AT&T (NYSE: T) and DirecTV (NASDAQ: DTV) are set to take over struggling regional sports network CSN Houston.
According to reorganization plans filed in federal bankruptcy court on Wednesday, Aug. 6, ownership of the network will be transferred from Comcast's (NASDAQ: CMCSA) NBCUniversal unit, the Houston Rockets NBA franchise and the Houston Astros MLB team.
UPDATE: The transaction is still subject to Comcast approval.
Under the plan, AT&T and DirectTV Sports Networks will respectively buy 400 and 600 common units for $1 per share to own 100 percent of CSN Houston. The channel, currently known by the non-abbreviated moniker Comcast SportsNet Houston, will then join DirecTV's Root Sports network of RSN channels.
Comcast SportsNet Houston launched in October 2012 as the exclusive RSN home of the Rockets and Astros, moving the teams off 21st Century Fox-owned channels. But in a dynamic eerily reminiscent of Time Warner Cable's inability to gain carriage for Dodgers channel SportsNet LA in Los Angeles, Comcast could not reach a deal with the market's No. 2 pay-TV service, DirecTV. Subsequently, it could not get other local operators, such as Verizon FiOS (NYSE: VZ), to fall in line, either.
Covering only 40 percent of the Houston market, and lacking affiliate fees, CSN Houston struggled to maintain enough viewership and advertising to support a $1 billion contract with its affiliated teams. The joint venture sought bankruptcy protection in September.
The news comes amid a report by Multichannel News that Dish Network has dropped Comcast's CSN New England, which features the Boston Celtics.
During Dish's second quarter earnings call Wednesday, company chairman Charlie Ergen reiterated his opinion that RSNs should be converted to a la carte models.
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