News Corp. Acquires 49% Equity Stake in YES Network
Just over a decade ago, the YES Network was a twinkle in the eye of New York Yankees owner George Steinbrenner. Now it is one of the most successful sports-television networks of all time.
After rumors abounded for much of the week, News Corp. and Yankee Global Enterprises today announced an agreement that calls for News Corp. to acquire a 49% equity stake in the YES Network, the exclusive TV home of MLB’s New York Yankees and the NBA’s Brooklyn Nets. According to various reports, News Corp.’s stake is worth approximately $1.5 billion.
As part of the agreement, YES Network’s current owners — Yankee Global Enterprises, Goldman Sachs, and other investors — will reduce their ownership. News Corp. Chairman/CEO Rupert Murdoch can increase the stake to 80% after three years.
“Fox wrote the book on regional sports networks, and we are excited to partner with Fox and take advantage of this opportunity to build upon our leadership position,” said Tracy Dolgin, president/CEO of YES Network, in an official statement. “At the same time, we are fortunate to continue to benefit from the vision and support of our current ownership. We are particularly thrilled for our valued employees, who will continue with the YES Network and will benefit from the multitude of resources and opportunities that Fox brings to the table. We look forward to having Fox join our winning team.”
Alongside the announcement, the YES Network also struck a media-rights extension with the Yankees to keep the team on the YES Network through 2042. The agreement is subject to Major League Baseball approval. The investment deal is expected to close by the end of the calendar year.
“We’ve long been a believer in the unique appeal of sports entertainment,” says James Murdoch, deputy COO, News Corp. “Partnering upstream with rightsholders is even more important today in the dynamic media marketplace in which we compete. This is a tremendous opportunity to enhance News Corp.’s industry-leading portfolio of sports properties, while also strategically re-entering the New York market. The YES Network represents the gold standard for regional sports networks and is a pioneer in sports media.”
YES Network, which launched in March 2002, is already filled with many former Fox employees, including Dolgin, COO Ray Hopkins, and President of Production and Programming John Filippelli.
“We at YES — along with the New York Yankees and our financial partners Goldman Sachs, NJ Holdings, and Providence Equity — had an incredible opportunity to build a network that quickly became — and remains — the number-one regional sports network in the country, based on any metric,” said Dolgin. “We were able to accomplish this because we have the greatest sports brand in the world, the New York Yankees, other important programming such as the rejuvenated Brooklyn Nets, the unwavering support of our board and, last but not least, an incredibly talented and dedicated group of employees.”
Fox Sports Media Group already operates 20 regional sports networks in the U.S., each carrying an array of rights agreements with teams across the MLB, NHL, and NBA.
According to a Forbes report in April, YES Network generates more than $200 million in annual earnings before interest, taxes, depreciation and amortization, making it worth more than $3 billion. The network currently pays the Yankees $85 million annually for its broadcast rights.