CSN Houston filing bankruptcy

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http://blog.chron.com/ultimateastros/2013/...om-csn-houston/

 

CSN Houston ‘will not’ survive without bankruptcy, Comcast says

Posted on October 15, 2013 at 8:41 pm by David Barron in Astros, Astros/MLB, Comcast, CSN, General

 

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Comcast and the Astros traded tartly worded legal documents in their struggle over the future of Comcast SportsNet Houston on Tuesday, with less than two weeks to go before an Oct. 28 court hearing that could decide the fate of the network and its 130 employees.

 

The Astros, in their submission to U.S. Bankruptcy Judge Marvin Isgur, accused Comcast of using bankruptcy court as a “smoke screen” for plans to cheat the ballclub out of its share in Houston Regional Sports Network, the Astros-Rockets-Comcast partnership that owns CSN Houston.

 

Meanwhile, four Comcast-affiliated companies said if Isgur dismisses the bankruptcy case, the network faces “near-term, fire-sale liquidation.”

 

“If this bankruptcy case goes forward, the business can survive,” the Comcast attorneys wrote. “If the case is dismissed, it will not.”

 

The documents filed Tuesday were in response to motions Isgur will hear on Oct. 28. Comcast opposes the Astros’ motion to dismiss an involuntary Chapter 11 case filed Sept. 27, and the Astros oppose Comcast affiliates’ request for an interim trustee for the company.

 

Comcast says a trustee is needed because the four-member board, which includes one representative each from the Rockets and Astros and two from Comcast, cannot agree unanimously as required on distribution agreements with such carriers as DirecTV, Dish Network and AT&T Uverse.

 

‘Fire sale’ in the offing?

 

But the Astros said, “What Comcast now disparages as ‘dysfunction,’ ‘deadlock’ and ‘gridlock’ is nothing more than the Astros’ assertion of their bargained-for voting rights.”

 

“Comcast’s allegations … are a smoke screen, designed to hide what is really going on here,” the Astros said. “Comcast orchestrated a collusive involuntary bankruptcy filing and is attempting … to facilitate its plan to acquire the network’s assets and the Astros’ media rights without the Astros’ consent.”

 

The Comcast filing warned of the network’s possible demise.

 

If the Astros are allowed to shop their games to another carrier, as team owner Jim Crane has said he wants to do, Comcast said, “At best, the network’s remaining assets would be sold in a fire sale. All of its 130 employees will lose their jobs.”

 

The Comcast affiliates — National Digital Television Center, CSN California, Comcast Sports Management Services and Houston SportsNet Finance — also claim that if the case is dismissed, the result will be “the collapse of the network and hence the destruction of millions of dollars in value.”

 

Another passage refers to the “Astros’ apparent strategy of sabotaging the network” by blocking carriage deals and said bankruptcy is “the natural and obvious result of the Astros’ refusal to permit the network to enter into carriage agreements. … The Astros apparently now feel (the agreement with CSN Houston) is not rich enough to suit them.”

 

Coming to light

 

The Astros’ argument in favor of dismissing the case includes a couple of revelations.

 

In one case, it says the Rockets and Astros have the right as of the network’s first anniversary, which was Oct. 1, to force Comcast to accept carriage agreements. Comcast, the Astros said,does not have that right and is making an improper bid to expand its authority.

 

Also, the Astros say the team and Comcast agreed in May to make capital contributions to the network, payable in three installments. But Comcast refused to make its third contribution unless all three partners agreed, and the Rockets “elected to secure an appraisal of the network prior to making a funding decision.”

 

The Rockets have declined to comment.