But now, an article in New York Magazine claims that while the Yankees did lose money—$28 million, which is pretty similar to Forbes’ estimate—their cable network, YES, was quite profitable. YES broadcasts Yankees’ games to a large New York viewership, which would explain why it rakes in the cash. The article says:
“The Yankees—read Steinbrenner—also own more than a third of the YES network … The network’s revenues top a quarter billion and its profit margin is 60 percent.”
One-third of 60% of a quarter billion is $50 million. So it seems like if you include YES in the calculation, the Yankees are actually quite profitable.
The New York article wants to treat the Yankees and YES as two separate businesses for purposes of the calculation, but that’s silly. If the team’s contract with YES were an arms’ length transaction, the Yankees would have demanded enough in royalty fees that YES would be making a lot less than $150 million.