Share prices for Dish Network parent EchoStar have taken a dive in the days since the company published its second quarterly earnings report, revealing about $2 billion in debt due over the next three months.

Currently, stock for the media giant is trading at $16.23, with overall share price down more than 14% in the past five days.

Before EchoStar reported its earnings Friday, shares for the company were up as high as $20.

Also Read: Dish and Sling TV Revenue Collapses, Down a Record 10% in Q2

That disparity inspired investment banking giant JP Morgan to drop EchoStar’s investment outlook Monday from neutral to underweight.

EchoStar, which closed Q2 with $521 million in cash and cash equivalents, confirmed in its financial results that it does not have the cash to pay off its debts.

However, the company is in discussion with outside parties to compensate for its cash shortage, and is working to refinance its debt obligations.

Also Read: EchoStar Posts Q2 Loss as It Sheds 104,000 Pay TV Subscribers

“We continue to make progress and are in constructive discussions with counterparties, which we feel best support our objective,” Dish CEO Hamid Akhavan told investors on Friday. “The complex and delicate nature of this process demands time and confidentiality. We will certainly have more to share in due course.” 

Akhavan emphasized the use of EchoStar’s spectrum assets, many of which it gained after acquiring Dish Network at the beginning of this year, as a possible point of sale to recover some financial runway.

According to Akhavan, the only reason the company hasn’t used its spectrum assets as collateral is because it has yet to secure a desirable deal.

Veteran analyst Craig Moffett has a less optimistic outlook — according to a report published by MoffettNathanson, he believes that auction dynamics for the company’s spectrum holdings are “unfavorable for a host of reasons.”

Even more, Moffet believes that EchoStar’s shares are “likely to be worthless,” and predicts that the company may see bankruptcy by the end of the year.

One of the more exciting streaming products to hit the video business, Bally Sports Plus, officially launches Monday across the national footprint of Sinclair Broadcast Group’s 19 Bally Sports-branded regional sports networks. 

But as the Sinclair subsidiary that runs the RSNs, Diamond Sports Group, looks to expand beyond the five-market test run of its DTC subscription service first hoisted back in June, it's reportedly having fire-sale discussions to save its own hide. 

According to the sometimes-accurate New York Post, Diamond Sports has had talks with its big-league constituents — the NBA, NHL and Major League Baseball — regarding a possible buyout. 

Diamond is facing debt of $8.6 billion as of the second quarter, along with the cash-flow problems that come with paying $450 million in annual interest alone. The subsidiary is close to bankruptcy, the Post said. 

Through Diamond, Sinclair wants to offload its RSNs to its creditors and reportedly walk away with as much as $3 billion in cash in its pocket. The lenders would then sell the channels to the three pro sports leagues. 

Also read: What Does the Return of the Clippers to Broadcast TV Mean to the RSN Business?

“They will offer it to all three leagues. There is a reasonable likelihood this will all happen,“ an unnamed source “close to the negotiations” said to the Post. 

The Post article follows another report in the Sports Business Journal from late August noting that Sinclair had hired investment bank LionTree and Moelis to negotiate a possible sale of its RSNs.

Diamond has the cash needed to keep operating through 2023, the Post added, but it is technically insolvent. Creditors could force it into bankruptcy if they chose to. 

“I believe Diamond is getting pressure from hedge funds to call the liquidation question early,” a source close to Diamond said to the paper. 

Sinclair responded with this statement: “Speculation raised by anonymous sources is just that, speculation. We enjoy the full support from the teams, NBA and NHL leagues, and look forward to continuing our work with them to transform the RSN model.”

The 19 Bally Sports channels, which were acquired in 2019 with the $10.6 billion purchase of the Fox Sports RSN empire, include 14 Major League Baseball franchises, 16 NBA squads and 12 NHL clubs. 

Beyond the Bally channels, Sinclair's RSN portfolio also includes the YES Network, the regional sports network jointly owned with Amazon and the New York Yankees, and Marquee Sports Network, which is co-owned with the Chicago Cubs. 

Amid the already intractable issue of cord-cutting, Sinclair and Diamond have faced distribution challenges, with Dish Network demurring on Sinclair's RSNs last year when it re-upped its retrans agreement for Sinclair broadcast TV channels. 

The Bally Sports Plus DTC play, meanwhile, was pitched to investors and creditors as an accretive mechanism for unlocking value in the Bally Sports channels by opening them up to subscribers not in the pay TV ecosystem. 

But the DTC launch will undoubtedly impact future carriage deals with Comcast, Charter Communications and DirecTV for linear Bally Sports RSNs. 

Certainly, the Fox Sports purchase hasn't performed on the field as Sinclair expected it would back in 2019, when it projected they would deliver EBITDA of $1.6 billion. 

Diamond said in August that EBITDA would come in at between only $183 million to $200 million this year. 

Despite all these issues, starting on Monday, consumers in regions served by Bally Sports channels can sign up for the $19.99-a-month Bally Sports Plus service, even if they don't have a cable TV or satellite TV subscription. 

Here in Next TV's home base of Los Angeles, Bally Sports West & SoCal is the exclusive RSN home of the NHL's Los Angeles Kings and Anaheim Ducks, which will be available to stream on the service later this fall via a master DTC deal signed by Sinclair with the NHL earlier this year. 

However, while Sinclair was able to sign individual DTC streaming deals with five MLB teams, the Los Angeles Angels — another Bally Sports West & SoCal constituent— wasn't one of them, so Bally Sports Plus subscribers in the region won’t get to see the Angels, who have been out of the postseason race since dropping 14 straight games in July, play out the string this season. 

Likewise, they might not be able to watch the NBA's Los Angeles Clippers on Bally Sports Plus. Quietly, the Clippers and Diamond are still negotiating a renewal deal. The team is currently bereft of an RSN arrangement and has chosen to show 15 of its games this season on Nexstar Broadcast Group-owned broadcaster KTLA. ■

About one year after emerging from Chapter 11 bankruptcy protection, Frontier Communications has been a surprising success story, moving full-speed ahead with building out its fiber footprint, doing it at a cost lower than even the company expected and watching its stock, driven by changing investor sentiment, rise more than 20% in the past three weeks. 

Frontier’s outlook wasn’t always so bright. In 2020, saddled with huge debt, a dwindling subscriber base and an outdated network, the company cleaned house under bankruptcy protection, refinanced its debt and refocused on delivering broadband via a state-of-the-art fiber network. About 14 months later — Frontier emerged from Chapter 11 protection in April 2021 — the company has a clear vision and a mission to beef up broadband speeds and reliability in its predominantly rural markets. Topping it all off is a new logo launched in April to reflect the company’s new direction and commitment to “relentlessly pursue betterness in our business and for our customers,” CEO Nick Jeffery said in a press release at the time. 

That Frontier decided to merely change its logo rather than scrap its name and conduct a total rebrand was telling to MoffettNathanson telecom analyst Nick Del Deo. In a May research report, Del Deo wrote that the decision to refresh the brand was “indicative of the positive effects the changes being made throughout the organization are already having on customer perceptions and marketplace traction.” 

Also: Equipment, Worker Shortage Could Delay Fiber Buildout

Del Deo added that management’s data-driven approach to the business has improved customer perceptions — its American Consumer Satisfaction Index scores are steadily moving up and its Net Promoter scores have surged in markets where it has fiber. 

“Put simply, the choice to refresh the company’s font and logo rather than totally rebrand is further evidence that changes to the business are working,” Del Deo wrote.

That change in sentiment also is evident in Frontier’s stock price. Frontier shares have risen about 21% between May 12 ($22.21) and June 3 ($27.03). While the stock is still down about 8% from the beginning of the year, Del Deo’s $33 target price for the stock seems to signify some decent upside.

