Bankruptcy judge Marvin Isgur commands respect. Not because he's a judge, but because of his understanding of bankruptcy law. He's respected by attorneys who appear before him. He's respected by his fellow judges. This is important to know because the Houston Astros have appealed his ruling putting CSN Houston into Chapter 11 Bankruptcy. This means they are asking a federal district court judge and probably also the Fifth Circuit Court of Appeals to overrule the judge, to say that he's wrong, that he doesn't understand the law. That he doesn't know what he's talking about.
The CSN Houston parties return to Judge Isgur's courtroom again tomorrow. The Astros will be asking the judge to stay his order putting the network into bankruptcy, that means they'll ask him to delay enforcing it because they believe that he's wrong and that his decision will be overturned on appeal. It is possible Judge Isgur will grant this stay, but the odds aren't in favor of the Astros.
This is a tough situation for all involved. Neither the Astros nor the Rockets are receiving media rights fees, so they're losing money. The Astros and Rockets are also losing money on the network, as is Comcast. Network employees fear for their jobs. And fans of the Astros, Rockets, and Dynamo who don't subscribe to Comcast cable are still unable to watch their teams.
The fans are tired of all of this. They want to see the games on television and they don't care who is at fault. The fans would probably be happy with the Astros/MLB plan to broadcast Astros games on the MLB Network -- sorry, the NBA hasn't offered up any helpful plans for the Rockets. The fans would be happy to see Jim Crane take any money-losing carriage plan because it gets the games on television. And they're probably angry at Judge Isgur for his bankruptcy ruling because this means the Astros can't yank their media rights from the network and get on TV.
But Judge Isgur's not tasked with with taking care of the fans. A bankrupt network has been placed in his hands. And as a bankruptcy judge, it's his job to help those involved devise a new plan, one that saves the network, that brings along some form of financial success. A plan which, as a byproduct, would guarantee that the games of the Astros and Rockets get nearly 100-percent carriage throughout Houston (sorry Dish Network folks, but that's probably never going to happen for you because they've essentially said no to any and all new regional sports networks -- the Yankees can't even get the YES Network on Dish Network in New York City).
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The Astros say the network will never work, and want out. The Astros are convinced they can sell their media rights back to Fox Sports Net and things will be fine. The Rockets are convinced the network can succeed, but they have to deal with the Astros seemingly sabotaging the network every time someone from the team speaks. The Rockets also have to deal with Comcast who appear to be trying to steal the network from them. Comcast says market conditions have changed from when the parties, behind Drayton McLane and Les Alexander, established the network and that there's no way to get carriage fee deals that were originally established. There was $6.02 million in cash available to CSN Houston when the Rockets refused to answer that cash call in June. This was after Comcast had loaned the network $100 million just as CSN Houston was going on air. Comcast has offered to buy out the Astros. And last month Comcast offered a stalking horse bid in the amount necessary to satisfy all debts, claims and defaults and that would allow the Rockets to remain a minority partner with no say in the governance of the network.
Jim Crane has said under oath that, with the right plan, the network can be a success. From the judge's questioning, it's clear that the judge agrees. The current plan doesn't work, this unanimous consent condition has hamstrung all parties. Bankruptcy reorganization is a way to make this happen, to get a new plan. But it's going to take a change in attitude, and the parties are going to have to start trusting each other.
Jim Crane wants the deal with the network that Drayton McLane promised him. It's more and more evident that that's not going to happen. Crane's vision seems to be a little different than McLane's -- it's my understanding that this is one of the key problems as it's caused problems between the Rockets and Astros because McLane and Les Alexander were supposedly in total agreement on most things CSN Houston. Judge Isgur is a bankruptcy expert, that's all that he does. Judge Hughes is a generalist, he handles anything that comes under the jurisdiction of his court, and that's the same thing with appellate judges. And in those type of situations, deference is usually paid to the opinion of the lower court judge, especially a respected lower court judge who's acknowledged as an expert in his field. So the odds of Judge Isgur staying his ruling are slight, though possible. The odds of other judges overturning Judge Isgur's decision are also slight, though possible.
Judge Isgur believes the network can survive. The Rockets believe the network can survive and thrive. The odds are that Judge Isgur will deny the stay, and that months from now, the appeal will be denied. And it's probably in the best longterm interests of the Astros that this appeal is denied quickly, because the sooner they get with the Rockets and try to get a new plan past Comcast, the quicker they get the money they are owed, the better the odds the network thrives, and the better the chances of near 100-percent carriage in Houston.