Yankees Buy Minority Stake In New Major League Soccer Team

Yankees Global Enterprises, the parent company of the New York Yankees, has teamed with the Manchester City Football Club of the English Premier League to bring a new Major League Soccer team to New York. The team will be known as the New York Football Club and will begin action in 2015 MLS season. The New York Times reported that the Yankees have invested as much as $25 million toward the $100 million purchase price.

Manchester City is owned by an investment group led by Sheik Mansour bin Zayed al-Nahyan, a member of the royal family of Abu Dhabi. That group has been working with MLS for several years to launch a new New York franchise. The New York Red Bulls play in Harrison, New Jersey.

The Yankees’ involvement in the Manchester City bid came together quickly in the past several weeks. The two sides know each other well as the Yankees’ Legends Hospitality provides services at Manchester City’s home stadium. As Howard Megdal reported for Sports On Earth, the New York Mets were once considered by MLS as the group that would team with a partner for a new New York pro soccer team. The Mets’ financial difficulties made that impossible, which opened the door for the Yankees.

The Mets do hold some cards, though. The New York Football Club — which will likely play its first season at Yankee Stadium — needs to build a new stadium. For years, talks have been focused on Flushing Meadows Corona Park, near CitiField. The Mets have demanded millions of dollars for use of the CitiField parking lots and restrictions on when soccer games can be played, relative to Mets games. The Yankees will now take the lead in shepherding the stadium proposal through the political NYC approval process.

The Yankees aren’t the first MLB team to invest in with a Premier League team. Fenway Sports Group, the parent company of the Boston Red Sox, bought the Liverpool Football Club for $476 million back in 2010. Two other Premier League teams are owned by families that also own NFL franchises. The Glazer family owns both the Tampa Bay Buccaneers and Manchester United. St. Louis Rams owner Stan Kroenke also owns Arsenal.

Dual-team ownership is nothing new, of course. Jerry Reinsdorf owns the Chicago White Sox and the Chicago Bulls. Mike Illitch owns the Detroit Tigers and the Detroit Red Wings. Lew Wolff is a part-owner of the Oakland A’s and the San Jose Earthquakes of the MLS. Ted Lerner Leonsis and his Monumental Sports and Entertainment owns the Washington Capitals, Washington Wizards and the WNBA’s Washington Mystics. The Cleveland Indians’ owner — Larry Dolan — is the nephew of James Dolan, who owns the New York Knicks and the New York Rangers.

The Yankees’ investment in the New York Football Club comes several months after News Corporation bought a 49% share of the Yankees Entertainment & Sports Network (YES) for nearly $1.5 billion. The reduction in the Yankees’ equity stake in YES will be accompanied by an increase in the team’s annual rights fee payment from the regional sports network. It also allowed the Yankees to reduce their investment in an area that may now be at its peak value — regional sports networks — and freed up funds to invest in an area that has a huge potential for growth in the United States — professional soccer.

Those are shrewd moves off the field for a team that made shrewd — but somewhat criticized — moves to fill the holes on the field left by injured stars. If the New York Football Club works out as well as the trade for Vernon Well, the Yankees will be in good shape.

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Wendy writes about sports and the business of sports. She's been published most recently by Vice Sports, Deadspin and NewYorker.com. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.

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