Disney is buying a majority stake in the MLBAM-founded BAMTech in a $1.58B deal, paving the way for the long-delayed debut of an ESPN-branded video streaming network early next year, followed by a Disney-branded OTT service in ’19. Both services will be supported by BAMTech technology. The deal follows Disney acquiring a third of BAMTech for $1B, which included an option for Disney to acquire majority control. Disney has now boosted its equity stake from 33% to 75%. MLBAM will retain a stake of slightly more than 15% of BAMTech, while the NHL has slightly less than 10%. The ESPN multisport OTT network will have more than 10,000 live events per year, and will include MLB, NHL, MLS, Grand Slam tennis and college events, and in turn represents the return of NHL hockey to ESPN after departing in '04 (THE DAILY).
Disney CEO Bob Iger said the "model of the multi-channel ecosystem" is still "very robust in terms of its profitability to the company and to ESPN." Iger: "We don't have right now a need to necessarily break it out from that, but this certainly gives us the optionality if we get to a point where that business model is no longer serving the needs or the interest of the company and the shareholders and ESPN. This gives us the ability to go direct with what is the ESPN linear service, but this is not an announcement in that direction right now (CNBC, "Closing Bell," 8/8).
Disney just became the "biggest cord-cutter Hollywood has ever seen" (WALL STREET JOURNAL, 8/9). It is one of the "boldest moves by an entertainment company to address the changing media landscape" (L.A. TIMES, 8/9).
