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Baseball team has also discussed joining with Sinclair to bid for the sports network

By Joe Flint and Anupreeta Das 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 29, 2018).

The New York Yankees are in talks with Amazon.com Inc. and broadcaster Sinclair Broadcast Group Inc. about partnering to bid for the team's regional sports network YES, according to people familiar with the matter.

The Yankee Entertainment and Sports Network LLC, which carries Yankee baseball and Brooklyn Nets basketball, is among the 21st Century Fox Inc. assets that Walt Disney Co. is required to sell for the government to approve its purchase of the majority of the company.

The Yankees own 20% of YES and have first dibs on acquiring the remaining 80%. The team has been talking to a variety of potential partners to purchase the network, for which Disney is seeking a valuation of $5 billion to $6 billion, people familiar with the matter said.

The talks are still in early stages and a partnership with either Amazon or Sinclair isn't guaranteed, executives close to matter said.

The Yankees have also approached cable operator Altice USA, which has systems in the New York City region, about joining the team's effort to acquire 80% of YES, people with knowledge of the matter said.

As the primary TV home for one of the most popular franchises in the number-one media market, YES is seen as one of the most valuable sports properties in the country.

For Amazon, a stake in YES would give it entry into another realm of the sports business. It already streams National Football League games on Thursday nights live on its Prime platform and has talked with other leagues in recent years about other partnerships to widen its subscription media offering.

Should it join with the Yankees, Amazon isn't likely to immediately begin streaming games on its own platforms, a person close to the team said. In addition, Major League Baseball restrictions would likely prohibit Amazon from streaming games outside the Yankees market. Furthermore, the MLB's streaming deals with the bulk of regional sports networks expired after this season and needs to be renegotiated, which could also complicate potential streaming opportunities for Amazon.

In another possible hurdle for Amazon, pay-TV distributors that currently carry Yankee games -- including Altice, Charter Communications Inc., Comcast Corp. and DirecTV -- would likely balk at games being carried by the retail and streaming giant as well.

The private-equity firm RedBird Capital Partners LLC is working closely with the Yankees and has been in discussions with the Ontario Teachers' Pension Plan and Abu Dhabi state fund Mubadala Investment Co. about investing in YES, according to a person familiar with the matter. RedBird managing partner Gerry Cardinale, a former Goldman Sachs Group Inc. banker who led the bank's earlier investment in YES, sits on the network's board.

Rupert Murdoch's media empire acquired a majority stake in YES through two transactions, in 2012 and 2014, that valued the network at more than $3 billion, The Wall Street Journal reported at the time. The sellers included Goldman and Providence Equity Partners.

Fox also owns 21 other regional sports channels in major markets across the country, including Los Angeles and Detroit. The other outlets, taken together, have been valued at more than $15 billion by the sellers.

21st Century Fox and the Journal's parent News Corp share common ownership.

Sinclair's interest in YES was earlier reported by Fox Business Network.

Sinclair is also interested in the 21 regional channels and is working with the private-equity firm Blackstone Group LP on a bid for them, people close to the matter said. Baltimore-based Sinclair, which is a large owner of local TV stations, has said it is interested in expanding further into the cable business through local sports networks.

Other suitors for the networks beyond private-equity firms include Major League Baseball itself, Commissioner Rob Manfred has said. The "New Fox" company that will be comprised of assets Disney doesn't acquire from 21st Century Fox is also considering a bid for some or all of the channels, people close to the process said.

--Miriam Gottfried contributed to this article.

Corrections & Amplifications Cable operator Altice USA is an independent company, following its separation from Altice NV this year. An earlier version of this article incorrectly said it was a unit of Altice NV. ( Dec. 28, 2018)

Write to Joe Flint at joe.flint@wsj.com and Anupreeta Das at anupreeta.das@wsj.com

(END) Dow Jones Newswires

December 29, 2018 02:47 ET (07:47 GMT)

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