That deal is for the rights fees, not the network. I don't doubt somebody is willing to broadcast the Rockets. I doubt someone wants a channel basically dedicated to the Rockets.
While the rockets have the most hype they've had in years... they still aren't going to be as popular in Houston as some other contending teams are in their respective cities. Additionally, territorial restrictions will prevent them from being seen all over the state, as well as in other states. Rockets have not drawn that well locally (ratings wise) since Barkley was here. Even in the Yao Ming era, they fell behind the Texans and Astros in terms of local interest. The rockets cannot carry a channel by itself. If CSN ultimately loses the Astros, I don't see the channel ending up as viable.
The biggest issue I see there is the NBA territorial restrictions...the Rockets attention from non-Houston areas doesn't mean much if the territorial restrictions keep you from broadcasting games there.
No sorry, let me be clear. If Comcast wants to buy out the Rockets and Astros of their ownership share in CSN they would not then walk away. They wouldn't give them money for their share if they weren't intending to get this thing on tv. In that scenario, they would basically be giving cash to the teams to take over the headache of running the station and getting it on the air. That is their only solution.
There's no way I can see where the broadcasting rights are tied to CSN now. The Astros compensation for their broadcasting rights included being an owner of the network...that would leave the Astros totally out of control of their own broadcasts for the next 20 years subject to a fledgling start up channel's ability to get on the air and generate enough revenue to satisfy the Astros' issues. I have to believe their broadcasting rights agreement is part and parcel of the larger agreement to be a member of the limited liability company that is the general partner of the limited partnership at play here.
They have to give them money for their share if they want them to walk away so they don't keep vetoing deals with carriers, though. They're offering cash to the Astros to walk away so they can get the station on more TV's basically. It's the breakup of a partnership...buy me out. Or they can liquidate the whole thing...and buy the assets on the cheap...which is what it certainly sounds like they're trying to do in the pleadings they filed with the BK court....that's certainly what Crane is saying he thinks they're trying to do.
If that's the case, Comcast should have just let them leave when they wanted to. Right now, yes... the rights should be tied to the ownership... thus when the Astros aren't getting paid, it shouldn't have come as a big shock to the team as they're part owners (ie - paying themselves), and the company isn't making enough money to dole out full rights fees. If Comcast wants to buy out their ownership stake, they're doing so under an agreement that they'd still retain their broadcasting rights (the rights fees would then presumably be paid... the $50-80 million/year that the Astros aren't getting right now as owners). Comcast wants to own the channel outright... with the Astros/Rockets on board (making the channel more valuable). They'll happily pay a pre-negotiated rights fee to these teams in exchange for a channel that will likely be worth far more in the long run. If the end result of Comcast buying out the Astros is that the Astros get to leave... not sure why they would go through all this extra red tape to get to the same conclusion.
I know, but you are misunderstanding me. They aren't going to buy the Astros/Rockets out and then put the channel on tv if there are no Rockets/Astros to broadcast. Do you get what I'm saying? They are not going to buy out the Astros/Rockets from the partnership if that lets them out of their exclusive broadcasting rights. That's the only thing of value. IF they buy out them out then they will end up making a carriage deal to salvage some sort of profit but they'd no longer have to share any of it with the the teams. The Astros don't want that (Probably not the Rockets either) because it's doubtful that Comcast would offer to buy them out at anything close to what the carriage deal would pay if agreed to at the rate Crane wants.
Of course they have broadcast rights connected to CSN. Otherwise the teams could go out and sign deals with any network they wanted despite being owners of CSN. The teams are part owners of the network, but part of the deal is exclusivity of broadcast rights. Comcast isn't stupid. They wouldn't let the Rockets/Astros form a network and not have contractual rights to exclusivity. If they DIDN'T have rights, the Rockets or Astros could strike carriage deals through CSN and then go and strike rebroadcast rights on their own with FSN for additional revenue that they wouldn't have to split.
