U.S. Bankruptcy Judge Marvin Isgur this week will "decide whether to accept a proposal reorganizing" CSN Houston "into a new partnership" owned by DirecTV and AT&T, according to David Barron of the HOUSTON CHRONICLE. Under the plan, which is supported by the Rockets and Astros, but opposed by Comcast, the buyers "will rebrand the network as Root Sports Houston and provide carriage on U-verse and DirecTV, which refused for two years to carry CSN Houston across Texas, Oklahoma, Louisiana and Arkansas." The RSN will "drop most non-game programming, and 96 of 141 CSN Houston employees will be laid off." The Rockets and Astros will "lose their equity and will be unable for now to recover about" $125M in rights fees. However, the teams "support the plan because it will provide increased carriage." Rockets CEO Tad Brown said, "The key is to make sure fans can see the games." Barron writes "quality was high -- CSN Houston won five regional Emmy awards last year and is nominated for 16 this year -- but the bottom line was catastrophic." Isgur's decision will be "critical, since the teams plan to pay the loan as part of their pledge to give AT&T and DirecTV a lien-free network." Even if the reorganization plan is approved, the CSN Houston "legal saga will continue." Astros Owner Jim Crane has sued Comcast and former Astros Owner Drayton McLane over "network-related issues, and the teams could sue Comcast to recoup unsecured network-related debts." CSN Houston's launch "will be remembered as a cautionary tale of poor timing, questionable decision-making, hundreds of millions of dollars in lost revenue, tens of millions of dollars in legal bills and untold quantities of squandered goodwill and lingering ill will." It will likely be the "biggest, most expensive collapse in the 35-year history" of RSNs (
HOUSTON CHRONICLE, 10/6).
