CSN Houston Files for Bankruptcy

By Phillip Pyle

Affiliates of Comcast/NBC Universal filed an involuntary Chapter 11 bankruptcy petition Friday in Houston against Comcast SportsNet Houston, the struggling regional sports network owned by Comcast/NBC Universal, the Rockets and Astros.

Officials with the Rockets, who own about 30.923 percent, could not be reached for immediate comment. NBC Universal owns 22.693 percent.

A statement from NBC, however, indicated that the filing may be designed to break up the logjam that has thus far prevented the network from getting widespread carriage on cable and satellite affiliates across its five-state region. Under the company’s governance structure, unanimous consent among the four-member board of directors – two from NBC Universal and one each from the Rockets and Astros – is required for approval, according to comments made by company officials earlier this year.

The NBC Universal statement said the Chapter 11 petition was filed “in order to resolve structural issues affecting CSN Houston’s partnership.”

“This action is necessary to preserve CSN Houston’s ability to provide its valuable programming and reaffirms Comcast/NBC Universal’s commitment to serving the region and its fans,” the statement added.

The network, CSN Houston, which features the games of Major League Baseball’s Houston Astros and the National Basketball Association’s Houston Rockets, has been unable to reach distribution deals with several major media companies that provide pay television to the local market.

The network’s owners, which include Comcast, the media conglomerate that also owns NBCUniversal, had been seeking monthly fees of nearly $3.40 from each basic-cable and satellite subscriber. However, television providers, led by AT&T,  have argued that the demand for the network’s programming was too small to justify such a fee. As a result, CSN Houston is available in only about 40 percent of Houston’s 2.2 million TV households and has not been able to negotiate carriage agreements with DirecTV, Dish Network, Suddenlink, AT&T U-verse or Verizon FiOS.

The network will remain on the air while the Chapter 11 bankruptcy procedure is resolved. Chapter 11 is designed to allow companies to remain in business while their business activities are reorganized.

The network reached a low this past Sunday when its broadcast of the Astros-Indians game registered a 0.0 rating by the Nielsen Co. Ouch!

Listed as petitioning creditors in the case are National Digital Television Center of Centennial, Colo., which is owed $10,517.50; Comcast Sports Management Services LLC, which is owed $1,251,573.75 for management services; Comcast SportsNet California, which is owed $43,129.02; and Houston SportsNet Finance, based in Philadelphia, which has a $100 million loan to the partnership plus accrued and unpaid interest, fees, and other amounts.

See the full petition here