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The TCB Daily Link, February 26, 2014: An Update on Our Favorite Subject, CSN Houston

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Who needs Astros baseball on TV when you have riveting court dates instead?


I am an accountant by nature, so admittedly a lot of the legal technicalities get lost on me. However, that is where helpful folk like David Barron help out. He has been providing continuous updates on the CSN Houston court proceedings, and recently provided an informative timeline for us. Here's a snippet.

Monday [February 24]: The Astros are to provide a legal brief on their appeal of the Chapter 11 bankruptcy order to U.S. District Judge Lynn Hughes, who is hearing the case.

March 4: A hearing before U.S. Bankruptcy Judge Marvin Isgur on CSN Houston financing issues while it continues operations under Chapter 11 protection.

March 6: Comcast’s deadline to reply to Judge Hughes on the Astros’ brief in support of their appeal.

March 10: The Astros’ deadline to reply to Comcast’s reply.

As is expected; the more court dates you see, the longer it will take to get the Astros on the majority of households in the Houston market. Unfortunately, nothing has happened recently that leads me to believe that there will be a prompt resolution, and realistically, the future still looks bleak from that perspective. At the same time, while the legal jargon might go over my head, I can still appreciate the importance of the channel's success, valuation, and potential cash flow it can bring to the Astros. As we have previously discussed, there will be major future implications and ramifications of the success or failure of CSN Houston. Fail, and the Astros will conduct its operations more like the A's or the Rays. Succeed, and we can spend more freely, much like the Cardinals. Obviously success can be accomplished either way; however, there is simply more room for error and more comfortable cushion taking the Cardinals' option.

I would also like to get your input on the situation. How much will this ongoing legal battle dampen your optimism and excitement for the 2014 season ahead? Or do you view this as a temporary inconvenience that will hopefully lead to great future benefits? Do you feel that Crane has a strong case against Comcast and McLane? From the outside looking in, it certainly seems like the projections and numbers that Comcast was presenting to Crane and his investment group were much greater than what ended up transpiring in reality. Without being privy to the evidence, it is difficult to determine if it was intentional or simply an overly aggressive projection. Even then, one would imagine that any and all financial information and projections would be analyzed thoroughly during the due diligence process prior to the purchase price being agreed upon. So many questions, and unfortunately so little answers.