Comcast SportsNet Houston is facing an “urgent financial and corporate government crisis” and cannot pay its bills due to a “total gridlock” among its three partners–the Astros, Rockets and Comcast/NBC Universal. The federal bankruptcy court petition was filed 9/27.
NBC Universal said in a statement that the action was “necessary to preserve CSN Houston’s ability” to remain in business. The Astros replied in a statement that the Chapter 11 filing was improper but also acknowledged that CSN Houston has not paid broadcast rights fees to the Astros for the last three months.
The disagreements between the owners is so severe that on 9/28 the network’s creditors asked U.S. Bankruptcy Judge Marvin Isgur to appoint an interim trustee to oversee network operations while the bankruptcy petition goes through court, reported The Houston Chronicle. The primary creditor seeking to force bankruptcy is Houston SportsNet Finance, a unit of Comcast that provided a $100 million loan to ramp up the network’s launch on 10/1/12 and to fund construction of the network’s studios.
Chapter 11 bankruptcy allows companies to continue operations while the court deals with creditors’ claims, so network will remain on the air while the case is contested.
Comcast said in one document filed Saturday that if the bankruptcy court sees fit, it would be willing to buy the entire network and continue in business under the CSN Houston name. The Astros currently own about 46% of the network; the Rockets 31% and Comcast/NBC Universal 22%.
The sharp disputes between the Astros and Comcast/NBC Universal were made clear by their Friday statements. Saturday’s filings provide more thorough detail into the ongoing disputes over critical issues, including the inability to reach affiliation deals with carriers such as DirecTV, Dish Network and AT&T U-verse.
However, said the Chronicle, those documents are heavily edited or redacted to prevent public disclosure of what Comcast/NBC Universal describes as “commercial information” that it claims would damage CSN Houston if it is disclosed publicly.
Added the petition: “The question before this court is by no means who is ‘right’ or ‘wrong’ in the various disagreements that have arisen among the parties. This bankruptcy filing is not an effort to have this court adjudicate any such dispute…[but] to preserve the going concern value of the network.”
CSN Houston has a four-member board – one representative each from the Rockets and Astros and two from Comcast/NBC Universal. All parties must agree for deals such as carriage agreements to be reached.
See the Houston Chronicle story here
