Comcast Gunning to Force Sale of Houston Regional Sports Network
The major creditors of the Houston Regional Sports Network, which does business as Comcast SportsNet Houston, have filed an involuntary Chapter 11 bankruptcy petition against the network. The three listed creditors are Houston SportsNet Finance LLC, National Digital Television Center, LLC, and Comcast Sports Management Services, LLC, a subsidiary of Comcast Corp, which owns NBCUniversal.
According to Reuters, this involuntary bankruptcy filing appears to be an effort by Comcast at a forced sale of the local network, which is embroiled in disputes with satellite and cable programming providers over the amount it should receive per subscriber. These disputes have apparently limited the company’s reach, and Comcast said in the filing that “would be prepared to make a bid to acquire either the network (under a plan of reorganization) or substantially all of its assets.”
The local network hosts games by the Houston Astros baseball team and the Houston Rockets basketball team, which could be very profitable if Comcast or another buyer has the capital to invest in expansion. Comcast apparently has that capital, as court papers indicate the company is willing to provide operational financing until the bankruptcy can be resolved.
Comcast, through its affiliate, is also a major creditor, having loaned the local network $100 million. In its filing, Comcast said that the two companies are at a “complete impasse, presumably in buyout negotiations, so it has requested the local network’s management be replaced by a bankruptcy trustee.
The local network’s board, however, has only three members -- a representative of Comcast and one each from the Rockets and Astros. The Astros have apparently not been paid its media rights fees for three months. Yet it appears to oppose any forced sale. In a press release on Friday, the team called the involuntary bankruptcy filing “improper.”
In its filing, Comcast said it "believes the network's assets have meaningful value” and should be sold for the benefit of creditors. The Houston Regional Sports Network has 30 days from Friday, Sept. 27, to respond to the filing.
Reuters, "Comcast to bid for Houston sports network if court forces sale," Tom Hals, Sept. 30, 2013
Chapter 11 Involuntary Petition, In re: Houston Regional Sports Network, L.P., U.S. Bankruptcy Court for the Southern District of Texas, Sept. 27, 2013