Major League Baseball Advanced Media (MLBAM) announced it is taking over all operations for the National Hockey League's cable channel, websites and digital operations. MLBAM also said that it plans to spin off a digital technology unit in which the NHL would hold an equity stake.
Under the terms of a six-year media rights partnership with the pro hockey league, MLB Advanced Media (MLBAM) will oversee the NHL's cable channel, the NHL Network, as well as the NHL's league and individual team websites.
MLBAM will reportedly pay the NHL $100 million a year for its content rights, and it will give the hockey league a 7 percent to 10 percent stake in the proposed streaming-tech spinoff.
According to the Wall Street Journal, in obtaining the new business, MLB Advanced beat out competitors including Comcast's (NASDAQ: CMCSA) NBCUniversal (NBC Sports), Google (NASDAQ: GOOG), Amazon (NASDAQ: AMZN), Verizon (NYSE: VZ) and AT&T (NYSE: T).
Rumors that Major League Baseball would spin off its successful digital technology operation date back to late last year, when HBO axed the in-house technology unit that was developing its HBO Now direct-to-consumer streaming service and outsourced development and operation of the platform to MLB Advanced.
MLB Advanced also handles backend streaming operations for WWE, Watch ESPN and CBS' March Madness On Demand, among other clients. The NHL deal differs in that MLBAM will the one paying the NHL, and will also manage the front end of the hockey league's content operations, monetizing them through subscriptions and ad sales. MLBAM replaces NeuLion as the NHL's digital vendor.
Bob Bowman, president of business and media for MLBAM, told the WSJ that the company is considering the creation of a bundled streaming sports product, combining not only NHL hockey, but also golf via a recently created partnership with the Professional Golfers Association (PGA).
"We are trying to signal to those who own rights that we are willing to bid on rights and be a co-owner," Bowman said to WSJ.
According to the paper, Major League Baseball is preparing to spin off MLBAM's tech unit and bring on board other strategic investors. If the plan is approved a board meeting later in August, Major League Baseball will hold talks with other investors.
Reporting on speculation about the spin-off in early December, the WSJ put the valuation of a spun off digital technology operation at $5 billion. Re/code amended that down today to around $3 billion.
Also speaking to the WSJ, NHL COO John Collins questioned the ability of niche channels like the NHL Network to remain viable existing only in the pay-TV ecosystem.
"In an environment where [Disney Chief Executive] Bob Iger is talking about ESPN going 'over the top' and Viacom is getting thrown off cable operators, what's the future of a single-sport linear network like NHL Network?" Collins said.
Working with MLBAM, he added, the NHL has a better chance to become a bigger business and brand "on a global stage."
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