[CHRON] Astros, Rockets renew interest in regional network

Astros, Rockets renew interest in regional network

Six years into what was proclaimed at the time to be a landmark agreement with Fox Sports Net, the Astros and Rockets are trying to negotiate a revised deal with FSN or to launch their own regional sports network in partnership with Comcast or with AT&T and DirecTV.

Astros owner Drayton McLane, in the wake of a report that Comcast had emerged as a front-runner in the negotiations, said Monday that talks continue and that he has no timetable to determine when a deal could be reached.

“We're talking with three candidates,” McLane said. “We're in the process of evaluating everything, but no decision has been made. It's not pressing. We do need time to prepare, but there's no real rush on this.”

McLane said the Astros are obligated to FSN through the 2012 season, and the Rockets could not change networks until after the 2011-12 season. Tad Brown, the Rockets' chief executive officer, declined to comment.

McLane's comments came in the wake of a story in Monday's Sports Business Journal that said Comcast was the front-runner and that an agreement could be reached within weeks under which the teams would launch a new network with Comcast as a minority partner.

‘Good deal at the time'

When Fox Sports Net and the teams reached an out-of-court settlement in November 2004 that ended a 20-month legal battle, the Astros and Rockets were said to be in line to reap as much as $600 million over 10 to 15 years to abandon plans to launch their own network and continue airing games on Fox.

McLane, however, said the value of the teams' rights has increased in recent years as other teams, including the Mets and Giants, have launched RSNs.

“It (the 2004 settlement) was a good deal at the time, but that was six years ago, and a lot has changed, particularly in digital media,” McLane said recently. “We're anxious to get something new going.”

Neither the teams nor the network disclosed details of the 2004 settlement, but both teams were assumed at the time to be receiving more than the $18 million each that they would have been paid in annual rights fees had they launched their own RSN.

Both the Rockets and Astros have aired games on the carrier now known as Fox Sports Houston since it was launched in 1983 as Home Sports Entertainment. Fox Sports Houston was created in 2005 out of the five-state Fox Sports Southwest territory to feature the two teams.

A Comcast spokesman had no comment on the Sports Business Journal story. A spokesman for DirecTV declined to comment, and a spokesman for AT&T said, “We're not commenting on this specifically, but we're always interested in discussions with programmers that can help us deliver more value.”

This week's developments grew out of a relationship that began in 1999, when Rockets president George Postolos proposed that the Astros and Rockets launch their own network. The teams in January 2003 filed suit against FSN, seeking a court ruling that would allow them to launch a network, and FSN countersued, accusing the teams of a “sham” conspiracy.

In April 2004, state District Judge Joseph Halbach ruled in favor of the Rockets and Astros, but the network was abandoned when the teams and FSN settled in November 2004. That agreement, however, reportedly contained language that gave the teams more leeway to seek new TV partners beginning with the 2013 Major League Baseball season and 2012-13 NBA season.

Landscape has changed

Both franchises were riding high when the 2004 settlement was announced. In the first year of the agreement, the Astros advanced to their first and only World Series, and the Rockets were 51-31 and made the playoffs.

Both, however, have struggled of late. The Rockets failed to make the playoffs this season, and the Astros have failed to make the playoffs since 2005 and currently are on track to lose more than 100 games this season.

According to the Nielsen Co., ratings for Rockets games were up 5 percent from a year ago with an average 2.8 rating. Astros games this year are down 17 percent from 2009, averaging 2.65 compared to 3.19 in 2009.

The cable industry in Houston also has changed since the 2004 settlement. Comcast in 2006 assumed ownership of the local system, which accounts for about 730,000 of 1.2 million cable subscribers in the 18-county Houston designated market area, which includes about 2.1 million TV households.

Analysts say the primary challenge facing Comcast or AT&T/DirecTV in launching a new RSN in Houston would be to obtain clearance on smaller cable systems or satellite carriers. Fox Sports Houston is carried on all major satellite and cable systems in the Houston DMA.

http://www.chron.com/disp/story.mpl/sports/7020613.html

Not sure if this belonged in the GARM, sorry if it doesn't.