Strange times in the regional sports network business are making for strange bedfellows.
The YES Network and MSG Networks have completed a joint venture called Gotham Advanced Media and Entertainment (GAME) that will seek to create a new revenue stream for both networks by offering digital content distribution services to third parties. Both YES and MSG operate direct-to-consumer streaming services, and they will be collaborating on a white-label digital platform similar to MLB’s successful BAMTech service, ultimately purchased by Disney for $3.8 billion. In other words, the technology and expertise behind MSG+ and the YES App will make its way to other services.
Such a partnership would have been unthinkable for most of the past two decades, as the two New York-area entities have battled regularly for regional supremacy among sports fans. Most specifically, the Steinbrenner family, which owns the New York Yankees and the largest share of YES, engaged in a bitter dispute in 2002-03 with James Dolan, now MSG’s executive chairman, over distribution of the RSN on Cablevision when the cable giant was owned by the Dolan family. Dolan also controls the New York Knicks and Rangers.
That YES-Cablevision battle ultimately involved multiple lawsuits, the New Jersey legislature, months of dueling advertisements and press releases, and no shortage of acrimony before it was resolved. Five years before that, George Steinbrenner reportedly had a deal to sell majority control of the Yankees to Cablevision before the pact broke down, largely over the future role of Steinbrenner, also helping set in motion the animosity between the two families.
But ongoing cord-cutting and generational change across the U.S. media landscape has encouraged an openness to new types of dealmaking, even as both the YES Network and MSG Networks are dealing from a relative position of strength, operating in the largest U.S. market with prominent teams and stable ownership.
“Any good business, including ours, always looks and will continue to look at opportunities to create value,” YES CEO Jon Litner tells Front Office Sports.
Future Pathway?
The YES-MSG deal is perhaps just as notable for what it doesn’t include: larger assets such as live game rights or joint distribution. But the formation of GAME does establish a pathway for potential future collaboration between the longtime rivals—such as a common streaming service combining live games for the Yankees, Knicks, Rangers, and New York Islanders, New Jersey Devils, and Brooklyn Nets—if the venture performs well.
“We’re always open to exploring opportunities that make strategic sense for us,” says MSG Networks president and CEO Andrea Greenberg.
—FOS senior writer Michael McCarthy contributed to this report.
