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News Corporation on Tuesday agreed to purchase a 49 percent stake in the YES Network.
Fear not, Yankees fans: the YES Network’s Yankees propaganda will continue even if News Corporation increases its ownership stake in the channel from 49 percent, which it agreed to purchase Tuesday, to as much as 80 percent in three years.
The deal cedes to the Yankees continued control of pinstripe content even if the team owns as little as 20 percent.
And why would Fox Sports, the division of News Corporation that owns 19 regional sports networks, want to alter YES’s Yankees propaganda formula? It has served YES so well that it will be valued at $3.8 billion if News Corporation buys majority control. Carrying the Nets did not make YES valuable. It’s about Yankees games; the pre- and postgame shows; the “Yankeeography” series and replays of games; and the “Yankee Classics,” in which the Yankees never lose. (They have lost classic games, but YES does not show them.)
Earlier this year, when YES was celebrating its 10th anniversary, I talked to Randy Levine, the Yankees’ president, and Tracy Dolgin, who runs YES, about the unashamedly pro-Yankees slant of the network’s announcers and the absence of a news operation like the one on SNY. “We tell our people if you want to be bipartisan and fair, don’t work for YES,” Levine said.
As for carrying a nightly news show, like SNY’s “SportsNite,” Dolgin said: “News is a loser. If you want news, watch ESPN.”
Fox will, of course, bring some of its programming to YES. That was one reason to make the deal. It needs a New York outpost, especially as it starts a national sports network that is, for now, called Fox Sports 1. But tinker with the propaganda? Never.
Now, if the Steinbrenner family is willing to sell some of its stake in YES, or all of it, is it willing to sell the team?
Hardly likely. There seems to be no incentive unless Hal Steinbrenner eventually cannot envision the Yankees without Derek Jeter. The Yankees owners will continue to get an annual rights fee from YES, now about $85 million. That will rise at about 4 percent annually for a while, and, eventually, to 5 to 7 percent a year. Through their holding company, Yankee Global Enterprises, the Yankees will get $420 million — half of it now, and half of it in three years — from News Corporation to keep the team on YES through 2042.
Another reason the Steinbrenner family might be averse to selling the team: the tax bill they would be handed upon a sale.
The evolution of YES would have been quite different if another deal had gone through.
In 2000, Dave Checketts, then the president of Madison Square Garden, flew to Florida to meet with George Steinbrenner and two of the New Jersey Nets’ owners, Ray Chambers and Lewis Katz. This was after the Yankees and the Nets ownership groups had merged into YankeeNets.
The subject of the meeting was to create a Yankees-centric network together, Checketts said. James L. Dolan, then the chief executive of Cablevision, which owned the Garden, had given him the go-ahead to try.
“Let’s take a shot at this deal,” Checketts recalled telling Dolan.
Checketts, also in an interview earlier this year, said that the joint venture was intended to keep the Yankees and the MSG Network together. For 13 years, MSG had spent nearly $550 million to carry the Yankees. The Yankees wanted their own network and MSG was looking at the distinct possibility of losing its most dominant programming, a staple from March to September.
Checketts suggested that the Yankees get a 40 percent stake in the proposed network, which would have converted what was then called Fox Sports New York — now MSG Plus — into a channel with the Yankees, the Islanders and the Nets. Cablevision would have run the network, so the pronounced Yankees bias would not have been so apparent. Checketts’s bosses subsequently told him he had made too rich a proposal. And Steinbrenner was seeking 50 percent, said another executive involved in the talks, so a deal could not be reached.
With that deal dead, a rancorous legal battle developed over the Yankees’ intent to leave MSG to start their own network. The Yankees paid a $30 million escape fee and started with Goldman Sachs and Providence Equity as their primary partners. Now, having enjoyed YES’s profits and benefited from previous bank refinancings of the channel, they are all cashing out to some extent.
TV Sports: Change in YES Ownership Unlikely to Alter Yankees-Heavy Format
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TV Sports: Change in YES Ownership Unlikely to Alter Yankees-Heavy Format
