News Corp set to take 49 percent stake in Yankee channel: source
(Reuters) - Rupert Murdoch's News Corp (NWSA.O) is expected to announce this week that it will acquire a 49 stake in the YES Network from the New York Yankees baseball team and its partners, in a deal that would value the sports channel at $3 billion, a person with knowledge of the talks told Reuters.
The deal is structured to allow News Corp to eventually acquire control of the channel, which broadcasts Yankees baseball and Brooklyn Nets basketball games to 15 million subscribers, said the person, who spoke on condition of anonymity because the deal has not been announced.
News Corp will share in the profits, according to the New York Times, which first reported details of the agreement. News Corp will have an option to increase its stake to 80 percent in three to five years, the newspaper said, citing unidentified sources.
Yankee Global Enterprises, the parent company of the Yankees, owns 34 percent of YES. Another 40 percent is owned by Goldman Sachs and Providence Equity, with the remainder owned by former owners of the Nets.
A News Corp spokeswoman declined to comment. YES representatives were not immediately available for comment.
The deal would allow YES to raise the $2.99 monthly fee per subscriber it currently charges cable and satellite operators to carry the channel, said the person. News Corp would negotiate on its behalf with the operators as part of a larger package of sports channels.
News Corp, the media company that owns Fox Broadcasting and The Wall Street Journal, owns or holds stakes in 20 regional sports networks, providing sports programming to more than 67 million subscribers.
Initially, the Fox sports channels are not expected to provide local or national sports programming to YES, or to manage the channel, the person said. (Reporting By Ronald Grover and Liana Baker; Editing by Chris Gallagher)