A partnership including online retailing giant Amazon, Sinclair Broadcast Group and the New York Yankees baseball club is close to finalizing a deal to buy the YES Network regional sports network for $3.5 billion, according to several reports.
The deal, which is expected to be announced today, is part of a larger move by The Walt Disney Co. to divest of 22 regional sports networks the company would acquire through its $71.3 billion purchase of certain 21st Century Fox assets. Disney agreed to divest the RSNs as a condition for winning federal approval of the Fox deal.
Fox owned 80% of the YES Network, as part of a deal it reached with the Yankees in 2014. As part of that agreement, the Yankees had the right of first refusal if Fox ever sold the asset.
Amazon has been dipping its toes in the sports business of late, plunking down $130 million ($65 million per year) in April to renew its streaming rights to the National Football League’s Thursday Night Football for two years. Sinclair, which purchased the Tennis Channel in 2016 for $350 million, has said publicly that the Fox RSNs would be a good fit.
According to a Fox Business Network report, the Yankees would be the majority shareholder of YES, followed by Amazon, Sinclair and private equity group The Blackstone Group. Forbes said private equity funds Red Bird Capital and Mubadala, the Ontario Teachers’ Pension Plan and the Michael Dell fund are also part of the group.
The YES Network would be the first of the 22 Fox RSNs to be sold. The remaining assets, once thought to be worth around $20 billion, have proven harder to sell off.
Disney has until 90 days after the close of its larger Fox transaction -- which the company has said is coming soon -- to strike a deal to sell off all of the RSNs. The other properties, in towns like Atlanta, Dallas, Los Angeles, Detroit, Minneapolis and Kansas City, have attracted potential suitors like Major League Baseball, three-on-three professional basketball league Big3 (led by rapper Ice Cube), Liberty Media chairman John Malone, and others private equity players.
Once the hottest properties in the cable sports game, RSNs have faced some backlash as their rates have skyrocketed and consumers have resisted paying for channels they never watch. As a result, the remaining networks are more likely to fetch a price in the $10 billion range.