CSN Updates Thread

The Rockets and Astros both make money through two mechanisms: media rights fees + profits from the network. The Astros own a larger portion of the network, so their portion from profits is higher.

If the network loses money, it could be a good deal for the Rockets because they get their above-NBA-average media rights fees while suffering small losses from the network. The Astros get their MLB-average media rights fees while taking larger losses from the network. So the profitability for each partner becomes very different.

 

Can you provide proof of any of this? Or do you not hold yourself to the same standard you demand of others where logical inferences are not acceptable?

 

It may very well be. But if the Astros have been kept abreast of the situation and they submitted an offer it may mean they want to negotiate agreements with 2 providers so that they will have carriage agreements in place when they buy out the Astros.

It also seems the Astros may be looking to get as much cash as they can from a buyout and from their Lawsuit to appease investors.

 

Proof of what? The only thing I should have added is that they were not going to pay the high rate for the length of the contract unless someone paid more than that rate or unless no one paid it. That's what MFN contracts are about.

 

We already know that the Astros and Comcast exchanged buyout offers earlier in the process, but could not agree on a valuation. Of course the Astros would try to get maximum value from an asset they own. It has nothing to do with appeasing investors - it's common sense business.

They'd ideally want to get equal value from the sale that they gave up by taking with the lesser media rights deal from CSN-H than they had from FSN.

 

Yes if you look at this from the perspective of a baseball owner who isn't financially able to be in a partnership where he needs to look at it as a long term investment. Owning an MLB team is pretty much the same thing. Drayton made his money selling the team.

 

Except as indicated in the tweets, CSN-H went from a profitable venture to one that MIGHT be "modestly" profitable IF signing DTV leads to a snowball effect - that's directly from Comcast. Not nearly as interesting a long-term investment as originally envisioned.

So the expectation from you is for the Astros agree to massive short term losses ("couple of hundred million over 5 years") in exchange for hoping Comcast is right this time around that they can get a snowball effect that might lead to modest profits down the line. All the meanwhile, Comcast is reeling in profits through their MFN and has continued incentive to negotiate lower carriage rates with future providers if they don't snowball like hoped. Basically, you're saying the Astros should lock in all the bad without any evidence of the supposed good that would follow, while relying on a partner that has incentives to NOT try to get the highest rates possible from the other providers.

 

The Rockets are reported to be submitting a formal offer. When has that happened before? It's news after overnight guy laid a goose egg and turned negotiating to the Rockets. Lol @ common sense business when it comes to Crane and this mess. The common sense train left Union Station as far back when Crane started telling fans to write 10m checks.

Yeah, Astros investors just love making cash calls because their leader got duped and now has failed on his boast of getting an offer in 6 weeks. It's got everything to do with appeasing investors

 

Let's not clutter up things today with this with news coming out today. Let's stick to commenting on what happens today since it seems we will have to wait a month before the next update

 

Of all the things Granville has said, I agree with him here. Comcast was never meant to pay $3.40 forever in my opinion. My guess is that Astros and Rockets agreed to take less in media fees than they could on open market. Comcast agreed to pay more to start with to help get network going. When CSN-H got projected rates at near full coverage, CSN-H would make good profits.

Projected rates didn't happen. If MFN is triggered at substantially below projected rates, CSN-H expected profits go down (or disappear) and Comcast makes a huge windfall. Astros reason for joining CSN-H goes away (profits at projected rates). Just as Comcast has refused to waive MFN, Astros have refused to sign deal that doesn't benefit them. Both operating in own self interest.

 

Thanks for the updates, JR.

 

I'm not ashamed to admit that I still have no idea what this means. I've read everything from Granville (you're not on ignore dude) to Refman/Max...it's just so much info. Does this mean that just maybe we'll have the Rockets on TV for the 60% of fans who do not have CSN soon?

 

Translation: Unlike Jim Crane and the Astros, we are going to keep our mouth shut while we work on a solution.

 

You just assume that there is no evidence and that the suit is frivolous. Meanwhile, those of us in the real world will wait for discovery and the trial.

 

I wouldn't bet the farm on it. First, the Rockets will have to get providers to agree to carriage. Then those agreements will be submitted to the bankruptcy court for approval. It is highly unlikely that the Court will sign off on agreements that will result in the network taking on millions in losses.

 

I am not trying to stir anything up, but are some of you just blind Astros supporters? It seems some are defending Jim Crane no matter what. It seems to me that he is either a poor gullible imbecile who was duped by Uncle Drayton, the Rockets, & Comcast (not likely) or he just can't seem to handle the fact that the team he bought is not worth the outlandish carrier fees he is expecting (very likely). I know the "business plan" projected the crazy high carrier fees, but things like that happen in business everyday. The "business plan" was obviously based on a scenario that had very little chance of ever happening. Surely he realized there was a chance that maybe, just maybe, nobody would pay the outlandish carrier fees in the"business plan" and he might just have to accept market value? Maybe, just maybe, he shouldn't have purchased a team he could not afford.

 

Maybe we should all admit that we don't know what the facts are, because none of us do, and let the process work and the evidence be presented.

 

yeah you learned that lesson the hard way.