CSN Houston is an organization too and the problem is Crane is not doing what's best for that organization even though he has a responsibility to his partners to do so. I feel that Comcast and the Rockets have put aside their self interest for the most part but the Astros have not. The Rockets have as much stated that the Astros self interest isn't grounds to dismiss the bankruptcy proceedings.
Wait...throwing the partnership into bankruptcy to have a trustee override the neogtiated partnership agreement and ultimately sell all the assets to Comcast is putting aside self interest? Seriously? No one has put aside self interest here. These are big boys with tons of money invested in this. While the Rockets talked about the Astros' self interest, they literally argued for preserving their own equity in the very same pleading. The idea that any of these groups is looking out for anything other than themselves is laughable. But it's most laughable coming from Comcast at this point. The "good guy/bad guy" narrative the media loves to roll with in cases like this just doesn't fit. They're all sefl-interested.
What are you smoking? The Astros only care about the Astros. The Rockets only care about the Rockets and Comcast only cares about Comcast. This is ALL about money and control, nothing else.
http://blog.chron.com/sportsupdate/...different-needs-in-comcast-bankruptsy-ruling/ Astros, Rockets have different needs in Comcast bankruptcy ruling Thursday, October 24, 2013 While reserving most of their rhetorical ire for Comcast, the Astros’ legal team Thursday outlined differences with the Rockets, their partner in Comcast SportsNet Houston, in a statement filed in advance of next week’s hearing on whether the network should stay in Chapter 11 bankruptcy. The Astros expanded on previous filings by accusing Comcast Corp., parent company of the NBC Sports Group that includes CSN Houston, of being the ultimate force behind the motion by Comcast subsidiaries to force CSN Houston into bankruptcy. “Comcast … orchestrated the bankruptcy to circumvent the Astros’ bargained-for contractual rights for its own purposes,” Astros attorneys said. “Such behavior ‘falls squarely within the parameters which classically define a bad faith filing.’” U.S. Bankruptcy Judge Marvin Isgur on Monday will hear the Astros’ motion to dismiss the involuntary Chapter 11 case filed Sept. 27 by four Comcast affiliates and Comcast’s motion to name an interim trustee for the network. The Rockets this week said they favor keeping Houston Regional Sports Network, the Astros-Rockets-Comcast partnership that owns CSN Houston, under Chapter 11 but oppose naming an interim trustee. The Astros also note that Comcast, the Rockets and Astros have different economic interests at stake. “The Rockets’ media-rights fees are among the very highest in the NBA, enabling the Rockets to outbid other teams on high-priced free agents in an effort to compete for world championships, regardless of whether the network is profitable,” attorneys wrote. “The Astros are differently situated. To invest in rebuilding a championship team, the Astros must supplement their media rights payments with equity distributions from a profitable network. Because of the different economic positions of the partners, some deals that might make business sense for Comcast and the Rockets would spell disaster for the Astros.” The Astros said Comcast “wants to handcuff the Astros’ media rights to the network so that its own interest can be served, even if it is economically devastating for the Astros, and the Rockets are much less concerned with losing their equity in the network.” Astros owner Jim Crane said the team has opposed informal proposals for carriage agreements because the network would run at a loss and the Astros eventually would lose their 46 percent share to Comcast. The filing also addresses arguments by the Rockets’ attorneys that the Astros do not have proper legal standing to challenge the involuntary petition and disagrees with the Rockets’ stance on whether the Astros’ media rights agreement can be assigned to a third party, which the Astros say is not allowed. ....................... How is this true: Regardless of how much the Rockets get they have a salary cap. They can't "outbid other teams" the way baseball teams can.
They can outbid teams in the sense that they can afford to be above the cap or deal with the luxury tax. As opposed to say, an OKC, which had to trade Harden to avoid that situation.
Yes, but do you think that is as much of an issue in this particular case? I hope the Rockets/CSN counter that argument.
Well, it's only an issue in the sense that the Rockets would be doing well with the deal even if CSN-H is not healthy, while the Astros would not be in a good situation. So it's really just a badly worded way of saying the two parties are looking at this situation differently.
Clearly the Rockets and Astros didn't have common goals here...they have very different needs from this...and yet they both entered into an agreement that required unanimous consent to enter into deals with carriers. That still blows me away. That the NBA league office approved that is just beyond belief. This crap was pending from the moment the ink was dry on the agreement.
