Twenty-First Century Fox - Class B (NASDAQ:FOX)
Historical Stock Chart
6 Months : From Dec 2018 to Jun 2019
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 email@example.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.