Nov
19

Update: News Corp. closing in on deal for YES stake

By

Nov. 19th: News Corp. would acquire 49% of YES in the transaction according to Richard Sandomir and Amy Chozick, but there would be the option to increase their stake to as much as 80% in 3-5 years. I can’t help but wonder if that option is an indication that the Steinbrenners have their eye on selling the club down the line. The network, meanwhile, is worth a bit more than $3 billion, meaning it is likely more valuable than the team itself. In-freakin’-sanity.

Nov. 15th: Via Matthew Futterman: News Corp. is closing in on a deal to purchase a minority stake in the YES Network. They have their eye on the nearly 40% share currently owned by long-time investors Goldman Sachs and Providence Equity Partners. The Yankees own about one-third of the network and aren’t selling any portion of their share.

Last month we learned that the team was looking for investors to buy out Goldman and Providence. News Corp. is a monster, the world’s second largest media group in terms of revenue. They have stakes in FOX, The New York Post, and The Wall Street Journal among many other media outlets. Futterman says YES is likely to raise the monthly fees (which currently lag behind other regional networks) it receives from cable providers when their contracts expire in the coming years. In other words, the deal will make the Yankees a ton of money and your cable bill might be slightly higher in the future. Business as usual, really.

Categories : Asides

59 Comments»

  1. Jerkface says:

    Hooray! The New York Profits #1!

  2. Murderers' Row Boat says:

    With all this new money coming in does that mean beer and food at the stadium will be cheaper? Hey, why are you all laughing? Stop that. I said, STOP THAT!

  3. Andy Pettitte's Fibula (formerly Manny's BanWagon) says:

    Does this mean they’re scrapping the 2014 bullshit budget?

    If not, who cares about billionaires becoming even richer at our expense.

  4. stu phillips says:

    Just dont go to any games.

  5. Need Pitching & Hitting says:

    As long as this doesn’t lead to a Buck/McCarver YES crew, no big deal.

  6. Pat D says:

    Fuck News Corp.

    That is all.

  7. dan gen says:

    189,189,189,189,189,189,189,189,…..r u sick of it….remember 189 when u are sitting in your overpriced seat watching the aging yanks.

  8. Dropped Third says:

    Ok fuck the 189… I want the boss back……

    • Rich in NJ says:

      I would settle for a first-rate mL system that is regularly churning out at least one top tier talent per year who is then shown the patience to succeed at the ML level. Sort of what Gene Michael did so that the franchise was able to be in a position to win 5 WS since ’96. Unfortunately, they haven’t shown the same scouting/development/patience skillset since then.

      That failure is the primary reason why they need to spend more.

  9. Ppiddy says:

    This is horrible news. I don’t know if I can watch anything owned by News Corp. Can’t that Aussie go buy an Australian soccer network or something? Soon he’ll have Michael Kaye spewing far right propaganda like the NY Post!

    • TomH says:

      Hard to tell which would be worse: “right” propaganda or “left.” To a dog they smell alike.

    • Herby says:

      Michael Kay is too busy explaining why he doesn’t like Mayo, hasn’t watched Sesame Street, never seen Star Wars, or needs Paul O’neill to teach him how to pleasure his wife. His idea of Right wing would be the right side of a chicken.

  10. AySz88 says:

    There will be “advertisers” concerned with the “pandering” or “slant” (read: lack of anti-left-wing vitriol) of various commentary… in 3… 2…

  11. AySz88 says:

    There will be “advertisers” concerned with the “pandering” or “slant” (read: lack of anti-left-wing vitriol) of various commentators… in 3… 2…

  12. Coolerking101 says:

    So let me get this straight. The Steinbrenners are potentially selling a majority share in their cash cow tv network while simultaneously lowering payroll so that the team is below the luxury tax threshold. If those aren’t sure signs of management looking to sell the team, I don’t know what is.

  13. TomH says:

    I can’t help but wonder if that option is an indication that the Steinbrenners have their eye on selling the club down the line.

