<blockquote class="twitter-tweet" data-partner="tweetdeck"><p>Comcast on the verge of buying Time-Warner Cable, which means it'll also be an owner of the new LA Dodgers RSN.</p>— John Royal (@John_Royal) <a href="https://twitter.com/John_Royal/statuses/433806931673624578">February 13, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
Well, you argue what you can based on your clients stated goals and the facts at hand. Crane looks like a jerk in all of this. Comcast has poured hundreds of millions of dollars into this partnership, and Crane is holding everything up because the market won't bear the price he wants, so he wants to bail and leave Comcast holding their proverbial dicks while the Rockets twist in the wind.
So does this mean that the Comcast-CSN subscriber fee gets transferred to the TWC TVs in the 5 state area eventually?
Nah. The Astros' attorneys cannot change the facts in this case or the law on these things. All they can do is argue the team's case as best they can. Sometimes your client just doesn't have a winning case. To the extent that anyone screwed up, I think that it was Crane and his business people when they overpaid for the Astros and the media rights apparently without doing enough due diligence in finding what the market really is.
It may solve the $200M in losses over 10 years problem. Are there enough TWC subscribers in the area to make >$20M a year in subscriber fees at the proposed DirectTV rate? Astros would need to suck it up and have some foresight though...
Its doubtful that the $3.50 rate is the same outside of Houston as it is in it. Outside of the immediate Houston area, CSN-H won't carry Rockets games - only Astros. So the valuation should be lower. That said, TWC is hardcore about not paying these fees (NFL Network took years to get online; LHN took 3 years even in the Austin area), so it was doubtful they had any plans to carry CSN-H before. So this should at least get coverage to parts of the 5-state Astros region, though almost certainly at a lower rate of some sort. But these kinds of mergers can take a long time to go through FCC reviews, so who knows when or if it will even go through.
Based on your assertion, one would assume that the record indicates that a viable business plan has been put forth or that acceptable carriage deals have been unreasonably blocked by the Astros. Let's check the tape: "Although Comcast has complained about the Astros’ rejection, the proposals made by Comcast would not have led to a profitable network. The proposals were appropriately rejected by the Astros." "Comcast Services never presented a business plan that would be profitable." Damn Crane. CSN Houston could be making some sweet negative cash flow if he wasn't so greedy!
Interestingly, from looking at the judge's ruling, it appears the Astros would have won dismissal on the original bankruptcy filing. You need 3 undisputed creditors, and it appears that only 2 of those original 4 Comcast subsidiaries qualified. 3 more creditors unrelated to Comcast joined at the last minute, and those 3 all qualified, so that kept the thing alive.
I agree that their knot head client insisted the attorneys push forward with a weak case. It just looks bad to get your ass handed to you like that not to mention how many people got fooled in to believing they had a chance of getting the case tossed.
Crane pulled the plug after CSN stopped paying the Astros their media fees. His net losses aren't crap compared to Comcast. Legally, Crane was exercising his rights under contract, but the move was fatal to the partnership. You don't make a move like that without knowing that it'll lead to years of litigation.
Why were the Astros rights fees not paid? Because the Rockets refused to make a capital contribution, which then led to Comcast not doing so either.
If crane didn't have access to CSN H book to see who might qualify, they certainly found out about the others along the way. Not only that they are appealing...
Oh jeez, I give up. At the end of the day, this was a stupid business arrangement. Comcast should have just licensed the rights instead of partnering with the teams. They just need to negotiate a buyout that returns the rights to teams at some point and move on.
Except the recent article by Barron stated that had the Rockets made that final cash call payment it still wouldn't have been enough to pay that final month of Astros fees (July, I think). So had the Rockets paid we might still be where we are now and the Rockets would be out another $6MM.
If you read the decision, the Judge even admits that other courts have ruled that if the initial creditors do not qualify, that the case was thrown out despite additional legitimate creditors coming forward. The 3 additional creditors that came forward (plus another 2 Comcast parties that were denied), were never contested by the Astros. The Astros were hoping the Judge would decide as some others have in the past, but the Judge disagreed with the decisions in those cases.
