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The Man Who Might Save CSN Houston

Way back in the day, I worked as a briefing attorney for a state district court judge. And one of the things I learned was that judges, or at least the judge that I worked for, really do hate making rulings on the record because once that happens, the appeals process can start. And once the appeals process works, the litigation comes to a standstill.

But there was also this reasoning: by not making rulings, the parties must keep working with each other. They must keep meeting or talking by phone or communicating by email. And the more parties talk, the better the odds of the case settling. Settlements are good results for judges. But once the judge rules on that summary judgement motion, or orders that evidence be disallowed, or that a party be sanctioned over some stupid matter, then the parties stop talking and go into fight mode.

That's what the judge taught me, what he believed. Whether it's true in all cases I don't know. It did seem to work when I was litigating because everybody would bitch about the judges be indecisive and being afraid to make rulings, then we'd talk about the case and come to our own agreements.

Thus comes the CSN Houston bankruptcy, which right now is lingering in bankruptcy court with the judge having decided very few of the real legal issues hanging over the case. Issues like whether this matter really belongs in bankruptcy court. Or whether there should be an independent trustee running the network and negotiating deals. Or if that fraud case filed by Jim Crane against Drayton McLane and Comcast should remain in the bankruptcy court or be sent back to state court.

But Judge Isgur is handling this case like a genius. He's got issues with this thing being in bankruptcy, issues he's aired on the record. Yet he's not kicked it out because he's probably figured out that the network is history if the case is tossed out, that CSN Houston will end up filing for bankruptcy in a couple of months instead of like now, where it's some of the creditors. And knowing this, he's set things where the parties will work it out themselves, settling this thing in a relatively short time period rather than in the timeframe that would arise if the legal works were in full process.

Jim Crane was sure the working out the carriage issues would be easy. So the judge agreed to a quite unusual order that put Crane and the Astros in charge of negotiating on behalf of the network. And suddenly Crane discovered that this wasn't such a simple matter, that the providers think he's asking a tad too much for the network. And now that Crane's failed -- and due to pending concerns over conflict of interest arising from the fraud lawsuit -- the Astros have moved aside and now Les Alexander and the Rockets are in charge of negotiating the deal.

 

The Rockets reportedly had some success with negotiations last year, supposedly reaching a carriage agreement with DirecTV that was vetoed by the Astros. But due to the court order, the Astros can no longer veto any deal reached by the Rockets -- only the bankruptcy judge can do that. So now the Rockets have the opportunity to see if they can finish what they started last year, which is to get CSN Houston carried by the other providers in Houston and in Texas. It's possible that the Rockets won't be able to pull it off -- Jim Crane did everything he could do in the fraud lawsuit to torpedo the network, calling it broken and overvalued.

Here's the beauty of Judge Isgur's move. If the Rockets reach a deal, the odds are that it'll be a deal with which the Astros aren't entirely happy. But they won't be able to veto it. The best they'll be able to do is object to the judge; however, the judge gave the Astros a chance to pull the deal off and they couldn't. The judge's only concern is the health of the network. The financial health of the Astros is not his concern. If the Rockets can pull off a deal that makes the network viable, the odds are that the judge will sign off, and once he signs off, then the network's on the air.

It's possible, and probably likely, that the Rockets will be unable to get the job done thanks to the damage the network has experienced the past several months. That and the sports rights market finally appearing to be at the crash stage may be too much to be overcome. But by quieting the Astros complaints over the process, by removing their veto powers, the bankruptcy court judge has set in motion the way for the network to get full carriage, and once it gets full carriage, then it's likely that the need for the bankruptcy disappears, at least for a time.

That doesn't solve the fraud issue of course. But the judge's role here is to salvage the network, to get it on the air. What happens between Jim Crane and Drayton McLane and Comcast once the network is on the air, if it ever gets on the air, is not his concern.

So what appears to be inaction from Judge Isgur has instead positioned the parties to get the matter solved without a long, costly litigation. The parties have had to keep talking, and by consenting to the order about who has the negotiation power, the parties, primarily the Astros, have pretty much lost the power to veto any deals. The overall situation might consider to be nasty and unpleasant for many, many years, but if the network ever gets full carriage, none of that matter to be the people who watch the games.


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