SBD/July 15, 2013/Media

Rockets' Addition Of Dwight Howard Could Bolster CSN Houston Carriage Negotiations

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Howard's arrival has Rockets and Astros execs expecting talks to progress
While carriers such as DirecTV, Dish Network and AT&T U-Verse still have not agreed to a deal to carry Comcast SportsNet Houston, the Astros and Rockets have "done more than their share to make themselves attractive" to the more than 40% of the market who have access to the net, according to Randy Harvey of the HOUSTON CHRONICLE. The Rockets within the past year have acquired Gs Jeremy Lin and James Harden, and last week signed C Dwight Howard. CSN Houston President & GM Matt Hutchings said Howard is "frankly, a game-changer." Astros Owner Jim Crane is "optimistic they will be more eager to negotiate as the NBA tipoff approaches because of Howard." Harvey wrote if the parties reach a carriage agreement, Howard will have "done something Houston Mayor Annise Parker has been unable to do." She has "refereed two meetings in her office" between CSN Houston partners and carriers "with no tangible progress." CSN Houston following the signing of Howard "now has about 105,000 names on its petition drive, up from about 80,000." Astros President of Business Operations Reid Ryan said, "Any time you have a player the caliber of Dwight Howard choosing to leave a city like Los Angeles and come to a team like the Rockets, it's a major story and very exciting. Is it enough to make carriers want to pick up CSN Houston? It's definitely a positive, without a doubt" (HOUSTON CHRONICLE, 7/14).

LINES DRAWN IN THE SAND: The WALL STREET JOURNAL's Matthew Futterman writes when the Astros and Rockets launched CSN Houston last October, they were "following the lead of other professional-sports teams that have given up guaranteed rights payments from broadcasters for equity in a potentially valuable asset." Sources said that the Astros and Rockets "turned down deals from longtime broadcaster Fox Sports Southwest valued at about" $60M per year for the Astros and $25M per year for the Rockets. By forming a partnership with Comcast, the "biggest pay-TV operator in the U.S., the two teams hoped their network would become part of the basic programming offered by Texas' television providers." The net "asked providers to pay a monthly fee of $3.40 for each of their subscribers, making it one of the most expensive cable sports networks in the country." Rockets CEO Tad Brown said that CSN Houston "deserves the same distribution and fees that other top regional sports networks in the country's biggest markets receive and will eventually be available to all subscribers in the region." Futterman notes cable and satellite TV operators over the past 18 months have "started looking more closely at sports-viewing habits, using data collected from set-top boxes." AT&T said that it used such data in "deciding not to carry the new Houston sports network." AT&T in a statement said, "We'd like to make the channel available to our customers, but the proposed cost is not fair to pass to all of our customers across Texas, Oklahoma, Louisiana and Arkansas, especially based upon our subscribers' historical lack of viewership of Rockets and Astros games" (WALL STREET JOURNAL, 7/15).
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