Walt Disney Co. has sold its stake in a regional sports outlet devoted to New York Yankees baseball, effectively ridding itself of a passel of TV-sports properties it acquired as part of its recent $71.3 billion buy of the bulk of 21st Century Fox.
Disney said Thursday that it sold its 80% interest in YES to an investor group that includes the Yankees, Sinclair Broadcast Group, Amazon and RedBird Capital, among others. The baseball team controls the other 20% of the media outlet, and the deal values the Disney stake at $3.47 billion.
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Disney’s deal to buy Fox came with a mandate for the company to sell off Fox’s interests in 22 different regional sports networks. Sinclair bought 21 of them in a recently completed deal.
The pact gives multiple buyers the chance to get more involved in sports programming, one of the more stable TV formats around in an era when more consumers are not watching live linear TV. At the same time, the business of regional sports cable networks has become more difficult, as they command high programming fees from cable and satellite distributors, even though not all subscribers watch or want them.
Amazon, which has a deal in place to stream the Fox feed of “Thursday Night Football,” gets to dip its toe into new waters. The Yankees get more control over the fate of a network tied directly to the team. And Sinclair bolsters a swelling operation in TV sports.
“We are excited about partnering with such a renowned franchise as the New York Yankees,” said Chris Ripley, president and CEO of Sinclair, in a statement. “With this investment, we will have 23 RSN brands, including Marquee with the iconic Chicago Cubs, and 21 RSN brands acquired from the Walt Disney Company last week.”
During a conference call held Thursday, Yankees President Randy Levine said Jon Litner, president of YES, had signed a new contract to stay at the helm of the operation. Levine said the Yankees will own about 26% of the business after closing the purchase from Disney, while Sinclair would control approximately 20%. Amazon has a 15% stake, with the option to buy more at a later date, he added.
Executives kept mum about an ongoing carriage dispute with satellite distributor Dish that has kept YES off of its platforms. “I never talk about negotiations in public,” Levine said.
And he hinted the group might have an opportunity next year to find a new distributor for digital rights to the games it controls. At present, a Fox-owned entity has digital rights to Yankees games, Levine said, but he suggested there could be new guidance from Major League Baseball about how digital rights might be sold going forward.