It's been quiet.. TOO quiet.. Is there nothing new, no movement, nothing to report at all? I don't like it..
If Comcast opposes the plan which it sounds like they might, this thing could easily drag on for another 3 years. Remember, whoever "loses" gets to appeal to the district court first, then to the appellate court next. There still hasn't been a ruling from the first "appeal" to the district court regarding the jurisdictional question. If that ruling on the jurisdictional issue came out tomorrow, it could easily take another 12 months to work its way through the 5th circuit court of appeals. Tack on another 12 months if the Supreme Court decided to review it (unlikely). So the only way this thing gets resolved in the short term (i.e., before the next Astros season starts) is if Comcast agrees to the restructuring plan or they all hammer out some agreement regarding the restructuring plan.
At this point, I don't think there's any reason for this to drag on 3 more years...and I don't think Comcast will want that. My guess is Comcast will want cash...they'll want their loan paid back as much as possible. That doesn't necessarily prohibit ATT/DirecTV moving on with the new product...because frankly, without it, there's no way Comcast is getting much of that cash. From what I understand of the situation at this point, it's in everyone's best interest to allow the new group to get on with it.
A logical party would just want to cut their losses, but who knows what's motivating Comcast nowadays. If they agree to the restructuring plan, they are basically handing over an NBA asset and a MLB asset to its biggest competitor. These assets are very valuable (even though as it currently is set up, CSN Houston is losing money) to the cable/satellite providers. Wouldn't surprise me if Comcast wants to figure out a way to hold on to these assets. I'm sure the Astros and Rockets are not like Boardwalk or Park Place to Comcast, maybe more like Marvin Gardens. But still, I'd be surprised if Comcast just walks away from the assets and takes money at this point. We'll see next month.
I definitely don't see it with Rockets and Astros getting paid in full and Comcast getting very little money on their end.
I wouldn't be surprised if that happened, but I think it would be the result of a couple more years of the lawsuits.
<blockquote class="twitter-tweet" lang="en"><p>Comcast objects to reorganization plan for CSN Houston. Not a surprise. Issue to be decided Sept. 4. Details forthcoming.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505138569992613888">August 28, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
[rQUOTEr]Attorneys for Comcast on Thursday said the company objects to the proposed Chapter 11 reorganization plan for Comcast SportsNet Houston, describing it as unconfirmable under bankruptcy law and designed to serve only the best interests of the Rockets and Astros. The company’s objection, which was expected, was filed in advance of a Sept. 4 hearing before U.S. Bankruptcy Judge Marvin Isgur on a document known as a disclosure statement. That document will include details of the plan under which the Rockets-Astros-Comcast partnership will give way to a new AT&T-DirecTV Sports Networks partnership that will operate the channel now known as CSN Houston. The teams hope the new network structure, which would include carriage on AT&T U-verse and DirecTV, can be in place in time for the start of the NBA season. Among Comcast’s objections to the disclosure statement is that it fails to provide for full repayment of a $100 million secured loan that Comcast advanced the network for startup costs in 2012. Attorneys also claim the voting process under which creditors will be asked to vote for or against the reorganization plan is “gerrymandered” to penalize Comcast. Comcast also complains that the plan assigns value to the teams’ equity in the network partnership, provided through their annual broadcast rights payments, while not paying creditors in full. The company also says the plan to sell the network to AT&T and DirecTV was structured by the Astros and Rockets “to serve their individual self-interests.” Comcast said in March it would not enter a bid to purchase the network out of bankruptcy, and attorneys acknowledge the company was aware that the Astros and Rockets could choose to align themselves with new partners. However, attorneys for the cable giant say the plan violates federal bankruptcy law and the “rules and principles” set by past bankruptcy case decisions. In at least one case, attorneys say, the Rockets and Astros are seeking to value Comcast’s 22.5 percent share in the Houston Regional Sports Network partnership as if the company were being liquidated. On the other hand, the plan indicates that carriage agreements will be forthcoming with DirecTV and AT&T U-verse, which previously had refused to carry CSN Houston. “The teams cannot have it both ways: obtaining for themselves significant media rights payments that could only be justified if the network were going to generate substantial revenue in a reorganization … while seeking to value Comcast’s collateral on a liquidation basis in order to deny Comcast its rights as a secured creditor,” attorneys wrote. Comcast also calls into question the stated $1,000 purchase price for the network by DirecTV and AT&T and says that while the Astros and Rockets may now prefer to be in business with those two companies rather than Comcast, “the plan they have proposed is unlawful on its face.” Comcast subsidiaries filed in September 2013 to place the CSN Houston partnership under Chapter 11 protection in an effort to prevent the Astros from terminating their rights agreement with the financially struggling network, which has been unable since its launch in 2012 to sign carriage agreements with DirecTV, U-verse, Dish Network, Suddenlink and other carriers. The network has been under Chapter 11 protection since February, and unpaid rights fees to the teams since last September now total more than $100 million. http://goo.gl/FGxoC7[/rQUOTEr]
