Yesterday, after months of rumored negotiations, news broke that Disney had agreed to acquire a 33% stake in MLB’s streaming-video division, often referred to as BAM Tech. According the report, Disney — which has ABC and ESPN under its umbrella — agreed to acquire one-third of BAM Tech for $1.16 billion, which puts the overall valuation for the entire streaming division at $3.5 billion. As part of the deal, Disney also has the right to purchase another 33% of the company in the future, which would allow them to become majority owners of whatever they choose to call BAM Tech long-term.
The deal is certain to have far-reaching implications for the future of streaming video, and it also could have implications in the upcoming labor negotiations as owners attempt to separate non-baseball revenue from baseball revenue despite its origins within the game.
With this deal, it is clear that BAM Tech is set to be distinct from MLBAM, focusing on streaming efforts outside of baseball. This development was first announced last August, coinciding with a deal to acquire NHL’s streaming rights. MLBAM has become a force in the industry, branching out from providing only MLB-related services several years ago to providing back-end help to ESPN, rolling out the WWE Network and HBO NOW, along with streaming the NCAA Tournament and PGA tour events.
MLB considered several options with their streaming-services business, from going public to staying put, but ultimately chose a strategic partnership with Disney. By retaining a large equity stake in BAM Tech, at least until the option to sell another third is due, MLB has bet on the continuing upside of the company. By partnering with Disney, the odds are good that more deals like what the league did with the NHL and HBO will come down the pike, and if MLB and Disney can grow the company together, the remaining equity the league holds will likely increase in value, perhaps significantly.