YES Network Has A New Owner

ImageA staple in the New York media market, YES (Yankee Entertainment and Sports) Network now has a new owner: Rupert Murdoch’s News Corporation.  News Corp will now own 49% of the network, now valued at roughly $3 billion.  Yankee Global Enterprises LLC (which is owned by the Steinbrenner family), as well as Goldman Sachs, will subsequently lighten their ownership grip, with the New York Yankees earning $500 million in the process and YES Network broadcasting Yankees games until 2042.

In three years, the value of the YES Network will exceed $3.8 billion (according to the Wall Street Journal) thanks to this agreement, and in turn, News Corp.–who also owns FOX–can own up to 80% of the network.  Steinbrenner’s Yankee Global Enterprises would still retain some control.

The $500 million payment to the Yankees comes from FOX, who retains the right to broadcast Yankees games, with $300 million of it coming by the time News Corp closes their deal with YES. The remaining $200 million will come in various forms in the next three years.  According to the Wall Street Journal and Associated Press, the team’s stake in the network will decline from 34 percent to 25 percent over this time period.

The deal with News Corp. allows the network to avoid tax gain increases in the fiscal year of 2013,  and with this new partnership, YES’s stipends to the Yankees will compound at 7 percent, compared to the previous contract, which pegged the fees at a 4 percent compound rate.  Again, this deal in incredibly lucrative for the Yankees: by 2042, YES Network will be paying the team $300 million.

Founded in 2002, YES Network broadcasts New York Yankees and Brooklyn Nets games during their respective seasons.  Also broadcasting Arsenal FC matches, the Football Association Challenge Cup, and UEFA Champions League on tape delay, the network’s sports grip for the New York/New Jersey/Connecticut market has grown exponentially.  With FOX in the picture, look for the Yankees brand to continue to grow in the national spotlight.  Make no mistake: despite the Steinbrenner’s desire to get under the $189 million soft budget imposed by Major League Baseball’s new Collective Bargaining Agreement, it is clear they are not suffering financially at all.  If anything, perhaps this new deal could perhaps spark a change-of-mind.

With a mega-partner in News Corp, a precedent-setting owner in George Steinbrenner and a demanding fan-base, you would hope so.

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