MLB and MLB Advanced Media are closing in on a long-anticipated funding deal for BAM Tech, the portion of baseball’s digital arm servicing third-party content owners and programmers. An announcement of additional partners is likely to come by the next set of owners meetings in August.
MLB owners talked at length about funding options for the fast-growing BAM Tech during owners meetings earlier this month in New York, continuing a process that stretches back more than a year. Commissioner Rob Manfred said he intends to complete a deal by this summer.
“I think we could get it done even before Houston,” Manfred said, referring to owners meetings scheduled there for Aug. 16-18.
MLB executives declined to specify any potential partners for BAM Tech. But recent reports and industry sources said the Walt Disney Co. and private equity firm Silver Lake Partners are among those looking seriously at a BAM Tech investment.
Executives with those firms also declined to comment substantively on the question. Disney Chief Executive Bob Iger, during a recent quarterly earnings call with analysts, said that he is impressed with MLBAM’s products, continuing that “it’s obviously quite evident if you engage with Major League Baseball on digital platforms. It’s probably among the best out there.”
The formal establishment of BAM Tech as a stand-alone entity received owner approval last summer, and the operation has grown to more than $100 million in annual revenue through large-scale deals with the NHL, HBO, WWE and Disney’s ESPN, among many others. The NHL received up to a 10 percent equity stake in BAM Tech as part of its major digital media rights partnership struck last year.
Any funding deal for BAM Tech would likely place a valuation on the operation of more than $3 billion, and help accelerate a business that has positioned itself as an industry leader in the midst of a broad industry shift toward digital video.
Part of the process to consummate a BAM Tech deal has been focused on whether to pursue a more strictly financial transaction, a strategic partnership, or to stand pat as now constituted. The strategic partnership route has been the favored option so far, but until a transaction is completed, further changes remain possible.
The BAM Tech conversation is entirely separate from the core MLBAM operation, which is not being sold, remains the property of the 30 MLB club owners, and produces baseball-specific digital products such as MLB.com, the 30 MLB club sites, MLB.TV game streaming, and baseball’s suite of mobile applications.
Full MLB team ownership approval of a BAM Tech funding deal technically is not required, provided the league’s business board of directors that oversees MLBAM votes in favor of it, but Manfred has been operating as commissioner in part on a platform of increased owner inclusion. If a funding deal is completed before the Houston meetings, the league would likely set up a conference call to brief owners.
