News Corp. to acquire stake in Yank' YES Network

News Corp. to acquire stake in Yank' YES Network

NEW YORK (AP) News Corp. is acquiring a 49 percent stake in the YES Network, a deal that gives the New York Yankees' owners hundreds of millions of dollars and values the channel at $3 billion.

Yankee Global Enterprises, Goldman Sachs and other investors will reduce their ownership as part of the transaction, and the team will receive $500 million.

``The Steinbrenner family expects to have a continuing, long-term ownership stake in the YES Network and we will continue our yearly commitment of fielding a championship caliber team for decades to come,'' Yankees managing partner Hal Steinbrenner said in a statement.

The agreement raises the value of the YES Network to $3.8 billion in three years, when News Corp. must decide whether to take control. The Yankees also committed to stay on YES Network through 2042, subject to approval of the rights deal from Major League Baseball. The Yankees' existing agreement with YES runs through 2021 and the network has three five-year options.

News Corp., which owns Fox, may acquire an additional stake in the YES Network after three years that could bring its ownership to 80 percent. Yankee Global Enterprises, the team's parent company, would retain a significant minority stake.

Fox will make a $500 million payment to the Yankees for extending their broadcast rights, of which $300 million will be paid when the deal with News Corp. closes and $200 million in about three years, a person familiar with the situation told The Associated Press, speaking on condition of anonymity because some details of the pact had not been made public. The team's stake in the network will decline from 34 percent to 25 percent.

YES's fee to the Yankees, which was $85 million this year, was due to compound at 4 percent annually under the options in the old contract. Under the new deal, the rate will increase gradually to 7 percent in the final years of the rights agreement, and YES's annual payment to the team will rise to about $300 million by 2042.

``We've long been a believer in the unique appeal of sports entertainment,'' News Corp. deputy chief operating officer James Murdoch said in a statement.

``This is a tremendous opportunity to enhance News Corporation's industry-leading portfolio of sports properties, while also strategically re-entering the New York market,'' he added.

YES currently is owned by the Yankees, Goldman Sachs, Providence Equity and NJ Holdings, the company controlled by former Nets owners Louis Katz and Ray Chambers. By closing the deal this year, they would avoid any possible increase in capital gains taxes in 2013.

Rupert Murdoch's News Corp. is emerging from the phone hacking scandal in Britain. The company is in the midst of a plan to split into two parts - one housing its newspapers, Australian operations and for-profit education business, and the other its more profitable TV and movie businesses.

Fox Sports Media Group already owns 20 U.S. regional sports networks. With Fox's investment in the Big Ten Network and Rutgers' plans to join the conference, this deal could help get the college sports channel into more homes in the New York area.

YES Network, which also broadcasts Brooklyn Nets games, launched in 2002. YES Network is one of the most valuable regional sports networks in the country, earning a nation-leading $2.99 in subscriber fees each month from its 11.8 million subscribers, according to SNL Kagan.

It is expected to have $500 million in revenue this year and around $232 million in cash, for a cash flow margin of 46 percent. That sets it apart from other regional sports networks that generate margins around 20 to 30 percent.

``They're a pretty strong network, definitely in the higher tier of networks when it comes to cash flow margin,'' SNL analyst Adam Swanson said.


AP Sports Writer Rachel Cohen and AP Business Writer Ryan Nakashima contributed to this report.

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Game 75 Capitals at Canadiens Date, Time, How to Watch, Game Thread

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Game 75 Capitals at Canadiens Date, Time, How to Watch, Game Thread

What: Washington Capitals vs. Montreal Canadiens

Where: Bell Centre, Montreal, Quebec, Canada

When: 7:00 p.m. ET

How to Watch: Capitals-Canadiens will be broadcast on NBC Sports Washington.

Live Stream: You can watch the Capitals-Canadiens game on NBC Sports' live stream page.


The Capitals (43-24-7) take on the Canadiens (27-36-12) Saturday, March 24 at 7:00 p.m. ET in Montreal.


The Capitals-Canadiens game will be broadcast on NBC Sports Washington. Coverage kicks off on NBC Sports Washington with Capitals FaceOff at 6:00 p.m. followed by Caps GameTime at 6:30 p.m. Stay with NBC Sports Washington after the game for Caps Extra and Caps Overtime at 10:00 p.m. for postgame coverage. (NBC Sports Washington channel Finder)

6:00 p.m. — Caps FaceOff
6:30 p.m. — Caps GameTime
7:00 p.m. — Capitals at Canadiens
9:30 p.m. — Caps Extra
10:00 p.m. — Caps Overtime


You can watch the Capitals-Canadiens game on NBC Sports' live stream page.


Use the comment section below to discuss the game action with other Capitals fans. 

For all the latest Caps coverage, follow Capitals Insider Tarik El-Bashir, Capitals correspondent JJ Regan and the NBC Sports Capitals account on Twitter. Be sure check out our Capitals page and NBC Sports Washington's Facebook page.

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Need to Know: The Redskins week that was—D-line scoop, Alex Smith's big deal

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Need to Know: The Redskins week that was—D-line scoop, Alex Smith's big deal

Here is what you need to know on this Saturday, March 24, 33 days before the NFL draft.  

The Redskins week that was

A look at some of the most popular posts and hottest topics of the week on Real Redskins and NBC Sports Washington.

Free agency update: What's next for the Redskins on the D-line? The Redskins have been casting out lines for defensive linemen since before free agency officially started but they haven’t been able to reel one in. Part of the issue might be that they know that Vita Vea and Da’Ron Payne are likely to be available in the draft. They have to balance spending big on a lineman vs. being able to get one pretty cheap for the next five years.

Redskins make a D-line contract change, gain roster flexibility—Speaking of the D-line, the team negotiated the removal of a salary guarantee for one player to give themselves more flexibility when it comes time to cut the roster down to 53 in September. See the post for details.

Redskins guarantee Alex Smith a whopping $71 million in new contract—In the words of Joe Biden, this is a big f-----g deal. It showed that the Redskins aren’t afraid to pay a quarterback big money if they think it’s the right guy. It should be noted that whether or not they chose the right guy is something that remains to be seen. Although the post shows that it’s plausible for the Redskins to terminate the deal after three years, I anticipate Smith playing out at least four if not all five years of the contract.

Redskins add another ex-Cowboy as they sign Scandrick—Orlando Scandrick has struggled with injuries the past few years and Redskins fans did not greet the news of his signing with great enthusiasm, to say the least. To point out the bright side, his contract is not pricey by NFL terms ($2.6 million cap hit this year, no guaranteed money beyond a $1 million signing bonus) and from what I have been able to gather it’s possible that change of scenery might give him a boost for a year or two.

Tweet of the week

Well before free agency started, I wrote that the Redskins’ top priorities in free agency should be to get extensions done for Smith, Brandon Scherff, and Jamison Crowder. They should have about $15 million to work with after a few more free agent signings and that would be plenty to get all of those extensions done. And if they do score a big free agent signing, it would be worth it to restructure the contract of someone like Ryan Kerrigan to get them done.

Stay up to date on the Redskins. Rich Tandler covers the team 365 days a year. Like his Facebook page and follow him on Twitter @TandlerNBCS.


Days until:

—Offseason workouts begin (4/16) 23
—Training camp starts (approx. 7/26) 124
—2018 NFL season starts (9/9) 169

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