The Walt Disney Company confirmed today that it will spend $1 billion for a 33 percent stake in OTT streaming shop BAMTech, which will be spun off from Major League Baseball Advanced Media as part of the transaction.
BAMTech, Disney also said, will be leveraged to launch what Disney calls a “new ESPN-branded multi-sport direct-to-consumer service.”
“Our investment in BAMTech gives us the technology infrastructure we need to quickly scale and monetize our streaming capabilities at ESPN and across our company,” said Disney Chairman and CEO Robert Iger, in a statement. “We look forward to working closely with BAMTech as we explore new ways to deliver the unmatched content of The Walt Disney Company across a variety of platforms.”
Disney said its $1 billion investment into BAMTech will be paid in two installments — one now and another in January. Disney has the option to pursue majority ownership down the road, it said.
BAMTech handles backend streaming services for HBO, WWE and the National Hockey League, just to name a few clients, reaching 7.5 million subscribers to through the platforms it services and operates.
The direct-to-consumer service, Disney said, will feature content provided by both BAMTech and ESPN, and include live regional, national and international sporting events.
“Bringing a multi-sport service directly to fans is an exciting opportunity that capitalizes on BAMTech’s premier digital distribution platform and continues ESPN’s heritage of embracing technology to create new ways to connect fans with sports,” said ESPN President and Co-Chair John Skipper, also in a statement. “As WatchESPN continues to grow and add value to the multichannel video subscription, this new service will be an outstanding complement.”
Disney’s announcement was made as the company simultaneously released its second-quarter earnings data. The company confirmed that its cash cow, ESPN, had once again lost pay-TV subscribers in the second quarter, offsetting gains made in advertising and MVPD affiliate fees.
Last week, Nielsen reported that ESPN had lost 2.2 million pay-TV subscribers from February to August.
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