Houston Sports Programming Network Files for Bankruptcy
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Houston Sports Programming Network Files for Bankruptcy

October 25, 2013

By: John Clark

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CSN Houston and several other affiliates of Comcast/NBC Universal filed for Chapter 11 bankruptcy this week, catching some sports teams by surprise, according to a report from the Houston Chronicle.

Sources say CSN Houston is owned by Comcast/NBC Universal, as well as the Houston Rockets and the Houston Astros. The Astros, however, who have the largest ownership stake in the regional network, were reportedly surprised by the network’s decision to file for bankruptcy help.

According to reports, the struggling sports channel had failed to pay rights fees to the Astros for the last three months, and the Astros will now have to circumvent bankruptcy’s automatic stay to seek these late payments. The Rockets, sources say, declined to comment on the matter.

The Astros appear to have the most to lose from the network’s bankruptcy proceedings, as they own 47 percent of the network, compared with shares of 31 percent and 22 percent for the Rockets and NBC Universal, respectively.

In a recent statement from NBC Universal, the minority owner suggested that the decision to hire a bankruptcy law attorney was triggered by the network’s desire to allow itself more freedom in its decision-making processes.

Sources say the network’s current governing statute requires unanimous consent among all three owners in order to approve financial decisions, which often leads to something of a logjam. According to an NBC Universal press release, the bankruptcy filing was needed “in order to resolve structural issues affecting CSN Houston’s partnership.”

Specifically, bankruptcy will allow the network to “preserve its ability to provide its valuable programming.” In response, however, the Astros issued a statement saying that the team was not happy with the partnership with NBC Universal, and suggested that potential litigation between the two companies could take place down the road.

In the Astros’ statement, the team said NBC Universal “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 went on to allege that “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.”


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