News Corp. has acquired 49% interest in YES, the regional sports network… (Aaron Vincent Elkaim, AP )
News Corp. has acquired a 49% stake in YES, the Yankees Entertainment and Sports Network, and extended a TV rights deal that will keep the Bronx Bombers' baseball games on the network through 2042.
Financial details of the deal announced Tuesday were not disclosed.
YES has been valued at around $3 billion, although News Corp. would have paid less than $1.5 billion for its stake if assumption of the operation's debt was involved in the transaction.
The regional sports network provides local television coverage of New York Yankees baseball and Brooklyn Nets basketball. The 10-year-old channel is available in about 9 million homes in New York, Connecticut, New Jersey and parts of Pennsylvania.
The deal substantially reduces stakes of YES' current owners -- the Yankee Global Enterprises and investment banking firm Goldman Sachs.
Having an ownership stake in an important regional network and a 30-year TV rights deal locked up will give the global media company, controlled by Rupert Murdoch, a hedge against the skyrocketing costs of sports rights fees.
News Corp. in three years also will have the option to increase its stake to 80%. That would allow Goldman Sachs to exit the venture and leave Yankee Global Enterprises with about a 20% interest.
News Corp. Deputy Chief Operating Officer James Murdoch, who is a board member of the Yankee Global Enterprises, was key to the deal.
"We've long been a believer in the unique appeal of sports entertainment. Partnering upstream with rights holders is even more important today in the dynamic media marketplace in which we compete," James Murdoch said in a statement. "The YES Network represents the gold standard for regional sports networks."
Major League Baseball must approve the TV rights agreement. The transaction is expected to close by the end of December.
"We look forward to the many opportunities for growth and development that this investment by News Corp. will bring to YES," Hal Steinbrenner, chairman of Yankee Global Enterprises, said in the statement. "The Steinbrenner family expects to have a continuing, long-term ownership stake in the YES Network."
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