News Corp. Connects on 49% Stake in YESFox Sports Media Group to Re-enter New York RSN Market via Deal 11/20/2012 6:46 AM Eastern
As expected, News Corp. has reached an agreement to purchase a 49% equity stake in Yankees Entertainment and Sports Network, the cable television home to the New York Yankees.
Under the deal, News Corp. will gain its stake from the current owners of YES -- Yankee Global Enterprises, Goldman and other investors -- who will reduce their holdings in the regional sports network, which also televises games and related programming from the NBA’s Brooklyn Nets.
The transaction, after three years, also paves a path for News Corp. to become the majority shareholder in the RSN with as much as an 80% stake. At that stage, Yankee Global Enterprises would retain a significant minority stake in the network.
YES, perennially the top-ranked RSN in primetime via its Yankees’ coverage, reaches some 9 million home in the clubs’ TV territories. With the deal, Fox will re-enter the RSN game in the New York metro area.
News Corp.’s Fox Sports Media Group is the leader in the RSN space, operating 20 owned-and-operated channels in the U.S.
Financial terms were not disclosed, but published reports had indicated that the transaction would value YES at some $3 billion. News Corp.’s investment is expected to close by year-end.
YES also announced a media rights agreement that will keep Yankees baseball on its air through 2042. The media rights extension is subject to Major League Baseball approval.
“This is a tremendous opportunity to enhance News Corporation’s industry-leading portfolio of sports properties, while also strategically re-entering the New York market,” said James Murdoch, deputy COO of News Corp. in announcing the deal “The YES Network represents the gold standard for regional sports networks and is a pioneer in sports media. We look forward to working with Yankee Global Enterprises, the network’s management team, and all of our partners to build on a decade of success and take the YES Network to even greater heights.”
Noted Hal Steinbrenner, chairman of Yankee Global Enterprises: “We are excited to have News Corporation as a partner. Its stature and acumen in sports broadcasting on a global scale is unmatched. We look forward to the many opportunities for growth and development that this investment by News Corporation will bring to YES. The Steinbrenner family expects to have a continuing, long-term ownership stake in the YES Network and we will continue our yearly commitment of fielding a championship caliber team for decades to come.”
YES's current management and employee team will remain intact following the closing of the transaction. “We at YES, along with the New York Yankees and our financial partners Goldman Sachs, NJ Holdings and Providence Equity, had an incredible opportunity to build a network that quickly became – and remains -- the number one regional sports network in the country, based on any metric," said YES president and CEO Tracy Dolgin. "We were able to accomplish this because we have the greatest sports brand in the world, the New York Yankees, other important programming such as the rejuvenated Brooklyn Nets, the unwavering support of our board and, last but not least, an incredibly talented and dedicated group of employees.
Fox wrote the book on regional sports networks, and we are excited to partner with Fox and take advantage of this opportunity to build upon our leadership position,” Dolgin continued. “In particular, [YES COO] Ray Hopkins [YES president of production and programming] John Filippelli and I have all previously worked at Fox, and we are eager to renew our working relationships with the company and with many of our friends and former colleagues. At the same time, we are fortunate to continue to benefit from the vision and support of our current ownership. We are particularly thrilled for our valued employees, who will continue with the YES Network and will benefit from the multitude of resources and opportunities that Fox brings to the table. We look forward to having Fox join our winning team.”