Houston Astros owner Jim Crane has filed a lawsuit against former team owner Drayton McLane on grounds of fraud and civil conspiracy and has accused McLane's company of breach of contract, according to David Barron of the Houston Chronicle.
Astros owner Jim Crane files fraud suit against former owner Drayton McLane
The suit accuses McLane of selling “an asset (Comcast SportsNet Houston) they knew at the time to be overpriced and broken.”
Bob Levey
When Crane bought the Astros from McLane in 2011, part of the $615 million price tag was for a 46 percent interest in the company that owns Comcast SportsNet Houston. However, when the network launched in 2012, it was only available to 40% of households in Houston and was absent from services including DirecTV, Dish Network, AT&T U-verse and Suddenlink. This limited availability hurt the network’s revenues and, when the Astros announced that they might reclaim their broadcast rights in September, four Comcast affiliates filed for involuntary Chapter 11 bankruptcy.
Crane now alleges that McLane sold him “an asset (Comcast SportsNet Houston) they knew at the time to be overpriced and broken.” He also argues that McLane “duped” him when Crane bought the interest in the network, since the sale was based on “knowing misrepresentations” and “falsely inflated subscription rates.” The suit goes on to say:
“Ultimately, fans of the Houston Astros have been injured because defendants’ misrepresentations leave (Crane) with an impossible choice: either accept the broken network as is and deprive thousands of fans the ability to watch Houston Astros games on their televisions, or distribute the game at market rates and take massive losses out of the Houston Astros player payroll - thereby dooming the franchise for years to come,”
The suit aims to recoup Crane’s losses from any breaches of his group’s purchase agreement.
Comcast and NBC’s response:
”Comcast/NBCUniversal vehemently rejects any claim of wrongdoing asserted by the Astros. This litigation outside the bankruptcy proceedings is a desperate act, committed during a period in which Mr. Crane and his team of sophisticated advisors have been granted by the Bankruptcy Court an opportunity to explore and effectuate solutions to the Network’s serious business problems.
“Instead, it appears that Mr. Crane is suffering from an extreme case of buyer’s remorse, and aiming to blame the Network’s challenges on anything but his own actions. Comcast/NBCUniversal looks forward to vindicating itself in this litigation and also remains committed to a reorganization of the Network in Bankruptcy Court.”
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