Astros owner Crane worries about CSNH's financial pinch
By David Barron
May 18, 2013
As Comcast SportsNet Houston approaches its ninth month without full distribution, the Astros/Rockets/NBC Sports Group partnership is low on funds and faces "tough decisions" about its future, Astros owner Jim Crane said Friday.
Crane said the network does not face irreparable financial damage and will remain on the air, but the partners might have to make financial decisions if NBC is unable to increase revenue by closing carriage deals with national carriers such as DirecTV, Dish Network and AT&T U-verse or regional carriers such as Suddenlink and Time Warner Cable.
Without coverage, the network is not making money and so without the other (carriers) signing up and paying, there are things that can happen as the entity draws down on its credit," Crane said. "As that goes on, we run out of money, and we are going to have to make some tough decisions.
"There are mechanisms for that in the plan. We're not going to go bust or anything, but basically it becomes more difficult for everybody to operate if we don't get coverage."
He said all options are on the table for the network owned by the Astros (46.4 percent), Rockets (30.9 percent) and NBC (22.7 percent).
"There are rights fees involved, there is equity involved, there is long-term viability, overhead costs, and all of those things are in play," Crane said. "It is what it is. It's a business deal, and we've got to get it to a point where it makes good sense for everybody and move forward."
Meeting with mayor
Crane and Rockets CEO Tad Brown are scheduled to meet Monday with Mayor Annise Parker and with representatives of Suddenlink, which services Kingwood, Humble and several cable systems across Texas and the five-state area serviced by CSN Houston, on carriage talks for the network.
CSN Houston is available in about 40 percent of Houston's 2.2 million TV households, and an offer to providers for a free-view period through the end of May was picked up by only a few local carriers in the Houston area.
Crane will assume the Astros' position on the four-member CSN Houston board that was held by George Postolos, who resigned Monday as Astros president and CEO.
Crane acknowledged that carriage pickup rates for CSN Houston, which launched in October, "certainly hasn't gone like we wanted it to."
"We want to get fans to see the games," he said. "What they have to understand is there's big economics here, and it's not only for this year or next year. It's a long-term deal.
"If we cut a bad deal moving forward, it will have significant impact for us competing against the Rangers and Angels and Mariners. So we are really focused to get the games on as soon as we can, but we also are focused on the long-term credibility and viability financially against our competitors, and the TV deal is a big part of that."
West tough in TV, too
The American League West could be one of the most competitive divisions in baseball in that regard. The Rangers and Angels have deals with Fox Sports Net that include equity interests in their respective regional sports networks - Fox Sports Southwest and Fox Sports West - and the Mariners announced plans to form an RSN partnership with their carrier Root Sports, owned by DirecTV.
Rights fees are in play, as are future equity exchanges.
Brown had no comment on Crane's remarks but added the Rockets "completely agree with Jim that the single most important issue we both face is and remains securing network carriage for our fans."
Matt Hutchings, CSN Houston's president and general manager, referred questions to NBC Sports Group officials. Officials had no comment, but all signs point toward NBC's long-term support for CSN Houston's success.