With no major carriage to speak of beyond its part owner, Comcast (NASDAQ: CMCSA), nearly 21 months after it first launched, bankrupt regional sports network CSN Houston has been given an offer by Dish Network (NASDAQ: DISH) it might have to actually consider: a la carte distribution.
Telling the Houston Chronicle this week that CSN Houston's carriage demands are "exorbitant" at over $3 per subscriber, a Dish Network spokesperson confirmed that the company is joining fellow satellite carrier DirecTV (NASDAQ: DTV) in offering to make the channel a premium a la carte offering to its subscribers.
Founded on a more lucrative business model that involves bundled distribution, CSN has staunchly refused DirecTV's overtures to date. But the ongoing Chapter 11 restructuring could affect this impasse. And in turn, it might influence other regional sports network stalemates, such as Time Warner Cable's (NYSE: TWC) inability to distribute Dodgers channel SportsNet LA nearly four months after its launch.
Collectively owned by Comcast, Major League Baseball's Houston Astros and the National Basketball Association's Houston Rockets, CSN Houston is available to only around 30 percent of the 2.2 million TV homes in the 20-country Houston area, with AT&T U-verse (NYSE: T) and Suddenlink also demurring on carriage.
The limited reach has rendered the network unable to pay the approximately $100 million in yearly fees it owes the Rockets and Astros. Attorneys for the network, meanwhile, are trying to collect another $850,000.
"Bankruptcy has complicated the process for the teams and Comcast, but DirecTV remains willing and open to constructive conversation," DirecTV strategy, acquisitions and development executive Dan York recently told the Chronicle. "I certainly would like to bring the Rockets and Astros back to DirecTV, but it has to be at a price that is fair for all of our customers, whether they are fans of the teams or not."
Comcast's sustained inability to strike carriage deals for CSN Houston would seem discouraging to Dodgers fans, who are hoping that the proposed Comcast/Time Warner Cable merger will provide SportsNet LA additional bargaining leverage through Comcast's NBCUniversal assets.
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