Disney Nears Stake in Major League Baseball's Streaming Tech Business

Major League Baseball MLB Logo - H 2012

Major League Baseball MLB Logo - H 2012

If the deal is consummated, Disney's investment implies BAM Tech is worth about $3.5 billion.

Walt Disney is closing in on a deal to pay nearly $1.2 billion to acquire a one-third stake in Major League Baseball's streaming video unit unofficially known as BAM Tech, insiders confirmed Friday to The Hollywood Reporter

While Bam Tech is closely aligned with MLB Advanced Media — pro baseball’s digital arm known as MLBAM — it was never intended as a baseball-only initiative. In fact, even before the creation of BAM Tech was revealed last year, MLBAM was providing streaming services for HBO Now, the WWE Network, CBS Sports and Disney-owned ESPN.

Disney's negotiations for a one-third stake in Bam Tech includes an option for another one-third at a later date, according to insiders. On Thursday, Bloomberg reported that WME-IMG also had been interested in buying some BAM Tech equity, and the National Hockey League already has agreed to take a 7-10 percent stake.

If the deal is consummated, Disney's investment implies BAM Tech is worth about $3.5 billion, which is more than the $3 billion it was reportedly worth when it was unveiled 11 months ago, according to people familiar with the deal.

As of now, BAM Tech remains majority owned by the 30 MLB teams, but at its launch board members endorsed the notion of taking on strategic investors. The NHL was the first, and the deal involved MLBAM getting streaming rights to some NHL games, which advances the theory that when Disney becomes an investor it will be done with some sort of content play in mind for BAM Tech. 

Bam Tech also acquired streaming rights to some PGA tournaments last summer, though, unlike the NHL deal, the arrangement didn't involve the PGA taking a stake in BAM Tech.

Even a name change for BAM Tech is in play, according to insiders. And, the entity is still forming, so it's unknown which assets of MLBAM will fall to Bam Tech, though it seems a safe bet that PGA and NHL content rights will be among them.

Disney has been seeking ways to deliver live sports online without cannibalizing ESPN, and aligning itself more closely to BAM Tech is seen as an important step.

MLBAM, run by Bob Bowman, was founded in 2000 and streamed its first live baseball game two years later. The creation of BAM Tech, and its eventual spinoff from MLBAM, has been in the works for several years.

As recently as February, Bowman had been suggesting that MLBAM and BAM Tech would be a digital competitor to ESPN, as opposed to taking it on as a partner by way of Disney buying into Bam Tech.

"We want to be competitive. We want to be bidding for rights," Bowman said in February at the Code/Media 2016 conference. "Are we going to beat ESPN? No. But is there a role for over-the-top and virtual MVPD? I think there is, and we'd like to at least compete in that business."

Whatever Disney and BAM Tech eventually do together, it probably won't involve selling ESPN's core cable TV service over the internet as a stand-alone product. At least not in the near future.

Insiders say Disney's talks with MLBAM regarding becoming a strategic equity partner with BAM Tech began several months ago. While an announcement of a deal could be forthcoming soon, it might not come until after the MLB's quarterly owners' meeting in August.