By Dow Jones Business News, October 22, 2013, 02:55:00 PM EDT
By Katy Stech
The owners of the Houston Rockets basketball team are siding with Comcast Corp. ( CMCSA ) against Houston Astros owner
Jim Crane over the fate of the struggling sports channel that broadcasts their games, saying that a bankruptcy sale or
reorganization is the best way for Comcast SportsNet Houston to survive.
In papers filed Monday with the U.S. Bankruptcy Court in Houston, Houston Rockets attorneys said that the network's
proposed bankruptcy case, which the Astros will fight to dismiss at a hearing next week, could allow it to reorganize
and continue to "provide the fans in the city of Houston and its surrounding region with the sports programming that
The filing breaks the basketball team's silence over the management dispute within the network that escalated to its
involuntary bankruptcy filing on Sept. 27, which was filed by Comcast affiliates that are owed more than $100 million.
Comcast wants to buy the network through a bankruptcy auction and has said its offer would be high enough to provide
some compensation to the Astros and Rockets.
The network has struggled to convince more subscribers to pay fees in order to get the sports channel that launched
last year. Some critics say the network's proposed subscriber fees are too high.
The bankruptcy filing blocked Houston Astros owner Jim Crane from yanking the team's media rights agreement with the
network, which would have blocked it from broadcasting baseball games and jeopardized its existence. After the filing,
Mr. Crane and his lawyers fought for the bankruptcy case to be dismissed, which would enable them to end and resell the
broadcast rights deal.
Bankruptcy Judge Marvin Isgur is set to hear arguments on the involuntary bankruptcy filing next Monday.
The sports network is owned by both sports teams and a Comcast affiliate. The sports teams, as part owners of the
network, are paid a rights fee and are also able to share in network profits.
Comcast SportsNet Houston is one of 12 regional networks that are part of the sports division of Comcast's
NBCUniversal unit, and it pays Comcast an annual fee for management oversight and other operational help, according to
CSN Houston is available to Comcast subscribers but has run into trouble persuading Comcast competitors such as
DirecTV and Dish Networks to carry the network. Cable and satellite providers have faced pushback from customers when
they have sought to pass on the cost of high sports-rights fees in monthly bills.
Mr. Crane has said that Comcast officials were supposed to "bring those deals to the table," but Comcast officials
said the team has blocked the network from signing "carriage agreements at the market-clearing prices," according to
court papers. Today, CSN Houston is available in less than half the region's households.
Mr. Crane, a Texas businessman, bought the Astros for more than $600 million in 2011 and began a major rebuilding
program. After dumping high-priced talent, the team finished with the worst record in baseball this past season.
Comcast said the network owes it more than $100 million that it provided under the deal that created the network,
which broadcasts sports programming out of a 32,000 square-foot space in downtown Houston, according to its website. In
addition to showing Astros and Rockets games, the network broadcasts Houston Dynamo soccer games, high school football
games and sports talk shows.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to
Write to Katy Stech at firstname.lastname@example.org.
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