Details of YES sale emerge

Probably the biggest development in Yankeedom this offseason has been the sale of YES to News Corp, a move that could eave Rupert Murdoch’s company owning as much as 80% of the Yankees’ broadcast partner in the near future, and commits the Yankees to having their games televised on the network through the 2042 season. Now we’ve got some details on the specifics of the deal, thanks to Richard Sandomir of the New York Times. Here are the big points:

  • While Fox will be bringing some programming to the network, not much will change on this front. YES’ lineup of programs will continue to be anchored by staples like Yankeeography, Yankees’ Classics, and (obviously) coverage of live games.
  • The unabashed pro-Yankee slant the network employs will also not be changing anytime soon, according to no less an authority than team President Randy Levine himself. “We tell our people if you want to be bipartisan and fair, don’t work for YES,” Levine said. This is something of an obsession for the rest of the local sports media, but for the life of me I don’t know what the big deal is supposed to be. The fact that YES is owned by the Yankees is hardly a secret (it’s even in the name!) and the network makes no pretense of being an unbiased media outlet covering the team. They don’t even have much in the way of a news department outside of Jack Curry.
  • On that last point, don’t expect anything like Geico SportsNite on YES anytime soon. “News is a loser,” said YES honcho Tracy Dolgin. “If you want news, watch ESPN.”
  • On to the financials, which are pretty darn juicy. YES will pay $85 million in rights fees to the Yankees this year, a figure which will rise by 4% annually at first, before bumping up to 5-7% in annual increases.
  • The most important point, however, seems to be this: in exchange for the extended agreement, News Corp will pay Yankees Global Enterprises, the holding company that owns the Yankees and a share of YES, $420 million in a sort of signing bonus. Half of that payment will be delivered now, and the other half will be paid in three years. I think this is the part where I’m supposed to make a crack about the team’s payroll slashing plan, right?

I intend to say more about this tomorrow, but as a teaser I’ll leave you with this: to echo the sentiments Larry shared when the deal was first announced, this feels a lot like the basic framework of the deal Frank McCourt tried to sign with Fox, an arrangement that Bud Selig nixed using the best interests of baseball clause as a pretense for forcing McCourt to sell the Dodgers.

3 thoughts on “Details of YES sale emerge

  1. Urban

    Looking forward to the article. While most fans are simply interested in ensuring they can watch Yankee games, the Yankees deal with News Corp/FOX Sports, followed by the Dodgers' soon-to-be-finalized $6B-plus deal with FOX Sports, illustrates how the landscape is changing.

    Some questions that perhaps will be addressed now or in future articles. The Dodgers deal supposedly is going to pay on average $240MM a year; Angels deal pays them $100MM-plus a year; the Rangers $80 or $90MM; the Phillies soon will have $100MM a year deal. That means on the surface it appears the Yankees deal with YES at last year's reported $85MM puts the Yankees in fourth of fifth place. That says to me there is more to the News Corp. deal, part being the Yankees get something the other teams don't, which is profit from the YES Network. And as News Corp, grows the YES network revenues further, the Yankees will continue to make even more. I believe the Yankees can also shield the YES profit from revenue sharing by having it go through one of their holding companies, something the Dodgers, the Angels, etc. can't.

    Looking forward to the article because, YES, it is about the money!

  2. Gorge

    Will the Yankees be making more than the Dodgers on their TV deal?

    • Urban

      Gorge, I don't know if it's going to be easy to determine that, although that's why I'm looking forward to IIATMS' view on this. They've done a good job on these financial-type breakdowns in the past, although they're going to run into the same problem anyone has in trying to figure out the YES-Yankee linkage. YES is a private entity, and Yankee Global Enterprises, the LLC created to house the Yankees baseball team, the YES relationship, the concessions business and other revenue-generating lines, is even more of a private entity. MLB has no view into Yankee Global Enterprises anymore than it did into Fred Wilpon's businesses and shifting of finances that exist above the Mets. The Yankees last year generated $85MM in licensing fees from YES, but I view that as window dressing, more fiction that fact, designed to show MLB that the Yankees make a decent amount of money from YES, but in reality is a very small fraction of what they're generating, which is hidden in Yankee Global Enterprises and shielded from revenue sharing.

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