You wouldn't walk away for nothing if there's still value there. Comcast offered them some money, so we know there was some value. The Astros asked for more. It's a negotiation, in theory, and they come to fair value. But instead it got short-circuited by the bankruptcy filing.
What money did they put into it? My understanding was Comcast created a company to be the lender? As for getting money back? There's no money to get back. The accounts are dry and there isn't real revenue coming in. The Astros and Rockets have already been paid monies through the deal.
1. I never read anywhere that the Astros were trying to walk away from their interest in CSN because they weren't paid for 3 months of broadcasting. I've heard that they don't want to agree to a deal with carriers that will lock them in to a competitive disadvantage with teams in their division. 2. There's no urgency to walking away right now. They're in the position of being the largest owner of a company that requires a unanimous vote to get critical deals done going forward. There's value in that position. You send over an offer and you see what the other partners say. 3. What are they going to get a 100% stake in ever? Any RSN is going to require they partner with a media company. 4. Agreed with you on the potential for the Astros with other networks. That potential is still there.
They have a carriage deal with Comcast which covers 40% of the market, so there are some revenues coming in. Or at least, there should be.
I agree the timing for them wanting out is a little strange (why wait until you've already lost out on $10s of millions?), unless there is something out there now that they can't afford to wait on. Crane makes it seem like there is a clear alternative available to him right now, but seems like that same thing would be around in February. We need facts that we aren't going to get to know exactly what is/was going on.
I don't believe Comcast is offering them to money to walk away though, Comcast is offering them money to buy out their ownership. Of course there's value there for Comcast if they have the Rockets and Astros on their network and are free to make a deal with the carriers. There's no value there for the Astros though if they aren't going to get on tv with CSN. What would they want a share of? There are no carriage fees to split up. Are the Astros going to demand a cut of something that doesn't exist? I really think you are misreading what is happening here. I believe the following: 1) The Astros wanted to walk away, scottfree, and go do their own deal somewhere else 2) Comcast is trying to block that 3) Simultaneously, Comcast is trying to buyout the ownership stake of the Astros, and possibly the Rockets, so they can go make a carriage deal
It will be hard for them to get setup to run on a different network in February. Let's say FSN is the carrier they would jump back to. FSN would need to get people and equipment back in place, not to mention they have to revise all of their own carriage deals as they negotiated rebates with DirecTV and AT&T after losing the Rockets/Astros.
There were cash calls...at least 2 of them...to investors in the first and second quarter of 2013. Crane alluded to them back in the summer. Google CSN Houston cash calls and you'll find more on them. The accounts aren't dry according to the Astros' attorney. But none of that matters....because if it's worth it to Comcast to pay the Astros to get out of the way, then it's worth it for the Astros to sit and listen to that. According to Crane, they've already exchanged counter-offers for that very thing. So whether CSN has cash in the bank is irrelevant to whether or not the Comcast partner thinks there's something to be salvaged here and is willing to pay the Astros for their position in it going forward.
If the Astros wanted to walk away scottfree, why did they exchange offers for a buyout? They were exchanging offers at the time the BK was filed. You can read the BK pleadings...they're not about blocking the Astros moving on. They're about getting someone else to take over the decision on negotiating with carriers, thus breaking up the stalemate between the partners so they can get on the air all through the city....even if it's at a pricepoint the Astros can't live with. And if that doesn't work, then they're asking the judge AS CREDITORS to let them buy the assets of CSN...not the ownership interests in CSN. The ownership interests in CSN aren't assets of the company that can be auctioned off through a bankruptcy.
Buyout of their ownership, not their carriage agreements. The buyout would give Comcast the majority stake in CSN and continue to broadcast the Astros.
Yeah... according to the Astros, they negotiated a $50 million rights fee for this year, but have only been paid in the "teens" thus far. Again, some of that money held back may represent the "losses" suffered by the company thus far, and the Astros being a 46% part owner need to share some of that. I definitely believe the Astros have another TV offer on the table for rights fees (and possibly ownership)... but the comcast bankruptcy filing prevents them from leaving right now. Several of the articles in fact stated that the BK was filed in part to keep the Astros from terminating their deal. I don't think they care about a "buyout"... more likely they just want to receive most of the rest of the original rights fees they agreed to (minus whatever they feel the % of startup/operating costs they're responsible for as being part owners). And from Comcast's standpoint, they would certainly welcome the Astros selling them back the ownership stake (but keeping them on as tennants). They would also welcome a trustee to negate the Astros say on subscriber fees to iron out carriage deals... but that would be a WORST CASE scenario for the Astros, as they would not only not get to leave, but be locked into low-ball carriage deals that they may be able to beat by partnering up with an established channel.
I doubt seriously that the broadcast rights that have been pledged aren't tied to ownership....the Astros were compensated, at least in part, with ownership based on the grant of broadcast rights. But I agree with your first point...it's for a buyout of the ownership in CSN that the Astros own. That's what they've exchanged offers on...because that, and that alone, is what provides the Astros the voting rights on accepting deals with Uverse, Dish, etc.
Ownership & rights are probably tied, but that doesn't mean you can't buyout ownership without sacrificing the rights. I promise you any buyout would contain language regarding broadcasting rights and ownership.
Sure... but EVERY team gets a piece of the national media deal, and the have-nots get more of the revenue sharing. The things that separate the haves from the have-nots in baseball are stadium deals and TV deals, with the latter providing the bulk of the profits. The Rays/A's are stuck where they are (payroll-wise) both because they have awful stadiums and don't have enough leverage or regional following to score large TV deals. The Astros can easily make a profit... but they won't be able to compete with the revenues of other teams that have both lucrative stadiums as well as lucrative TV deals. Rangers/Mariners are supposed to be their "equals" (considering market sizes and fan interest)... but they become inferior to them if they can't get a TV deal on par with what they have. Its all likely moot because the Astros play in a strong enough market, with a multi-state regional following with little competition, that they'll eventually get a good TV deal (as long as the CSN deal doesn't force them to be locked in at a low rate).
My guess is buyout of ownership absolutely sacrifices the broadcast rights....that those are completely tied, to the point that ownership was granted to the Astros in CSN as part of their compensation for the grant of broadcasting rights. That's why they get the bigger end of the deal...because they're broadcasting rights are more valuable than the Rockets simply due to the number of games they play. Compensation for 162 nights of programming for CSN. But after they break apart, then they're free to negotiate entirely from that point forward as separate parties (no longer partners) to see what CSN is willing to pay for the Astros for their broadcasting rights going forward.
Lets say the Astros Rights fees were worth $1B: They get paid with $800M cash deal, ownership stake worth $200M. Astros get offered $200M for their ownership stake as a buyout from Comcast. Astros now scheduled to receive same $1B in consideration for their rights, just now it is in cash only, not a cash/equity combo. A buyout can include anything it wants to include. Any buyout agreement would include a termination of broadcasting rights, a continuation of the current broadcasting rights, or a renegotiation of broadcasting rights.
The transcript will not be available unless somebody orders it. Even then, it will only be available in the clerk's office.
