CSN Updates Thread

Well, well. Jim Crane couldn't get it done overnight.

 

Hope this is a good thing for us non-comcast Houston fans..

 

Rockets play in the NBA which requires 55% revenue sharing for basketball related income. Long term CSN-H will make money if they get ATT and DirectTV at decent rates. Rockets most likely will make more money in this scenario long term because Rockets' share of CSN-H profits aren't basketball related income instead of just selling media rights to highest bidder.

Astros don't play in NBA. Astros share of CSN-H profits and media rights paid by CSN-H would need to be greater than Astros would receive from highest bidder paying media rights for the Astros to profit from CSN-H.

Rockets are in it for long term profits. With revenue sharing, any short term losses by Rockets are smaller because media rights are worth a lot less and 55% of that goes to NBA any way. Rockets can weather losing ~5-10 million/year (very rough approximation assuming Rockets would get paid half of media rights like the Astros) in short term for potential (Heck, that is Royce White money) for potential for hundreds of millions profits later with a shelter to keep money from the NBA.

Astros are losing about 60 million per year (40 million in non-paymnet, 20 million in lower media rights), Crane isn't super rich, and he just spent a lot of his and investors money on Astros and CSN-H.

Therefore, it is easy for someone with a grasp of logic to understand that the Rockets are able to accept much lower carriage fees and profit than the Astros in the long run and they are much better equipped to handle losses short term as they are much smaller for them.

 

Comcast got two offers from one provider in 3 years. USPS is better than that.

 

It feels like we're nearing the final stretch with this whole thing. Glad when it's over.

 

Potential deals with 2 outside parties and a separate offer for a buyout from the Rockets. Hope that any one of those gets done and we can watch our teams again sooner rather than later.

 

Their media rights fees are greater than the Astros and should be a static number provided Crane doesn't bankrupt the station by holding out for eternity.

And Crane is claiming CSN H would lose money. It hasn't been stated by any of the parties that CSN H would lose money for the length of the contract.

The Rockets wouldn't get paid half the media rights if Crane signed off on carriage deals at the current rate. His profits would be less over the length of the contract on the CSN H ownership side.

The non-payment is tied to Crane being stubborn and not signing off on market deals. His inability to get a better deal over the last 90 days validates what the current market rates is.

Provided they get back on track and the media rights fees get paid that is a moot point.

As far as long term Network profits, you are right, Crane isn't super-rich. That's why he had no business getting involved in the TV station and why he needs to be bought out.

 

That is kind of disappointing. After 6 weeks, we have no new offer on the table. I would have been happier with Isgur tossing the thing out than to have to wait almost a month more for another status update. With the Rockets again offering to buy out the Astros, it seems they aren't too optimistic with the Astros getting an offer that they will accept up to this point either.

 

With the Rockets taking over the negotiations and offering to buy the network, this could be headed towards a solution within the next month or so.

 

I have to say I am surprised a little that Les has made a formal bid. Way to go, Les! If CSN-H works and Rockets own it completely, it would be a game changer for the Rockets.

That is just some serious dough to be throwing around.

 

It might also be a sign that the negotitations were going nowhere with the other providers in regard to the Astros accepting their offer. The Rockets buying out the Astros would be the best thing.

 

For what it's worth, they wouldn't own the entire network. Comcast/NBC would still own part of it.

 

I wonder if "two major players" isn't talking about carriage, but a new network. Maybe their talks were with Fox Sports or DirecTv to be partners instead of Comcast

 

Depends. Sounds like the Rockets may buy the network and short circuit this whole thing.

 

Which would be a quick solution

 

IMO, either the Rockets or Comcast owning the network is best case to get both teams televised. If all the Astros are concerned with is their rights fees, the onus of getting carried falls strictly on the Rockets and/or Comcast. This would be over much quicker if the Astros were out of the picture in terms of ownership of the network.

Plus, I really don't want any of our teams back on FSSW. It's too dallas-centric.

 

I don't know Rockets media rights fee, but based on number of games and fewer commercials, I assumed they were less than Astros. Please provide numbers for Astros and Rockets media rights fees. Please remember that the Rockets only get to keep about 45% of their media rights fees.

If market rates are low as you indicate, CSN-H doesn't make money (or makes very little) by offer from DirectTV due to MFN status. Crane not signing would be a smart and wise decision, not stubborn.

Crane can only be stubborn if market rates were high (i.e. significantly over 2.33 per subscriber) and he refused to agree.

 

Couldn't an FS Houston station just use the studios in Houston and run a channel dedicated to the city just like CSNHouston?

Also, I wonder what the end game for Crane and the Astros is as far as rights fees goes. If they get bought out, they're on their own when baseball season rolls around. Seems like they wouldn't make much money no matter where the broadcast the games.