Lawyers from seven Am Law 200 firms have grabbed roles on News Corporation's acquisition of a 49 percent stake in the YES Network that reportedly values the regional sports channel at roughly $3 billion.
While Rupert Murdoch's media empire did not disclose how much it is paying to acquire nearly half of YES, the price tag was put at roughly $1.5 billion by The New York Times, which broke the news last week that the network was mulling a deal with News Corp., the world's second-largest media conglomerate. As part of the deal, News Corp. has an option to increase its stake in YES, which broadcasts New York Yankees and Brooklyn Nets games, to 80 percent after three years.
The Times also reported this week that News Corp. is once again in acquisition mode after putting an embarrassing phone-hacking scandal behind it in the U.K. As it happens, the YES deal was announced the same day that two former executives of News Corp.'s British newspaper unit were hit with bribery charges as part of a parallel investigation into phone-hacking.
News Corp. has incurred an estimated $200 million in legal bills and employed more than a few outside lawyers in its quest to combat the legal fallout from phone-hacking abroad, according to our previous reports. But the number of attorneys working on the YES deal, known internally as "Project Homer," could fill out more than a few lineup cards.
A 30-lawyer team advised various parties on the YES side of the transaction, according to Yankees COO Lonn Trost, who has been with the team since 1997. Prior to joining the Yankees, Trost was a partner at Herrick, Feinstein, a firm he joined in the early 1990s after leaving New York's Shea & Gould, where he headed the now-defunct firm's sports practice.
Trost says Yankees president Randy Levine, who is also senior counsel with Akin Gump Strauss Hauer & Feld in New York, played a major role in the negotiations with News Corp. Alan Chang serves as deputy general counsel and vice president of legal affairs for the Yankees, the storied Major League Baseball franchise that formed YES in June 2001 and had resisted selling a major stake in the sports channel until now.
New York–based YES, which stands for the Yankees Entertainment & Sports Network, launched in 2002 as the official home of the Yankees and National Basketball Association's Nets, who at the time played in New Jersey. The network and its other investors—including former Nets owner Raymond Chambers and Goldman Sachs—endured a fierce fight with Cablevision that eventually ended with a settlement in 2003 allowing the station to broadcast sporting events to millions of additional subscribers in the tri-state area.
Since then, the value of sports programming has skyrocketed, and YES is now considered the most valuable regional sports network in the country, according to Forbes. Richard Birns, a corporate partner at Boies, Schiller & Flexner, is leading a team from the firm representing YES on the News Corp. deal that includes corporate partners Mike Huang and Jason Hill and tax head Mike Kosnitzky.
While Boies Schiller has long advised the Yankees as a team—founding partner and legendary litigator David Boies famously left Cravath, Swaine & Moore in 1997 because of a conflict involving his representation of the franchise and Time Warner—the firm has also handled corporate and litigation work for YES since its inception in 2001, including the settlement with Cablevision. (Boies Schiller touts the settlement on its website, noting that it "won an arbitral award on behalf of YES" that resulted in a "long-term carriage agreement with Cablevision that substantially increased the enterprise value of YES.")
Advising the Yankees and their holding company Yankees Global Enterprises on the deal with News Corp. is Trost's former firm, Herrick, which is fielding a team of lawyers led by chairman of the executive committee and corporate practice cochair Irwin Kishner, corporate cochair Edward Stevenson, and corporate partners Richard Morris and Daniel Etna. Like Boies Schiller, Herrick is a longtime legal adviser to the Yankees, having handled both litigation and stadium finance work for the team.
