YES Network has local media rights to the New York Yankees and Brooklyn Nets and becomes the newest regional sports network for News Corp. The network commands almost $3 per subscriber per month in fees, according to SNL Kagan, making it among the most lucrative RSNs in the country. (Time Warner Cable’s new LA channels that carry the LA Lakers get a reported $3.95 per sub per month.) The News Corp-YES deal means current owners Yankee Global Enterprises, Goldman Sachs and others will reduce their stake, and News Corp has the option to acquire an additional stake after three years that could give it up to 80% of the network. No other deal terms were announced, but the acquisition is reportedly valued at $3 billion — lower than the $4 billion sellers had suggested. Here’s this morning’s release:
NEW YORK – November 19, 2012 – News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) and Yankee Global Enterprises today announced an agreement that calls for News Corporation to acquire a 49 percent equity stake in the Yankees Entertainment and Sports Network (YES). The YES Network delivers exclusive live local television coverage of New York Yankees baseball and Brooklyn Nets basketball, as well as other leading local and national sports-related programming. The YES Network also announced a media rights agreement that will keep Yankees baseball on the YES Network through 2042.
The media rights agreement is subject to Major League Baseball approval. The investment is expected to close by the end of the calendar year.
The current owners: Yankee Global Enterprises, Goldman Sachs and other investors will reduce their ownership in connection with this transaction. After three years, News Corporation may acquire an additional stake in the YES Network that could bring its ownership to 80 percent, at which time Yankee Global Enterprises would retain a significant minority stake in the network.
Since its inception in 2002, YES has grown its footprint to include local availability in New York, Connecticut, New Jersey, and parts of Pennsylvania, as well as national availability on several cable and satellite television distributors. The network currently showcases live Yankees and Nets games to approximately 9 million households in the teams’ television territory in the New York area. Outside of the New York area, the YES Network also distributes a variety of national programming to millions of homes across the country.
“We’ve long been a believer in the unique appeal of sports entertainment. Partnering upstream with rights holders is even more important today in the dynamic media marketplace in which we compete. 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 Chief Operating Officer, News Corporation. “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.”
Hal Steinbrenner, Chairman of Yankee Global Enterprises, said, “This transaction underscores the great value we and our partners created in establishing the YES Network and sets the network on the path for even greater achievements in the future. 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.”
Fox Sports Media Group is the leader in regional sports programming, operating a leading array of 20 owned-and-operated U.S. regional sports networks, which collectively produce over 5,000 live local events each year and serve as the local TV homes to more than half of all MLB, NHL, and NBA teams.