Disney has "agreed to acquire a one-third stake" in BAM Tech in a deal that values the business at about $3.5B, according to a source cited by Soshnick & Palmeri of BLOOMBERG NEWS. The source said that Disney will also "obtain a four-year option to buy" an additional 33% stake in BAM Tech. The deal "underscores the importance of the video-streaming business to the future of ESPN, which has been losing viewers and advertising dollars to online media." Disney "could use the technology to offer more of ESPN's content online, particularly for niche sports like track and boxing, which typically don't draw a big viewing audience on the cable-TV network." Investment bank firm Houlihan Lokey Managing Dir Chris Russo said, "You see the biggest sports media company moving to greater digital delivery. It really shows they're trying to get ahead of the digital phenomenon rather than being left behind it." The source added that WME-IMG "was among the bidders for a stake in the business" (BLOOMBERG NEWS, 6/30). DEADLINE's David Lieberman noted with its "dramatic growth" under MLB President of Business & Media Bob Bowman, many "have wondered how long it would be before MLBAM went public or sold to a deep-pocketed backer" (DEADLINE.com, 6/30). ENGADGET's Steve Dent notes while the core MLBAM operation runs MLB.com, MLB At Bat and MLB.tv, it is BAM Tech that "handles streaming" for the PGA Tour, NHL, WWE Network, HBO Now and "provides infrastructure" for March Madness On Demand (ENGADGET.com, 7/1).
STILL WORK TO DO: Several league and industry sources said that formal signing of the Disney deal is likely at least several weeks away, which would be in line with MLB Commissioner Rob Manfred’s expectation of completion at or near owners meetings scheduled for Aug. 16-18 in Houston. The league’s business BOD was briefed again recently on the further progress with Disney. “It’s not finished but proceeding in a positive manner,” an ownership source said. Several other entities, including private equity firm Silver Lake Partners, have also looked seriously into a BAM Tech investment, and other partners could still be brought in following the completion of the Disney transaction. The Disney investment into BAM Tech would join one of world’s dominant companies in entertainment and sports programming and experiences with a major sports league, and more specifically one that has established a market-leading position in the development and distribution of digital content. The developing BAM Tech transaction is entirely separate from the core MLBAM operation, which is not being sold and remains the property of the 30 MLB club owners (Eric Fisher, Staff Writer)
