Yankee Global Enterprises
Yankee Global Enterprises is an American company which owns the New York Yankees baseball team, along with 20% stakes in YES Network and the New York City FC soccer team. It was formed in 1999 and is controlled by the family of George Steinbrenner. Other investors including Lester Crown, Donald Keogh, Donald Marron and Jerry Speyer own minority stakes.
The company was originally created as YankeeNets, through a merger between the Yankees and the Brooklyn Nets.
History
In 1998, the Yankees had their most successful season in modern history, winning a combined total of 125 regular season and playoff games, culminating in a World Series championship. The team was in discussions to be sold to Cablevision, who at the time owned the broadcast rights to every MLB, NBA and NHL team in the New York City Metropolitan area. The proposed deal fell through because the two sides could not come to an agreement that would include George Steinbrenner continuing to run the team for the new owners.
After the proposed sale fell through, the Yankees and Nets agreed to merge business operations, creating a combined holding company. This was done to increase the negotiating power of both teams for future television contracts and stadium and arena construction deals. The pre-merger owners would continue to control their teams, with a minority interest in the other team. This arrangement was approved by both Major League Baseball and the NBA.
YankeeNets engaged in marketing agreements with the New York Giants football team and the British football powerhouse Manchester United, which resulted in exclusive Giants and Manchester United programming on the YES Network for a period of time. The company also created an affiliate, Puck Holdings, which purchased the New Jersey Devils ice hockey team, to have relationships in all major league professional sports, and to give better leverage to the Nets in constructing a new arena – the Prudential Center, which was ultimately built as the home of the Devils without the Nets involvement – in Newark. The Devils were later sold in 2004 to Jeffrey Vanderbeek, a minority share holder of Puck Holdings.
Broadcast negotiations
With the Yankees' television contract with Cablevision expiring in 2001 and the Nets' contract expiring after the 2001-2002 season, the teams negotiated together with potential cable partners for the next contract. They spoke to Cablevision about remaining on their networks, or creating a new network with them. Cablevision offered to pair both teams on their Fox Sports Net New York affiliate. YankeesNets also spoke to other cable companies, including Time Warner, about launching a new network with them. In the end, YankeeNets decided to pair with Goldman Sachs to launch their own regional sports network, the YES Network, which launched in March 2002, in preparation of the upcoming baseball season. Cablevision, after losing out on the broadcast rights, did not reach an agreement with YES for carriage on its system during the network's first year. The two sides did reach a temporary agreement in 2003, and a long-term deal about a year later.
Breakup of YankeeNets
In 2003, reports leaked out about serious disagreements between the Yankees and Nets sides of the organization. The Yankee ownership in Tampa did not want any part in paying for an arena for the Nets and Devils, as the teams were money-losers. This led to the Nets being sold to Bruce Ratner, who intended to move the team to an arena in Brooklyn, New York, and the Devils being sold to businessman Jeffrey Vanderbeek, who moved the franchise to the Prudential Center in Newark, New Jersey as was originally proposed by the previous Nets ownership. The Nets sale did not include the team's stake in the YES Network, which remained with the pre-merger owners. Since the breakup, the Devils extended their television contract with Cablevision, ending the speculation that they would move to YES once their initial contract expired after the 2006-07 hockey season.
In 2004, with the exodus of the Nets and Devils complete, the company changed its name to Yankee Global Enterprises LLC, keeping the Yankees and the YES Network as separate entities owned by the same company. The legacy of YankeeNets is the YES Network, which allowed both the Yankees and Nets to dramatically increase their revenues. This allowed the Yankees to front the $800 million to construct their new Yankee Stadium.
See also
References
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