They’ve come a long way from being the home of White Shadow re-runs and a movie with Yogi…
Via the Times:
News Corporation is on the verge of acquiring up to 49 percent of the YES Network from the Yankees and their partners, according to three people familiar with the negotiations. The purchase price for the noncontrolling stake is based on a valuation of the channel at slightly more than $3 billion.
Even a minority stake in YES would be a prize for News Corporation, whose Fox Sports division owns 19 regional sports networks around the country. YES is the most valuable regional sports network, having built its appeal on televising Yankee games, pre- and postgame shows and the “Yankeeography” series to a large, rabid fan base.
YES, which also televises Nets basketball games, has served as a model for other team, league and college-conference-owned channels.
Although News Corporation prefers to have 100 percent ownership of its regional networks, it would be able to share in the profits of YES. And according to the people familiar with the discussions, who spoke late last week, the deal would provide News Corporation a route to eventual control of YES — an option would exist in three to five years for the company to increase its investment to as much as 80 percent. But at that point, the price would be based on a valuation of at least $3.5 billion.
The people who spoke of the deal were not authorized to speak publicly because negotiations were continuing. News Corporation and Yankee officials declined to comment.
The potential price for a News Corporation stake in YES underscores the soaring value of live sports and sports networks. Indeed, at $3 billion, YES would be worth more than the Yankees themselves. The Los Angeles Dodgers were sold earlier this year for a record $2.15 billion — largely on the likelihood that approaching TV negotiations will yield an enormous local television deal from a swelling group of potential bidders.
Through their holding company, Yankee Global Enterprises, the Yankees own 34 percent of YES; another 40 percent is owned by Goldman Sachs and Providence Equity, and the remainder is held by some former owners of the Nets, who operate under an entity called Community Youth Organization.
At some point the Yankees would have to sell some of their stake for News Corporation to reach 80 percent. That decision would rest with Hal Steinbrenner, the team’s managing general partner, who succeeded his late father, George, as the family member overseeing the team. Since YES’s start nearly 11 years ago, Yankee management has exercised control over the pro-Yankee tone of YES; if News Corporation acquires the majority of the network, YES could turn into a more conventional, less-biased sports network.
The deal could also include other payments to the Yankees, including higher rights fees.