AT&T Said to Weigh Buying Comcast’s Houston Sports Network

Aug 06, 2014 2:35 pm ET

(Updates with Comcast’s no comment in ninth paragraph.)

Aug. 6 (Bloomberg) -- AT&T Inc. is considering a purchase of CSN Houston, the regional sports network that’s backed by Comcast Corp., according to people familiar with the matter.

CSN Houston, which is also owned by the National Basketball Association’s Houston Rockets, Major League Baseball’s Houston Astros, as well as Comcast’s NBC Universal, filed for bankruptcy last year. A court filing revealing AT&T as an interested bidder for the entire network may be released later today, one of the people said, asking not to be identified discussing private information.

AT&T could potentially own the network in conjunction with DirecTV, the satellite-TV provider that it plans to acquire for about $48.5 billion, the people said. DirecTV owns or co-owns four regional sports networks, collectively called Root Sports.

The price of the Houston network will be a sticking point for any deal, the people said. The channel could be worth as little as $100 million or as much as $800 million, depending on comparable sales, one of the people said.

Comcast owns about 22 percent of the network, the Rockets own about 31 percent, and the Astros about 46 percent.

AT&T U-verse and DirecTV both serve customers in the Houston area. Neither pay-TV operator has shown the Rockets or Astros games in their most recent seasons after failing to come to contractual terms with the network.

Losing Record

The Astros have one of the worst records in baseball this year after finishing last year 51-111, a franchise record for futility. The team’s poor performance is a drag on the valuation and a reason U-verse and DirecTV haven’t agreed to carry the network, one of the people said.

“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,” Dan York, DirecTV’s executive vice president of programming, told the Houston Chronicle in May.

Brad Burns, an AT&T spokesman, declined to comment, as did John Demming, a spokesman for Comcast. Darris Gringeri, a DirecTV spokesman, couldn’t immediately be reached for comment.

A spokesman for the Astros declined to comment, while a representative for the Rockets didn’t immediately respond to voice messages seeking comment.

--With assistance from Scott Moritz and Eben Novy-Williams in New York.