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.
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.
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.
Times must be tough.
32 Comments
Matzo November 19, 2012 10:19
Just sell the team already. Get your 4 billion and leave. Rather that than this nonsense about lower payroll and higher owner profits.
Moshe Mandel November 19, 2012 10:35
Take the money. Makes me excited. Yuck Yuck
Duh November 19, 2012 10:36
Even George was in this game to make money, so I don’t know why it comes as such a surprise to folks that his sons would follow suit. Yes, George was more ego-driven. Yes, owning the Yankees was more important to him than maximizing profits. I get all that. But the team already has the highest payroll in the game, by a big margin. And with the luxury tax, they pay considerably more and have not gotten the desired results, which is winning a championship. We all have screamed for years about the horrible contracts and all the wasted money, but now we’re going to be in an uproar because they are finally showing some restraint? Sorry, but for $189 million, you ought to be able to field a considerably good team. Draft better, cultivate prospects better, coach better, assemble a team better … we’re not exactly the Miami Marlins here, folks, nobody is slashing the team to pieces. Personally, I’m all for it, even though it may mean a few lean years while we rid ourselves of these ridiculous contracts.
AGE November 19, 2012 12:50
We couldn’t slash this team even if we wanted to!
Nick Social November 20, 2012 02:04
Fuck lean years.
I have no problem getting under the luxury tax, but you can’t sacrifice the present to get there.
Duh November 20, 2012 11:57
I would hardly consider a $189 MILLION payroll to be “sacrificing”. My point is that if they avoid any more additional albatross contracts over the next few years so we can rid ourselves of these and in the meantime give some prospects a chance and find guys like Ibanez and Ichiro to supplement, we’ll be okay. There are no huge free agents anyhow (I don’t want Grienke or Hamilton) so instead of paying Swisher, can we not just throw in one of the prospects? You can’t do anything about Tex, A-Rod, Jeter, Cano (next year) anyway, but in the meantime you can limit the damage by NOT going after any huge free agents. Seriously, if you could somehow unload A-Rod, even if you still had to pay 75% of his contract, it would be a huge savings in more ways than one.
Correction November 21, 2012 00:17
The Yankees do not have the highest payroll. See: Los Angeles Angels; Los Angeles Dodgers; etc.
For reference for all of the small brainers out there, the Angels completed a blockbuster broadcasting deal with FOX a year ago, which is where they added an ADDITIONAL 150 million per year to their payroll (Pujols; C.J. Wilson, etc).
Finally! November 21, 2012 04:10
Glad someone pointed this out, and glad I’m not the only one living in the dark and believing all the headlines.
DormantUlcer November 21, 2012 14:08
Eat a penis.
Food Stamps November 23, 2012 11:50
You suggest 2 impossibilities:
1. Trading A-Rod (and paying only 75% of his contract. HAHAHHAHA)
2. Just throw a prospect into Swisher’s position. Who? Name the prospect.For 162 games? Hitting at .220 with 8 HRs and 35 RBIs? Yeah… no.
Food Stamps November 23, 2012 11:47
The Dodgers actually have the highest payroll. Also, I’m all for some fiscal responsibility from the Yankees in the form of not giving out ridiculous contracts to A-Rod, Tex, etc. But that doesn’t mean that we close our pockets completely and say “well, tough shit, we can’t sign someone for 2 years $10 million.” It simply means we don’t give Josh Hamilton an 8 year deal.
There is a big difference between not spending any money (which we are currently doing), and just not spending money in a stupid manner. No more Giambi, A-Rod, Tex, etc, but please, please, please still spend money to improve the team.
Chiggie November 19, 2012 11:13
Can’t do it all at one time. I like the network because it is all Yankees. I do not want that change. That would be like all the other networks. What’s the point?
bargain shopper November 19, 2012 12:58
Be patient prices will drop unlike beer and hot dog prices etc at the stadium while you miss an inning in line.
Mike Axxisa November 19, 2012 13:01
time to get out of my suburban-nj-basement-sublet!
Joe Páwlikowski November 19, 2012 15:41
You can always move in with me and we could cuddle every single night.
Scrooge McDuck November 19, 2012 16:16
I’d buy the team if they weren’t so boring. It’s more fun to have sex with Daisy on the money in my vault.
Benny Blanco from Da Bronx November 19, 2012 16:33
We should be all over the Indians for Cabrera and Choo. Trade them Hughes and who else?
the farm November 20, 2012 15:32
me?
TSJC November 21, 2012 14:10
MY SPIC!
More fun than a barrel of Cabreras November 27, 2012 19:58
Orlando plays for the Indians?
AW November 19, 2012 17:55
This makes a lot of sense if you’re planning to sell a baseball team.
YES pays under-value to broadcast the Yankees as a matter of Steinbrenner financial strategy. The less money the Yankees make, the better off they are in terms of MLB revenue sharing. So, they don’t reap a lot of revenue for their Broadcast rights, but since the Steinbrenners own YES too, it’s essentially just transferring the revenue to a different entity with no financial penalty.
Now if Murdoch owns 49%, There’s not as much incentive to offer YES the same cheap broadcast rights, which means the Yankees should get more Broadcast revenue, which makes their books a lot better for a potential suitor.
In other words, it makes financial sense to own the Yankees and YES. It doesn’t make nearly as much sense to own one without the other
Mike Burke November 20, 2012 13:03
I say, sell the whole kit and kaboodle to CBS. Hell, it worked before.
RAB Editor-in-Chief November 19, 2012 23:16
Joey Paws, would love to move in but what about the “girlfriend”.
Can we get sweaty to Slayer’s Reign in Blood ??
Joe Páwlikowski November 21, 2012 14:11
I can kick the “girlfriend” out in a second. Doug can find a new place.
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Killer Clown November 20, 2012 11:54
Tough times indeed. I guess my bid didn’t win.
Of Course! November 20, 2012 15:21
Yes… unwinding the Estate planning and paying astronomical taxes on the sale of the Yankees is just the kind of financial blunders that successful financial organizations/individuals do, right? I mean, the revenue was estimated at a paltry 400 million last year. There are PLENTY of other assets they can acquire that will earn the same!
You’ve figured it out! Oh the breadth of knowledge that riddles this site is awe inspiring!
Financial blunders? November 27, 2012 20:01
See A-Rod’s Contract
Estate taxes probably less than the luxury tax. I know, I know, but not as far fetched as suggested by Of Course!
Sorry your family didnt have a R.I.F. course for you November 29, 2012 01:06
400 million net profit a year AFTER Arod’s contract. After ALL of the contracts.
I’m sorry that you are a moron. Must be a tough life for you,
Sorry you cant do basic math November 29, 2012 01:10
Estate taxes on 3-4 BILLION will be less than luxury tax??? What? How many returned check charges do you get a week?
Cant read, cant write. You’re a douche.
I don’t know why I’m even bothering.
I’m attempting a battle of wits with an unarmed person.
Ted Nelson November 23, 2012 23:46
Fuck off Food Stamps …I’ll eat you for lunch in a posting war
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