I know technically CSN Houston and Comcast are different entities, but why isn't the $100M loan at least partially cancelled out by the tons of unpaid rights fees?
The teams are in effect acting as different entities in their role as Network owners. The loan, media right payments, other Network financial obligations are debts that will have to be dealt with. The teams want to be paid in full for unpaid media rights. I would be in favor of what you are suggesting, deduct the Comcast loan from whatever share Comcast owes the teams in media rights fees. Keep in mind, the Rockets and Astros through their equity in the Network owe a combined 77.5% of the media rights payments. I can't see the Judge agreeing to this agreement as is but this could be an initial offer that the teams felt to start with something that gave them some leeway to negotiate downward to what they actually feel is reasonable. I don't fault them if that's the case.
Comcast owes themselves money - I don't think it's that unusual in a bankruptcy of a private company. Generally, the owners/founders have lent money in so they would be one of the creditors seeking money from the entity.
http://goo.gl/O3KT9E <blockquote class="twitter-tweet" lang="en"><p>Rockets/Astros/AT&T/DirecTV filed new disclosure statement early Friday in CSN Houston case, so we have details on things that irk Comcast.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505519233199923201">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Chief among them, it appears, is teams want Comcast to be repaid only $16m to $23m of its $100m secured loan for startup expenses.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505519509856194560">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>However, teams are not requiring full repayment in cash of more than $100 million in rights fees -- $58.75m for Astros, $46m for Rockets.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505519699983994880">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>“Such concession is providing significant value” to the new network, the plan says.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505519761933860864">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>My interpretation: If we (teams) don't get all our money, you (Comcast) won't, either.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505519933430591488">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Plan provides for full repayment of about $8m in assorted administrative claims, tax, priority and trade claims.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505520288478420992">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>It also estimates unsecured claims to be no less than $292,850,000. Payment of these are based on recoveries through a litigation trust.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505520518296907776">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>The litigation trust is a process whereby Comcast could be sued for the following:</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505520700145152000">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>"Exerting undue influence or control of network, attempting to obtain ownership of network at a severely & artificially depressed price ...</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505520941372162050">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>"And imposing enforced losses upon creditors."</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505521037404958720">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>The disclosure statement is a document prepared for those owed money by the network who will vote whether to approve the AT&T/DirecTV plan.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505521215889346560">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Comcast already has objected to the disclosure statement, which will be discussed at a hearing next Thursday.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505521271791054849">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>One final CSNH observation for the night: A document attached to the plan includes a sobering note about programming under DirecTV/AT&T.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505544009918332928">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Non-game feature programming, it says, would “focus mainly on core teams (Astros/Rockets), which would result in lower programming levels.”</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505544281965076481">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Employees would "focus on the core teams and related programming."</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505544738204704768">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>No indication in this projection if staffing levels would change.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/505544979301687297">August 30, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
