Yankee Global Enterprises (YGE), the parent group over the New York Yankees empire is carrying almost $2 billion in debt, according to a report by Daniel Kaplan in this week’s SportsBusiness Journal. And while the amount seems staggering on the face of it, in regards to the large revenue sources available according to Kaplan, “the enterprise value of the companies composing YGE is roughly $5 billion, and cash flow at YES alone is expected to hit $208 million this year, sources said. YGE has been using the bulk of YES’s cash flow to reduce the regional sports channel’s debt, which is $1.448 billion, the sources said.”
The nearly $2 billion in debt is said to be “very manageable” according to an unnamed source.
In addition to the nearly $2B in debt, the Yankees are said to be on the hook for $1.2 billion of tax-exempt stadium bonds used to build new Yankee Stadium.
Below is a breakdown of the totals, according to SBJ research
YANKEE DEBT OVERVIEW
|Yankee Global Enterprises (YGE)
||The parent company of all things Yankees
||YGE owns 34 percent of YES, with the balance held by Providence Equity and Goldman Sachs
|New York Yankees
||YGE owns 99 percent of the team; as a stand-alone entity, the team has very little debt
|Legends Hospitality Management
||The concessionaire owned by YGE with the Dallas Cowboys, Goldman Sachs and CIC Partners is adding debt to fuel expansion
|Yankee Stadium Holdings
||Not technically debt for the Yankees, but YGE is responsible for the payments on the PILOT (Payment in Lieu of Taxes) bonds sold through a public authority to finance the stadium, which amount to $64 million annually; YGE owns 100 percent of the entity
|* According to SportsBusiness Journal sources
** Calculated from the $1.6 billion enterprise value of the Yankees franchise, YGE’s 34 percent ownership of YES and Legends, and roughly $25 million for the dozens or so smaller business in YGE, including Yankee-Steiner, YGE Technology, an overseas unit and a nonsports events company. The total value of all YGE companies is about $5 billion, but YGE’s share is roughly $2.75 billion.
Source: SportsBusiness Journal
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, as well as a contributor to FanGraphs and Forbes SportsMoney. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.
Follow Maury Brown on Twitter
Follow The Biz of Baseball on Twitter
Follow the Business of Sports Network on Facebook