Have no idea what mechanisms are in place for the Astros to be able to do so. I don't think the Astros ever indicated they were shocked. The argument isn't that the company isn't making enough money to dole out the fees....the Astros' attorney is saying CSN is sitting on cash they're not paying. The test in BK is, "are you able to meet your debts as they come due." Simply choosing not to pay doesn't get you there. Let's remember what Comcast asked for in the BK pleadings: 1. Appoint a trustee to take over negotiations with carriers to get the channel on the air, removing the Astros from the decision making process...that's the part Crane and the Astros are saying they can't have happen..that it's going to lock them down for 20 years in a deal that doesn't match other teams in the AL West. and/or 2. Let Comcast buy the assets now. It's certainly in the real of possibility that the Astros get their ownership stake bought and then still agree to sell their broadcast rights to CSN anyway....but I doubt seriously there's not an out in the broadcast agreement for the Astros if they are bought out of their position in the company. This BK is about Comcast trying to force an agreement without the Astros vote in the first instance....or buying up the assets in the second
I'm not arguing with your point here....I'm suggesting that once the ownership is severed, my guess is that the deal is structured so that the broadcast rights go away as well. That only makes sense given the Astros position in this whole mess at this point. We grant you broadcast rights to CSN subject to our ownership in CSN....in the event of a buyout by Comcast, our broadcast rights go with us. Now that doesn't mean that they can't still negotiate a deal with CSN (the CSN that no longer has the Astros as a partner) for broadcasting rights....of course they could. But I doubt seriously the Astros or Rockets pledged broadcasting rights to a fledgling RSN they owned a stake in and didn't preserve the right to pull them away in the event their interest is bought out by Comcast. Their broadcast rights were part and parcel of that larger deal to begin with.
According to reports, having rights fees withheld. Bankruptcy has been reported as an attempt to stop the Astros from leaving.
And I'm saying that can't be true because Comcast would have no interest in buying out the teams if they lost their broadcast rights by doing so. The Astros are trying to get out of the deal because they haven't been paid. They probably feel they have a right to sever their ownership AND their broadcast rights.
Ownership is part of the compensation for the broadcasting rights. Buyout of that ownership is in effect to make the teams whole for the full value of their broadcasting rights. Any potential buyout is going to include the rights fees in some fashion.
I don't think I was clear. Having rights fees withheld isn't a mechanism for the Astros to get out of the CSN partnership....it might be a mechanism for them to cancel the portion of the deal that includes the pledge of broadcasting rights to CSN, though. That seems to be what that last article was saying. BK stops the Astros from leaving in the short term and potentially forces a resolution of the veto issue by having a trustee appointed to force a deal with carriers....even if that deal sucks for the Astros. That's why they filed and requested that relief. It leads me And in the alternative, Comcast seems to be asking for the right to buy the assets of CSN from out of the bankruptcy. That's what's in the pleadings.
Yes, what value to CSN have, if there are no Rockets/Astros? They aren't going to buy a channel with the hopes the Dynamo can carry them to a profit. Seems from the reports, that the Astros could certainly terminate their rights deal and negotiate with someone else. I'd imagine there would be a mechanism in the legal documents requiring them to relinquish their ownership should they wish to do that.
Sure they would...if they can't get the product on the air otherwise and they're losing money, then they'd have every incentive in the world to buyout a partner that they believe is keeping that from happening. None of this is about the 3 months of nonpayment. It's all about the broader deal going forward for the next 20 years....and disagreement over what they can accept. With the Astros saying what Comcast is willing to accept isn't enough to justify the Astros being a part of it given what their competitors are getting from similar deals. And that broader deal going forward with carriers like Dish and Uverse is exactly what Comcast is trying to do an end-around with by asking for emergency relief from the judge to appoint a trustee to make these decisions on his/her own without the voting structure that the parties agreed to to begin with.
Why would there be a mechanism to allow the Astros to maintain ownership, and sell their broadcasting fees? All of a sudden, the Astros would be the largest shareholder and have veto rights over a partnership they aren't involved in.
Agreed entirely. That's part of what the Astros and Rockets brought to the table. That's why there were to be included as owners in the first place.
Nope...I'm guessing it goes both ways. The ownership and broadcast rights are joined at the hip. Can't have one without the other....UNLESS...ownership is severed and you're just going to make an offer now for broadcasting going forward.
