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YANKEE DOODLE DANDY! MERGER MANIA HAS EVERYONE IN NY TALKING

          The Yankees and Nets announced yesterday their plan "to
     merge into a company called the YankeeNets and promised that
     each team would continue to operate separately," according
     to Richard Sandomir of the N.Y. TIMES.  Howard Rubenstein,
     spokesperson for Yankees Owner George Steinbrenner: "George
     Steinbrenner has made it clear that he won't run the Nets. 
     If he's asked his opinion, he'll give it."  Though a
     definitive agreement has yet to be signed, both teams signed
     a letter of intent to form the YankeeNets, "in which each
     team will be equal partners in a company designed" to
     maximize the sale of local cable TV rights, sponsorships,
     luxury suites, tickets and advertising.  In their 50-50
     partnership, the teams will exchange some stock, and the
     Nets owners "will contribute at least" $350M from outside
     investors.  The capital will originate from two sources, the
     first being a group led by investment firm Allen & Co. and
     the second possibly being real estate developer Tishman
     Speyer Properties.  Allen & Co. Chair Donald Keough and
     Tishman Speyer President Jerry Speyer have been named to the
     YankeeNets Board of Directors.  Sandomir called the deal 
     unprecedented in sports, the "first instance of two teams
     merging into one company."  The "main benefits" of the
     merger for the Yankees "seem to be the cash from the new
     investors and the leverage a second team could create in
     talks to renew" the teams' cable TV deals with Cablevision's
     local sports channels MSG (Yankees) and Fox Sports NY
     (Nets).  Sandomir adds that the creation of YankeeNets means
     the end to talks about Cablevision buying the Yankees, "at
     least for the foreseeable future." (N.Y. TIMES, 2/26).
          WAIT UNTIL THAT DEAL COME ROUND: Officials from both
     teams declined to discuss specific financial terms of the
     merger, but sources of Stefan Fatsis of the WALL STREET
     JOURNAL also said that Allen & Co. and Tishman Speyer "would
     contribute several hundred million dollars to the new
     company to bridge the gap in value of the two franchises." 
     The Nets were acquired in December for $150M by a group led
     by Lewis Katz and Raymond Chambers, and the Yankees have
     been valued at over $500M.  The deal must still clear
     several "hurdles," as MLB and the NBA have yet to approve
     it.  Also, "it isn't clear what percentage of the separate
     ownership of the Yankees and Nets would be transferred in a
     deal, [or] whether the majority control of either team would
     change" (WALL STREET JOURNAL, 2/26).  The Bergen RECORD's
     Vial & Fitzgerald report that the deal values the Yankees at
     $700M and the Nets at $150M.  They add that Nets officials
     "did not give any indication" that the new partnership would
     cause either team to relocate (Bergen RECORD, 2/26).  In
     N.Y., Kerber, Hardt, Elsen & Kuntzman write that Katz and
     Chambers will have to pay "an estimated" $200M to buy into
     the deal.  On Wall Street, Cablevision shares dropped 3 3/16
     yesterday, closing at 63 13/16 "on concern that the company
     will face steep bills to keep the Yankees in the fold" (N.Y.
     POST, 2/26).  Pilson Communications CEO Neal Pilson
     estimates that Steinbrenner will seek a $1B rights fee for a
     10 to 12-year TV deal for the Yankees (DAILY VARIETY, 2/26).
          BOARD WALKERS: Members of the YankeeNets' Board of
     Directors include: Speyer; Keough; Lester Crown; real estate
     developer Jerry Cohen; former ABC Chair Thomas Murphy;
     Rubenstein; Harold Steinbrenner and Stephen Swindal, George
     Steinbrenner's son-in-law (N.Y. DAILY NEWS, 2/26).
          REAX: The Bergen RECORD's Bob Klapisch writes that the
     deal "isn't done," and that broadcast-industry insiders
     "consider it possible for Cablevision to reenter talks to
     buy the Yankees, now that Steinbrenner has made CEO Chuck
     Dolan jealous" (RECORD, 2/26).  In N.Y., Joel Sherman notes
     the name YankeeNets, and writes, "let us hope they put a lot
     more thought into this union than the name."  Sherman adds
     the Nets provide the "NBA cache and cash potential, without
     any threat to Steinbrenner's power base" (N.Y. POST, 2/26). 
     In N.Y., George Vecsey: "Now George [Steinbrenner] has been
     rescued from his major problem of needing instant cash. ...
     [he] can settle his estate and still leave half the team to
     his heirs" (N.Y. TIMES, 2/26).  Also in N.Y., Mike Lupica
     calls the merger a "marriage of convenience," and writes:
     "Steinbrenner gets the new money he craves.  Chambers and
     Katz buy themselves into society.  And both sides think they
     end up with a ton of leverage" (N.Y. DAILY NEWS, 2/26). 
     Also in N.Y., Phil Mushnick writes that while details of the
     merger are slim, "One thing is for sure -- You're gonna pay
     for it" (N.Y. POST, 2/26).  Also in N.Y., Bob Raissman
     reports that Charles Dolan and Steinbrenner "parted on good
     terms," and that the deal means Steinbrenner "will remain in
     complete control of the Yankees, something that eventually
     would not have been the case if he sold the team to Dolan"
     (N.Y. DAILY NEWS, 2/26).  In NJ, Adrian Wojnarowski writes
     that people in and outside the Nets "were incredulous over
     the ability of the Nets to court Steinbrenner."  One Nets
     exec: "We thought our owners had a lot of clout, but we just
     found out how much" (RECORD, 2/26).  Yankees P David Cone,
     when asked how the deal was received in the lockerroom: "Go
     around the room, and 98% of the players here won't know what
     the hell this [deal] is about" (RECORD, 2/26).  FSN's Keith
     Olbermann: "Just to clarify: the Yankees will continue to
     play baseball, and the Nets will continue to do whatever it
     is they do" ("Fox Sports News," 2/25).

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