The Yankees officially announced an agreement that allows News Corp. to acquire a 49% stake (which could reportedly grow to 80%) in the YES Network from investors like Goldman Sachs, NJ Holdings, and Providence Equity yesterday. The deal is still pending MLB approval and is expected to close by the end of the calendar year. The sale price indicates that the network is worth approximately $3 billion right now, meaning it’s likely more valuable than the team itself. Here’s more on the transaction courtesy of Darren Rovell, Andy Fixmer, and Scott Soshnick…
- The Yankees will sell 9% of their stake in YES, lowering their share to 25% and earning the club a whopping $270M. The team might also receive a $400-500M payment separate from the rights agreement, so think of it like a signing bonus.
- As part of the transaction, the Yankees have extended their agreement with YES to ensure the network will broadcast games through 2042. YES currently pays the team $85M annually for broadcast rights, but escalators will push that to $350M annually (!) by the end of the new agreement.
- Goldman, NJ Holdings, and Providence will retain some stake in YES but will have the option to sell the remainder to the Yankees and News Corp. in four years for a portion of the predetermined market value of $3.8 billion. That’s what everyone expects the network to be worth in 2016.
- Although there has been speculation (including by me) this deal with News Corp. is an indication the Steinbrenner family will look to sell the team down the line, the reporting trio all say this move puts them in better position to hold on to the club long-term.
- Brian Heyman has official statements from Hal Steinbrenner and others, so check that out if you’re interested.