Me too. What I fear the most is the following chain of events: 1. Comcast appeals this ruling to the Fifth Circuit. 2. Isgur denies a stay pending appeal. 3. Isgur confirms the plan based partly on his value ruling. 4. The value ruling is overturned on appeal months later. 5. Comcast then seeks vacatur of the confirmation order, What in the hell would happen then? Would the network operate under new ownership while this is sorted out? This would get messy as it would be very difficult to wind it all back.
Sounds like a nightmare scenario! BTW- Many thanks to you and Max for your legal commentaries during this process. I may not have always agreed with your personal opinions on this subject but I have really enjoyed learning some the legal aspects of this case through both of your post.
The major thing I DON'T understand is, why is Comcast trying so hard? What their overall plan was in Houston failed, big time. Remember the three Astros game with 0.0? They been in Houston for two seasons and yet to even recover the money they was loaned from Comcast.
Comcast can afford to keep losing money on this product for several years more than the teams can. They want to protect their initial investment, and get something out of it.
The problem is that the only other likely outcome is a liquidation. I can't imagine that Comcast would get more out of it from a liquidation than they will under the plan, especially once you factor in the attorney fees for a lengthy Fifth Circuit appeal.
Could they stall long enough to then eventually propose a buyout by themselves with pre-arranged widespread coverage?
Pre-Arranged widespread coverage would still have to go through ATT/DTV. I'm not sure they would want to work with Comcast when the alternative is they can own the network. I just don't see them helping Comcast out in that respect, unless it was almost assured it would go to liquidation instead of to the sell. Personally, I know that it is a legal proceeding and that nothing is finalized until it is finalized, but it seemed to me the stuff I read from yesterday is that the judge looks like he may be ready to confirm the sell at the end of the month (barring setbacks from an appeal). At least the spin on the articles makes it look like he could be leaning that way.
Exactly right. It's this or it's liquidation. Seems to me that Comcast is much more likely to get something back from their investment if this plan goes through than they are if this liquidates.
Question: Is the appeal just for the valuation of the $100M loan? If so, that shouldn't conflict with a ruling on the sell of the network. Correct? Basically, if Comcast appeals and gets a reversal and a larger valuation, wouldn't it just mean that the Astros, Rockets and ATT/DTV would owe them the difference +any interest or costs the court would tack on? In essence the sell could still happen but somewhere down the road there could be a chance that they owe Comcast some extra cash.
Thanks for saying that, but I give lots more credit to Refman and CarlHerrera. Those guys know a lot more about bankruptcy proceedings than I do.
The appeal is for the ruling that the Comcast carriage agreement is "of inconsequential value" to the network. This ruling affects in a big way what a reasonable value is for the network as a whole. That goes pretty far in determining whether the price stated in the plan is a reasonable price. It makes confirmation of the plan more likely. Also, there really isn't the opportunity to tack costs on. Once a plan is confirmed, the terms of the plan are binding on all parties. Think of the plan as a contract. Once approved, the deal is done.
Comcast has stated that they are overpaying for CSN as it is, and then that will be even worse when DTV strips down the network. So if they can force liquidation, they might not get the loan back, but they would be getting out of a 20 contract that they feel is overvalued - if I remember right, that contract would cost Comcast over a billion dollars over that timeframe.
They could do that. Then DTV and AT&T can start Root on its own. Then they can choose the price to charge Comcast. If Comcast doesn't agree to it, then they will be without the games. It seems to me that people would be more likely to leave Comcast if they had a choice between Uverse or DTV than they were to switch when Comcast was the only choice to get the network.
Comcast has about 40% of the market. Dish doesn't seem to want to pay so you might still have 50-60% of the people who can't see the games.
That could very well be, but you have a few issues: 1. People have now been without games for 2 years. The city is kind of used to this nonsense, and Comcast may be betting that people won't switch much. 2. The Astros/Rockets picked this route because it was a way of bankuptcy - but if they don't have the Comcast deal in place, it might be easier and more financially logical to just go back to FSSW. 3. DTV is getting an already-built network with full carriage in place for free, essentially. If they had to build a whole new work from ground up, and would be in Comcast's position dealing with carriage issues, is it really worth it for them? From a PR standpoint, after spending 3 years saying the price the CSN-H was charging was way too high, are they really going to be able to get away with asking Comcast to pay the same price for a slimmed down network? The Root Sports thing only really works / makes sense if DTV can get the network intact and with Comcast locked in. Without that, I'm not sure DTV bothers. It's probably easier/better for all the parties (the teams, Comcast, DTV, Fox) if the teams just agree to terms with FSSW, have full coverage, and no one has to deal with creating a network or negotiating new carriage rates.
Comcast won’t ask appeals court to intervene before CSN ruling Attorneys for Comcast say they will not ask the 5th U.S. Circuit Court of Appeals to intervene in the Comcast SportsNet Houston bankruptcy case prior to next Tuesday’s hearing, which could produce a final decision in the year-long legal struggle over the network’s future. Bankruptcy Judge Marvin Isgur is scheduled to approve next week a reorganization plan that will result in the sale of Houston Regional Sports Network, the Astros-Rockets-Comcast partnership that owns CSN Houston, to AT&T Teleholdings and DirecTV Sports Networks. DirecTV and AT&T plan to relaunch the channel as Root Sports Houston and will make Astros and Rockets games available for the first time in two years on DirecTV and AT&T U-verse. However, the teams and Comcast will lose their equity in the network, and 96 of CSN Houston’s 141 employees will lose their jobs. Comcast attorneys considered an immediate appeal to the 5th Circuit of Isgur’s decision last week that Comcast’s affiliation agreement to carry the network on its cable systems was of inconsequential value as of Sept. 27, 2013, when the involuntary Chapter 11 petition was filed. The affiliation agreement was among the assets securing a $100 million Comcast startup loan granted in 2012. Comcast says its assets in CSN Houston are sufficient to recover the entire loan; the teams, who say they are making possible the AT&T/DirecTV deal by not demanding immediate payment of more than $100 million in unpaid rights fees, want to limit Comcast’s recovery to no more than $23 million, which the teams will pay themselves. While Comcast will not file a separate appeal of Isgur’s valuation decision, attorneys said in a document filed Tuesday they will “reserve the right to challenge, on appeal, the factual and legal conclusions” of any final order. The teams hope Root Sports Houston will be on the air by Oct. 29, the date of the first Rockets game available for local broadcast. Isgur said last week that while he may rule Tuesday on whether to approve the AT&T/DirecTV takeover, he will delay the effective transfer to give Comcast time to file an appeal.