Wells Fargo Securities telecom analyst Eric Luebchow was even more optimistic, calling Frontier the “best risk/reward opportunity that has meaningful exposure to fiber overbuilds” in a recent research note. Luebchow estimates Frontier will see an internal rate of return (IRR) of 20% or more at 40% penetration on its fiber build, well outpacing its cost of capital. 

“[Frontier] also has proven metrics that its fiber deployment is gaining traction, with its 2020 cohort of homes already exceeding 40% penetration just 24 months after completion (vs. its 25-30% initial expectations),” Luebchow wrote. “We believe this early success can continue, in part because FYBR on average is undercutting its cable peers on price by ~20% on average over a 3-year period for symmetrical broadband.”

Luebchow added that although year-over-year EBITDA and revenue growth was negative in Q1 — at $1.4 billion, revenue was down 10.7% in the period and  EBITDA of $509 million fell 22%, but both were in line with consensus estimates — he expects them to turn positive in late 2022 and 2023, respectively.

”We strongly view [Frontier] as a mispriced asset and presents a unique opportunity for the longer-term investor,” he wrote.

In a May research note, J.P. Morgan telecom analyst Phil Cusick wrote that Frontier’s fiber buildout was beating expectations, with the third phase of construction -- targeting the last 5 million households of its 15-million home footprint, costing less than the $900-to-$1,000 per passing earmarked for Phase 2. In addition, sell-through was higher and faster than earlier expectations. 

Cusick added that the company was optimistic concerning federal support of the network buildout, and that Frontier has already staffed up to pursue those funds, with the greatest impact expected in 2023. Nevertheless, Frontier believes Phase 2 of the buildout is funded through 2024.

Cusick noted that Frontier plans to build the network out to another 6 million homes in Phase 2, bringing the total number of homes where fiber is available to 10 million. So far, he wrote, Frontier is tracking ahead of schedule, building 640,000 fiber passings in 2021 (ahead of a 500,000-home target) and plans to finish 1.1 million to 1.2 million passings this year, up to 20% ahead of its earlier goal of 1 million additional passings.

In the first quarter, Frontier added 52,000 residential fiber broadband customers, its biggest quarterly addition in that metric ever, and beat analysts’ consensus expectations of 48,000 additions. 

In his report, Luebchow estimated that Frontier would more than triple its residential broadband subscribers over the next five years, from 1.5 million in 2022 to 4.8 million in 2027. Most of those additions will be fiber customers, as the analyst predicts that its legacy copper broadband customers will fall from 1.1 million in 2022 to 650,000 by 2027.

“[Frontier], in our view, remains the best ‘pure-play’ operator given its relative exposure to residential fiber, with a pathway toward revenue growth in early 2023 and a current valuation that makes for an attractive entry point,” Luebchow wrote. ■

Frontier Communications said it will expand its fiber-optic network to an additional 280,000 consumers in Connecticut  in 2021, the initial phase in what it says is a multi-year expansion effort.

The moves come about three months after Frontier successfully emerged from Chapter 11 bankruptcy with a cleaner balance sheet and plans to capitalize on broadband demand in its service territories. In its reorganization plan, Frontier recognized the lack of fiber-based broadband in many of its markets, pledging to bridge that gap by investing as much as $1.4 billion in its network. 

As part of the state approval process of that restructuring plan, in February Frontier agreed to expand its Connecticut fiber network to about 100,000 homes over four years. The most recent expansion plans appear to build on that pledge substantially. 

Frontier said it will offer 1 Gigabit per second speeds in the state, as well as offer more simplified service offerings. The company said that means no annual commitments or data caps, waived activation fees (an $85 savings), and a three-year price guarantee on monthly charges for Gig service. Frontier also offers a free $100 Visa Card or Ring Video Doorbell with Gig service and contract buyouts are available.   

“This infrastructure investment stems from Frontier’s belief that access to high-speed broadband is critical to building a digital society, enhancing community inclusion, and helping the environment,” Frontier Connecticut senior vice president Julie Murtagh said in a press release. “I am confident communities will see Frontier in a new way once they experience the power of fiber-optic technology.”

Frontier said the communities where the fiber expansion is currently underway include: Andover, Ansonia, Bethel, Bloomfield, Bolton, Branford, Bridgeport, Bristol, Cheshire, Coventry, Danbury, Derby, East Haven, Enfield, Farmington, Hamden, Hartford, Hebron, Manchester, Marion, Meriden, Middletown, Middletown , Milford, New Britain, New Haven, New London, Newington, North Haven, Norwalk, Norwich, Plainville, Plantsville, Quaker Hill, Rockfall, Shelton, Southington, Stamford, Trumbull, Uncasville, Vernon, Rockville, Wallingford, Waterford, West Hartford, West Haven, Wethersfield, and Woodbridge.

Frontier Communications said it has named former Arcosa Inc. executive Scott Beasley as its new chief financial officer, replacing Sheldon Bruha who will leave the company to pursue other opportunities. 

Beasley previously served as CFO of Arcosa, a Dallas-based maker of infrastructure products. He will join Frontier effective June 14 and will report to president and CEO Nick Jeffery.

“The addition of Scott Beasley as our new CFO is an important step in building a world-class leadership team as we transform our business into a modern technology company,” Jeffery said in a press release. “Frontier has a newly strengthened balance sheet and Scott brings considerable experience in corporate finance that will be critical as we invest in building our high-speed Fiber network. Scott is the ideal executive to lead our finance organization as we build Gigabit America."

Frontier named Bruha, who had been serving as interim CFO, as permanent CFO in June 2019. He joined Frontier in 2018 as SVP and Treasurer. Frontier emerged from Chapter 11 bankruptcy protection in April and began trading under a new NASDAQ symbol (FBYR) on May 4. 

“We thank Sheldon Bruha for his significant contributions over the past three years,” Jeffery added in the press release. “Sheldon played a key role in Frontier’s successful emergence from bankruptcy, including leading the Company’s critical balance sheet restructuring. We wish him well in his future endeavors.”

Orby TV was a bit of a contradiction in terms when it launched back in 2019: A video programmer that was offering a skinny bundle (a plus), over a satellite distribution platform (a minus) but economically priced at $40 per month (a plus) and aimed at a market that was becoming increasingly neglected by traditional TV (Baby Boomers who wanted a lean-back experience.) But former CEO Michael Thornton said the service, which was zeroing in on its break-even point after a little more than a year in business, was done in by a combination of industry misperceptions about the satellite TV business, broken promises from potential investors and the emergence of streaming video.

In an interview with B+C/Multichannel News, Thornton said Orby TV was in the final stages of landing a new benefactor before they pulled out at the last minute, dashing the satellite startup's chances of survival and leading to it filing for Chapter 11 bankruptcy in March.

Thornton, a former chief revenue officer at premium programmer Starz, founded Orby TV in 2018, with $25 million in backing from the General Electric Pension Trust. Armed with that money, Thornton said that Orby TV was poised to carve out a healthy niche, even if it was in a segment of the TV business that practically everyone else believed was dying a slow, painful death. 

But according to Thornton, the initial reaction to the service was extremely positive. 

“When we went out [to potential investors], I guess it was in late 2017, we got a ton of traction,” Thornton said. “The story, even though it was somewhat contrarian, people understood it, particularly the idea of a centralized and very un-capital intensive [company]. It was a really easy story to tell [and] it didn’t take a lot of subscribers to generate a fair amount of cash.” 

Thornton said when Orby TV shut down, it had about 30,000 subscribers, nearly half-way to its break even point (where it would start turning a profit) of 65,000 customers.  

Simple Pitch

Orby TV’s pitch was focused on its prepaid, pay-as-you-go offerings, with no contracts to sign and no credit checks to slog through. The company believed that it could appeal to the 30 million existing prepaid wireless customers, who are traditionally focused on keeping costs low and don’t particularly cotton to the hidden fees and charges that pop up in many traditional video packages. With Orby TV there were no surprises in the monthly bill -- that $40 included all taxes and fees.   

