Comcast could recover as much as $73M in revived CSN Houston case after appeals court ruling

Comcast Center headquarters in Philadelphia. Image: Comcast
Comcast has a second shot at recovering some of the loaned funds it put into CSN Houston. (Image: Comcast)

Comcast could receive as much as $73 million after an appeals court swatted the 2014 bankruptcy case of the former Comcast SportsNet Houston back to a lower court judge.

The 5th U.S. Circuit Court of Appeals has ruled in favor of Comcast on an element of the case, meaning the Houston Astros and former Houston Rockets owner Leslie Alexander may have to pay the giant cableco either $54 million or $73 million depending on how the math works out, according to a report in The Houston Chronicle.

The appeals panel said U.S. Bankruptcy Judge Marvin Isgur erred in a 2014 ruling to determine if Comcast should recover any or all of a $100 million secured loan that helped launch the regional sports network in the fall of 2012. It said Isgur should not have reduced the value of Comcast's affiliation agreement with the professional baseball and basketball teams, which was collateral for the $100 million loan, to less than zero by subtracting $107 million in unpaid rights fees owed to the Astros and Rockets.

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The case now goes back to Isgur, who has not yet set a date to resume proceedings. It’s not clear whether the 5th Circuit ruling, absent another finding by the judge, would mean that the amount Comcast could recover is $73.8 million or $54.3 million—or if the teams will ultimately be able to argue successfully once again that the cable company is owed nothing, the paper said.

The parties had agreed that the value of the network's tangible assets was $26.2 million, which Comcast eventually received. Isgur set the value of the network's affiliation agreement with Comcast at $54.3 million and then subtracted from that the unpaid rights fees. That wiped out the value of Comcast's affiliation agreement, invalidating its claim and clearing the way for the network to be sold.

The Astros, Rockets and Comcast were partners in CSN Houston with stakes of, respectively,  46.5%, 31.5% and  22%. With the bankruptcy, the teams lost their equity in the network, which they established with an estimated value of $700 million. Following what may have been the largest regional sports network failure in history, CSN Houston was sold to AT&T and DirecTV and now goes by AT&T SportsNet Southwest.