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Owners Approve Merger & Sale

November 30, 1999 / 4:00 PM EST / CBS/AP

The proposed merger of the New York Yankees and New Jersey Nets and the sale of the Montreal Expos were unanimously approved today by baseball owners.

Yankees owner George Steinbrenner decided to merge his team's business operations with the Nets last February after breaking off sale talks with Cablevision Systems Corp. While the merger has been approved by the NBA, baseball owners had not considered it until now.

"We approved the transfer of some control of the Yankees," commissioner Bud Selig said after the 3 1/2-hour meeting, which owners had tried to keep secret. "Steinbrenner still has total responsibility, with the changes made. We approved the part of the merger we needed to address."

Steinbrenner concluded after the Cablevision talks collapsed that the Yankees needed a partner before the expiration of their current TV deal, a $486 million, 12-year contract with the MSG Network. That deal runs through the 2000 season.

Cablevision acquired the MSG Network when it gained control of Madison Square Garden, which gave Cablevision a monopoly on regional sports cable in New York City. Cablevision also owns SportsChannel, which was renamed Fox Sports New York as part of Cablevision's deal with Rupert Murdoch's News Corp.

By merging, the Yankees and the Nets create an entity with year-round programming, allowing them to either create a new regional sports channel in New York or to negotiate with The Walt Disney Co.'s ESPN and Time Warner Inc.'s Turner Broadcasting about forming a new regional sports channel. The teams also have though about issuing stock to the public.

It still is unclear when the Yankees and Nets will close their deal. Former U.S. Olympic Committee executive director Harvey Schiller resigned last month as president of Turner Sports and is expected to become head of YankeeNets, the holding company for the two teams.

The sale of the Expos to a group headed by New York art dealer Jeffrey Loria had been in the works since last winter, tied to a proposal to construct a new baseball-only ballpark in downtown Montreal.

Expos chairman Jacques Menard, part of Claude Brochu's ownership group, helped put together Loria's group, which would take over the lowest-drawing team in the major leagues. Montreal drew just 773,227 to Olympic Stadium this year, more than 400,000 fewer fans than any other team and an average of just 9,547.

Brochu had said that if the sale was approved, he and the Expos' other partners would have to talk with their lawyers to determine when the deal would close.

On labor matters, some in the commissioner's office are considering whether to propose an extension to the current labor cotract with players, which probably will expire after the 2001 season.

The luxury tax, which caused the high-revenue teams to slightly slow the rate of their payroll increase, is to expire after this season. If there is an extension, owners would get a tougher tax.

While the labor deal ends after next season, the union has an option to extend it through the 2001 season and is expected to exercise that option.

Owners also are discussing plans that would increase revenue sharing among the high- and low-revenue teams. No decision is imminent, with owners' awaiting the report from their latest economic study committee, which includes former Federal Reserve Chairman Paul Volcker, Yale president Richard Levin and commentator George Will.