Rupert Murdoch’s 21st Century Fox (FOXA:US) Inc. agreed to boost its stake in YES Network to 80 percent, taking control of the regional sports channel that carries New York Yankees baseball games two years sooner than planned.
Tracy Dolgin will continue to lead the network as president and chief executive officer, New York-based Fox said yesterday in a statement. Fox purchased 49 percent in 2012, in a deal that valued the business at about $3 billion.
The accord gives Fox majority ownership of a network in the largest U.S. TV market, with programming that includes the Yankees and basketball’s Brooklyn Nets. The company, which initially had the right to increase its stake starting in 2015, has been seeking control of some minority holdings. Sports rights are among the most valuable on TV, in part because they attract large audiences to live events.
“Our investment in the YES Network underscores our commitment to growing our global sports portfolio with offerings that are exceptional and unique,” James Murdoch, Fox’s deputy chief operating officer, said in the statement.
Financial terms weren’t disclosed. The company said the acquisition is expected to close by March 31. Once completed, the network will become part of 21st Century Fox.
Yankee Global Enterprises will keep 20 percent, according to the statement. The network reaches about 9 million households in the New York area, Fox said.
Fox paid $584 million for the 49 percent stake and $250 million in upfront costs on behalf of YES, the company reported in a Nov. 6 regulatory filing (FOXA:US).
As part of that transaction, Fox negotiated to raise its stake based on a $3.8 billion valuation for the channel, people with knowledge of the matter said when the deal was announced in 2012.
YES Network has rights to air Yankees games through 2042, the people said at the time. The network generates more than $200 million in annual earnings before interest, taxes, depreciation and amortization, Forbes reported in April 2012.
Fox fell 1.5 percent to $31.27 yesterday at the New York close. The Class A shares advanced 56 percent last year.
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