Of course the Rockets want CSN-H to succeed. The NBA doesn't get a cut of CSN-H profits, but the NBA does take over a 50% cut from media rights fees to my understanding. A dollar from CSN-H profits is worth 2 dollars from media rights fee in rough terms (over simplified). Long term, CSN-H could be a plus for Rockets as a way to hide money from the grubby little hands from the likes of the Grizzlies and Pellies. To the Astros, a dollar is a dollar to my understanding. Taking less in media rights fees than CSN-H profits gives them is not an optimum situation. Better for them to exercise their rights to walk. The Rockets not wanting to sell is irrelevant unless they can do something to appease the Astros. Les mentioned wanting whole enchilada. When looking at the long term potential, CSN-H probably is great deal for Les, but nearly half a billion dollars in the the short term is a large sum of money to spend on Royce White...I mean.. CSN-H when it isn't even profitable yet. I think Comcast or the Rockets will blink in the end to save CSN-H by either selling to another provider or buying out partners. Astros don't appear to be willing (maybe capable) to take any more losses in the short term. I don't think Comcast wants to let a judge decide their fate who already implied they are acting in bad faith and took their negotiating power and gave it to their adversary... I mean partner.
Then why did you suggest that the Rockets be bought out? The Network isn't on a road to profitability yet namely because of Jim Crane.
Because it is a funny scenario that Comcast could be partners with DirectTV and partially be paying DirectTV to air Astros and Rockets games. It was meant to be satirical. No. CSN-H predated Crane. It is not his fault agreements put in place before him couldn't make network profitable. It is not his fault that Comcast has MFN. It is not his fault that an agreement with DirectTV would have little impact on profitability unless it is at rates near what Comcast projected. His only faults in this mess are: 1) He bought a piece of CSN-H 2) He is unwilling to make an agreement that for all intents and purposes gives Comcast millions (hundreds of millions if DirectTV offer was about 2.33 per subscriber) of dollars from DirectTV and very little to none is left with CSN-H so that he can pull media rights from CSN-H, get Astros on more TVs than any offer Comcast has ever negotiated for CSN-H, and make more money for the Astros.
What a dumb comment. Comcast testified that only one provider even offered to pay to carry the channel and it was, IIRC, $1.85 per subscriber. Comcast also testified that this rate would lead to $200 million in losses over 10 years. That failure of a negotiation wasn't led by Crane. It was led by Comcast. The fact of the matter is, if a crane consented to that deal today, the bankruptcy judge would never approve it. It is a deal that will lead to 9 figure losses.
If the $1.85 is correct, I would point out that (thanks to Joe Joe) we know that CSN-H would have *LESS* revenues had they agreed to this deal than they do now, unless more providers came on board at that rate. In fact, a lot less. Let's say 5 million households. Comcast controls 40%. DTV controls 20%. NOW: Comcast pays 2 million households x $3.40 / month x 12 months = $81.6 million per year in carriage fees Total CSN Carriage revenues $81.6 million With DTV: Comcast: 2 million households x $1.85 / month x 12 months = $44.4 million DTV: 1 million households x $1.85 / month x 12 months = $22.2 million Total CSN revenues: $66.6 million So if the Astros accepted the offer Comcast brought them, CSN-H's revenues would drop by $15 million per year while Comcast would save $37 million per year. It's easy to see why Comcast would go for that. Tell me again why the Astros should?
I haven't seen the 1.85 figure, do you care to verify that and don't use Jim Crane's vague comments on percentages based off the high rate. I could easily point out comments you have made and make derogatory comment instead of simply debating the comment but I am abiding by the moderators request to keep things on a civil path. We've been over the 10 year thing time and time again. Jim Crane can't afford to be in a start up TV business. Most of us have that figured out alredy.
Ok... It didn't read that way. But I understand now. Again.... No one has testified that the Network wouldn't be profitable over the length of the contract. Les Alexander wouldn't be asking to buy out Crane if it were not going to be profitable. Get with Refman on the $2.33, he says you are wrong. His faults are that he did a horrible job at doing due diligence for 2 types of businesses that he had never been involved in before and he looks like a bumbling idiot to his investors. THE MFN was in the contractual documents between the teams. You can buy in to that fairy tale of it not being in the documents he received if you want to but that's pretty damn far fetched since it took around a year all while Crane was taking heat for being a stubborn jackass for Crane to bring that up. Plese elaborate a little more on point 2. If more carriage deals were signed, CSN H can afford to make the media rights fees to both teams. How is it "giving" Comcast money. Comcast has been giving CSN H over inflated / above market rates for over a year now.
We have no proof that $1.85 is correct, so that was a waste of time to read. But if it were true, why would the Rockets for it? The answer is, they wouldn't either.
Wow...you have actually read the contractual documents? You must have since you definitively state that the MFN clause is in it. Seeing as how you value due diligence. You wouldn't say such a thing without having read the documents.
Geez dude, you are telling me that the MFN clause doesn't exist? Crane and all other parties have talked about it. crane claims it was hidden from him.
