Fox to acquire majority control of N.Y. Yankees’ YES Network
Regional sports networks continue to be the hottest ticket in media.
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.
When Fox first invested in the YES Network, some analysts valued the channel at more than $3 billion.
Yankee Global Enterprises is to hold the remaining 20% stake.
One of the next things on the YES Network’s to-do list is to negotiate a new carriage contract with Time Warner Cable, one of the largest cable operators in the New York metro region. Time Warner Cable has said the channel’s distribution agreement is about to expire.
Some have speculated that the negotiation process could be ticklish because Fox and Time Warner Cable have clashed in the past. Fox lost the rights to televise L.A. Lakers and Dodgers games after Time Warner Cable agreed to pay the teams substantially more than Fox had been paying.
The YES Network deal is expected to close during this fiscal quarter.
Fox also announced that Tracy Dolgin, who is chief executive and president of the YES Network, will remain in his role leading the network.
The network, which launched in 2002, provides local TV coverage of New York Yankees baseball and Brooklyn Nets basketball. It is available in about 9 million homes in New York, Connecticut, New Jersey and parts of Pennsylvania. Some cable operators also make the channel available outside the channel’s primary geographic footprint.
“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.
Fox Sports Media Group has 22 owned-and-operated U.S. regional sports networks, including two sports channels in the Los Angeles area.
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