News Corp To Buy 49% Of Yankees Channel

News Corp (NASDAQ:NWSA) has just agreed to purchase 49 percent of the YES Network. YES is a cable channel which broadcasts the New York Yankees games. The deal places a $3 billion value on the YES Network. News Corp (NASDAQ:NWSA) is purchasing the holdings from Goldman Sachs (GS), the Yankees, and other investors. Media mogul Richard Murdoch is the chairman and CEO of News Corp (NASDAQ:NWSA), and the deal also states that after three years he can increase the company’s holdings in the network to 80 percent. As part of the deal, YES Network also secures its position as the network for Yankees games through 2042.

News Corp To Buy 49% Of Yankees Channel

Currently the Yankees hold a 34 percent stake in YES, while the private equity unit of Goldman Sachs Group, Inc. (NYSE:GS) owns 30 percent of the network. The rest of the network is owned by other investors, many of whom, according to Forbes, will probably bring in five times the amount they originally invested in the network.

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The purchase of YES Network is a strategic one for News Corp (NASDAQ:NWSA). News Corp (NASDAQ:NWSA) owns Fox, and Fox Sports Media Group owns 20 other regional sports channels in the U.S. Murdoch is betting on sports television becoming even more valuable than it is now, so his company has been building a strong portfolio of sports networks and channels, while also trying to get back into the New York market. Next year News Corp. is planning its own national sports network, which would compete with ESPN and NBC Sports. Also, News Corp. is facing off against Time Warner Cable (TWC) for the rights to carry Los Angeles Dodgers games on a regional Southern California sports channel.

In Tuesday midday trading, News Corp (NASDAQ:NWSA)’s shares were up less than 1 percent.