Amazon seeks to purchase YES Network
Amazon (AMZN) and other investors have reportedly made a deal with the New York Yankees to buy back Walt Disney’s (DIS) regional sports network YES (Yankee Entertainment and Sports Network). Amazon along with Sinclair Broadcast Group (SBGI) and Blackstone (BX) are the leading investors in the Yankees and agreed to buy YES Network for $3.5 billion on March 8.
Stake in YES network
The Yankees owned a 20% stake in the New York-based YES network, which broadcasts Yankees games as well Brooklyn Nets and New York City Football Club games. 21st Century Fox (FOXA) owns the remaining 80% in YES, which will be sold to Disney in an acquisition deal for $71.3 billion. Disney had earlier valued 80% of YES network at around $5 billion to $6 billion. The buyback deal would thus give the Yankees the majority stake in the YES network, followed by Blackstone, Sinclair, and Amazon.
Disney’s condition to sell YES network
Disney is trying to sell its 80% stake in YES and other regional sports networks to get approval from the US Department of Justice to acquire Fox’s entertainment and media assets. Disney also has to obtain regulatory approval from Mexico and Brazil (EWZ) to seal the deal. However, last month, Brazilian regulators reportedly asked Disney to sell either Fox Sports or ESPN to get regulatory approval. Disney hopes to close the Fox deal in the first half of 2019.
Disney won the bidding war with cable and media giant Comcast (CMCSA) for Fox assets, which is expected to boost its portfolio with premium movie content from National Geographic, FX, and Searchlight, and help it to fight digital rivals such as Netflix (NFLX) and Amazon (AMZN) amid rising user penetration for the “video-on-demand” segment.