Newspaper article International Herald Tribune

News Corp. Aims for Stake in U.S. Sports Broadcaster ; YES Has Built Its Appeal on Televising New York Yankees Baseball Games

Newspaper article International Herald Tribune

News Corp. Aims for Stake in U.S. Sports Broadcaster ; YES Has Built Its Appeal on Televising New York Yankees Baseball Games

Article excerpt

Even a minority stake of 49 percent in YES, a regional sports network that has built its appeal on televising New York Yankees games, would be a prize for News Corp.

News Corp. is on the verge of acquiring as much as 49 percent of the YES Network from the New York Yankees and their partners, according to three people familiar with the negotiations. The purchase price for the noncontrolling stake is based on a valuation of YES at slightly more than $3 billion.

Even a minority stake in YES would be a prize for News Corp., whose Fox Sports division owns 19 regional sports networks around the United States. YES is the most valuable regional sports network, having built its appeal on televising Yankees games, pre- and postgame shows and the "Yankeeography" series to a large, enthusiastic fan base.

YES, which also televises Brooklyn Nets basketball games, has served as a model for other channels owned by teams, leagues and college conferences.

Although News Corp. prefers to have full ownership of its regional networks, it would be able to share in the profits of YES. And according to the people familiar with the discussions, who spoke late last week, the deal would provide News Corp. a route to eventual control of YES: an option would exist in three to five years for the company to increase its investment to as much as 80 percent. But at that point, the price would be based on a valuation of at least $3.5 billion.

The people who spoke of the deal were not authorized to speak publicly because negotiations were continuing. News Corp. and Yankees executives declined to comment.

The potential price for a News Corp. stake in YES underscores the soaring value of live sports and sports networks in the United States. Indeed, at $3 billion, YES would be worth more than the Yankees themselves. The Los Angeles Dodgers were sold earlier this year for a record $2.15 billion, largely on the likelihood that approaching TV negotiations would yield an enormous local television deal from a swelling group of potential bidders. …

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