CSN Houston update: Comcast claims the network will not survive if bankruptcy case is dismissed

Ed Zurga

Comcast claims that CSN Houston will not survive without going through Chapter 11 bankruptcy. What is the future of the network?

Ever since Comcast and NBC Universal filed an involuntary Chapter 11 bankruptcy petition on CSN Houston's behalf three weeks ago, the Astros and Comcast have been embroiled in a messy dispute that has seen both don their legal armor and go to battle in court. As both sides file motion after motion in this dispute, we'll try to recap what exactly is going on.

In order to fully understand what is going on, we have to go back to September 27th, when NBC Universal filed the petition, an action that the Astros were unaware of until it was filed and responded with a quick statement deeming the petition as "improper." The Rockets, meanwhile, were content to sit on the sideline and they declined comment on the situation.

In the ensuing weeks, the Astros filed a motion to dismiss the bankruptcy case, claiming that it was merely a ploy for NBC Universal to take over a controlling interest in the company and agree to distribution deals that the Astros would not agree to. The reason for that is that in a bankruptcy case, a judge will often appoint one party to run the company while the case is being settled, and Comcast believes that they could reach agreements for carriage during that period.

Comcast's latest filing counters those points, saying that if the bankruptcy case is not allowed to go through, CSN Houston will not be able to survive. It also discusses how the Astros have taken an "apparent strategy of sabotaging the network by blocking its ability to raise capital or revenue from carriage agreements at market terms." The Astros, of course, were reported to have blocked a deal before the Rockets season that would've brought CSN Houston to DirecTV, ending the biggest impasse and likely allowing the first domino to fall.

On top of this, there is the issue of broadcast fees. The Astros didn't receive their fees from CSN Houston for the last three months of baseball season, and are attempting to get out of their arrangement with CSN Houston to get a more lucrative agreement elsewhere. The bankruptcy filing, the Astros claim, is a tactic to stall the Astros from getting out of their contract with CSN Houston and going elsewhere.

So what does all of this mean for the Rockets? To this point, the Rockets have yet to make any public statements about the litigation, and they have showed no signs of breaking that silence. They are in the same boat as the Astros in terms of wanting to receive broadcast fees, but they have significantly less invested in the network. And they were apparently on board for a deal with DirecTV last year, so they seem to be on the side of Comcast in that respect.

The bottom line is that this is a messy situation, but nothing will likely change in the near future as the litigation process for this will be extremely lengthy, especially with the government shutdown potentially jeopardizing the next hearing in the case. The best case for fans is that a judge appoints a trustee to oversee the network in the next month or so, and that trustee can agree to deals with distributors, getting Rockets games on TV by the end of November or so.

One thing is for sure. This thing is messy and it's only just beginning.

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