    Believe it. At least twice in the past two years, we’ve heard them deny any intention of selling the team. That’s confirmation enough that they’ll probably be bailing out.

    Didn’t someone post, earlier today, that they don’t make their dough off ship building any more, but, instead, off the Yankees? If so, then why not take the money and run, sooner rather than later, before various financial apocalypses occur?

  14. Rich in NJ says:

    I think they will be selling, which is why they are reducing payroll to remove as many future financial obligations as possible. It makes the spreadsheet look better, even if the team starts struggling (relative to past success) near-term.

  15. pat says:

    Is anyone else not all that concerned with the 189 limit? It’s forcing us to have to use and develop our own talent for the next couple years. Isn’t that what we all have been hollering about since forever? They never said that the 189 was going to be permanent, just a 2 yea thing to allow the tax to reset itself. I think if you offered almost any company in the world the chance to save 20, 30, 30 or 50 million dollars (whatever it adds up to) by doing something that is unlikely to affect your long term earning potential I think they would look into it. Plus, it’s not like the budget is really going to handcuff us going forward. Did we want to give Swisher 4 or 5 years? How about 4 or 5 for Grandy? 10/250 for Cano? Seems like the hard cap could keep us from falling into that all too familiar trap of buying a guy for one or two more prime years then getting stuck with him as he enters the decline phase. All I’m saying is I’m not freaking out about it. Is there anybody set to become a FA in the next two years truly worth breaking the bank for?

  16. stu phillips says:

    I hope thats true, about selling team.

  17. RetroRob says:

    We know little about the details of this transaction.

    First, as most know, although clearly not all, the Yankees do not own the majority of YES. The Yanks own 34% of the network, Goldman Sachs owns another 34%, a group of former owners of the Brooklyn Nets hold about 27%, with Providence Equity owning the rest at about 5%. Goldman and the former Nets group have been looking to unload their shares since 2007, and perhaps so is Providence. As far as I know, none of the stories have talked about where the shares are coming from, but it’s clear the bulk, if not all, come from Goldman, and the others may have decreassed their shares. Maybe when the dust settles the Yankees will have purchased some of the shares too and it will be 51% Yankees and 49% Newscorp.

    Bottom line, in the near term I don’t see additional money coming to the Yankees from this transaction to spend on free agents. They might even have less money if they increased their shares, although I’m doubting that’s the case.

    The rumor was the Yankees wanted a new partner to buy the Goldman shares with expertise in the cable/programming market. Certainly Newscorp fits that in a big way. As part of the deal, Newscorp supposedly will represent YES in negotiations to increase the subscriber fees the Yankees collect from cable networks, so that’s one will cash will increase to the YES Network owners.

    No one (yet) knows if Hal has agreed to absolutely sell controlling interest in 3-5 years, or specifically what types of shares are being sold. To date, despite 66% being owned by other entities, the Yankees always maintained controlling voting interest. Who knows how that would change. Even if the Yankees gave up controlling interest, they still own the Yankees brand and can then take that and market the TV rights to Time Warner, and what is YES without the Yankees? The value of YES is based on the Yankees, which is why it’s kind of funny the network is valued more than the team.

    Last, Newscorp has talked about creating a national sports network to compete with ESPN, and some believe this might be part of that plan. If so, then the Yankees and Steinbrenner could end up being owners in that.

    Too many questions and almost no information beyond the Yankees are surely going to profit from this longterm, even though they may not today.

  18. Robinson Tilapia says:

    It’s YES, not the Yankees. I don’t necessarily like the investor, but whatever.

    I agree with Rob. Nothing to do here but read tea leaves.

  19. Need Pitching & Hitting says:

    Does anyone know then the Yankees’ current TV rights agreement expires?

  20. bonestock94 says:

    lol at people complaining about $189m

  21. Another Bronx Dynasty says:

    Handwriting is on the wall now for the Fantstic Four Steinbrenner’s to sell the Team.