But though the service launched with much optimism, there were already two strikes against it: the precipitous decline of satellite TV and the chasm between what consumers say they want and what they are willing to pay for.

First, the satellite business. 

Satellite Decline

Subscriber numbers for the satellite business have never been worse than they are today, but they weren’t much better in 2019. DirecTV and Dish Network had been steadily losing subscribers for years -- DirecTV had peaked at about 21 million customers in 2017, around two years after it was purchased by AT&T, but has lost about 8 million subscribers in just three years, according to Statista. Dish Network, which had about 11 million satellite TV customers in 2017, had shrunk to about 8 million subscribers by the time Orby TV launched. 

Orby TV launched amid that backdrop, which to the untrained investor would look like a risky neighborhood. Even trained investors said that in retrospect, launching a brand-new satellite TV service in that climate would have raised many questions.

FBN Securities media analyst Robert Routh, who has followed the satellite business for years but did not cover privately-held Orby TV, said that the primary rule for any TV service is that it brings something new to the overall business. And though Orby TV was trying to differentiate itself through its low-priced prepaid options, he said to most consumers, that probably wouldn’t be enough. 

“When it comes to distribution, unless you're bringing to the table something that is a real advantage to the consumer that the other’s don’t have -- and I don’t know what that could be --  at a better price, why bother?” Routh said. “It’s like putting up a gas station across the street from other gas stations.” 

Thornton said he realized that satellite TV service was in decline, but he and his investors believed that was tied more to the inefficiencies and high prices of the larger providers. Plus, Orby TV only needed to convince less than 100,000 prepaid wireless customers to sign on to the video service to make money. With 30 million prepaid wireless customers already out there, that seemed like a good gamble. 

“The difference with us, we were looking at tens of thousands of customers for a profitable business and a really profitable business once it hits that break-even,” Thornton said. “So, it doesn't take a [lot of] time to move forward. But you’re right, satellite is not the future in terms of in-home television viewing, And that just became a really really hard thing to overcome.” 

Blinders Off

Thornton didn’t enter into the satellite venture naively. A 22-year veteran of the TV business, he had spent eight years at premium channel Starz, was an EVP at Disney/ABC Domestic Television and even served as SVP of programming acquisitions at DirecTV in the late 1990s. So he knew how the pay TV business worked. And even with the satellite business in decline, Thornton was convinced that there was room for a focused, cost-efficient, niche player that offered a strong programming slate for a low price.

“We really felt that the traditional market was just too expensive and there had to be an opportunity for people to access television but not at these exorbitant prices that just keep going up and up,” Thornton said of the decision to start up the business. “The idea was, even with the streaming that hit the market, there were still a ton of people, particularly in the boomer generation, that just wanted to turn on their TV and watch it and get a skinny bundle with a lot of value that wasn’t exorbitantly priced, wasn’t in that $125 price range.” 

And the prevailing wisdom seemed to back him up. For years prior, analysts, distributors and some programmers touted the need for “skinny bundles,” thinner packages of programming, usually minus sports networks, that could be offered at lower prices to consumers. With the traditional TV bundle costing north of $100 per month, several distributors attempted to offer up smaller, cheaper bundles that at first brought some pretty stiff resistance from programmers. As time went on, and pay TV subscriber rolls have dwindled across the board, that resistance has waned somewhat. 

The Trouble With Skinny Bundles

And that brings us to the second strike against the satellite startup -- rights issues and payment demands have hamstrung MVPDs in trying to set up skinnier packages for years. While that is beginning to ease a bit, consumers have managed to talk a good game when it comes to desiring smaller video packages, but have been reluctant to open their wallets.

A combination of not being able to get the channels they want in a skinny package, the hassle of switching providers and the emergence of streaming services like Netflix, Amazon Prime Video and Hulu have effectively squashed the skinny bundle. The advent of direct-to-consumer offerings from established programmers like Disney (Disney Plus), WarnerMedia (HBO Max); ViacomCBS (Paramount Plus) and Discovery (Discovery Plus) have made it even more complicated. 

Secondly, for pay TV stalwarts like cable, telco and satellite TV companies, skinny bundles haven’t really worked. Mainly because they’re not that skinny.

Obligations to keep pricey sports channels like ESPN, FS1 and regional sports networks on the most popular tier have tied many a cable, telco and satellite TV operator’s hands. When Verizon’s Fios first introduced its Custom TV skinny bundle in 2015, it was met with outrage by programmers, who said the package violated their agreements. One year later, Verizon amended the Custom TV package, adding ESPN and other sports channels to a Sports and More offering for the same price.  Today, Verizon has “Mix and Match” which allows customers to “test drive” its entire channel lineup, formulating a package of most-watched channels after two months.  

But Then Again, There’s Philo

At the same time, Philo TV, launched in 2018, around the same time as Orby TV, has managed to carve out a niche in low-cost, non-sports programming. Philo first offered 35 channels for $16 per month (an add-on package of nine channels was also available for an additional $4 per month). Now the company offers 63 channels (including AMC, Comedy Central and Discovery Channel) for $20 per month and as of November 2020 had about 800,000 subscribers. 

Thornton pointed to Philo as proof that the skinny bundle is still desirable.

“They [Philo TV] have many, many more subs that we had with a smaller bundle than we had,” Thornton said. “The skinny bundle is something that people want.”

He also dismissed the argument that what consumers really want is ala carte programming where they can mix and match their favorite channels for lower prices. While that’s the ideal, it’s also a hassle to sort through the hundreds of possible options such a future could bring. 

“Ultimately everybody tries to get to more of an ala carte place, but in reality people don't want ala carte, they want to be told, ‘Here are the different packages,’” Thornton said. “They want to be pointed to the best value, they want the ability to think that they can ala carte as well. It’s a difficult balance, and a lot of it is based upon history.”

Routh added that adding to the pressure is that some people, especially in really rural areas, don’t want TV at all. And it doesn’t matter how low the price for the service is.

"You can’t change the nature, the behavior of those people,” Routh said. “There’s nothing wrong with that, but out of that universe he was targeting, there was [probably] a certain percentage that even for nothing they wouldn’t take it.” 

Opening Optimism

When it launched in 2019, Orby TV offered content from top programmers like ViacomCBS, WarnerMedia, AMC Networks and Discovery. From the start, Orby TV offered 44 channels for $40 per month, with an expanded package that included digital networks like MTV Classic, DIY and others for $50 per month. Orby TV was able to keep its rates low because it didn’t offer sports channels like ESPN and FS1, and broadcast channels. Customers could access their local broadcast networks via a digital antenna over-the-air. 

Also Read: Brave New TV World 

With lower cost programming -- no USA Network, Fox News Channel or Disney Channel --  and no upfront equipment costs -- customers had to buy their own dishes and set-tops at Best Buy, Target or other retailers -- Orby TV had low overhead. Thornton said the company at its height only had 17 full-time employees. 

 "The cost basis was very low," Thornton said.   

Financing Troubles 

Looking back, Thornton said he wished he hadn’t relied on one financial backer. And even with low overhead, the company burned through most of that $25 million in about 16 months -- bankruptcy documents said the company had $500,000 in cash and $52 million in liabilities, mostly to programmers. 

According to court documents, GE Pension Trust is owed about $11.6 million, while programmers like Viacom ($16.4 million), AMC Networks ($10.4 million), Turner Broadcasting System ($4 million) round out the list of unsecured creditors. 

When it became clear that the GE Pension Trust wasn’t going to put any more money in the company, Thornton said that he had lined up a group of investors -- including programmers who had networks carried by the service -- to pump in needed capital. But that deal collapsed literally inches away from the finish line. 

“We lined them up, hopefully to close in the middle of 2020, but like everything else in the pandemic, things were slow to get going,” Thornton said. “That close kept getting pushed off, pushed off until the fall. Then at the eleventh hour, literally the week we were set to close with the programmers, one programmer backed out. With that programmer backing out, all the programmers said, ‘Well, maybe we will take a step back and rethink this.’ The irony at least to me was the numbers had held really really well during the pandemic -- a lot of people were watching TV, were watching their budgets, and we continued to grow.” 

