Comcast has won a bid to keep Houston Regional Sports Network in bankruptcy (as of 9/27/13) over the objections of Major League Baseball’s Astros, whose games are carried on the channel. The ruling prevents the Astros from terminating its media rights agreement with the MSO.
The Astros argued the current deal with Comcast–which claims to be owed more than $100 million and has offered to buy the network–is unprofitable and hurts the team’s long-term prospects, reports Bloomberg.
The network is 46% owned by the Astros, 31% by the NBA’s Houston Rockets and 22% by Comcast, said the story. Comcast has said that it wants to buy the network’s assets or equity, saying it has substantial value.
While the value of the Astros deal hasn’t been made public, other teams have reaped billions of dollars in similar deals. The LA Dodgers are slated to receive more than $7 billion over 25 years for their broadcast rights from Time Warner Cable. The Philadelphia Phillies inked a deal with Comcast last month that was worth $2.5 billion in media rights fees over 25 years plus equity in the regional sports network, according to Philly.com.
U.S. Bankruptcy Judge Marvin Isgur at a hearing yesterday in Houston rejected the ball club’s arguments that Comcast colluded with units to force the company into an involuntary bankruptcy and that reorganizing the network under court protection was futile.
“This was not a case brought in bad faith” and “the case is not futile” because “there is nothing in the evidentiary record that shows the future of the network cannot be profitable,” the judge ruled.
