Disney Nears Sale of YES Network -- 2nd Update
09 March 2019 - 7:15AM
Dow Jones News
By Joe Flint and Miriam Gottfried
Walt Disney Co. is in advanced talks to sell a majority stake in
YES Network to a group that includes the New York Yankees, Sinclair
Broadcast Group Inc. and Amazon.com Inc., in a deal that would
value the sports network at around $3.5 billion, according to
people familiar with the matter.
The New York City outlet that carries Yankees games is
considered the crown jewel among the 22 regional sports networks
that Disney is required to sell as part of its $71.3 billion
purchase of the bulk of 21st Century Fox Inc.'s entertainment
assets.
The YES Network was valued at $3.9 billion in 2014 when Fox
bought its 80% stake. The Yankees own the remainder.
The decline in YES's value is indicative of the challenges
regional sports networks are facing as more consumers abandon their
traditional cable and satellite pay-TV providers in favor of
streaming services.
Representatives for Disney and the Yankees didn't immediately
respond to a request for comment. Fox Business Network earlier
reported on the progress toward a deal.
The auction for the regional networks has attracted a range of
bidders, including Major League Baseball, sports teams and
private-equity firms. The deal making is likely to lead off with
YES and then accelerate for the remaining channels, people familiar
with the matter said.
Disney had been seeking a price in the $5 billion to $6 billion
range for YES and more than $15 billion for the other 21 networks,
according to people close to the talks.
However, bids from interested parties have been much lower and
the sales effort has dragged as a result, the people said. It
didn't help that both the new Fox company that will be launched
after the Disney deal closes and Comcast Corp., a large owner of
regional sports networks, indicated they weren't interested in the
channels.
For Sinclair, the deal would inch the Baltimore-based
broadcaster closer to becoming a major player in the regional
sports network business. It is one of the bidders for the remaining
21 networks, a person close to the company said, and last month
partnered with the Chicago Cubs on a new sports channel in
Chicago.
For Amazon, a stake in YES would provide another path into the
sports media business. It already streams National Football League
games live on Thursday nights on its Prime platform and has talked
with other leagues in recent years about partnerships.
Should the YES deal proceed, Amazon isn't likely to immediately
begin streaming Yankees games on its platforms, a person close to
the team said. Furthermore, Major League Baseball restrictions
likely would prevent Amazon from streaming games outside the New
York market.
Disney has six months to sell the channels after its Fox deal
closes, which is expected to happen in the coming weeks.
Write to Joe Flint at joe.flint@wsj.com and Miriam Gottfried at
Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
March 08, 2019 15:00 ET (20:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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