Thornton declined to identify the investors, but said the specter of streaming TV dominated almost every conversation he had with potential backers. At one point, because of its pre-pay option that allowed customers to “pay-as-you-go,” for service, Thornton met prepaid wireless carriers like Tracfone and its then-parent American Movil about potential partnerships.

“We had some very interesting discussions with the Tracfone guys and even American Movil out of Mexico City,” Thornton said. “But unbeknownst to us, at the same time we were talking to them, they were talking about selling as well.” 

Tracfone said in September that it had agreed to be purchased by Verizon. 

Hooking up with a prepaid phone carrier would have been a smart move, Routh said.

“What he was doing, it did, on a certain level did make sense, and if he could have gotten it bundled with a prepaid phone plan, then it probably would have had a much greater chance of survival,” Routh said. “Since he wasn’t able to, I’m sure he was paying the programmers multiples of what Comcast pays. And with the upfront costs and the leverage, he couldn’t grow subs fast enough. It was ballsy to even attempt, you have to give him credit for that.” 

Thornton added that there was no lack of trying. In the pitch to phone providers,  he compared Orby TV to another alternative video carrier -- Layer 3 -- that was eventually swallowed up by T-Mobile in 2018 for $325 million.  T-Mobile shuttered that service, along with its TVision video offering, about two years later.  

Orby TV was pitched as a way for prepaid carriers to break into the video market at a lower cost than Layer 3, he said. At the time Layer 3 (which raised about $100 million in several rounds of financing) was marketing a high-end, “fat bundle” package, targeted at customers that wanted lots of video, white-glove customer service and weren’t afraid to pay top dollar for it. Layer 3 video packages started at $75 per month. 

“In some of the early pitches, I would say if you’re familiar with Layer 3, we are exactly at the other end of the spectrum,” Thornton said. 

Streaming Emerges

Also at that time, several programmers were eyeing streaming options, but most were still selling content to SVOD companies like Netflix and Amazon Prime. That all changed when The Walt Disney Co. launched its Disney Plus streaming service in 2019. Disney set the tone with a $6.99 monthly price point, and was followed by offerings from WarnerMedia (HBO Max), AMC Networks (AMC Plus), NBCUniversal (Peacock), ViacomCBS (Paramount Plus) and Discovery Inc. (Discovery Plus). 

“The surprise to me was the amount of focus solely on streaming, it's the bright shiny object that everyone seems to be chasing,” Thornton said. “People talk about that there is a lot of money out there that needs to be invested, and there is, but people are singularly focused on streaming.”

He added that the market responds quickly and favorably to seemingly minuscule streaming moves, ignoring the fact that it will take a tremendous amount of growth before that segment is profitable. Meanwhile, other parts of the video business are being ignored. 

“People are wildly, wildly focused on that one [streaming] aspect,” Thornton said. “Wherein last I checked it’s still a very profitable business to be in the broadcast business. Local broadcast stations are still doing insanely well. Do they need to grow and do they need to adapt? Absolutely. But it’s a great business right now.” 

Still, there’s no mistaking that streaming is the future of the business. And programmers are making moves to lay out the infrastructure for that future now. In the meantime, there are some analysts that predict that some satellite players will be whittled down to nothing in as soon as five years. 

Thornton said that when it became apparent that the bottom was falling out of his financing deal, he tried hard to save the company, talking with Dish Network founder and chairman Charlie Ergen about a possible partnership. In the meantime, speculation was high that the company was in trouble, especially after its website suddenly went dark. 

“I went to Charlie and we talked about even doing an MVNO relationship,” Thornton said. “Using his capacity, using his satellites and his equipment and just keeping  the Orby name and having to transfer everybody over. He [Ergen] sees the value in these customers because it’s probably not unlike the customer he originally went after. In the end, while we talked about it and thought about it, the expense of pushing everybody over he felt was probably more than it was worth.”

After it filed for bankruptcy in March, Orby TV urged customers via its website to switch to Dish Network. 

Lessons Learned

Today, Thornton isn’t holding out much hope for an Orby TV rebirth.

“I think if it was going to be able to restart, it probably would have by now,” he said. “The longer the customers are without programming, the harder it is to bring them back. If it got down to right before pre-filing that I thought there was a chance for somebody to come in and swoop it up, I actually thought about trying to raise money myself and swoop it up, but it just became more trouble than we thought would be worthwhile.”

But he believes there is a lesson to be learned from the demise of the business.

“You would think that the programmers would look at that and say we’ve got to figure this out,” Thornton said. “When a cable operator, no matter how small, says it’s worth my while to give you a Firestick or an Apple TV or a Chromecast because I can't give you programming in a way that I can make money, something’s wrong.” 

After a year winding through the bankruptcy courts, Frontier Communications said it expects to emerge from Chapter 11 protection on April 30.

Frontier filed for bankruptcy protection on April 15, 2020. Earlier this month it said it had received all the necessary approvals for its reorganization plan,  which includes swapping about $10.2 billion in debt for equity, and investing about $1.4 billion to build out its fiber network. 

Frontier added that its new common stock will begin trading on the NASDAQ exchange on May 4, under the symbol “FYBR.” 

“Frontier is ready to set a new course as a revitalized public company. Through the restructuring process, the company has stabilized its business and recapitalized its balance sheet, while making significant progress on the early stages of implementing our initial fiber expansion plan,” said John Stratton, incoming Executive Chairman of the Board. “Frontier’s success with the Fiber-to-the-Home pilot program, which upgraded more than 60,000 locations from copper to fiber optic service in 2020, is just one example of the important work already underway. Frontier’s future is bright. I’m eager to work closely with our new Board, our CEO Nick Jeffery, and the rest of the leadership team to build the new Frontier.” 

The company said it will hold a conference call, which will be webcast, on April 30 (Friday) at 10 a.m. ET to discuss the path forward and Q1 results.

The new eight-member board of directors will be led by Stratton and Jeffery, who joined Frontier in December after serving as CEO of British wireless company Vodafone UK.  The remaining six independent board members are: Astra Capital founding partner and 2B Partners CEO Kevin Beebe; Coca Cola SVP and chief people officer Lisa Chang; former Liberty Media SVP, deputy general counsel and corporate secretary Pamela Coe; former Vodafone chief technology officer and current senior advisor to Bridge Growth Partners Stephen Pusey; former NFL chief operating officer and current senior advisor to the infrastructure division of Brookfield Asset Management Maryann Turcke; and Kaiser Foundation (Kaiser Permanente) SVP and chief digital officer Pratabkumar “Prat” Vemana.

“The future of Frontier is an innovative, modern technology company, poised to deliver next-generation fiber-rich infrastructure for our customers and communities,” Jeffery said in a press release. “Upon emergence, we will have the capital structure and resources to establish Frontier as a digital leader with top-tier talent and an entrepreneurial, high-performance culture. I want to express my appreciation to all our stakeholders who have enabled this process. Our team looks forward to beginning our next phase of long-term growth and value creation across the business.”

Frontier Communications, about a year after filing for Chapter 11 protection, received the final state approval of its reorganization plan, which the company said sets it on a path toward emerging from bankruptcy in “the coming weeks.”

Frontier filed for Chapter 11 protection on April 15, 2020. The company had worked out a restructuring plan that would exchange about $10.2 billion in debt for equity, and funnel about $1.4 billion toward building out fiber networks throughout its service territory.  On April 15, 2021, the company received the final approval of its plan from the California Public Utilities Commission, which it said was the last hurdle in the bankruptcy process. 

“Having already received all other required state and federal approvals, the Company expects to successfully emerge from Chapter 11 in the coming weeks,” Frontier said in a press release. 

