Houston Rockets: CSN Houston Negotiations Continue

By Phillip Pyle

The sky is falling as Rockets are nearing a decision on the CSN Houston situation. Credit: Geoff Burke-USA TODAY Sports

The Houston Rockets and their current television provider CSN Houston have been in and out of court dealing with the fact that CSN Houston is available to no more than 40 percent of Houston’s 2.2 million TV households because unanimous approval is required for major decisions,

The Rockets have retained two advisory firms and met with multiple parties for assistance and/or possible media deals and for assistance and/or possible private equity investment deals. The Rockets are currently in negotiations with Comcast and an unspecified party, and have met with Fox Sports, Direct TV, and AT&T.

The Rockets requested, and received, the right to remain as the network’s lead negotiator until early next month. At that time, if there’s no result, the parties will once again return to the court. The court then, maybe, rule on the various motions in front of it, including whether to return the Astros fraud lawsuit back to state court and whether or not to dismiss the bankruptcy case.

In plain English, the Rockets want the ability to find new carriers, the Houston Astros have little to no leverage, and Comcast wants a full blown Chapter 11 bankruptcy.

During the hearing the Rockets announced that they’ve been meeting with AEG regarding network matters. AEG is a huge player in both the sports and entertainment industries. The company’s best known in Houston as the owner of the Houston Dynamo, but they also own, among others, the Los Angeles Galaxy of MLS and the Los Angeles Kings of the NHL along with numerous European sports franchises.

It was also announced during the hearing that Comcast has provided the Rockets with a stalking horse bid for the network that will serve to set the floor for all bids. This info, along with the AEG news, makes me think that Les Alexander is making progress to either getting the network total carriage or getting the network sold or partnered with another entity who will be able to get the carriage.

But what’s not known is the nature of the talks between the Rockets and AEG. Are the talks about AEG purchasing the network? What’s missing from the AEG portfolio is a regional sports network, and there is some logic to the entity purchasing a RSN as the next step in its takeover of the sports industry. AEG might also be in such a strong overall financial position that it can take some massive short term hits in deals with Direct TV (Astros have issues with DirectTV) and AT&T so as to get complete carriage in the area while also paying the Astros and Rockets what the Astros and Rockets believe they should be getting in rights fees.

The saga continues on February 4 when all parties are due to return to Judge Isgur’s courtroom for the latest progress updates.