The Yankees could line up several investors to help boost their bid (the net's David Cone pictured)yes network
The Yankees are "considering buying back the YES Network" if Fox sells its assets to Disney or Comcast, according to a source cited by Scott Soshnick of BLOOMBERG NEWS. The Yankees "ceded control of the regional sports network four years ago" to 21st Century Fox, which "increased its stake" to 80% from 49%. A source said that the agreement "included a clause that gives the baseball team the right to buy back the network in the event Fox puts it up for sale." Fox first took a 49% stake in YES in '12 in a deal that "valued the network" at about $3.8B. In '14, Fox bought an additional 31% at "roughly the same valuation," and Yankee Global Enterprises "owns the rest." The source added that its deal with Fox "calls for the team to pay fair-market value to buy back the sports network." Consulting firm LHB Sports, Entertainment & Media President and CEO Lee Berke, who has worked with YES, said that the price of the net "could increase further if the bidding war between Comcast and Disney escalates" (BLOOMBERG NEWS, 6/14). In N.Y., Andrew Marchand notes while YES is "valued in the billions," if a transaction is completed with the Yankees, it is "not expected to have a big impact on a deal" between Fox and either Disney or Comcast. The Yankees "could line up investors to boost its bid for YES" (N.Y. POST, 6/15).
PIECES OF THE PIE: The WALL STREET JOURNAL's Schwartzel & Flint note Disney and Comcast have "indicated a willingness to shed Fox's collection" of RSNs. The sports assets that would be "combined in either a Disney-Fox or Comcast-Fox deal will get heavy scrutiny." The addition of Fox’ channels "would make Comcast the home for local sports in just about every major television market." That could "potentially give it leverage in negotiations with other distributors for the rights to carry those channels." However, the channels for the most part "don’t compete against one another." Disney "doesn’t operate any local sports channels." The addition of Fox' 22 RSNs could "give it tremendous clout both locally and nationally with pay-TV distributors, sports leagues and advertisers" (WALL STREET JOURNAL, 6/15). Bruin Sports Capital Founder & President George Pyne said of RSNs, "Those are a valuable set of rights ... (that) throws out real cash flow and will impact the valuation of the teams. ... It would be the first place you might see a little weakness, but we haven't seen any yet, and I think to Disney, these are very valuable assets given the fact of their focus on direct-to-consumer and they own the relationship with the sports fan in the sports market" (“Squawk Box,” CNBC, 6/15).
COMPETITORS PREPARING: Liberty Media Chair John Malone, who owns stakes in Charter and Discovery, said that he "doesn't plan to consolidate his empire into a vertically integrated content and distribution player any time soon." Malone said, "Why would I put Discovery together with Charter? Apples and oranges." Malone said that there "may be smaller content opportunities for Charter, including teaming up with other distributors in a joint venture to own content companies." He added that it "could also buy regional sports networks, regional news or Spanish-language assets." Malone said that targeting Spanish-language media "would make sense for Charter ... because Hispanics are 'heavily concentrated' in the company’s markets" (WALL STREET JOURNAL, 6/15).
