Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Comcast SportsNet, Astros Square Off in Bankruptcy Court
Author: Joel R. Glucksman
Date: November 8, 2013
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On Oct. 28th, a bankruptcy court presided over a cable channel dispute between Comcast SportsNet and local sports teams involving the fate of Comcast SportsNet Houston.
The regional sports network, which broadcasts games from the Houston Astros, Houston Rockets and Houston Dynamos, has failed to generate sufficient revenue and instead, has been dependent upon the financial support of broadcasted teams to stay afloat, according to the Houston Chronicle.
On Sep. 27, the Astros filed a motion to dismiss an involuntary Chapter 11 case filed against Comcast SportsNet and to oppose Comcast’s appeal for an interim trustee to be appointed for the company.
In a submission to U.S. Bankruptcy Judge Marvin Isgur, the Astros alleged that Comcast is using the bankruptcy in an attempt to expand its authority within the market.
“Comcast’s allegations … are a smoke screen, designed to hide what is really going on here,” the Astros said in a statement, according to the news source. “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.”
Problems between Comcast and its affiliates have been well-documented since CSN Houston’s 2012 launch. Unable to secure carriage deals with cable systems such as DirecTV, Dish Network, AT&T U-verse and Suddenlink, CSN Houston is available in only 40 percent of households out of the possible 2.2 million that represent the Houston metro area, the Houston Chronicle reported.
After Comcast failed to send three monthly rights fee payments, the Astros were allegedly close to withdrawing media rights before the company filed for protection under Chapter 11 bankruptcy law.
“If this bankruptcy case goes forward, the business can survive,” wrote attorneys for Comcast. “If the case is dismissed, it will not.”
Businesses affiliated with Comcast, including National Digital Television Center, CSN California, Comcast Sports Management Services and Houston SportsNet Finance, claim that if the bankruptcy case is dismissed, it could result in the network’s collapse, as well as the loss of millions of dollars in anticipated value, Chron reported.
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