Houston Sports Channel Asks to Rerun Ads

The struggling sports network that broadcasts games for two Houston professional sports teams—Major League Baseball’s Houston Astros and the NBA’s Houston Rockets—plans to rerun some TV ads for free after failing to meet minimum ratings levels when the ads originally aired.

According to papers filed in U.S. Bankruptcy in Houston, there weren’t enough people watching Comcast SportsNet Houston when spots for some 47 different advertisers ran.

The 18-month-old channel broadcasts to only about 40% of Houston households. The network is available to Comcast Corp. subscribers but has had trouble convincing competitors such as DirecTV and Dish Networks to carry the network in exchange for subscriber fees, which some have said are too high.

Also, since Texas entrepreneur Jim Crane bought the Astros for more than $600 million in 2011, he has dumped high-price talent. The team finished with the worst record in baseball last season.

Comcast SportsNet Houston officials are proposing to rerun certain ads for free to keep those advertisers happy, but they’ve asked U.S. Bankruptcy Court Judge Marvin Isgur to approve that move first.

The network’s lawyers pointed out that advertising revenue is vital; the channel took in about $3.6 million in revenue during January but—overall—lost $8.3 million that month after its expenses were added up.

“In the age of cable television and internet content providers, competition for advertising dollars is fierce,” the channel’s lawyers said in court papers. “Without its advertising customers, a significant percentage of one of the [channel’s] most steady revenue streams would suffer.”

Prior to the network’s bankruptcy in September, Houston Astros owner Jim Crane blamed Comcast Corp., which manages the network, for failing to bring new deals to the table. But when Judge Isgur gave Mr. Crane and Houston Rockets officials several months to ink new deals themselves, they were not able to sign up any major partners.

Within the sports entertainment industry, Comcast SportsNet Houston’s troubles have called into question whether the rising subscriber fees for sports channels are worth the price.

Since the network’s founding, Comcast SportsNet Houston officials have pressured cable providers to pay a monthly fee of $3.40 per subscriber, making it one of the most expensive cable sports networks in the country.

Over the past decade, several regional sports networks launched by professional sports teams have collapsed after failing to gain traction. The Kansas City Royals, Minnesota Twins and Charlotte Bobcats all launched networks that weren’t picked up by enough local providers.

In recent court papers, Comcast, which owns a minority ownership stake in the sports channel, said it would consider reorganization proposals that would keep the network alive, including ones to sell the network through a bankruptcy auction.

The channel broadcasts sports programming out of a 32,000 square-foot space in downtown Houston. In addition to showing Astros and Houston Rockets basketball games, CSN Houston broadcasts Houston Dynamo soccer games, high-school football games and sports talk shows.

-Matthew Futterman contributed to this article.

Write to Katy Stech at [email protected]. Follow her on Twitter at @KatyStech.