News Corp. Said Close to Buying Stake in Yankees’ Network
News Corp. (NWSA) is in advanced discussions to acquire a stake in YES Network, the cable channel that carries New York Yankees baseball games, according to people with direct knowledge of the talks.
Negotiations are ongoing and the sides are working toward an agreement, said the people, who sought anonymity because they weren’t authorized to speak publicly. News Corp. would buy its interest from parties including Providence Equity Partners Inc. and Goldman Sachs Group Inc. (GS) The Yankees also hold a stake in the channel founded by their late owner, George Steinbrenner.
Adding YES would give Rupert Murdoch’s News Corp. a stake in the channel with games from the Yankees, a marquee Major League Baseball team, and the National Basketball Association’s Brooklyn Nets, strengthening its regional sports business. The company plans a national sports channel next year to compete with Walt Disney Co. (DIS)’s ESPN and NBC Universal’s NBC Sports.
YES Network generates more than $200 million in annual earnings before interest, taxes, depreciation and amortization, making it worth more than $3 billion, Forbes reported in April. Goldman, which along with Providence Equity helped fund the network in 2001, held a 34 percent stake, the magazine said.
News Corp., also trying to retain rights to carry Los Angeles Dodgers baseball games, would pay as much as $1.5 billion for the YES Network stake, assuming the team retains control and a $3 billion valuation, estimates Paul Sweeney, an analyst with Bloomberg Industries.
Julie Henderson, a spokeswoman for News Corp., declined to comment, as did Andrew Cole, a Providence Equity spokesman, and Eric Handler, a YES spokesman. Michael DuVally, a spokesman for Goldman Sachs, declined to comment.
News Corp., based in New York, fell 1.8 percent to $23.12 at the close in New York. The shares have advanced 30 percent this year.
The New York Times reported yesterday that the sides were close to an agreement.