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News Corp., which already has ownership interests in 20 regional sports networks, agreed yesterday to buy a 49 percent stake in the YES Network.
YES has rights to New York Yankees games and is in 15 million households, including nine million in the New York metropolitan area.
Terms of the deal were not released, but the deal values YES at $3 billion, people familiar with the situation said.
“This is a tremendous opportunity to enhance News Corp.’s industry-leading portfolio of sports properties, while also strategically re-entering the New York market,” said James Murdoch, deputy chief operating officer, in a statement.
As part of the deal, YES, which owns the rights to air Brooklyn Nets games, negotiated an extension to its Yankees rights that will run through 2042.
In addition to getting a 49 percent stake in the country’s No. 1 regional sports network, News Corp. has the right to increase its stake to 80 percent in three years, sources said.
The added purchase will be based on a $3.8 billion valuation, these sources said.
YES president and CEO Tracy Dolgin, a former News Corp. sports executive, told The Post sports rights are a one-of-a-kind asset in TV programming.
“Sports is unique,” he said. “It’s the only way you can get people to subscribe to a distributor — a cable, satellite or telco operator. If you don’t watch sports live, it’s gone. Ratings go up immediately when the Yankees are ahead, that’s how immediate it is.”
Bernstein Research’s media analyst, Todd Juenger, values the deal at 15 times YES annual revenues, which are $200 million, according to Forbes.
“While the price is extraordinarily high, the investment is still superior to sitting on a pile of non-productive cash,” said Juenger.
Mike Paul, a branding expert with sports expertise, told The Post: “This is a big deal. News Corp. is very interested in knocking off leaders and that’s not going to stop. Anyone resting on their laurels be warned.”
News Corp. owns The Post.
In addition to getting News Corp.’s regional sports networks back into the New York City market, the YES acquisition helps the media company push forward on a plan to fill out a national platform.
News Corp. is going up against Time Warner Cable for the rights to LA Dodgers games.
As part of News Corp.’s deal, the Yankees are expected to receive a check for as much as $500 million, which could be spent to improve the team.
YES Network equity partners selling a piece of the RSN are Goldman Sachs, Providence Equity and a group of former owners of the then-New Jersey Nets.
The deal is a sweet one for News Corp. President Chase Carey, who is a huge Yankees fan and owns a collection of signed baseball bats.
Separately, Murdoch is on the board of Yankee Global Enterprises.