Alexi Lalas Leaves ESPN For Fox Sports People & Personalities Media Notes "MNF" Down On ESPN For Saints-Bears MASN Wins Majority Of Discovery Request Lakers, Clippers See Dip In RSN Ratings BBC Talks With BT About Sharing Wimby Rights NBC's EPL Investment Paying Off ESPN Stays On Top Of Comscore Rankings App Review: Deck Pass Plus For iPhone
SBD/November 21, 2012/Media
News Corp. Completes Deal For Stake In YES Network, Reportedly Will Pay Yankees $500M
Published November 21, 2012
SETTING THE TONE: In N.Y., Chozick & Sandomir note the acquisition "underscores the competitive and lucrative arena of televised sports." News Corp.’s Fox Sports division "already owns 19 regional sports networks nationwide." Adding YES Network would "strengthen that unit" as News Corp. prepares to "introduce 'Fox Sports 1,' a cable sports channel that would compete against ESPN." YES Network reaches "about 15 million homes" and is the most-watched RSN in the country. Even with Fox programming "that will eventually be added to YES, the Yankees will still control the channel’s content, so the pro-Yankees coverage is not likely to change over the next three years." When Fox "assumes the majority stake, it will run the business" (N.Y. TIMES, 11/21). CABLEFAX DAILY notes with News Corp. "expected to soon launch a national sports net, some see this as the programmer further flexing its muscle in sports" (CABLEFAX DAILY, 11/21). YES Network President & CEO Tracy Dolgin said, "Sports is unique. It's the only way you can get people to subscribe to a distributor -- a cable, satellite or telco operator. If you don't watch sports live, it's gone" (N.Y. POST, 11/21).
B1G OPPORTUNITIES AHEAD: USA TODAY's Michael Hiestand writes under the header, "Big Ten Expansion Boon For News Corp." With the announcements that the Univ. of Maryland and Rutgers Univ. will be moving to the Big Ten Conference, Fox' Big Ten Network will "try to turn Maryland and New Jersey into so-called footprint markets." BTN's business "right now isn't based on selling TV ratings to advertisers," but it does "get revenue through cable operators, from subscribers." In the net's "footprint states, cable operators pay about 80 cents per TV subscriber and give BTN broader exposure by including the channel on basic cable." In non-footprint states, operators "pay about 10 cents per subscriber and usually relegate the channel to a pay tier." Big Ten Commissioner Jim Delany said that BTN will move to "charge cable operators more in Maryland and New Jersey ... only that as current deals expire." He said, "We'll have discussions, and I'm sure those discussions will be constructive" (USA TODAY, 11/21). Delany also said that News Corp.'s purchase of the stake in YES Network was "a 'pure, unadulterated coincidence' with the pending addition of Rutgers, which craves attention from New Yorkers." In Chicago, Teddy Greenstein notes News Corp. "could try to bundle BTN with YES to get BTN distributed in New York" (CHICAGO TRIBUNE, 11/21).
LAWYER UP: Yankees COO Lonn Trost said that a "30-lawyer team advised various parties on the YES side of the transaction." Trost said that Yankees President Randy Levine, who also is senior counsel with Akin Gump in N.Y., "played a major role in the negotiations with News Corp." THE AM LAW DAILY's Brian Baxter noted Boies, Schiller & Flexner Partner Richard Birns is "leading a team from the firm representing YES on the News Corp. deal." Advising the Yankees and "their holding company Yankees Global Enterprises on the deal with News Corp. is Trost's former firm, Herrick, Feinstein." Skadden Arps M&A Partner Thomas Greenberg, Tax co-Head Matthew Rosen and Tax Partner Dean Schulman are "advising Goldman Sachs on the sale of most of its equity stake in YES." Weil, Gotshal & Manges M&A Partners David Duffell and Michael Weisser are "leading a team from the firm advising Providence Equity Partners on the sale of part of its stake." Fried, Frank, Harris, Shriver & Jacobson Senior Counsel Arthur Fleischer Jr. and Corporate Partner Peter Golden are "taking the lead representing YES' remaining stakeholder N.J. Holdings." News Corp. "turned to teams of lawyers" from Hogan Lovells and Jenner & Block (AMERICANLAWYER.com, 11/20).