No, I'm telling you that I don't know whether it was in the documents or not. Since you affirmatively state that it was there, you must have read them, right?
We've already been through this numerous times. Even with lower numbers, this deal is good for the Rockets because it leaves them in the upper tier of the NBA TV deals. Rockets and Astros interests are not aligned.
Except that the math supports the testimony that no one refuted: David Barron @dfbarron 28 Oct Crane says Astros opposed May 10 distribution offer by unnamed provider because it would have not made CSNH profitable by itself. David Barron @dfbarron 28 Oct That would have cost CSNH even more money, Crane says. David Barron @dfbarron 28 Oct Comcast had most favored nation status, so it would have paid less for CSNH sub fees had DirecTV deal gone through, Crane says. David Barron @dfbarron 28 Oct Crane says Comcast never offered anything "remotely close" to $150 mil in revenue needed for CSNH to make money. Doesn't really matter what the specific number is. We know it was substantially lower than the $3.40 target, and according to this, it would have cost CSN-H money to accept it, meaning it's probably below Joe Joe's $2.30ish mark using our rounded estimates of households/ownership/etc. Looking at the tweets more, the DTV offer alone was not ever expected to make the network profitable. Comcast claimed that there *could* be a domino effect that would leave to "modest" profit, but no guarantees. So all they were promising was to lock in a losing deal with the hope that other carriers would come on board later. David Barron @dfbarron 28 Oct Astros say even current offer by DirecTV won't be enough to make network profitable. David Barron @dfbarron 28 Oct Comcast attorney says original hope for CSNH profit "simply isn't attainable. ... It will not be as profitable as all parties had hoped." David Barron @dfbarron 28 Oct Comcast, though, says it had offer from carrier that could be "domino effect" to lead to more "modest" profit, but Astros balked. David Barron @dfbarron 28 Oct Postolos: NBC proposal to DirecTV in October 2012 still would have resulted in five-year loss to CSNH of “couple hundred million." David Barron @dfbarron 28 Oct Ruth says Comcast/NBC hasn't assumed it will get on Cable One, Cox, Charter or Dish Network. Dish "is very hard to predict," he says. So to summarize, Comcast was asking the Astros to lock in a long-term losing deal that actually decreased CSN-H revenues while benefiting Comcast tremendously thanks to MFN, solely on the hope that they could make a modest profit if and only if they could convince all the other providers to get on board, which they couldn't promise and had failed to do thus far. Again, you tell me why the Astros would agree to this.
I gave my reasons for doubting Jim Crane's word. Until he puts up concrete evidence that Comcast, the Rockets (both of whom have nothing to gain since they had a signed deal with the Astros ) conspired with McLane to trick Crane, I'm not going to believe Crane's illogical claim
No, he isn't. His number is what is offered, supposedly. Mine is a rough approximation of minimum needed before CSN-H actually gains revenue from carriage fees. As long as Comcast doesn't waive MFN provision, any deal with DirectTV will need to be near the $3.40 rates to actually generate profits. Crane does not control Comcast. Comcast should waive it for the good of the Newtork. That would actually put CSN-H on the way to profitability. Like the Astros ability to veto and Astros ability to walk, the MFN provision is a protection of a partner against the partnership. Comcast made the faulty projections...shouldn't they be the ones to live with their mistake?
But the Astros are claiming that they would lose money and the Rockets wouldn't be down for an agreement that would lose money. Are you saying that with lower numbers that this deal would be profitable because that's not what Crane is claiming. He is saying he would lose equity because of the losses.
<blockquote class="twitter-tweet" lang="en"><p>We're back in bankruptcy court this morning for a <a href="https://twitter.com/CSNHouston">@CSNHouston</a> status update hearing.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/411148412218642432">December 12, 2013</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Astros owner Jim Crane is scheduled to update the court on his efforts to arrange a new business plan for the network.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/411148561586204672">December 12, 2013</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>The Astros have requested that the hearing be closed, so there's a good chance that we will be unable to report immediately on some actions.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/411149232943271936">December 12, 2013</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Rockets attorney Alan Gover says Rockets will take over as lead negotiator for the network.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/411150597467799552">December 12, 2013</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Gover says Astros and Rockets agree that Rockets should proceed as lead negotiator.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/411150843384049665">December 12, 2013</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Gover wants next status conference to be set for Jan. 7.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/411150974753837056">December 12, 2013</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet" lang="en"><p>Attorneys also say that the Rockets have made a formal bid to buy network. That bid has not been submitted yet to the court.</p>— David Barron (@dfbarron) <a href="https://twitter.com/dfbarron/statuses/411151175262543874">December 12, 2013</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
No, it actually supports a sob story that Crane is trying to get people to believe. Why any of you think that somehow Comcast was supposed to pay above market rates is utterly ridiculous. They were not going to agree to pay the $3.40 carriage rate for the length of the contract and would not have paid it without the MFN. I can't wait to see this doctored CSN H contract that Crane was sent that has missing pages, whited out clauses and or missing amendments etc.... Because we all know that any one group involved in CSN H before Crane signed on wouldn't realize how stupid a legal risk it would be to do something like that.
