Bankruptcy Judge Gives Astros' Crane Time To Craft Profitable TV Plan
A U.S. Bankruptcy Court judge has "placed the onus" on Astros Owner Jim Crane to "prove he can craft a profitable business plan for the Astros-Rockets-Comcast TV partnership," according to David Barron of the HOUSTON CHRONICLE. In the meantime, CSN Houston parent company Houston Regional Sports Network is "likely to remain under bankruptcy court supervision at least through Dec. 12," the deadline given to Crane by Judge Marvin Isgur to set new financial and carriage models. Everything otherwise "is up for grabs," and "even ownership shares" may change if DirecTV, Fox or AT&T enters the picture. Isgur is "taking Crane's word from the witness stand that he can remake the network into the financial success it has not been since launching last October." Crane said, "We think there is demand, and Major League Baseball is behind us. They believe in our position that our (TV) rights are valuable." Barron notes a "few details emerged to indicate what Crane wants and needs out of CSN Houston to achieve his goal of rebuilding the Astros." It was "revealed the network was valued" at $700M as of the '10 agreement among Astros then-owner Drayton McLane, Rockets Owner Leslie Alexander and Comcast, with the Astros' share accounting for $326M. That represents about half the value of the original $680M purchase price Crane "paid for the Astros (and their share of the network)." Witnesses also said that the Astros' annual rights fees were $55.6M in '13, with a 3.5% "annual increase." Crane said that the Rangers' annual payout from FS Southwest is $72M, "and the gap indicates the amount he needs from network operations each year." Testimony and court filings "revealed the Rockets' annual rights fee" of $45M "ranks higher in the NBA pecking order than does the Astros' MLB deal, which in part explains the Rockets' lean toward Comcast in some network management disputes" (HOUSTON CHRONICLE, 10/31).