Cable Guys Could Win In a YES Network Sale
New York — Several of cable’s biggest hitters are hoping to smack a financial home run with the proposed sale of the Yankees Entertainment & Sports Network.
Former Continental Cablevision chief Amos Hostetter, Bresnan Communications CEO Bill Bresnan and Leo Hindery, principal of media-focused private-equity firm InterMedia Partners VII and the former YES and Tele-Communications executive, hold small minority shares in the regional sports network, part of which is on the block, a recent Fortune article claims. It seems Goldman Sachs is reportedly shopping around its share in the network. YES is estimated to be worth some $3 billion — nearly four times its worth when the channel, whose primary fare is telecasts of New York Yankees Major League Baseball games and New Jersey Nets National Basketball Association contests, in 2002.
If the network is indeed sold, it could translate into a major financial windfall for Bresnan, Hostetter and Hindery, whose InterMedia Outdoors, a portfolio company of his media-equity firm, owns The Sportsman Channel. They collectively own less than a 10% share in YES, according to executives familiar with the network.
But Yankees owner George Steinbrenner is throwing a curve ball into the YES sales plan.
Randy Levine, the president of the Yankees, told The New York Times that the estimated 37% YES stake held by the Steinbrenner group is not part of the deal. “We’re testing the market for our financial partners, not for the Yankees’ stake,” Levine told the Times. “The whole network isn’t for sale. The YES board has clearly stated that we’re not authorizing a sale.”
Then the question remains who would purchase the network if it were available? According to the Times, none of the logical media companies with regional sports network holdings — Cablevision Systems, which owns Madison Square Garden, Comcast and Time Warner, which own a piece of SportsNet New York or Fox Sports with its numerous regional services — are being considered.
An executive from one of those companies said he’d be “surprised” if any YES sale is conducted before year-end.
Jet Broadband Closes on Suddenlink Va. Systems
Stamford, Conn. — Jet Broadband has completed its acquisition of cable systems in several Virginia communities from Suddenlink Communications.
Jet Broadband acquired systems with about 40,000 revenue generating units in Radford, Glade Hill, Bedford, Rocky Mount, Christiansburg, Farmville, Clarksville, Lawrenceville, Keysville, Charlotte Court House, Kenbridge, Dante, and Lebanon for an undisclosed sum.
President David Baum said that the company plans to add advanced services like high-definition television, digital video recorders and digital telephone to the new systems in the coming months.
With the acquisition, which was first announced in May, the company serves about 110,000 customers in West Virginia and Virginia.
New York-based cable investment banker Waller Capital initiated the transaction and served as Jet Broadband’s exclusive financial adviser.
WWE Pay-Per-View Buys Dip in Second Quarter
Stamford, Conn. — World Wrestling Entertainment said it generated 2.1 million pay-per-view buys during the second quarter, down from 2.22 million buys during the same period last year.
While WWE generated a record 1.18 million pay-per-view buys for WrestleMania 23 — topping 958,000 for WrestleMania 22 in 2006 — buys from some of its other events declined during the second quarter.
WWE said it generated $39.8 million in revenue from its PPV events, up $1.7 million from the $38.1 million it posted in the second quarter of 2006. WWE charged $39.95 for most PPV events during the second quarter, following a price increase. WrestleMania cost pay TV subscribers $49.95.
Ski Channel Buys Stake in Rage Films
Los Angeles — The Ski Channel, which has a video-on-demand distribution deal with Time Warner Cable that comes out of the gate in first-quarter 2008, has made an equity investment in Rage Films, as part of a multi-faceted partnership with ski filmmaker.
The deal, terms of which were not disclosed, includes exclusive and non-exclusive windows for Rage ski films, access to ski and other action sports clips, and rights to future production partnerships.
The Ski Channel chairman and CEO Steve Bellamy, who was one of the founders of Tennis Channel, said the fledgling programmer holds an option to purchase the remainder of Rage at a future date. Moreover, the network will have a significant sponsorship presence on the upcoming Rage Ski Film Tour, which will showcase genre content at some 100 college and mountain towns this fall and winter.
Bellamy, who has been engaged in distribution talks with cable, satellite and telco providers and is optimistic about closing a deal with a cable operator within the next four to 12 weeks, said the Rage pact will buttress Ski’s programming library, initially giving it access to 10 skiing movies, including Booter Crunk, Corduroy and Enjoy.
The channel will also present year-round coverage of and information about activities such as snowboarding, hiking, biking, backpacking and climbing, as well as lifestyles content.
Dow Jones Buy Raises On-Air Questions
New York — With News Corp. signing a $5.6 billion deal to acquire The Wall Street Journal publisher Dow Jones & Co. last week, Rupert Murdoch and his Fox News Channel will at some point gain an asset to fortify the Fox Business Network.
Slated to launch Oct. 15 with a minimum of 30 million cable and satellite subscribers, Fox Business Network, though, won’t be able to feature WSJ reporters discussing business news on-air, owing to an agreement that CNBC has with Dow Jones that runs through 2012.
A CNBC spokesman said the network is “very happy with the relationship and the quality delivered by it. We expect that relationship and quality to continue for the next five years.”
But that doesn’t necessarily mean WSJ personnel won’t appear on FBN.
Asked about the CNBC/Dow Jones agreement during a May 1 interview with Fox News senior vice president and managing editor of business news Neil Cavuto, who will oversee content and business coverage at the new service, Murdoch suggested it wouldn’t prevent FBN from using the newspaper’s talent.
“There are a lot of other things in the Journal … we think there’s plenty of room for all of us to work together,” Murdoch said.
Dow Jones CEO Richard Zannino might be of similar mind. In an Aug. 2 WSJ story, it was reported that Zannino said the company’s agreement with CNBC may not block other TV channels from access to Dow Jones’ “brands and content” when it is related to “non-business journalism.” A Dow Jones spokesman said the company wouldn’t “explain further” those comments.
WSJ opinion-page editors already appear on Fox News Channel and sources familiar with the situation believe that FBN air time could be in the offing for WSJ reporters. “When it comes to business news there’s a [contractual] obligation to CNBC. But say stories about travel, lifestyle or politics, those could be fair game for other organizations.”
Fox News officials declined to comment about WSJ programming possibilities for FBN.
Under the terms of the deal, Dow Jones stockholders will get $60 in cash for each share of common stock they own. The companies said certain members of the Bancroft family and the trustees of trusts for their benefit who collectively own about 37% of Dow Jones’ voting stock agreed to vote to approve the transaction.
The deal is expected to close sometime in the fourth quarter. —Mike Reynolds