Astros determined to boost local TV coverage
Crane meets media day after motion to dismiss network's Chapter 11 filing
HOUSTON -- Astros owner Jim Crane said on Tuesday that the team will continue to fight to receive a fair-market television deal to help ensure a competitive product on the field, while stressing the importance of more fans being able to see the team's games on television next season.
Crane spoke candidly about the Astros' ongoing stalemate with Comcast/NBC, which the team claims improperly filed an involuntary bankruptcy petition in an attempt to prevent it from terminating the media rights agreement between the Astros and Houston Regional Sports Network.
Crane and the Astros' general counsel, Giles Kibbe, met one-on-one with a series of reporters from local media outlets at Union Station on Tuesday. The meetings came a day after the Astros filed a motion to dismiss an involuntary Chapter 11 filing made by four Comcast affiliates against Houston Regional Sports Network, the parent company of Comcast SportsNet Houston.
CSN Houston, which hit the air a year ago, is jointly owned by the Astros (46 percent), NBA's Houston Rockets (31 percent) and NBC Universal (23 percent). It hasn't been able to gain widespread carriage in Houston.
"We feel it was an improper filing," Crane said. "They're in breach; they didn't pay our rights fees for most of the year, which is basically what supports the team and keeps us moving forward. They haven't paid us, so we were going to terminate our rights agreement and get our rights fees back, and they just jumped the gun to try to throw it in bankruptcy, which technically means they could wipe our equity out if the thing got restructured."
HRSN failed to pay the Astros' media rights fees in July, August and September while the sides negotiated to get the games carried on outlets beyond Comcast. During the 2013 season, only about 40 percent of the Houston television market was able to watch Astros games, leaving customers of DirecTV, ATT U-verse and Dish Network, among others, in the dark.
The team contends that Comcast has attempted to lock the Astros into a long-term affiliate agreement that would put them in the bottom tier of media rights revenues among Major League clubs, thus affecting the club's payroll.
The Astros contend that Comcast is regularly paying debts to third parties and has $7 million cash on hand.
"They've made us offers at 60 cents on the dollar, which wipes out all our equity," Crane said. "That's not a position we bargained for when we came in, and we've been told by baseball that the rights fees are going up; they're not going down. We think this is a method to strip us of our equity, and that's not fair for the partnership, it's not fair for the Astros, it's not fair for the fans."
U.S. Bankruptcy Judge Marvin Isgur has set Oct. 28 to hear the Astros' motion to dismiss the case and the creditors' motion to appoint an interim trustee to oversee the network, the Houston Chronicle reported.
"If this thing is thrown out and we get our rights fees back, they're going to need us in that deal to move it forward and so it gets everybody back to the table," Crane said. "If that doesn't happen, everybody is going to get back to the table in a bankruptcy situation.
"Eventually, it's going to get sorted out. Bottom line, this is a 20-year deal. If we get stripped of our equity or get our rights fees reduced, it puts us at a very uncompetitive position for 20 years. We feel we have to fight for the fans and for the organization to be able to get a market deal that makes us competitive and gives us the money that everybody else has."
Crane stressed that the Astros can't go another season without having more fans able to access their games on TV next year.
"We can't go another year without the games on TV," Crane said. "We appreciate the fans' support. The fans are No. 1, and we're working hard to put a good product out there. We've spent the last two years ... [planning] to get the organization re-set and [further] rebuild the system."
Crane says he plans to increase the team's payroll this offseason, regardless of the TV situation. He said the Astros could have a payroll between $50 million and $60 million next year after they add some help to the bullpen, outfield and starting rotation to go along with some up-and-coming prospects.
The Astros had a payroll of less than $15 million by the end of this past season following a series of trades.
"We're ready to [increase the payroll]," Crane said. "We're going to stick to our plan, whether this gets worked out or not. We're going to continue to improve the product for the fan and get more fans. One way to beat this is get more fans in the door and win some ballgames, and people will see the games and then the tension starts."