Frontier stock, currently trading on the over-the-counter “pink sheets,” was priced at about 29 cents per share in early trading April 19, down about 5%. Once the company emerges from bankruptcy, it plans to return to trading on the full Nasdaq Exchange under the new trading symbol FYBR, which MoffettNathanson telecom analyst Nick Del Deo said in a note to clients “may be a bit corny, but it leaves no uncertainty regarding management’s focus.” 

According to the California PUC’s proposed decision to approve the reorganization in March,  Frontier would have to invest about $1.75 billion in its fiber network in the state over the next four years, including expanding broadband availability in unserved or underserved communities. As part of that condition, Frontier would build out fiber to 350,000 customer locations by Dec. 31, 2026, of which 150,000 locations must be in areas where Frontier has lower rates of return. 

As it nears the bankruptcy exit, Del Deo, who initiated coverage of the stock on April 19, added that he believes with new management, more manageable leverage and funds earmarked for an aggressive fiber buildout, Frontier could overcome the hurdles of the past. Frontier named former Vodafone UK CEO Nick Jeffery as its CEO in December. 

The analyst added that the company has identified millions of homes in its footprint that could be upgraded to fiber at attractive returns, “which would put the business on a sustainable path and potentially create billions of dollars in value.”

But he cautioned that although Frontier will emerge with substantially lower debt -- about $7 billion -- only about one-third of its total revenue comes from fiber services, with more than half coming from its struggling commercial unit. 

“A successful transformation would likely bring Frontier to revenue stability or modest growth, but not make it a star,” Del Deo wrote.

MobiTV, a key video technology vendor to T-Mobile, Cable One and myriad small cable companies, has filed for Chapter 11 bankruptcy protection. 

According to FTI Consulting, a firm brought on by the Emeryville, Calif. company to oversee the restructuring process, MobiTV has obtained $15.5 million in debtor-in-possession financing to keep the lights on, the employees paid and its cloud-based video systems up and running. 

FTI didn't specify who the lender is. But according to the Wall Street Journal, it's T-Mobile, MobiTV's biggest client. 

FTI said the restructuring is intended to address MobiTV’s debt obligations so that it can be sold.

The company was founded 1999 and has secured $213.8 million in private funding to date. 

MobiTV markets Connect, a cloud-based platform that enables pay TV operators to turn their video services into app-based solutions playable on popular connected TV devices. According to the company’s bankruptcy petition, it currently has 125 customers.

MobiTV lists total assets of $19 million and liabilities of $75 million in its Wilmington, Delaware filing. 

MobiTV’s technology helps power T-Mobile’s TVision, the virtual MVPD launched by the wireless company back in November. Notably, T-Mobile’s top executives didn’t mention TVision once during the company’s fourth-quarter earnings call in in early February, just over three months following the big TVision launch. MobiTV’s revenue is reportedly structured on the customer uptake of the platforms it furnishes to its pay TV clients. 

Cable One, meanwhile, is in the process of rolling out Sparklight TV, which is based on MobiTV tech. 

The Connecticut Public Utilities Regulatory Authority approved Frontier Communications' Chapter 11 bankruptcy reorganization plan Wednesday, agreeing to expand its fiber network and pledging not to reduce its workforce in the state for at least two years.

Frontier filed for Chapter 11 bankruptcy in April. The company received Federal Communications Commission approval for the plan earlier this month.  With Connecticut’s approval, 12 of the 25 states in which Frontier operates have approved the plan.

The Communications Workers of America, which represents about 1,600 Frontier technicians and call center workers in Connecticut, had pressed for the approval to include conditions to improve service quality and preserve jobs in the state. The CWA had pointed out that Frontier has jettisoned about 740 employees in the state, about 30% of its workforce, since 2016. The union also wanted the PURA to use the oversight process to ensure the company stayed accountable to its workers and customers and not Wall Street hedge funds.     

As part of the reorganization, Frontier said it would reduce debt by about $11 billion and build out its fiber network across its footprint. It expects to emerge from bankruptcy early this year. In December, the company named former Vodafone executive Nick Jeffery as CEO.  Jeffery, who is expected to take the helm on March 1, replaces Bernie Han, who will remain on the board of directors and assist in the transition.  

Among the conditions for approval in Connecticut, Frontier agreed to add at least an additional 100,000 locations in the state in a four-year period ended Dec. 31, 2024, pledged not to reduce its technicians and call center workforce through involuntary attrition for two years and promised to maintain its corporate headquarters in Connecticut.

In a statement, CWA Local 1298 president Dave Weidlich said the PURA approval commits Frontier to expanding its fiber network and offers some protections for employees, but fell short of the mark.

“However, we believe this was a missed opportunity to follow the lead of other states who have put stronger conditions on Frontier related to capital investment, broadband deployment and workforce retention,” Weidlich added. “CWA remains committed to working with Frontier to provide the best possible service to Connecticut customers and to ensure that Frontier lives up to both the letter and spirit of this decision. We hope that this decision will serve as a starting point for Frontier’s continued investment and that Frontier makes a strong, ongoing commitment to Connecticut homes and businesses to provide Connecticut with the connectivity we deserve.”

Frontier Communications said it has named Vodafone UK CEO Nick Jeffery as its new CEO. Jeffery will replace Bernie Han, who will step down March 1.

Frontier filed for Chapter 11 protection in April  and has been winding through a restructuring process for months. Its reorganization plan was approved by the U.S. Bankruptcy Court in August and the company said that it has received regulatory approval in 12 states for its restructuring plan. It expects to emerge from Chapter 11 in early 2021.

After Jeffery takes the helm, Han, who joined Frontier in December 2019 from Dish Network, will step down, but will remain a member of the company’s board of directors and will assist in the CEO transition. Jeffery will join the board of directors after the company emerges from Chapter 11.  

“There is still important work to do in unlocking Frontier’s full potential, and I am excited to facilitate the transition and pass the CEO baton to someone with Nick’s outstanding track record,” Han said in a press release. “I want to again thank the entire Frontier team for their support as we see the chapter 11 process through to completion.”

Jeffery was selected after an extensive internal and external search for a new CEO. He has about 30 years of experience, most recently at Vodafone UK, where he helped engineer a turnaround at the British wireless and wireline operator. According to Frontier, during Jeffery’s tenure at Vodafone UK, the unit of Vodafone PLC grew revenue and market share, improved customer service, reduced churn and increased customer and employee satisfaction. Prior to his tenure at Vodafone UK, where he spent eight years, the last four as CEO, Jeffery spent more than a decade at Cable & Wireless, where he led the UK and international markets business units.

In a press release, Robert Schriesheim, chairman of the finance committee of Frontier’s board of directors, said that in addition to Jeffery becoming CEO, John Stratton will become Frontier’s executive chairman after it emerges from Chapter 11. 

“We are now at a point of natural evolution in our transformation and, following a rigorous process, the search committee concluded that Nick is the right CEO to lead Frontier through its next phase of investment and profitable growth,” Schriesheim said in the release. “On behalf of the Finance Committee and Board, I want to thank Bernie for his leadership in executing Frontier’s operational turnaround while managing the unprecedented challenges of the COVID-19 pandemic. Bernie has demonstrated his world-class skills as a CEO operator, managing large-scale complexity with a relentless focus on driving performance and emphasizing accountability. His contributions have helped to reposition Frontier as a stronger, more resilient business, and we appreciate his willingness to guide the CEO transition and remain on the Board through transition.”

Frontier said it is making progress in executing its reorganization plan, including recapitalizing the balance sheet, which upon emergence, will include reducing its debt by about $11 billion and its annual interest expense by about $1 billion. The company also plans to re-focus its efforts to become a fiber-based broadband service provider, and has had five straight quarters of consumer broadband subscriber growth.

