Comcast SportsNet Houston Files for Chapter 11 ProtectionComcast Would Be Interested in Fully Acquiring the RSN from Team Partners 9/28/2013 6:44 PM Eastern
Three Comcast/NBC Universal units and a fourth-related TV company have filed for an involuntary Chapter 11 petition against CSN Houston, the struggling regional sports network that televises Houston Astros and Houston Rockets games.
The filing, made Sept. 27 in the Southern District of Texas, comes as the RSN, which is 46% owned by the Astros, 31% by the Rockets and 23% by Comcast/NBC Universal, approaches its first anniversary on Oct. 1 with only 40% distribution in its territory.
On Saturday Sept. 28, the network’s creditors asked U.S. Bankruptcy Judge Marvin Isgur to appoint an interim trustee to oversee network operations while the bankruptcy petition winds its way through court.
Moreover, one of the Comcast entities said that if the bankruptcy court sees fit, it would be willing to buy the entire network and continue to run it under the CSN Houston heading.
The creditors are: National Digital Television Center, which is owed $10,517.50; Comcast Management Services, $1.25 million; Comcast SportsNet California, $43,129.02; and Houston SportsNet Finance, which loaned the RSN $100 million to help launch the network last year and build its studios.
Comcast SportNet Houston, which is reportedly seeking a $3.40 monthly subscriber fee, has only been able to secure carriage with Comcast and a number of smaller distributors. It has not been able to reach agreements with DirecTV, Dish, Time Warner, Suddenlink and AT&T U-verse.
In a statement Friday evening, CSN Houston said: "In order to resolve structural issues affecting CSN Houston's partnership, affiliates of Comcast/NBCUniversal have filed for involuntary bankruptcy protection in the Southern District of Texas. This action is necessary to preserve CSN Houston's ability to provide its valuable programming and reaffirms Comcast/NBCUniversal's commitment to serving the region and its fans."
The Astros issued the following statement: “Comcast has improperly filed an involuntary bankruptcy petition in an attempt to prevent the Astros from terminating the Media Rights Agreement between the Astros and Houston Regional Sports Network,” the statement said. “HRSN failed to pay the Astros media rights fees in July, August and September, and we have invested additional money in order to keep the network viable through our season.”
The RSN acknowledges that it has missed payments to the Astros in July and August and will do the same for the Astros and Rockets over the next 60 days.
The Rockets didn’t respond to requests for comment.
While significant portions of the petition have been redacted, one segment refers to “the deadlock among the parties (that) has thwarted all efforts to engage in any constructive exercise to salvage the Network.” Decisions at the RSN, which has a four-member board, must be approved unanimously.
Houston SportsNet Finance said the company remains confident in CSN Houston’s value as an ongoing entity, and in document filed with the bankruptcy court wrote that it "would be prepared to make a bid to acquire either the network (under a plan of reorganization) or substantially all of its assets.”
Since tipping off last October, CSN Houston has televised a full season of Rockets game before its small distribution base, while the Astros will complete an abysmal 2013 campaign on Sunday, Sept. 29.