In this scenario, the Astros had the contractual right do each of the things it did (holding out and then leaving). I can't imagine CSN had the right to just stop paying fees because they didn't like the results of the partnership terms they agreed to.
Of course, but the issue particularly from the fans perspective is who is holding up the agreements that are preventing us from watching the Rockets. It seems obvious now it's the Astros despite their denials when Jeff's article came out.
Do you blame them? Why not blame Comcast (don't understand why everybody is seemingly giving them a free pass)? Or both? And the Rockets too? "from a fan's perspective" means nothing here.
Crane has said as much. He said there were offers the Astros couldn't agree to and still get media deals on par with other teams in their division. But keep in mind...no one forced the Rockets to enter into a deal where the Astros controlled the Rockets availability to local media. They did that because they saw dollar signs. I blame the Rockets for me not being able to see the Rockets...and I blame the Astros for me not being able to see the Astros. Expecting the Astros to take a lesser deal than other teams in their division just so the Rockets games could be show is crazy. I find it unbelievable that the Rockets went into this deal knowing how much more important local media dollars were to the Astros...I think Comcast, the experienced party, led both of these teams down a primrose path based on projections. I think they both had expectations set by Comcast...and then the bubble on RSN's popped.
I'll do better than that. I haven't been to a game all season and I probably won't be going next season either. Keep your team off local television and see where that gets ya.
It's a Monday, I doubt he has anything else scheduled that morning. One thing that has come up several times in this thread is that the creditors that filed the petition are affiliates of one of the partners. While they are insiders, the debts are valid debts. That also makes them creditors. I do not know the rules that apply to insiders that are also creditors. However, that they are creditors makes this unique. If you are going to the hearing, I recommend getting there early. This thing is going to be a circus. Media will be everywhere.
So, turns out I was right. The Astros were trying to terminate the deal and walk away so they could go sell their rights on their own.
The one thing I am taking away from this whole mess is that I was right to place little to no blame on my current provider in this mess. Hard to say which of Comcast, Astros or Rockets are really more to blame, but they all got into a situation that they didn't have control over and apparently didn't realize they weren't all on the same page (as far as what they were willing to accept). I'll stay with Uverse. Hopefully something settles out and the Rockets can break free of the Astros so I get to see them. Honestly, even though I do consider myself a baseball fan, it wouldn't bother me that much at this point if I never saw the Astros play ever again.
I remember going back and forth with you..but I don't remember that being the issue. Maybe I misunderstood you. I think the Astros are absolutely trying to get out of all this. Which includes termination of the broadcasting rights deal AND a buyout of their interest in the partnership. They exchanged offers for that buyout...Astros made the last offer...Comcast ran to the courthouse. That's why I said I can't imagine a situation where CSN ends up with the Astros on the air next season. It's possible if they can come to a broadcast agreement after they deal with the partnership issue...but seems extremely doubtful to me given bridges burned. Which begs the question...where do the Rockets games end up on TV?
Actually one of the arguments in the Astros pleading is that a couple of the creditors do not own valid debts..that they were oral agreements that the Astros never consented to. They're arguing there aren't enough creditors to substantiate an involuntary filing.
CSN also made the first offer. Could the Astros re-sell their rights fees without relinquishing ownership? If not, the Astros would have a purely empty threat of leaving. Money heals all wounds, so I wouldn't be completely shocked if the Astros are still with CSNH when the dust settles.
1. Yeah, technically Comcast made the first offer...not CSN. Picking nits, but unfortunately that's important. The Comcast partner of CSN offered FIRST to buyout the Astros' interest. There was at least one round of exchanging numbers before the Comcast Creditors threw CSN into bankruptcy. 2. I don't know if they can nor not. No idea. Just guesses really. 3. I would be surprised.
If I were structuring the organization, I would think if the Astros took back their TV rights due to nonpayment, they would still have ownership but would lose their seat on the 4-person decision-making board. That seems like the most logical structure, but it's clear they didn't think this through very well.
I think this is a hail mary from the guys at Comcast so that they can get control of CSN Houston. I am pretty sure the Astros will win the in court on Oct 28 because it totally smells of collusion between different Comcast controlled entities. Unfortunately I don't know who to support in the case. I really just want CSN Houston to be on ATT. I think I would love to have the channel even though I have not seen 1 second of it. Right now I don't like what I see from Jim Crane. He totally stripped down the payroll to nothing and gave us a Triple A team to watch this year. Thankfully I couldn't watch this disaster. It seems that he has bought the team with mostly borrowed money and really can't afford the Astros personally or collectively with all the owners. They need Cash to pay down the debt before they can start paying for players. Long term it seems he will be one owner that cannot afford the Astros to be in the red because he doesn't have the deep pockets. So if he is going to be the owner we need enough revenue so that the Astros can pay for players they develop and not lose them. That is where the CSN Houston deal comes into play. I just wish that we had a better owner that had more money so that he doesn't have to be so miserly.