“Frontier owns a unique set of assets and maintains a competitive market position,” Jeffery said in the release. “My immediate focus will be on serving our customers as we enhance the network through investments in our existing footprint and in adjacent markets while building operational excellence across the organization. I am committed to delivering world-class customer service. I look forward to speaking and meeting with our employees while working with Bernie, the Board and leadership team to ensure a seamless transition.”

Frontier Communications said former Verizon executive John Stratton will become executive chairman of the board of the company once it emerges from Chapter 11 bankruptcy protection, expected in early 2021. 

Frontier filed for Chapter 11 protection in April. In August, its reorganization plan, which would retire about $10 billion in debt, was approved by the U.S. Bankruptcy Court. The plan is awaiting federal approvals. 

“We are excited that John Stratton, an executive with a proven track record leading telecom businesses through all phases of the investment life cycle, will oversee Frontier’s strategic direction following the Company’s emergence from bankruptcy,” said Frontier board member and chairman if its finance committee Rob Schriesheim said in a press release, adding that Stratton’s acceptance of the new position is “a powerful endorsement of the company’s ability to deliver value to customers and shareholders. 

Stratton became a Board Observer at Frontier in May of 2020 after he was selected by creditors in connection with Frontier’s restructuring. As a Board Observer, he has supported Frontier’s Finance Committee as it developed a strategic plan.

“Since becoming a Board Observer of Frontier in May, I’ve had the opportunity to engage with the Finance Committee to review and evaluate the company’s broad portfolio of assets and have developed strong confidence that Frontier can emerge as one of the nation’s leading broadband providers in the markets it serves,” Stratton said in a press release. “There is significant opportunity to drive operational efficiency, deliver an exceptional customer experience, expand Frontier’s fiber footprint and achieve profitable growth. I’m looking forward to working with the management team, helping drive execution of the Company’s strategic plan and achieving sustainable, long-term success.”

Stratton retired from Verizon in 2018 after 25 years with the company, most recently as EVP and president of Global Operations. Prior to that role, he had served as Chief Operating Officer of Verizon Wireless and separately, President of its Global Enterprise Solutions Group. He also was Head of Wireline Divisions at Verizon, where he had full responsibility for all of Verizon’s wireline operations for seven years. 

Ducera Partners LLC and Houlihan Lokey Inc. are serving as financial advisors and Akin Gump Strauss Hauer & Feld LLP and Milbank LLP are serving as legal advisors to representatives of noteholders of Frontier.

Frontier Communications has reached an agreement with bondholders to restructure via a Chapter 11 bankruptcy, reducing its debt by about $10 billion and pumping another $1.1 billion into the telecom company in the form of new financing.

Frontier had been expected to file for bankruptcy for months. The company said late Tuesday that it had reached an agreement with bondholders representing more than 75% of its $11 billion in unsecured bonds on the deal, which is expected to reduce its debt by more than $10 billion. In addition, the company said it has secured about $460 million in debtor-in-possession (DIP) financing, which coupled with its $700 million of cash on hand give it about $1.1 billion in liquidity. Frontier said it filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of New York on April 14 and will continue to operate normally as it goes through the process.

Frontier had mapped out plans for the restructuring in its amended 10-K filed earlier this month. The company had said it was seeking to reach a prepackaged bankruptcy agreement with bondholders, swapping about $11.7 billion in debt for equity in the company. 

When the dust clears, Frontier expects to emerge from Chapter 11 with about $7.5 billion in debt, considerably smaller than the $17.5 billion in leverage it had carried previously. The company has admitted that it has underinvested in fiber over the years, and in the 10-K said it would need to invest only about $1.4 billion to build out its network -- part of that possibly coming from federal programs -- through 2024.

“We are pleased that constructive engagement with our Bondholders over many months has resulted in a comprehensive recapitalization and restructuring,” chairman of the finance committee of Frontier’s Board of Directors Robert Schriesheim, in a press release. “We do not expect to experience any interruption in providing services to our customers. With a recapitalized balance sheet, we will have the financial flexibility to reposition the company and accelerate its transformation by allocating capital resources and adding talent to enhance our service offerings to our customers while optimizing value for our stakeholders. Under the RSA, our trade vendors will be paid for goods and services provided both before and after the filing date.”

Frontier said it also will continue to pursue the closing of the sale of its system in Washington, Oregon, Idaho, and Montana to Northwest Fiber for $1.352 billion in cash. That deal is expected to close by April 30.

“With this agreement with our bondholders, we can now focus on executing our strategy to drive operational efficiencies and position our business for long-term growth,” Frontier CEO Bernie Han said in the press release. “At the same time, the COVID-19 pandemic continues to impact the entire business community, and our team is focused on ensuring the health and safety of our employees and customers. The services we provide to our customers keeps them connected, safe and informed, and I would like to thank our team for their continued dedication, especially in light of the current environment.”

The FCC said it would make sure Frontier continued to fulfill its obligations to keep its customers connected.

“Staying connected to reliable telephone and Internet services is essential in today’s America—perhaps never more so than during this unprecedented time as we confront the coronavirus pandemic," said Kelly Montieth, chief of the FCC's Wireline Competition Bureau. "As such, I am pleased that Frontier has made clear that consumers will remain connected despite Frontier’s filing of a bankruptcy reorganization plan. As the company undertakes this process, we expect it to comply with all Commission regulatory obligations. We will be vigilant in ensuring both that Frontier’s customers stay connected to vital 911, voice, and broadband services and that Frontier continues to put the federal funds it receives through the Connect America Fund and other universal service programs to work for the American people.”

In a statement, the Communications Workers of America, which represents some Frontier employees, hoped that workers would have a voice in the reorganization.

"Frontier’s front-line employees have a unique insight into the challenges - and opportunities - that the company faces. Unfortunately, Frontier’s management did not engage with CWA members or leadership as part of their negotiations with creditors, denying their workforce a much-needed voice in the future of the company," The CWA said in its statement. "CWA members expect to have input in the direction of the company as the bankruptcy process goes forward."

"Frontier’s front-line employees have a unique insight into the challenges - and opportunities - that the company faces," said the Communications Workers of America. "Unfortunately, Frontier’s management did not engage with CWA members or leadership as part of their negotiations with creditors, denying their workforce a much-needed voice in the future of the company. CWA members expect to have input in the direction of the company as the bankruptcy process goes forward." 

But CWA still supports a way forward for the company. 

"The need for high-speed, reliable communications services is more evident now than ever before. Our position has been clear - Frontier needs the debt relief and financial flexibility to invest in its network and its employees, so that it can provide the service that its customers want and deserve. 

"We call on Frontier and its creditors to work quickly to put Frontier on a strong financial footing and prioritize the long-term gains that will come from investment in Frontier’s network over extracting cash from the company for short-term profit." 

Frontier Communications is expected to file for Chapter 11 bankruptcy protection within the next two weeks, part of a sweeping restructuring plan that would include swapping about $11.7 billion in debt for equity, as well as possibly selling off some assets.

According to a 10-K annual report filing with the Securities and Exchange Commission on March 31, Frontier said it has been in discussions with its bondholders since January. Frontier had been expected to file for Chapter 11 protection for months. Last month it said it would exercise its right to defer about $322 million in interest payment on its debt for 60 days, a move that many saw as a precursor to a prepackaged Chapter 11 filing. In its 10-K, the company said it would defer a $6.8 million interest payment due on April 1 as it continues to negotiate with bondholders over the restructuring.

Frontier still needs its bondholders to sign off on the plan, so there is no guarantee that the proposal will be approved. But the company did say in the documents that a Chapter 11 filing could commence "no later than April 14." 

Frontier outlined a presentation it gave to bondholders in SEC filings regarding that restructuring, blaming its past problems on a serious under investment in fiber infrastructure and an inability to capitalize on the fiber assets it had.

