Report: Deal Nets George $175M

March 5, 2000 / 3:31 PM EST / CBS/AP

New York Yankees George Steinbrenner owner made $135 million from his team's business merger with the New Jersey Nets and will get another $40 million from junk bonds sold by the new company, Newsweek reported Sunday.

The magazine said its conclusions came from an analysis of the offering memorandum for the bonds, currently being circulated on Wall Street.

The Nets' owners, Lewis Katz and Ray Chambers, contributed their team, valued at $150 million, to YankeeNets and paid $225 million for a 37.5 percent stake in the Yankees. Steinbrenner, who owned approximately 60 percent of the Yankees, got about 60 percent of the money.

In exchange, the Yankees' owners contributed a 62.5 percent stake in their team to YankeeNets. The deal, according to Newsweek, values the Yankees at $700 million, about $600 million above the team's debt.

Proceeds from the sale of seven-year junk bonds and the contemplated $75 million sale of a stake in YankeeNets to new investors will total of $214 million, Newsweek said. The documents indicate $40 million of the money will go to Steinbrenner, and that he will receive the money by June.

YankeeNets also is negotiating to buy the New Jersey Devils.

The Yankees' $486 million, 12-year contract with the Madison Square Garden Network expires after next season, while the Nets have a contract with Fox Sports New York through the 2001-2002 season. Both those networks are controlled by Cablevision Systems Corp.

YankeeNets is expected to form its own regional sports cable network, possibly in partnership with Cablevision, Time Warner Inc. or ESPN, which is owned by The Walt Disney Co.