(Reuters) - DirecTV and AT&T Inc would jointly own a Houston sports network under a plan to end the network’s bankruptcy, although current part-owner Comcast Corp warned it may challenge the proposal.
The Houston Regional Sports Network, which operates as Comcast Sportsnet Houston, broadcasts the games of the Houston Astros baseball and Houston Rockets basketball teams.
DirecTV Sports Networks would own 60 percent of Houston Regional Sports Network and AT&T would own 40 percent, according to documents filed late Wednesday with the U.S. Bankruptcy Court in Houston. The plan must be put to a vote of creditors and approved by the U.S. Bankruptcy Judge Marvin Isgur.
Comcast made clear it did not back the plan in its current form.
”The reorganization plan presented raises significant concerns regarding the equitable treatment of the network and its various constituencies,“ Comcast said in a statement. ”We intend to exercise all of our available rights as part of a fair process.”
The network was pushed into bankruptcy by a unit of Comcast Corp, which loaned the network $100 million and filed an involuntary bankruptcy against it in September. At the time, Comcast said the network should be put up for sale and that it was prepared to bid.
The sports network owes the Astros $27.8 million for unpaid licensing fees from its 2013 season, and it has not paid the team at all for 2014, according to court documents.
The Rockets was owed $44.4 million for its 2013-14 season, court documents say.
The network plans to repay some of what it owes the teams by pursuing legal claims against Comcast for exerting undue influence over the network and attempting to it at a knock-down price, according to court documents.
Regional sports networks have risen sharply in value in recent years, thanks to exclusive rights to broadcast games and the loyalties of sports fans.
The Houston network was formed in 2003 by the Astros and Rockets to broadcast their games as well as games of the Houston Dynamo soccer team and 150 college games. Comcast bought a stake in 2010.
The network has failed to reach a majority of Houston-area viewers due to disagreements with cable and satellite television providers. The reorganization plan unveiled late Wednesday would allow the network to triple its market reach in the Houston area, according to court documents.
The documents did not provide detailed financial information.
As part of the plan to bring the network out of bankruptcy, new media rights agreements would be negotiated with the Astros and Rockets.
The case is In Re: Houston Regional Sports Network LP, U.S. Bankruptcy Court, Southern District of Texas, No. 13-35998
Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Liana Baker in New York; Editing by Jeffrey Benkoe and Frances Kerry