Astros' Crane Says CSN Houston Carriage Proposals Were "Way Under Water"
Astros Owner Jim Crane yesterday said Comcast's proposed carriage agreements for CSN Houston were "way under water," off by about half from original business projections for the fledgling RSN, and would have crippled the club's investment in the venture. He said what Comcast was "proposing would have saddled us with so much debt, it would have wiped our equity" in CSN Houston. Crane added, "Nobody wants their equity diluted to nothing, but that's what could have happened." The Astros on Monday filed a formal objection to the involuntary bankruptcy proceedings for CSN Houston, arguing Comcast's move was legally improper and could leave the club crippled in its local TV rights revenue. Crane: "No one's happy here, but TV rights are very important. There's no secret this is a very big deal for us, and (the league) supports our position." The initial bankruptcy filing arrived just days before the club intended to file a breach-of-contract complaint for non-payment of rights fees by Comcast. The Astros were set to receive "a little north" of $50M in total local TV rights fees, but that has not been paid since before the All-Star Game.
TWO TO TANGO: Crane remains open to selling his equity in CSN Houston and selling his TV rights to another provider, but only "at a fair price." Crane declined to specify who a new partner might be, but said "there were other bidders for this prior to our doing this deal" with Comcast. He acknowledged, however, that any plan will require some sort of relationship with Comcast given the company's extensive distribution reach in greater Houston. A hearing on the club's move to dismiss the bankruptcy proceeding is scheduled for Oct. 28, but that date is in some jeopardy due to the federal government shutdown. The bankruptcy court at this point is certain to stay open through Oct. 17, pending further developments. Meanwhile, Crane said the club's relationship with the Rockets, also a partner in CSN Houston, is fine, and said the NBA team stands at risk of losing its equity investment as well. He said, "We're both in the same position. At this point, they're not going to get paid (rights fees) either." Crane also said the club's ongoing youth-driven rebuilding effort remains unchanged, despite the ongoing turbulence in this matter. Crane: "The plan remains the same. We're making progress, though you can't really see it yet (at the major league level). But we're staying on that course" (Eric Fisher, Staff Writer). Crane said of selling the Astros' TV rights, "We feel there is legitimate interest from other parties, but people will probably stay to the sideline until this piece is sorted out." He said that if the partnership "is restructured, the Astros would be interested in increasing their 46 percent share 'if we thought it was a good bargain' and that carriage agreements with Comcast, the area's largest cable provider, remain in force" (HOUSTON CHRONICLE, 10/9).
HOUSTON, WE HAVE A PROBLEM: MULTICHANNEL NEWS' Mike Reynolds wrote given the RSN’s "governance issues and the hearing date of Oct. 28, it’s highly unlikely that the Oct. 30 tipoff of the Rockets season will spur any new carriage agreements in time for the start" of the '13-14 NBA campaign (MULTICHANNEL.com, 10/8).