Two big-name investors have pulled out of the Yankees Entertainment and
Sports Network, the regional sports network slated to carry New York Yankees
Major League Baseball games next year, but officials said other investors have
taken up the slack.
Quadrangle Group LLC, a New York private-equity firm, and cable legend Amos
Hostetter pulled out of the fledgling cable network over the weekend. Quadrangle
was expected to invest about $150 million in the network and Hostetter about $20
million.
According to sources, Goldman, Sachs & Co. snapped up both Quadrangle's
and Hostetter's stakes in YES Network. Goldman had already owned about 20
percent of YES.
Officials at YES said the deal is expected to close later this week.
Quadrangle, Goldman, Hostetter and former AT&T Broadband president Leo J.
Hindery Jr. were expected to take a combined 40 percent stake in YES. Hindery,
who is president and CEO of YES, also invested about $20 million.
YankeeNets LLC -- the holding company that includes the Yankees, the National
Basketball Association's New Jersey Nets and the National Hockey League's New
Jersey Devils -- owns the other 60 percent.
When the deal was announced earlier this month, Hostetter was also expected
to assume the role of nonexecutive chairman of YES. In an interview, Hindery
said he will become chairman and CEO.
'[Quadrangle and Hostetter] had the right until the funding, which is
occurring this week, to back out, and they did,' Hindery said. 'We wish them
well.' He declined further comment.
According to sources familiar with the matter, Quadrangle and Hostetter took
exception to a nominee to YES' board of directors -- Bresnan Communications
president Bill Bresnan, himself a legend in the cable industry.
Those same sources said Bresnan has been the independent director of the
network for almost seven weeks. The other 12 members of the board are tied to
either investors in the network or YankeeNets.
Quadrangle and Hostetter were uneasy about Bresnan's ties to the Yankees --
his son-in-law is Yankees general manager Brian Cashman -- and about his
longtime friendship with Hindery.
Miramax Films co-chairman Harvey Weinstein is also expected to be named to
the board, appointed by the Yankees.
Sources said Bresnan will remain the board's only independent member, and he
will also be an investor in the network. How much he would invest could not be
determined.