Reading through Astros Response that was mentioned in the article posted earlier: 1. Refman, you and i talked about the ridiculousness of the Comcast argument that the Astros don't have standing to make an argument (since they're not the involuntary debtor) but that Comcast, through its affiliates, can throw the whole thing in bankruptcy to begin with. The article cites to case law showing similar situations where the issue is purported gridlock between partners...and in those cases, the partners do have standing to argue on their own behalf. 2. Comcast Creditors are not saying they're owed any money at all...they're saying their debts are being paid in the ordinary course of business. So Comcast is framing the entire bankruptcy around the fact that the Astros, themselves, have not been paid. The Astros point out that Comcast doesn't "cite a single case in which Section 303(h) (the involuntary bankruptcy requirements) was satisfied where, as here, the only party with a debt past due is the movant seeking dismissal of the involuntary bankruptcy. Indeed, all but one of the cases Comcast cites involved missed payments to unaffiliated third-party creditors....The third decision Comcast cites was reversed by the district court, which held that the petition should have been dismissed for the failure to comply with the three-creditor requirement and based on the petitioning creditor's bad faith. Because there are no third-party creditors, or even Petitioning Creditors with debts due and owing as of the petition date, Comcast has failed to satisfy Section 303(h) This is the primary reason I think this bankruptcy gets dismissed, incidentally. Judge Isgur can conceivably dismiss on these grounds without even getting to the bad faith argument. 3. Astros cite to case after case where the Court finds bad faith for filing involuntary bankruptcies through affiliate creditors to resolve partnership disputes. The Astros point out that Comcast cites to only one case where the bankruptcy was not found to be filed in bad faith...and in that case "the petitioning creditors included UNAFFILIATED third-party creditors, not wholly-owned subsidiaries acting at the direction of executives and lawyers from a parent corporation seeking to gain an edge in an intra-partnership dispute." They also draw a distinction because in this case, the vote they're arguing over was one that was negotiated...so all the parties knew going in that everyone had the right to veto any deal offered by a carrier....and they signed that document knowing full well of that right. 4. They cite to a lot of deposition testimony that is redacted to support the contention that the debts made the subject of the bankruptcy are subject to a bona fide dispute because they were never submitted to the Astros or Rockets for approval. If a debt is subject to a bona fide dispute, it can't be the support for an involuntary bankruptcy. 5. Ok, this is new...we already knew that from the General Partnership Agreement between the Astros, Rockets and Comcast, that there had to be unanimous consent to file a bankruptcy on behalf of CSN. "Yet, in the face of this contractual prohibition, three of the four declarations filed in support of the Involuntary Petition were provided by officers of Comcast Owner (the actual Comcast partner to the CSN agreement)." They cite deposition testimony of the 3 persons who signed those declarations to make this point. 6. Points out that Comcast failed to cite to even one case where a partnership was reorganized under Chapter 11 "over a partner's objection in derogation of the rights set forth in a partnership agreement."
MadMax, How will it work exactly on Monday? Will the judge simply come out and say, "after reading everything submitted I'm doing this..." Or will each side do more talking and present their sides?
Interesting. Even if dismissal goes through, I suppose hoping for it to happen in the next few weeks is probably a pipe dream?
This is just not true. The Astros portrayal of Houston as a baseball "Have Not" market is simply false. Drayton had a payroll into triple digits and was making $. The only difference between the Astros now and the Astros 5 years ago is the owner of the team actually had the pockets to fund a winning baseball team. Outside of Chicago, LA, and New York, Houston will crank out as much revenue as any of the other markets when they are winning. The reason the Astros' revenues are down is because they have a historically awful team right now. It is not inherent to the market. They need to start winning and then they will make $. An owner that needs to be substantially subsidized to start winning in this market, shouldn't be the owner in the 1st place.
Agreed. I've been harping on this repeatedly. Jim Crane has been crying poor mouth and talking about a "bad" tv deal and how it would handicap the team for years. People here have bought into that when it's absolutely bogus.
5 years ago, TV markets were very different. The deals that have been signed over the last few years have changed the landscape completely. Half the teams in the league this year have payrolls larger than the Astros' largest ever (2009, when they ranked 8th). Attendance and ballpark revenue is a much smaller part of the equation than they were back then, so revenues are much less dependent on being good. An as example, the Dodgers just signed a deal that will pay $280 million *per year*. That is twice what their media rights were believed to be worth just two years ago in the bankruptcy proceedings. Seattle has a deal worth $115MM per year. Rangers are at $150MM. Angels are at $150MM. The Astros, if all had gone well with CSN-H, would be at $80MM. These numbers are far multiples higher than what TV deals looked like 5 years ago. The problem is that the bubble burst after a handful of teams - including most of the Astros' division - got these deals. So now you're left with a total mess in MLB with some teams having bubble deals and others having much, much less. He's not being asked to be subsidized.
This is a bad comparison. The Astros would have ownership stake in their own network (a big stake at that). Their profit margins would be much higher than media right fees.
