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Does No Progress in CSN Houston Mediation Effort Really Mean No Progress?

The Houston Astros, Houston Rockets and Comcast gathered before federal district court judge Lynn Hughes on Friday. This wasn't a hearing, and no judicial orders were handed down. It was, instead, the third mediation session for the parties within the past several weeks. The dispute under mediation is the CSN Houston bankruptcy, but as has been the case since October of 2012 when the network went on the air, nothing was settled.

I handled lots of mediations back in my litigation days. I was a big fan of mediation days. They were days of easy billable hours that the client wouldn't dispute. The lunch was free, and there were usually free muffins and donuts for breakfast with all of the free drinks one could desire. For me, this was back in the days before BlackBerrys and iPhones, so a day at mediation was a day away from emails and constant disruptions from partners. It was bliss.

The one issue with those mediation days was the whole mediation thing. Mediation works great in concept. It brings the parties together with a chance to air their side, give their position, with no consequences. The plaintiff gives its desired settlement. The defendant gives its position. The mediator puts the parties in different offices, then shuttles back and forth, trying to get the two sides to meet somewhere in the middle.

But for mediation to be successful, both parties must be willing to settle at some point between the extremes. I handled the defense side of automobile collision litigation. The client was technically the insured party driving the car that supposedly caused the accident. But the person calling the shots was always somebody with the insurance company, and these people didn't want to settle. So we'd come into the mediation, the arguments would be presented, we'd go to our different rooms and for the most part, the closest the insurance rep would get to meeting anybody in the middle was agreeing whether it was a nice day outside.

It's doubtful this is how things are proceeding down in Judge Hughes's courtroom. From what I've been told, he's not much for putting up with guys like my old insurance reps who absolutely refused to participate in the process. So it's doubtful that the only thing Jim Crane or Les Alexander or the Comcast reps have agreed to is deals with the weather. There's been no successful settlement yet, but here's the thing. I'm not buying into any talk or any suggestion that there's been no movement by the parties.

"We didn't get anything finished," Crane told the Houston Chronicle's David Barron Friday evening. "We just got to an impasse, and everybody is leaving. We're still working on it [and] will continue to work on it until we hopefully get a good solution for our fans."

 

There are lots of big and little items that need to be handled for this CSN Houston mess to possibly go away. There's the whole thing about CSN Houston owing the Astros and Rockets money. There's Comcast putting the network into bankruptcy. There's Comcast trying to buy the Astros and Rockets out on the cheap, putting the network into bankruptcy so as to make a play to buy it, then pulling its offer. There's the whole management issue behind the network and who is going to run the thing. The Astros want out. The Astros want money. What's going to happen to the carriage.

So yeah, coming to an impasse, as Crane says, makes complete and total sense. And sure, nothing's finished. And maybe I'm just reading too much into those words of Crane's, but it sounds like things are being accomplished, parties are giving in, coming off extreme positions. That leads me to take an optimistic view: The broad outlines of a deal are in place. It's a deal with either the Rockets or Comcast buying out the Astros ownership stake in the network. It's a deal that guarantees the Rockets and Astros get the money still owed to them under the media rights deal. It's a deal that gives the majority owner full control of the network with the ability to make carriage deals.

But it's within the broad outlines of that deal where the parties have reached the impasse, that hasn't been finished because the specifics can't be reached. Specifics like dollar amounts and ownership stakes and whether the Astros will be forced to stay with CSN Houston or if Jim Crane will be allowed to shop the media rights to the highest bidder. It could, of course, all fall apart because nothing's official about conclusions reached during mediation until the documents are signed and blessed by the court.

Then again, it's possible I'm wrong about everything. It's possible the mediation's not progressing and that some version of one of my old insurance reps is just sitting in on the meetings, shooting down every single suggestion.


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