According to the filings, Frontier’s broadband service is available to about 14 million homes, but only 3 million of those residences are passed with fiber. According to the filing, most of Frontier's broadband customers have low-speed digital subscriber line service (DSL). About 30% of its customers have service with download speeds of 0-12 megabits per second; 35% have download speeds of 13-24 Mbps and only 6% have download speeds of 24 Mbps or higher. The company has managed to survive mainly because in many of its markets it is the only provider.

Frontier admits that it has not invested in fiber over the years. And it believes that if its restructuring plan is approved, it would have the necessary capital to build out its network. But even then it said it would only invest about $1.4 billion -- part of that possibly coming from the FCC’s Rural Digital Opportunity Fund -- through 2024.

Frontier’s biggest problem is its debt, currently at about $17.5 billion, accumulated through a series of now questionable acquisitions over the past few years, mainly its $10.5 billion purchase of Fios assets in California, Florida and Texas in 2016. Those obligations have prevented the company from investing adequately in its network and as subscribers continue to defect from its broadband services, its financials have faltered.

Revenue has been on a steady decline over the past few years -- $9.1 billions in 2017 to $8.1 billion in 2019 -- and is expected to fall further in 2020. Net losses have tripled in the same time frame, from $1.8 billion in 2017 to $5.9 billion in 2019.

By increasing its emphasis on fiber, Han and the rest of the Frontier team believe they can begin to reverse the company's history of declines, but it will take time. According to the SEC filings, Frontier doesn’t expected to turn a profit

Current Frontier stockholders would likely be left in the lurch in a Chapter 11 filing -- in most of those cases, current equity is valued at 0 and retired and replaced with shares in a new entity.

Frontier hired former Dish Network chief operating officer Bernie Han as its CEO in December, and he has been working hard to hammer out a deal with bondholders. According to the SEC filings, Frontier believes with its debt problems out of the way and a new focus on fiber, it can grow revenue and cash flow over time.

But it wouldn’t be immediate. According to the restructuring plan, Frontier revenue would decline over the next four years -- from about $7 billion in 2020 to about $5 billion in 2024 -- as it shifts from a legacy copper-based business to a fiber-centric operation. But by 2024, when fiber accounts for 47% of revenue (it’s at about 34% now), it will have a customer base that is more profitable. By Frontier’s estimates, fiber cash flow will grow at a 6.1% clip from 2019 to 2024, and at a 10.2% rate between 2024 and 2031. Cash flow at the legacy copper business is expected to decline from about $2.2 billion in 2019 to $900 million by 2031.

Frontier Communications said Monday that it would invoke a 60-day grace period to pay its bond debt due March 16, a move that many believe could be the first steps in restructuring its debt, including a bankruptcy filing.

Frontier was scheduled to make a $320 million interest payment on its bond debt on March 15, a payment that many have speculated it cannot make. The company has been trying to restructure about $17.5 billion in outstanding debt, much of that incurred after it agreed to buy Verizon Communications’ Fios business in three states in 2015. That deal closed in 2016. 

In a statement on March 16, Frontier said it would take advantage of the 60-day grace period on its interest payment, adding that it continues to hold talks with bondholders as it works to “reach a comprehensive resolution.”

“We remain actively engaged in constructive discussions with our bondholders as the Company continues to evaluate its capital structure with an eye to reducing debt and interest expense,” Frontier continued in its statement. “...Importantly, we continue to provide quality service to our customers without interruption and work with our business partners as usual.”

In the meantime, Frontier stock continued to fall, dipping 20% (7 cents per share) to $27 cents each on March 16. The stock has been trading under $1 per share since Oct. 31.

In December Frontier hired former Dish Network executive Bernie Han as CEO. According to reports, Han has been working hard to restructure Frontier’s debt. Bloomberg reported that Frontier is negotiating terms of a debtor in possession loan that would allow it to continue operating through a bankruptcy filing. 

But just when that filing would come is up in the air. Frontier had been expected to file for Chapter 11 restructuring in March, possibly before the interest payment came due, but that hasn’t happened. According to Bloomberg, the company has another interest payment due April 1 (with a 30-day grace period) and one due April 15 (without a grace period). That could mean that the telecom company would file for protection around the middle of next month.

Latino and multicultural youth-oriented programmer Fuse Media said it is expected to emerge from Chapter 11 bankruptcy protection in the next few weeks, after a federal court approved the programmer's exit plan June 18.

Fuse Media, which targets young millennial Latinos through its Fuse TV and FM (Fuse Music) linear cable and video-on-demand channels, online properties including Fuse.tv and OTT apps, social media and live events, filed for Chapter 11 bankruptcy protection in April in the U.S. Bankruptcy Court for the District of Delaware. 

At the time the company said it had also filed a reorganization plan that would reduce its debt by about $200 million and allow it to emerge from bankruptcy some time in the second quarter.  In a press release June 19, Fuse said the court approved its plan at a June 18 hearing and that it “will officially exit Chapter 11 in the coming weeks.”

In a press release, Fuse Media said it has renewed carriage agreements with AT&T and DirecTV and most recently renewed a deal with T-Mobile, which will keep its Fuse TV and FM linear programming on TV Vision Home, the wireless carrier’s upgraded version of Layer3 TV which will be available later this year in about eight markets. 

Fuse Media interim CEO Miguel "Mike" Roggero added that the programmer will continue to increase its spending on original content.

"Looking forward, Fuse will continue to provide content that entertains and inspires young and underserved Latino and multicultural audiences, and to collaborate with creative, brand and distribution partners who share this goal,” Roggero said in the release.

Fuse Media has filed for Chapter 11 Bankruptcy protection in U.S. Bankruptcy Court for the District of Delaware, a move it says will allow it to reduce its debt by about $200 million.

Fuse Media, which includes linear cable and video-on-demand channels Fuse TV and FM (Fuse Music); online properties including Fuse.tv and OTT apps; social media; and live events, said its reorganization plan had the support of most of its noteholders.

The bankruptcy filing, made on April 22, was the logical next step after Fuse said in January that it had missed a $12.5 million interest payment. At the time the company had about $240 million in debt and said that it was in talks with its lenders. 

Related: Fuse Media CEO Michael Schwimmer Resigns 

The reorganization plan is still subject to approval by the court, but the company said it expects to complete the process and emerge from Chapter 11 protection during the second quarter of 2019.

“Unlike many other companies in our industry, Fuse has been experiencing growth across platforms, but we have been unable to realize the full benefits of this progress because of the significant amount of debt on our balance sheet,” Fuse Media chief financial officer and interim CEO Mike Roggero said in a press release. “The Chapter 11 process provides a proven framework to efficiently address these challenges in order to position our business for long-term success. It is a logical next step toward ensuring that we are able to provide entertainment content to a traditionally underserved audience for many years to come.”

Fuse added that it fully expects to continue its day-to-day business activities, maintain its current programming and honor its operating commitments throughout the bankruptcy process. Fuse said it also has filed a series of “First Day Motions” with the court, which pending approval will give it authority to pay its employees and operating expenses.

“The company is confident that it will have sufficient liquidity to continue to meet its commitments while it works to achieve its financial goals,” Fuse said in a press release.

More information on the Fuse Chapter 11 case can be found here. 

Despite a late inning offer that never officially made it to court, the sale of The Weinstein Co. to investment group Lantern Capital for $310 million was approved by U.S. Bankruptcy Court on May 8.

The Weinstein Co., rocked by a horrific sexual harassment scandal involving its co-founder and former CEO Harvey Weinstein, filed for Chapter 11 bankruptcy protection in March.  At the time, Lantern Capital, a unit of Texas-based investment firm Lantern Asset Management had made a stalking horse bid for the company. While another bidder – Inclusion Media, headed by Broadway producer Howard Kagan – planned to make a $315 million offer, including $30 million set aside for a victims fund for women sexually assaulted and harassed by Harvey Weinstein, that bid was never formally made to the court, according to reports. The Lantern Capital bid, which involved $310 million in cash and the assumption of about $125 million in debt, was approved by The Weinstein Co. board in early May as superior to the Inclusion Media. 

