Not even that. There is quite literally no connection either in terms of plot or character to The Tempest other than an old man living with a young woman and a group of outsiders arriving with one of them falling in love with the young woman. That's not being "loosely based" on something; that's just sharing a very basic premise. The old man/young woman relationship here is grandfather/granddaughter rather than father/daughter, the grandfather doesn't deliberately cause the group to get stranded in the town, the granddaughter and grandfather never come into any kind of conflict because she wants him to treat the strangers more nicely, none of the group are forced to go to work for the grandfather, none of the group have a connection to either the grandfather or the young woman before they arrive, the group aren't separated or tormented at all, there's no character(s) analogous to either Ariel or Caliban (at a push one could possibly argue that John Russel's character is mildly Caliban-esque but I'd still say that's reaching quite a bit), etc. Trying to say that Yellow Sky is "loosely based" on The Tempest is like trying to claim that Pinocchio is "loosely based" on Little Red Riding Hood just because both centre around young kids with absolutely no sense of stranger danger and who get themselves into trouble because they refuse to do what they were told by their respective parental figures.
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