Wednesday, November 28, 2007

Changing definition of the "YES Network"

ESPN.com's Bob Klapisch told Charley Steiner on XM yesterday, "The Yankees have so much money. The YES Network is worth $4 billion dollars." After a few more words Steiner said, "Really? 4 billion?" Klapisch responded, "Forbes said $3 and a half to $4 billion. The Yankees are rich beyond anyone's dreams." Wow. How revelatory. Right off the 24/7 ESPN talking points. Not mentioned during this dreamy sequence is the Steinbrenner group only owns 37% of the YES Network and that other owners have been shopping their shares. According to the NY Times, Gerry Cardinale even says new partners will want a say in how games are broadcast: "Any new financial partners, he added, “will want a partnership with the Yankees about how the games are broadcast.”"
  • Quote from Gerald Cardinale about future of Yankee broadcasts. ("Gerald J. Cardinale, a managing director of Goldman Sachs and a YES board member..." from the article).
  • On percentage owned by the Steinbrenner group:
"Randy Levine, the president of the Yankees, said that the estimated 37 percent piece of YES owned by the Steinbrenner group"...
  • (Current attempts to sell portions of the YES Network will of course determine its actual worth. But currently being evaluated is):
"whether possible new investors in the YES Network, the channel of the Yankees, would pay enough to place a value of at least $3 billion on it." (And this on dreams of Yankee money from Forbes on 11/27/07): ***An 11/20/07 Reuters report put the Steinbrenners' percentage at 40% and said sale of (others') shares has been impeded by problems in the current market:
  • (Reuters): "The YES Network is around 40 percent owned by the Yankees baseball team, with the remainder owned by Goldman Sachs Group Inc, private equity firm Providence Equity Partners and Raymond Chambers, former co-owner of the New Jersey Nets basketball team.
But the current price tag is a problem for private equity firms because the credit crunch has choked off lending from investment banks and dramatically cut leveraged buyout deal volume.

One source said that YES has been shopped around more to private equity buyers than corporate -- or so called "strategic" -- buyers, in part because buyout firms were aggressively scooping up assets before the credit crunch hit.

  • "I would have thought that a Time Warner or a Comcast or a News Corp would mesh well with their existing services," Mansell said. "But you're in a current economic environment where there aren't a lot of deals getting done. The market would hammer the companies for empire building."
From Reuters article by Michael Flaherty and Megan Davies, " NY Yankees Network Sales Stalls as A-rod Deal Looms," published on Reuters.com, 11/20/07

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