Amazon rumored to be bidding on Disney’s YES network
Amazon (AMZN) is reportedly in talks with the New York Yankees to form a joint bid with Sinclair Broadcast Group to buy the Walt Disney Company’s (DIS) regional sports network, YES (Yankee Entertainment and Sports Network).
According to Fox Business Network, Sinclair, one of the leading US TV broadcasting companies, is the highest bidder for 21 local sports networks. Other potential partners include cable and satellite TV provider Altice USA (ATUS) and RedBird Capital. However, a partnership with any company hasn’t been finalized.
Disney’s sale of the regional sports network
According to a report by the Wall Street Journal, Disney has been seeking to sell an 80% stake in YES and other local sports networks as a condition enforced by the US Justice Department for its acquisition of the entertainment and media assets of 21st Century Fox (FOXA) for $71.3 billion. Disney recently won a bidding war with cable and media giant Comcast (CMCSA) to acquire the majority of Fox’s assets. The Disney-Fox deal is expected to close in 2019.
The Yankees already own a 20% stake in New York–based YES and are looking to buy the remaining stake with other potential partners. Disney values the 80% stake in YES at ~$5 billion–$6 billion.
Amazon’s interest in sports programming
Like its peers Alphabet’s Google and Facebook, Amazon has been expanding into sports programming and has made several small sports deals in the past. The company has already gained the rights to stream NFL and English Premier League matches. The acquisition of Disney’s YES network could help it bolster its presence in the sports business and drive consumers to its Prime membership program. Amazon streams live NFL games on its Prime Video platform.
Amazon Prime members also enjoy exclusive discounts, free delivery of items purchased online, video streaming, ad-free music, and other digital entertainment services for an annual fee of $119. At the end of September, the number of Amazon Prime members in the United States stood at 97 million, up from 47 million in September 2015.