No - I'm going on the projections the Comcast (the experts in the field) provided. That was the business model that the Rockets and Astros and Comcast bought into. Once it turned out that wasn't possible - regardless of who's fault - everyone has to re-evaluate the network. That's just basic business for any partnership. The Astros should look at what's in their best interests. And the Rockets and Comcast should do the same. None should agree to a plan that no longer makes sense for them just for the sake of the other partners. It's why the whole network is flawed and should be blown up. Without the original projections, the three parties' interests are no longer aligned, and therefore they aren't likely to agree on a business model that works for all of them.
Comcast was responsible for getting offers from other providers. I was under the impression that Comcast brought two offers from one provider. Neither offer would make CSN-H profitable and both offers would save Comcast a lot of money. One thing I am unclear on is whether either offer would actually make CSN-H lose less money. With MFN status, any offer from Direct TV would need to be around $2.33 per subscriber for any deal between CSN-H and DirectTV to break even for the Astros and Rockets. At $2.33 per subscriber, every dollar DirectTV paid CSN-H would for all intents and purposes go to Comcast. Astros are not in business to make Comcast money. Disclaimer: My calculations are loosely based on DirectTV having a 20% share and Comcast having a 40% share.
I don't remember Comcast or the rockets saying that their original projections don't work. I know they say they will lose money but i don't remember them saying it wasn't part of the plan. I would be more apt to agree if it weren't for the rockets being okay
Everyone has agreed that the original projections were wrong. They intended to get $3.40 / suscriber and are not able to get anywhere close to that. Thus, the network will lose money instead of making money. That means the network's projections were completely wrong. Comcast's own people admitted that. That's the heart of this whole case. If CSN-H were able to get what they thought they could, there would be no issues.
I hadn't done the math before, but this is spot-on. If the DTV offer was $2.33 or less, CSN-H would be no better off in terms of total revenues, but Comcast would save 33% or more on their own costs.
I still don't remember Comcast saying that they told crane they could get that fee and projections are what they are. Projections
Who is they? DirectTV? Based on what I can understand here were the options available to Astros: 1) agree to deal that guarantees CSN-H loses money, Astros are responsible for paying CSN-H debts (which includes paying themselves for CSN-H to have Astros media rights) while their partner Comcast gets an additional $2.33 per subscriber from Direct TV. This only gets them on who they are already with and DirectTV. or 2) Reclaim their media rights that they were entitled to because Comcast could not bring them a money making deal. Sell media rights to most likely Fox for more than CSN-H pays. So Astros get more money for media rights and don't pay CSN-H debts. 2 pays them more money and most likely gets them on every provider that has Fox Sports next season in Astros viewing area. Astros choosing more money for themselves and getting their team on the air on more TVs seems to be the slam dunk as what is in best scenario for Astros and Astros fans. Unless CSN-H makes money, Astros are better off ditching station which would mean Crane would have lost a bunch of money. Better to lose 300 million than try to save it and lose more. I think long term, CSN-H would make money. Right now, it appears Astros would be taking less money and giving it to Comcast.
For the third time if the astros agree to the offers they get the final broadcast rights payments. That was just a response to something in particular castor wrote.
And the projections failed. This caused business plan to fail. Alternates Comcast brought to table were unacceptable to Astros. Business agreement had a provision that allowed Astros to get their media rights if they weren't paid. Astros weren't paid and attempted to exercise rights to leave. Comcast in last ditch effort to keep CSN-H alive was to call for a bankrupcy hearing on unpaid bills that possibly weren't due from Comcast related companies.
Comcast put the most favored nations clause in the contract because they had reservations about those numbers so you can stop with the "their" projections crap. The Astros and the Rockets insisted on shooting for those carriage rates. I
The rockets and Comcast were fine. no one wants to address the rockets because its easy to say the big bad Comcast is evil. but the rockets can't afford to lose money. so I'll take what crane says with a grain of salt.
