The Beatles once wrote that happiness is a warm gun. They were singing about heroin. But truthfully, it's not to hard to imagine them digging their way through the latest happenings arising from the CSN Houston bankruptcy and literally figured that happiness involved putting a gun to their heads as a way of ending the madness.
The madness flared to life again yesterday with an emergency hearing arising from the request of the Rockets and the Astros to keep certain information confidential. And not just confidential from the public, but kept away from the third owner of the network, Comcast. The request, they stated, was the wish of a prospective buyer of the network with whom they're currently negotiating. The potential buyer is asking that its identity and the terms of its potential purchase be kept from the network board until it gives permission or until July 31, whichever date comes first.
Before getting to the nuts and bolts of the legalities and arguments, let's get to the really important part. There is a third party out there willing to step in and complete the restructuring of the network. Or rather, there's a sucker out there willing to buy a bankrupt Houston-based regional sports network with only about 40-percent carriage in the Houston area and whose prime assets are one of the worst teams in baseball and a basketball team that got bounced in the first round of the playoffs last season and just made it worse for the upcoming season.
The supposed terms of the deal weren't, of course, discussed in the briefs or before the court. The speculation is that the proposed purchaser is either DirecTV or U-Verse or a combination of both. There's been talk of one or both attempting to buy the network in the past. DirecTV has several RSNs of its own, and U-Verse has spoken of wanting its own RSN. And its doubtful, that any party purchasing the network out of bankruptcy is going to pay what the network was valued out when Jim Crane was purchasing his share of it from Drayton McLane.
What will probably happen is that one of those entities purchases the network, changes the name, keeps the staff already working, and inks carriage deals that will get the network on air in Houston and some of the surrounding area. Since the network will be purchased out of bankruptcy at a much cheaper cost, the new owner will not need to charge the excessive carriage fees that have been sought by the current ownership. The Astros and Rockets will go along with all of this probably for the following reason: They get to unload their ownership stake, they're probably negotiating new media rights deals and the new purchaser will also probably be paying the Rockets and Astros the rights fees they haven't been paid over the past two years. So the Astros and Rockets finally get on TV. The Astros and Rockets finally start making some money from the network. Comcast is gone, and the Astros have to stop using the lack of money from the network as an excuse for some of the team's financial moves.
But there's no guarantee that a deal's going to get done. It's obvious the parties are concerned that Comcast will attempt to torpedo the deal in some manner, thus the request to keep the purchaser's identity secret from the CSN Houston board because the only party on the CSN Houston board that doesn't already know the identity is Comcast -- the other members on the board are the Astros and the Rockets. The Court ordered that the identity of the potential purchaser be made available to the attorneys representing the network in the bankruptcy, and Judge Isgur's comments before his ruling made it clear he wasn't happy with board members trying to prevent other board members from being aware of what's happening with the network.
The next big date is July 31. The network is obligated to disclose to details of the proposed detail to the Court. And according to the brief filed by the Rockets/Astros, the purchaser made it clear that it would not be willing to proceed with the deal if all details are not finalized by August 7.
So it's almost all over. Except maybe it isn't. The Astros and Rockets appear to have found a buyer. They just don't want Comcast to know who it is. Happiness may not be a warm gun, but seriously, try reading through this stuff sometime and not conclude that the Beatles meant not heroin, but CSN Houston.
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