Houston RSN Mess Worsens

Astros Owner Calls TV Deal 'A Bust To Date’
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The complicated situation with Comcast SportsNet Houston has gotten even messier, now that the Houston Astros owner has gone to court and publicized his grievances.

On Nov. 22, two years to the day after he bought the team, Astros owner Jim Crane presided over a press conference at Minute Maid Park discussing the litigation he has brought against the club’s former owner and Comcast/NBCUniversal over the struggling RSN, which is available to only 40% of the Houston DMA within its five-state trading area and is in the midst of a bankruptcy proceeding.

The Astros own 46% of CSN Houston with the NBA Rockets controlling 32% and Comcast/NBCU the balance.

Crane, whose presser was streamed on CSNHouston.com, called the TV deal “a bust to date.” In the suit, filed on Nov. 21 in the 80th Texas State District under Judge Larry Weiman, Crane claimed that former Astros owner Drayton McClane, Rockets owner Leslie Alexander and Comcast/NBCU had constructed a fraudulent business plan for CSN based on infl ated monthly subscriber-fee rates.

As a result, the Astros have “lost tens of millions of dollars, perhaps hundreds of millions,” Crane said.

Aside from Comcast, CSN Houston has only been able to reach affiliate deals with a handful of smaller providers. DirecTV, Dish Network, Time Warner Cable, AT&T U-verse, Verizon FiOS and Suddenlink Communications are all on the distribution sidelines.

As a result, the RSN, which has reportedly seeking a monthly subscriber fee of $3.40, has been unable to meet its rights-fee obligations.

At the request of the Rockets, which added the talented-but-temperamental Dwight Howard to its roster during the off-season, CSN Houston recently extended a 45-day freeview offer — a span that would have encompassed about two dozen of the club’s games — but it was met with deaf ears by the distributors and withdrawn.

Four Comcast-related entities on Sept. 27 filed for an involuntary petition for Chapter 11 bankruptcy protection for the RSN. U.S. Bankruptcy Judge Marvin Isgur has delayed ruling on the Astros’ motion to dismiss the case and Comcast’s motion to name an interim trustee for the network, while giving Crane until Dec. 12 to build a new business plan that can make the network profitable.

Houston SportsNet Finance, which loaned CSN Houston $100 million to build a studio and for startup costs, indicated during the initial filings that it would be willing to buy the RSN. Rockets owner Alexander expressed a similar sentiment during a Nov. 21 bankruptcy status meeting among the parties.

The rising cost of sports license fees has made RSN carriage far from the slam dunk of the past. Dish Network is not carrying Time Warner Cable’s two Los Angeles Lakers-centric networks, and DirecTV remains on the outside with the Pac-12 Networks. FS San Diego, which covers MLB’s San Diego Padres, has still not come to terms with Time Warner Cable. Meanwhile, CSN Northwest recently inked a deal with Charter Communications, but has not been able to bridge differences with Direc- TV and Dish Network. Still, most RSNs operate smoothly and profi tably for their owners.

TAKEAWAY

The owner of the Houston Astros has lashed out at his partners in Comcast SportsNet Houston, claiming the joint venture has lost the baseball franchise “tens of millions, perhaps hundreds of millions of dollars.”

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