Just what the new owners will do with the studio, producers of cable reality hits like Project Runway, remains to be seen. Lantern Capital is run by Andy Mitchell and Milos Brajovic, who have pledged to bring the studio back to its heyday, when it was one of the top independent film producers in the country. Lantern’s portfolio is decidedly absent entertainment investments – its biggest holdings are American Zinc Recycling, Roundtree Asset Management (a vehicle for rolling up underperforming car dealerships across the country), bulk shipping platform Good Bulk and North Carolina luxury resort Bright’s Creek.

Delivery Agent, the electronic commerce company that works with several TV programmers and made Katy Perry’s Super Bowl XLIX halftime show in 2015 “shoppable,” announced Thursday (September 15) that it had filed voluntary Chapter 11 bankruptcy and is seeking a sale.

San Francisco-based Delivery Agent filed for voluntary Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware, and announced it has obtained a commitment for debtor in possession financing that will, if approved by the court, will provide the Company with the necessary liquidity to maintain normal business operations during the Chapter 11 process.

The Wall Street Journal said the filing comes after Delivery Agent’s plans for an IPO failed, and that it hopes to clear more than $65 million in unsecured debt, noting that it had $20 million in unpaid bills after shutting down a Denver-based agency called The Band that serves as a sales representative for cable operators and satellite providers.

Delivery Agent said it will be soliciting competitive bids “with the goal of maximizing value for all stakeholders,” adding that the sale process is on a “fast track” that is aiming for completion by year-end.

Company founder and CEO Mike Fitzsimmons characterized this as “a very positive development for our company and our customers…Through these proceedings we’re initiating a process that preserves company value, allows the company to reorganize its business affairs, and establishes a necessary foundation for future growth and profitability."

RELATED: Delivery Agent Embeds ShopTV with Sony

“We will continue to deliver outstanding services to our partners today, throughout the Q4 holiday season, and beyond,” he added.

From the TV world, Delivery Agent’s list of clients include Discovery, NBCU, Fox, CBS, HBO, Showtime, CBS, FX, Turner, Comcast, Cablevision Systems, AT&T, and Verizon, among others, along with studios such as Lionsgate, Legendary, and Sony Pictures.

RELATED: Delivery Agent Helps Discovery Sell ‘Shark Week’ Merchandise

Per documentation tied to the filing, related debtors include Clean Fun Promotional Marketing, MusicToday LLC, and Shop the Shows LLC.

Matthew English, CTP and Howard Bailey, CTP of Arch + Beam are serving as the company’s financial advisors; Keller & Benvenutti LLP and Pachulski, Stang, Ziehl & Jones LLP are serving as legal advisors; and Houlihan Lokey is the Company’s investment banker.

The air space is open, but the question remains when will there be lift-off for coverage of Houston Rockets games on the new regional sports network operated by DirecTV.

Attorneys for Comcast on the one side and DirecTV, AT&T, the NBA Rockets and MLB’s Houston Astros on the other reached an agreement on Nov. 6 allowing for CSN Houston, the team’s regional sports network home, to morph into Root Sports Houston.

After bankruptcy judge Marvin Isgur on Oct. 30 okayed a reorganization plan sanctioning the sale of the Comcast-Astros-Rockets-owned CSN Houston, which went into chapter 11 protection in September 2013, Comcast on Nov. 5. sought a stay with U.S. District Judge Lynn Hughes while it appealed the decision.

Barristers on both sides of the bench agreed that Comcast could continue its appeal on the financial aspects of Isgur's call as it tries to recoup more of a $100 million secured loan that was used for start-up costs in 2012 by the embattled CSN Houston, and that the MSO, whose NBC Sports Group operated the RSN, would not contest the launch of the new network. Hence, Hughes on Nov. 6 denied Comcast’s appeal of Isgur’s order while terminating the automatic 14-day stay acceded as part of the bankruptcy judge’s decision, opening the door to the sale of the network and transfer of the teams’ media rights to Root Sports Houston.

At this juncture, the time line for meting out a resolution for the money stemming from the secured loan – Isgur’s reorganization calls for Comcast to receive $26 million of the $100 million – could be ahead of the new RSN starting. Although the Houston Chronicle has reported the network could tip off on Nov. 14 with the Rockets' game against Philadelphia, DirecTV, which will operate the new service, declined to comment.

When it does launch, Root Sports Houston will be carried by the DBS company and the telco, which are awaiting federal approval of their merger, as well as Comcast.

CSN Houston never gained distribution traction—it only had carriage from Comcast and a handful of smaller provider in the Houston DMA, and not in the rest of its TV territory in Texas, Oklahoma, Arkansas, Louisiana and parts of New Mexico. As such, it never collected enough license fees  -- $4 per month per subscriber within its central area, and 70 cents elsewhere --  to pay the clubs their rights fees and meet its other obligations.

Under the reorganization plan, the Astros (46%), Rockets (31%) and Comcast (23%) will lose their network equity positons, and the teams agreed to forego immediate payment of more than $100 million in unpaid rights fees. DirecTV and AT&T are picking up the RSN for $5,000.

The transfer will result in 96 of 141 CSN Houston employees losing their jobs, as the new service won’t retain the service’s news and studio fare.

Will CSN Houston’s Friday night coverage of the Houston Rockets-Dallas Mavericks NBA preseason game be the embattled regional sports network’s last live telecast?

Perhaps.

Closing arguments for the RSN’s year-long Chapter 11 bankruptcy case is set for Tuesday, Oct. 28, at which point Judge Marvin Isgur will be asked to approve a reorganization plan that sells CSN, which is owned by the Rockets, MLB’s Houston Astros and Comcast’s NBC Sports Group to DirecTV and AT&T U-verse. In turn, the DBS provider and the telco, which are awaiting federal approval of their proposed merger, would relaunch the service under the Roots Sports Houston banner with carriage from the owners and Comcast in the Houston DMA and beyond.

After hearing testimony from the parties on Wednesday Oct. 22 – the same day that CSN Houston personnel delivered their final live studio and news shows, as 96 of the service’s 141 employees will lose their jobs under the plan -- Isgur set next Tuesday for closing arguments.

The teams and DirecTV/AT&T hope the plan will be approved that day. That means the Rockets ‘ game against Utah on Oct. 29 would air on the new channel. (The team starts its season on Oct. 28 in Los Angeles against the Lakers with the contest airing nationally on TNT.)

However, Comcast opposes the plan for a number of reasons, and is still looking to reclaim some compensation for the $100 million loan it provided to the RSN for start-up costs, the studio build-out and early rights fee allotments; fair value for NBC Sports' 22% stake in the network that was valued at $700 million in 2010 and would be sold for just $5,000 to DirecTV/AT&T; and exculpation from creditors upon the transfer of the network.

Comcast/NBC Sports could also file an appeal that would further delay matters. If that were the case, it’s unclear whether other Rockets regional contests – their home opener versus the Boston Celtics is scheduled for Nov. 1 – would continue to air on CSN Houston. Bankruptcy protocol usually mandates that business/operations continue until case resolution. In the interim, CSN Houston is currently airing a mix of infomercials and other filler fare.

Under Isgur’s plan, the teams would not only lose their equity in the succeeding service, but abandon their claims to some $100 million in rights fees owed by CSN Houston.

Comcast/NBC Sports declined to comment.  DirecTV and AT&T declined to comment.

Launched in October 2012 and seeking a monthly subscriber fee in the $3.40 neighborhood, CSN Houston failed to gain distribution traction beyond Comcast and a few smaller providers in the Houston DMA, much less with DirecTV, AT&T U-verse, Time Warner Cable, Suddenlink, Charter and Verizon, among others, in its five-state TV territory that also stretches to Oklahoma, Arkansas, Louisiana and New Mexico.

As such, the RSN never generated nearly enough affiliate revenues to pay the teams their rights fees and meet its bills.