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Saturday, January 25, 2014

Fox to acquire majority control of N.Y. Yankees’ YES Network

Wonder if Michael Kay will balk at his show’s name change to CenterStaged.

21st Century Fox said Friday that it was taking a majority stake in the New York Yankees Entertainment and Sports Network, known as the YES Network, a little more than a year after Fox first invested in the popular regional sports channel.

Fox said it would increase its stake to 80%, up from the 49% interest it bought in December 2012.

Fox declined to say how much it was paying for its increased interest. It paid $584 million for the 49% stake in 2012.

At that time, the entertainment company headed by Rupert Murdoch also paid $250 million to help cover some programming costs. That put Fox’s initial investment in the channel at $834 million, according to regulatory documents.

Fox had long planned to own a majority stake in the channel, but it increased its holdings more rapidly than initially envisioned. The value of sports channels has accelerated in recent years.

...“Our investment in the YES Network underscores our commitment to growing our global sports portfolio with offerings that are exceptional and unique,” James Murdoch, Fox deputy chief operating officer, said in a statement. He is also a board member of the Yankee Global Enterprises.

Repoz Posted: January 25, 2014 at 07:17 AM | 17 comment(s) Login to Bookmark
  Tags: media, yankees

Reader Comments and Retorts

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Statements posted here are those of our readers and do not represent the BaseballThinkFactory. Names are provided by the poster and are not verified. We ask that posters follow our submission policy. Please report any inappropriate comments.

   1. Pasta-diving Jeter (jmac66) Posted: January 25, 2014 at 08:44 AM (#4646118)
So Ann Coulter will replace Suzyn Waldman?
   2. ??'s Biggest Fan! Posted: January 25, 2014 at 09:39 AM (#4646138)
as a progressive liberal and ardent yankees fan, that's a trade I'd do in a heartbeat. twice on sundays.
   3. PreservedFish Posted: January 25, 2014 at 09:45 AM (#4646140)
Two great tastes that taste great together.
   4. TerpNats Posted: January 25, 2014 at 09:52 AM (#4646144)
A sidebar to this is that it probably means most of the NYC area will get the Big Ten Network, which Fox owns a major portion of, so next fall fans of Rutgers, Maryland and the 12 other Big Ten members will have the channel.
   5. Jim Wisinski Posted: January 25, 2014 at 10:42 AM (#4646160)
What does this mean for when the broadcast contract comes up for renewal? If I recall correctly the Yankees give YES a sweetheart deal on the rights currently as a profit-hiding mechanism since the money ends up in their pockets anyway. I assume that has to change next time with Fox owning 80% of the channel, most of that extra money won't be going to the Yankees ownership any longer.
   6. willcarrolldoesnotsuk Posted: January 25, 2014 at 11:07 AM (#4646172)
"Welcome to the game, everyone; I'm Michael Kay. I'm joined in the booth by my colleagues Governor Sarah Palin and Mayor Rudy Giuliani. Looks like we've got a good matchup today, the big man CC Sabathia is on the mound for the Yanks, and opposing him will be some communist who hates the Yankees and hates America. Rudy, take us through this matchup, will you?"

"9/11."
   7. cercopithecus aethiops Posted: January 25, 2014 at 11:16 AM (#4646174)
RE#5: According to Forbes, the Yankees only owned 34% of YES prior to the FOX's initial buy-in; that deal took them down to 27%. IIRC, the team never owned more than 60% of the network. How much lower the Yankees' share goes depends on whose shares FOX is acquiring this time around. Also, MLB put some fair market value language into the revenue sharing plan to address team-owned media networks a few years back.
   8. Pat Rapper's Delight (as quoted on MLB Network) Posted: January 25, 2014 at 12:17 PM (#4646210)
As long as MSNBC doesn't buy NESN....
   9. Rough Carrigan Posted: January 25, 2014 at 12:27 PM (#4646214)
What should we infer about the Steinbrenner family from this? Do they have any outside business interests at all or are they sort of new millenium Calvin Griffiths who see that it would be a good time to cash out?
   10. cercopithecus aethiops Posted: January 25, 2014 at 01:03 PM (#4646227)
Currently FOX owns 49% and the Yankees own 27%, with the remaining 24% held by other investors. FOX will increase it's stake to 80% and the Yankees' share will decrease to 20%. The Steinbrenners are only "cashing out" about a quarter of their current stake in YES. So I'd say you should probably only infer about 25% of what you were thinking you could infer. ;-)
   11. Repoz Posted: January 25, 2014 at 01:07 PM (#4646229)
I saw this coming in 1973.
   12. hardrain Posted: January 25, 2014 at 04:38 PM (#4646294)
Michael Kay is a liberal. How will this work?
   13. Bote Man Posted: January 25, 2014 at 04:56 PM (#4646300)
Fox had better make hay while the Sun shines. TV does not last much beyond the year 2040.*

* That's what LtCdr Data reported retrospectively in the year 2364.
   14. Dr. Vaux Posted: January 25, 2014 at 05:52 PM (#4646313)
That actually sounds like a fairly good estimate, although it could be sooner.
   15. cercopithecus aethiops Posted: January 25, 2014 at 07:15 PM (#4646343)
Fox had better make hay while the Sun shines. TV does not last much beyond the year 2040.*


YES is a content provider. People will pay for that content even if they aren't receiving it via broadcast or cable, or watching it on a TV. But thanks for explaining why Time Warner only bought the Dodgers' broadcast rights through 2039.
   16. ptodd Posted: January 25, 2014 at 07:23 PM (#4646346)
Yes is valued at 3.8 billion. How did Fox get 49% for 584 million. Should have cost them closer to 2 billion which is what they paid

http://mediadecoder.blogs.nytimes.com/2012/11/20/news-corporation-completes-deal-for-stake-in-yes-network/?_php=true&_type=blogs&_r=0
   17. ptodd Posted: January 25, 2014 at 07:32 PM (#4646348)
5. Jim Wisinski Posted: January 25, 2014 at 10:42 AM (#4646160)
What does this mean for when the broadcast contract comes up for renewal? If I recall correctly the Yankees give YES a sweetheart deal on the rights currently as a profit-hiding mechanism since the money ends up in their pockets anyway. I assume that has to change next time with Fox owning 80% of the channel, most of that extra money won't be going to the Yankees ownership any longer.


After the deal in 2012, in which the Yankees got over 400 million for extending the rights to Yes until 2042, the Yankees got 85 million a year with a 5% escalator each year until 2042. They also got about 350 million for giving up 9% of their ownership mistake. At 25% ownership stake, the Yankees were looking at 50 million a year in profits from Yes.

At 20% ownership stake, with Fox having acquired 80%, Wendy Thurn at FG tweets that the agreement calls for a higher rights fee. She guesses 150 million. Presumably with a 4-5% escalator until 2042. If so, their deal is comparable with the Dodgers. The Dodgers deal averages 240 million after revenues sharing for 25 years, but presumably starts off at lower dollars in the first year with a 4% escalator that tops out at 350 million by the end of the deal. Yankees will also retain 40 million a year in profits at Yes at the lower ownership stake of 20%, assuming Fox bloated management does not siphon off all the profits





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