    It’s their fathers passion and there all going through the motions. Due the Fan Base a favor & sell the team to Sir Donald Trump!

  22. smurfy says:

    I’m guessing Goldman and Private Equity represent many well heeled investors, and it is surprising that they want to sell now their (derivative) interest in the Yanks. Returns elsewhere are none too plush.

    Maybe the tail is wagging the dog just too much. The Yankees would be both more flexible and more salable if they eschew overly long term contracts. Guess Yankees pay the league taxes, not YES.

    But the same people who like young stars are willing to deal suspect prospects, three for a buck. So, I’m with you, Pat.

  23. smurfy says:

    I guess the thing isn’t glued up properly, the Yankees’ performance is YES’ concern, so they’d want nothing but superstars, damn a salary budget, to get viewers. But the Yankees face league controls, and have to fund their minors. Bifurcation of interest, so the Yankees have to control the majority of YES, or there’s that 80% option.

    The Chicago Tribune tried to sell the Cubs games nationally, but they didn’t spend on payrolls or minors. Let’s hope News Corp can do better.

  24. Actuallymissingtheboss says:

    I’ve been a Yankee fan since childhood, even though it’s clearly stupid to give a poop about grown men swinging their wood. But this will do it. This will kill it. If they sell to that devious nasty cutthroat sonuvab.. I will have a lot more free time to waste on other pursuits. I await your decision, suits.

    • Kentucky Bomber says:

      Same here…I’ve been living and dying with the club since the days of, well, let’s just say Marv Throneberry hit a Yankee homer the first game I ever saw at the Stadium. But if Murdoch puts one finger on the club I am done. That he is human garbage is enough, what he has done to the world of journalism is enough, but to a more cogent point, look what he did to the Dodgers when he got them from the O’Malley family. Gutted them for every penny he could get, then turned them over to another vulture who picked the bones. The Yankees would be no different.

  25. Gonzo says:

    Holy crap. Darren Rovell is reporting that there is talk that this could include an additional payment to the Yankees outside of the Yes deal. That payment could be upwards of $400/$500mm dollars. This would be compensation for extending the rights to 2041. He also thinks this means that they won’t sell. Remember, this is Darren Rovell not Sandomir though.

  26. smurfy says:

    The $400/500 mm sounds like the premium, but the strike price makes a big difference.

  27. Dave says:

    Get ready for the NY Times, MSNBC, CNN, NBC, ABC, CBS, and every other left wing media outlet to declare war on the Yankees. It has already started in the NY Times.

  28. RetroRob says:

    Deal is basically complete.

    While final details are not out, there’s nothing in the deal that would indicate the Steinbrenners have any plans on selling the team. I can make an argument that it does, but it seems more likely it’s the opposite. This will make their YES investment even more profitable, both short and longterm.

    Oh, and, uhhh, Randy Levine is not going anywhere. He’s the guy who helped the Yankees structure their very friendly tax arrangement with the city to build the new Stadium, he was key in helping George launch and build the YES Network, and he was key in this deal with Newscorp. He has made billions for the Steinbrenners. He is more important to them then Cashman. He’s more than doing his job as president to such a degree that the Steinbrenners will allow, and forgive, his ocassional forays into baseball operations, such as signing Soriano, which didn’t exactly turn out so bad afterall.

  29. @coffeewithian says:

    Here’s my main concern:

    Will the network keep the YES name once Fox takes over (and I don’t see why they wouldn’t purchase the 80% in the future)? I have always been a fan of the fact that the Yankees had their own channel, and now there’s a huge chance that the Yankees will be playing on a reformulated Fox Sports Net NY, with the same generic graphics and music as the other Fox RSNs have.

    I would not be surprised if we see a merger between MSG and SNY as a result, with Comcast, Time Warner, Cablevision, the Mets and MSG holding equity. A Fox-owned YES is damaged goods…

Leave a Reply

You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

If this is your first time commenting on River Ave. Blues, please review the RAB Commenter Guidelines. Login for commenting features. Register for RAB.