Ok, so the Astros' pleading hasn't made it to PACER (the online filing system of the federal courts) yet. What has made it, though...and what has gone unreported apparently...is that the Comcast Creditors have filed their Motion to Appoint Trustee. This is the crux of the bankruptcy proceeding as outlined in their initial Involuntary Petition. I read it this morning..here's what it says: 1. It outlines the dispute between the partners related to how CSN should be run. It describes it as "fundamental disagreement." It says because of those disagreements, the network has been unable to take actions necessary for it to meet its own obligations. It describes it as a financial and governance crisis. "To avoid the destruction of the Network's substantial value, the Alleged Debtor requires the appointment of a Chapter 11 trustee." It goes on to say they need this trustee in order to reach distribution agreements with carriers. "The Network's assets -- including the right to telecast Astros and Rockets games, the right to receive monthly fees under an affiliation agreement with Comcast Cable Communications, LLC for distribution of the Network's Service, and rights to receive revenue from a few smaller operators that carry the Service -- have significant value, the protection of which is the central purpose of this involuntary bankruptcy filing....the Petitioning Creditors are asking this Court to appoint an independent and disinterested trustee who will owe a fiduciary duty to the Alleged Debtor's estate, and who will be well equipped to make those decisions for the hamstrung Alleged Debtor." 2. Comcast Lender wants to acquire the Network or its assets through an auction run by the Trustee, ultimately. Some other interesting points: Affidavit of Jon Littner, Pres. of Comcast Sports Management Services, LLC: 1. This sheds light on the original agreement between the parties. Says the partners entered into the agreement in Oct. 2010, pursuant to which "each team, in exchange for compensation, granted the Network certain rights, upon the launch of the Service, regarding the exhibition of team programming. These agreements are multi-year contracts, each approved by the teams' respective leagues. Each involves several multi-million-dollar payment obligations on the part of the Network. Several large payments by the Network are already past due or will soon become due. Specifically, the Network has failed to make payments due to the Astros under their Media Rights Agreement. The Astros declared default of that Agreement. 2. Inability to enter into affiliation agreements -- he says this is the primary source of income for CSN Houston. Says the Rockets and Astros negotiated with Comcast in 2010 over the terms and rates that they would agree to with respect to carriage of the Network. It doesn't give ANY details as to what those agreements were, other than to say generally there was an expectation they would be seeking carriage of the Networks through providers. 3. Efforts to fix it that have taken place so far: a. there was a proposal made by one of the partners to restructure the whole mess...proposals to restructure and recapitalize the Network. The partners could not agree to the terms of that. b. Offer to buy/sell. There have been various offers made by partners to buy out one another's equity interests...none have been accepted. c. Capital call. A few months ago, the owners achieved the necessary agreement for an additional capital contribution by each of them. The contributions were to be made in 3 separate installments...each made the first 2 payments; none made the last 3rd. 4. Calls the Astros broadcast rights an "indispensable asset." The pleading asking for a trustee seems strained. The case law it cites to all suggests that the 4 bases to appoint a trustee in this situation are fraud, dishonesty, incompetence and gross mismanagement. The Petitioning Creditors aren't alleging any of those things, and they make that clear. They cite to some case law for exceptions to the rule...but it seems like an uphill battle, particularly given the argument back that says that all of this is really just a way to set aside their partnership agreement. What they're asking for is granted by exception...not by general rule. The Motion says: "Here, it is clear that the Network cannot operate its business or preserve itself as a going concern under its current corporate governance structure, which has resulted in an irreconcilable impasse, preventing the Network from taking critical steps to sustain the business. When, as here, management is deadlocked, the appointment of a trustee is the best (and only) recourse to ensure reorganization and payments to creditors." One final note...it's just weird to read through pleadings where the Petitioning Creditors are essentially the Debtor by affiliation. The degree of detail the the Creditors have with respect to otherwise confidential meetings/practices/agreements between the partners of the Debtor is crazy. Also about the governance of the Debtor. Not something you typically see, and I'm guessing the Astros attorney will use that fact to make the point that this is clearly Comcast reaching in to try to: 1. force the Astros into carriage deals they don't want with their broadcasting rights; OR 2. buy up all the assets from a bankruptcy auction. If the Astros and Rockets broadcast rights are up for sale at a BK auction ultimately...I wonder who all gets involved in that as a potential buyer.
That seems logical..but I have no idea. Both the Astros and Comcast are saying that there were offers to buyout the Astros' interest. It doesn't say anything specifically about the Rockets. I hate the idea of the Astros and Rockets broadcast rights being assets of a bankruptcy auction though. The Astros are arguing they can't be...that those rights can't be assigned like that, and thus the whole bankruptcy proceeding is a "road to nowhere" -- the line used directly by the Astros' attorney. We'll see. But that's where the Rockets and Astros have common ground, it seems to me.
