Yankees plan to reacquire the YES Network from Fox, Disney

The New York Yankees are in the process of buying back the YES Network, the regional sports network that was purchased by 21st Century Fox four years ago.

The YES Network, the most-watched regional sports network (RSN) in the country in nearly every year since its inception in 2002, owns the exclusive local television rights of the Yankees. The network also airs the Brooklyn Nets and National Hockey League games, as well as a variety of other sports-centric shows.

According to Bloomberg’s Soshnick who first broke the story, the Yanks have notified both Fox and the Walt Disney Company, which is about to acquire nearly all of Fox in a $71 billion agreement, of their intentions. If the deal goes through, it will bring together two of the most significant media and entertainment giants.

When the Yanks sold YES to Fox in 2014, the club retained 20 percent of YES. The original agreement gives the Bombers the right to buy back YES if Fox was to put the network up for sale. YES is the most valuable of Fox’s RSNs.

The Yanks have decided to take advantage of this opportunity, and the organization has lined up financing from several sources. Discussions are ongoing.

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As stipulated in its agreement with Fox, the Yanks must receive a 60 days notice of any proposed sale of YES. (The club is expecting to receive a formal communication shortly.) Once the Yankees receive notice, they then have 60 days to officially notify the seller that they have decided to exercise their intention of reacquisition.

RSNs are cash cows. The audience is made up of die-hard, fanatic fans (like us) watching live games and other kinds of team related programming. A specific audience makes it easier for businesses to target viewers with advertising. RSN sales, however, exclude digital rights to baseball.

Soshnick believes that the significant unresolved portion of the imminent megadeal between Fox and the Walt Disney Company is what to do with Fox’s RSNs, such as YES.

Disney is willing to sell the RSNs in return for obtaining government approval of the sale. Disney presently owns ESPN, which includes about 90 million cable customers. Thus, it could be accused of creating a sports monopoly by federal regulators if it were to hold on to Fox’s RSNs.

If the Yanks are successful in buying back YES, we shouldn’t expect a major change in the operation and programming of the channel. It is unlikely that the Yanks will want to radically alter an already profitable venture. Plus, YES has earned over 100 Emmy Awards since its 2002 launch.