They are not getting paid their money because Jim Crane's stubborn stance has severely hampered the Network's ability to pay those fees. If the Network kept paying them based on only 40% of the market, it wouldn't have been long before the Network shut down. What they are saying is.....Judge, this ain't working. Please let an unbiased party decide what's best for this company. Who knows what a trustee would decide to do. Comcast may not like their decisions either.
Can you provide a link where Comcast said that over the course of the 20 year contract term with all providers signed up that the Network would lose money? I saw some projections for a 10 year period and I may be wrong but those included only DTV and Comcast as providers. What Crane has said is that he would lose his equity if Comcast had to fund the losses for him during the 10 year period. Comcast would fund the losses in exchange for equity. I'm assuming Les Alexander has the financial ability to fund his share of losses until the Network is in the black. Jim Crane can't afford to be in a start up TV station business, that's the problem.
See response above on losing money. Les Alexander would be lining up behind Crane if he was going to lose money. So, if all this blows up, the Astros don't have an obligation to pay 46% of the outstanding debts which include a 100 Million dollar loan from Comcast? If Crane can't fund the losses for the 10 year period and loses his equity, yes they would make more money on just a media rights only deal. What would be nice is if Crane got an offer from Fox for the media rights, let the Rockets and or Comcast pay that for to him for the Astros media rights to get him the hell out of CSN H. I'd like to see the full 20 year projection at what we have an idea the carriage rates actually are and spread that number out amongst all providers with the assumption each of the partners don't lose equity for not being able to fund the 10 year loss projection.
Thank you. And suggesting you blow up a business before it gets started pissing off your and another team's fans is okay is ludicrous. Especially when he isn't getting that deal anywhere.
Wait - this is something a person you don't trust alleged in a lawsuit you say is BS, and something that I believe Comcast has challenged. Now you suddenly believe this one snippet of what he says but disagree with everything else? And what the Astros are saying is that all the parties had a plan for what would happen if this wasn't working. They agreed to terms that allowed the Astros to do what they are doing and ultimately walk away. Now Comcast doesn't like that and wants to try to use bankruptcy to get out of the terms they agreed to and force new terms on the partners unwillingly. Not at all - I don't think they've ever claimed that. In fact, Comcast claimed the network would be profitable and generate $x. That's no longer true. But revenues will be 30%ish lower than expected if everyone were to sign for $2.33 instead of $3.50, for example, meaning everyone makes less money and the original business plan has gone bust. And therefore, each party needs to look out for their own interests and see if the partnership still makes sense for that. Let's say I come to you with a partnership idea. I'm the expert in this industry and I offer you these terms: You get 50% ownership in exchange for X, and you will make $40,000 per year. I get 50% ownership in exchange for Y, and I will make $60,000 per year. We agree that we must both agree on major decisions to go forward. Now, circumstances change in the market and it turns out I was very wrong, and you will only make $20k per year from the deal. I will only make $40k, (but I also will make another $10k on the back end for other reasons). I'm still happy with the deal. But are you obligated to go along with it for my sake? Of course not - you have to look out for your family and your interests, and determine if this partnership still makes sense for you. If it doesn't, you can kill the whole thing through your veto power - you negotiated that into the partnership agreement. And if you decide $20k isn't enough for you and you have other better things you could do instead, you SHOULD walk away. That's what's happening here for the Astros.
I don't think Comcast is evil. They are trying to make money. I am very pro-CSN-H idea if they got carriage. That doesn't mean I think Crane is stupid. Astros have veto power. Astros have right to walk. Whether Astros win fraud case or not I don't know. Do you think Astros were paid? Do you think there us a provision in agreement that allows the Astros to walk? I've not seen Comcast or the Rockets deny either fact. Whether CSN-H makes money is really irrelevant if that is a no and then yes. Bankruptcy is a last ditch effort to deny Astros their rights.
And don't think the astros want to be there anyway. Believe me I'm not anti crane. I'm anti longhorn network. I think everyone in the industry is learning even cash cows have limits.
