Comcast subscribers are guaranteed to get the channel no matter what... plus, there's no way the teams would agree to go from the largest provider in Houston to an even smaller provider, without the larger provider still having access to the games. The key here is will there still be a deal with the dish people should AT&T acquire it? How much do they value exclusivity?
Its a designed leak... but with all the excitement, I fear that Comcast could find a way to tie this up in court with more litigation.
<blockquote class="twitter-tweet" data-partner="tweetdeck"><p>Here's the full story -- AT&T interested in buying CSN Houston from Comcast, Astros, Rockets out of bankruptcy: <a href="http://t.co/v5KuiIeLFk">http://t.co/v5KuiIeLFk</a></p>— Alex Sherman (@sherman4949) <a href="https://twitter.com/sherman4949/statuses/497068813083746305">August 6, 2014</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> AT&T Inc. (T) is considering a purchase of CSN Houston, the regional sports network that’s backed by Comcast Corp. (CMCSA), according to people familiar with the matter. CSN Houston, which is also owned by the National Basketball Association’s Houston Rockets, Major League Baseball’s Houston Astros, as well as Comcast’s NBC Universal, filed for bankruptcy last year. A court filing revealing AT&T as an interested bidder for the entire network may be released later today, one of the people said, asking not to be identified discussing private information. AT&T could potentially own the network in conjunction with DirecTV, the satellite-TV provider that it plans to acquire for about $48.5 billion, the people said. DirecTV owns or co-owns four regional sports networks, collectively called Root Sports. The price of the Houston network will be a sticking point for any deal, the people said. The channel could be worth as little as $100 million or as much as $800 million, depending on comparable sales, one of the people said. Comcast owns about 22 percent of the network, the Rockets own about 31 percent, and the Astros about 46 percent. AT&T U-verse and DirecTV (DTV) both serve customers in the Houston area. Neither pay-TV operator has shown the Rockets or Astros games in their most recent seasons after failing to come to contractual terms with the network. Losing Record The Astros have one of the worst records in baseball this year after finishing last year 51-111, a franchise record for futility. The team’s poor performance is a drag on the valuation and a reason U-verse and DirecTV haven’t agreed to carry the network, one of the people said. “I certainly would like to bring the Rockets and Astros back to DirecTV, but it has to be at a price that is fair for all of our customers, whether they are fans of the teams or not,” Dan York, DirecTV’s executive vice president of programming, told the Houston Chronicle in May. Brad Burns, an AT&T spokesman, declined to comment, while Darris Gringeri, a DirecTV spokesman, and John Demming, a Comcast spokesman, couldn’t be immediately reached for comment. A spokesman for the Astros declined to comment, while a representative for the Rockets didn’t immediately respond to voice messages seeking comment. To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net James Callan
http://blog.chron.com/sportsupdate/2014/08/report-att-to-make-bid-for-csn-houston/ Report: AT&T to make bid for CSN Houston Posted on August 6, 2014 | By David Barron One day before a bankruptcy court hearing that could provide details regarding the future of Comcast SportsNet Houston, speculation increased today that AT&T is the most likely candidate to submit a bid for the bankrupt Astros-Rockets-Comcast television partnership. Bloomberg News reported that AT&T is considering a bid for the network, which has been unable to obtain carriage deals with DirecTV, AT&T U-verse, Dish Network or Suddenlink and is seen by fewer than 40 percent of TV households in the 20-county Houston area. Thursday is the deadline for the network’s court-appointed attorneys to submit a plan of reorganization for the network, which has been under bankruptcy court supervision since last September. Comcast attorneys previously speculated that a competitor in the TV marketplace would likely bid for the company, and speculation since last month has focused on AT&T as the most probable bidder. An AT&T spokesperson last week said the company would not comment on its plans for the Houston Regional Sports Network partnership. Officials with the Rockets and Astros have said they will not comment until Thursday’s status conference. Comcast, which owns about 22.5 percent of the network partnership to about 46.5 percent for the Astros and 31 percent for the Rockets, said earlier this year it would not submit an initial stalking horse bid to buy the network out of bankruptcy. Even if a reorganization plan potentially involving AT&T is submitted to the court today or tomorrow, that does not mean a quick resolution to the network’s carriage issues. Parties can file competing bids beginning Sept. 3 with the court or can submit bids to network attorneys. New ownership, particularly if it involves AT&T, could result in new carriage agreements for the network, but those would be negotiated separately from the purchase of the network. AT&T does not operate a regional sports network but is in the process of acquiring DirecTV, which owns or operates RSNs in Seattle, Pittsburgh and Denver under the Root Sports banner.
The amusing thing about AT&T+DTV buying it is that they control the majority of the remaining market. Since they would own the whole network, they can pay the high subscriber rate - they would just be paying themselves so it doesn't matter - and Comcast would be stuck with the higher rate despite their MFN status. So in the end, the network would actually be able to get the rates that were supposed to be impossible to get - but the only party really stuck paying them would be Comcast.
On one hand, there'd be more pressure on Dish if AT&T/DTV/Comcast all had it. On the other, its less likely that Dish could negotiate rates down due to AT&T losing money on Comcast's MFN.
Looking to swap to DTV? Honestly, my contract has been up for a while. I have considered negotiating for a hopper, but this issue has held me up. Glad I waited, as I can immediately swap to DTV if Dish decides not to carry the channel. I've got no other issues with Dish and have had good service with them. But I have family with DTV and they have had no problems with them either.
There's a cause for concern if price hasn't been settled upon. Having an interest in the Network is great but this has been about numbers all along. Excited that none of the current partners will be involved in managing the Network as all 3 made some awful decisions. I really don't want Comcast to win a bid to own the entire Network (provided their carriage deal stays intact with the new owners) at this point since we'd still have to negotiate with DTV and ATT. Not 1 bit surprised that the Astros performance drug down the value. This kind of flies in the face of those who say the providers would look Astros value to the Network long term. Love U-verse, this is a good thing.
One thing to note for non-Houstonians. Time Warner controls a lot of surrounding areas like Austin and San Antonio. This makes it much less likely that carriage agreements will be struck there.
You are right, Comcast could get screwed on this which in turn would likely cause them to raise their subscriber fees. They weren't affected by 22% percent they paid to themselves previously. Another interesting thing is, it might not be more profitable for ATT to sign DISH unless they paid the higher rate too. The incremental dollars gained from signing DISH at a lower rate might not make up for the difference in the dollars lost having to lower the rate for Comcast per the MFN. Even at the highest number, 800M, the parties still have to pay off Network debt and recoup their initial investment. Not a big win for anyone there, mainly just stops the bleeding. In the case of the teams, they get their media rights fees payments resumed but don't get revenue from the Network.
Agreed - I think it makes it less likely that anyone outside of the big 3 (AT&T, DTV, Comcast) would carry the network. Unfortunate for those of us in Austin and the like. Agreed - I'd be curious what CSN-H's accumulated liabilities are now.
Possibly - but I don't think so. I doubt Comcast has intention of paying for more subscribers at their current rate - they've already said it's way over market value and they never intended to pay it. Comcast is only locked in because they have to be. So unless the current agreement requires them to cover the new areas if it changes over to Comcast, I doubt they voluntarily expand their coverage.
