Comcast rejects latest SportsNet Houston deal

Comcast (NASDAQ: CMCSA) is now fighting a bankruptcy court-backed deal that would transfer ownership of struggling regional sports network Comcast SportsNet Houston to AT&T (NYSE: T) and DirecTV (NASDAQ: DTV).

Comcast lawyers say that subtle changes made to an agreement carved out over the summer will now make it very difficult for the conglomerate to recoup a $100 million loan it gave its partners on the network, pro baseball's Houston Astros and pro basketball's Houston Rockets.

U.S. Bankruptcy Judge Marvin Isgur is set to rule Monday as to whether the deal is fair.

Under the agreement, Comcast would give up its 23 percent share in the network. The Astros (46 percent) and Rockets (30 percent) would also lose their stakes, while 96 of channel's 141 employees would lose their jobs.

The channel would then assume DirecTV regional sports network branding, "Root Sports Houston," and finally gain carriage on the satellite service, which is the No. 2 pay-TV platform in Houston.

Similar to the carriage impasse for Time Warner Cable's (NYSE: TWC) SportsNet LA, CSN Houston could never reach a critical mass of market penetration because DirecTV would never agree to license the channel.

For more:
- read this Wall Street Journal story (sub. req.)
- read this Houston Chronicle story

Related links:
DirecTV set to take over Houston RSN it refused to carry
Comcast cited 'total gridlock' at CSN Houston bankruptcy filing
Dish offers to distribute carriage-starved CSN Houston a la carte
Houston mayor pressures DirecTV, Suddenlink, AT&T to sign deal with Comcast SportsNet Houston