Deal puts value of network at $3.47B

The Walt Disney Co. completed the sale of the 80% stake in the YES Network to a group including Sinclair Broadcast Group in a deal that values the regional sports network at $3.47 billion.

Disney acquired the YES stake when it bought 21st Century Fox. Disney had to sell YES and 21 other regional sports networks, in order to get the deal approved by Federal regulators. Sinclair led a group buying the other regional sports networks.

Sinclair’s Diamond Sports Group subsidiary paid about $346 million for a 20% equity interest in YES, the most-watched regional sports network.

Yankees Global Enterprises, which had owned a 20% stake in YES, now owns 26%. Other owners include Amazon, with a 15% stake and three financial investors with a total of 39%. Those financial investors are RedBird Capital, funds managed by Blackstone’s Tactical Opportunities business, and Mubadala Capital.

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Sinclair now owns a large group of RSNs, including the Marquee, which it is launching with the Chicago Cubs.

“We are excited about partnering with such a renowned franchise as the New York Yankees,” commented Chris Ripley, president & CEO of Sinclair. “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.”

On a conference call, Yankees president Randy Levine said that Jon Litner will continue to run the network and that the management team will be staying on. Litner has signed a new contract, Levine said.

The role Amazon will play in the network's operations was left vague, with Levine citing the company's expertise in the digital space.

Regional sports networks are among the most expensive channels carried by pay-TV distributors and in the current environment, where consumers are cutting the cord to reduce their costs and gain more control, some analysts question how the networks will be able to maintain their revenue.

Ripley, speaking on the call noted that YES offers some of the most-watched programs in its market and that the cost to watch games is "an incredible value" to consumers that is delivered right to their living rooms. " 

He called YES "a vital part of any distributor's offering."

 Advisors for Sinclair were Guggenheim and Liontree.