WSJ Article Journal, Essay Example

An article in Wall Street Journal reports that media giant News Corp. is going to acquire a minority stake in New York regional sports network YES which is the home network of New York Yankees. The deal is coming at a time when fees for sports rights are growing at a rapid pace and the networks owning the rights are also enjoying growing values. New York Yankees typically attracts larger local audiences for their games than other sports teams and play in the country’s largest media market. Currently, the fees received by YES from cable operators is low but the network is expected to significantly raise its fees once the contracts with cable operators expire (Futterman).

This article demonstrates the importance of scanning the external environment for opportunities and taking advantage of them before the competition. News Corp. realized that YES network has a large subscriber base and its fees will go up once current contracts with cable operators expire, thus, it has decide to buy a minority stake now which may even allow it to buy on the cheap. Highest fees may also increase the value of YES in the future.

News Corp. move is a great strategy because it is already a media company and adding a new business which complements its core competencies and adds valuable revenue stream. By acting now, it may also be getting the stake on cheap.

Once current cable contracts expire, fees for sports networks like YES will significantly go up which may also force cable companies to increase subscription fees for the consumers. News Corp. will have a significant advantage in negotiations with cable operators because Yankee has a large and loyal fan base. I chose this article because it shows the importance of scanning the external environment for opportunities and acting upon them in a timely manner. Organizations that act earlier also gain advantage over the competition.

Reference

Futterman, Matthew. News Corp. Nears Deal for YES Stake. 14 November 2012. 14 November 2012 <http://online.wsj.com/article/SB10001424127887324735104578119832333743590.html?mod=WSJ_business_whatsNews>.