Chapter 11 Plan for Haynes and Boone Client HRSN Wins Approval; Reorganized Network Launches

11/19/2014

HOUSTON – Root Sports Southwest successfully launched Nov. 17 following confirmation of the plan of reorganization for Haynes and Boone, LLP client Houston Regional Sports Network, L.P. (HRSN). Root Sports Southwest is the exclusive broadcaster of the Houston Astros and the Houston Rockets.

U.S. Bankruptcy Judge Marvin Isgur confirmed the plan of reorganization filed jointly by HRSN, the Houston Astros and the Houston Rockets on Oct. 30, over the objection of Comcast. The confirmation battle was led by Houston Partners Charles A. Beckham Jr. and Henry Flores in contentious confirmation hearings throughout October involving an array of interested parties.

“We are gratified that Judge Isgur agreed with our client that the plan’s merits far outweigh the arguments that were brought against it,” said Beckham. “We believe this outcome will give the network the best chance for future success and will serve the public well.”

HRSN, also known as Comcast SportsNet Houston, was jointly owned by Comcast, the Astros, and the Rockets. The sports teams and Comcast were tangled in the Network's complicated involuntary bankruptcy since September 2013. With limited carriage deals in place and HRSN holding the teams’ exclusive broadcast rights, more than 60 percent of Houstonians lacked access to televised Astros and Rockets games.

Under the approved reorganization plan, Root Sports Southwest, owned by DirecTV Sports Networks and AT&T Teleholdings, is now available on DirecTV and AT&T U-Verse, in addition to Comcast Xfinity, bringing Astros and Rockets games to most of the Houston market.

“We are thrilled at the outcome of the Network’s reorganization efforts, which will bring Astros and Rockets games back to the majority of Houston sports fans,” said Tad Brown, Chief Executive Officer of the Houston Rockets.

The reorganization was opposed by Comcast, which lost its equity in HRSN. As repayment of its $100 million loan to HRSN, Comcast will receive HRSN’s cash and accounts receivable accrued prior to the closing of the transaction, plus the proceeds of an auction of HRSN’s furniture, fixtures, and equipment to be conducted in early December.

AT&T and DirecTV received equity in the reorganized network and will invest $50 million in working capital. Root Sports Southwest signed up new media rights agreements with the Astros and Rockets through 2032, and the new network will provide expanded carriage that has eluded HRSN. While Root Sports Southwest will pay the teams’ media rights fees going forward, the teams agreed to delay receipt of past-due rights fees totaling at least $108.7 million and to pay millions in other claims to facilitate the reorganization and sale to DirecTV and AT&T.

HRSN was formed in 2003 by the Astros and Rockets to broadcast their games along with the Houston Dynamo soccer team contests and 150 college games. Comcast bought its stake in 2010.

The case is In re: Houston Regional Sports Network LP, case number 4:13-bk-35998, in the U.S. Bankruptcy Court for the Southern District of Texas. In addition to Beckham and Flores, the Haynes and Boone team assisting HRSN with its reorganization included Partners Lynne Liberato, Ricardo Garcia-MorenoFelicity A. Fowler and Susan A. Wetzel; and Associates William Feldman, Christopher L. Castillo, Jason Huebinger, Kelli M. Stephenson, Jarom Yates, Arsalan Muhammad, Alex Stevens, Arrissa Meyer and Valisa Berber-Thayer.

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Nathan Koppel
Director of Media Relations
+1 512.867.8431
nathan.koppel@haynesboone.com
Linda Campbell
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+1 214.651.5362
linda.campbell@haynesboone.com

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