how large of a market Houston is and how much a below market deal could hurt them as they enter the next phase of their rebuilding process.
This is actually good news. If the Astros break away from Comcast they can start go a different direction and and have 9 months to find another deal or rejoin FSN Rockets can stay with CSN and make a deal and Astros will choose their own fate. No need to have two organization in completely different directions tied together like this.
I agree, REEKO. I think the best thing that can happen at this point is the parties settle ahead of the October 28 hearing. I looked online this morning, and the transcript from the hearing last week is not available, likely because it's sealed. I was curious to see if Judge Isgur had any comments on the record that showed his hand at all with respect to how he was seeing all this. Assuming it doesn't settle before hearing, it would be best if Isgur poured the case out of court in the hearing. Then the parties would be left to negotiate out, and the Astros could get on to getting on. At this point, I don't know if CSN Houston would stick around here long term. Only being tied to an NBA franchise with 82 dates isn't a lot of programming. They were going to show Aeros games too, but that ship sailed. My guess would be that the Rockets and Astros would be free to look elsewhere...and the Rockets would have some nice negotiating power with a group like Fox to sell broadcast rights to given the interest in them here as the season approaches. I wonder if the Rockets want to be bought out of their position in CSN at this point as well...???... Interesting stuff, anyway. Will be nice to have a resolution to it, and I think that's where this is all heading.
How is it good news? Basically that is what the Astros may have been wanting to do, and Comcast stopped them. That would also mean Comcast doesn't want to continue CSN without the Astros. It could have been good news, but now it isn't.
TWS and the Lakers are doing ok by themselves and CSN also has the Dynamo. Seems like enough programming with Rockets and Dynamo alone. The price will be lower and that will be an in demand product. I think the Astros are destined to make a short term deal with fox.
The Rockets can't just be bought out of their share in the network and move on. They have a contract. Even if they are bought out of their share to the revenues, their broadcast rights are still tied up with CSN Houston. And even if CSN Houston can't get deals like it expected, it likely wouldn't let the Rockets go if they could help it. They could still do reduced deals with DTV, etc. and get SOME money.
Just asking...why do you think it necessarily means they won't want to continue CSN without the Astros. I don't think that's necessarily true...I think they were trying to push pause (which is what BK does during the automatic stay) so they could slow down whatever momentum the Astros had to get out quickly to see if Comcast can preserve something going forward.
Who knows, with 35% share some money might actually be more money than expected with the Astros in the network. I like the idea of the Rockets sticking with CSN Houston
My guess is there's something in the agreements here that allow the Rockets to kill the broadcast deal if they get bought out of the station. It depends on what Comcast's goals are at this point...I don't know what they intend to do if they're reduced to Rockets only. REEKO's point makes sense..but the Lakers are a whole different engine in the LA market than the Rockets are here.
There's no way Comcast would have interest in buying out the station ownership of the teams if that let them out of their deals. They'd be stuck with a station that has literally ZERO value beyond the equipment and studios. Buying out the Rockets/Astros ownership stake is a way to give them money in exchange for control of carriage negotiation and ownership of profits.
Why bother with Bankruptcy unless you want them to stay? Why bother with a buyout of their ownership, unless you want them to stay? Why not let them walk and go ahead and start getting paid, unless you want them to stay.
If the intention was to come into town to form a station...and incur costs around forming a station...that was going to cover roughly 250 live events annually...and 162 of those walk out the door...I'm not sure they're going to want to stick around to cover the 82 left. They certainly may want to. I don't know the economics well enough to know if that makes sense for them. But assuming the Astros walk, this is a massive game changer for CSN going forward over the next 20 years, and Comcast may or may not be interested in it any longer at that point. At some point sunk cost is sunk cost, and you move on if you don't think there's enough in it long term to justify it. Is your thought that after all this, the Astros are still gonna be on CSN Houston? Because I don't see that happening at this point, frankly. Maybe I'm wrong. Again...not saying that I know either way...
Because you want to press pause. Because you're in negotiation for a blowup, and the Astros have rights to clear out otherwise...so you're trying to push pause long enough to keep that from happening. Crane said there was an offer to move on...that he countered and hadn't heard back...and then BK was filed.
Received email from Jim Crane today as season ticket holders...the pertinent part is below: Regarding CSN, I'm sure you're aware that Comcast affiliates recently filed a petition requesting that the network be placed into bankruptcy. This was an improper filing by Comcast and, we believe, an attempt to force us to accept a deal that will have extremely negative consequences on the Astros for the next 20 years. This is a battle we must fight. You, as our fans, deserve to watch the games on television and you deserve to watch a playoff caliber team. We will continue to do everything we can to make sure to provide both of those things to you.
Juicystream, the Rockets are not the Lakers but the Lakers deal is $3 billion dollars. The Rockets only need 10% of that. The Rockets are an in demand product and would get attention from non Houston areas. The team has more national buzz then at any other time in the last 20 years. They could justify a partnership with the Dynamo and there will be demand.
So basically, JS is right when he says CSN doesn't want the Astros to leave. They want to buy them out of the ownership of the network... But they still want to be broadcasting their games. Channel loses value without the Astros.
