The Walt Disney Company has announced they are acquiring a 33 percent stake of BAMTech. The deal will see Disney leverage BAMTech’s streaming and over-the-top (OTT) services to help launch an ESPN-branded “multi-sport” streaming service by the end of 2016.
Disney will pay a total of $1 billion to acquire this one-third stake. They will pay in two installments, one now and the second in January 2017. The deal also allows Disney the ability to purchase a majority ownership stake down the line, if they chose.
One of the key points is the eventual formation and distribution of a completely new ESPN owned streaming sports subscription service. The direct-to-consumer service will not feature any of ESPN’s current broadcast content. It will instead focus on live local, national and international sports coverage provided by ESPN and BAMTech. The content will reportedly include college football and basketball, tennis, rugby and cricket.
This deal comes on the heels of Disney’s similar one-third acquisition of MLB Advanced Media.
MLBAM, the digital leg of MLB, officially launched BAMTech in August 2015. The idea behind starting the spinoff was to let the new company take over all non-baseball related services. Since then, BAMTech has become a huge player in the world of direct-to-consumer streaming services. They currently have over 7 million paid subscribers OTT services across their clients.
Disney hopes their massive investment will help spur even greater expansion of BAMTech’s video-delivery platform. They also want to help them expand their services to a much bigger set of clients and continually develop new technology.
BAMTech will partner with Disney to help run and provide the video and digital content for Disney, ABC and ESPN. “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 Robert Iger, Disney CEO.
The NHL will earn a minority stake in BAMTech, based on their partnership with MLBAM.
BAMTech specializes in direct-to-consumer video services for live events. They are able to provide impressive quality to a large number of people, on any device. They currently provided streaming and OTT services for HBO NOW, NHL, the PGA TOUR, WWE Network and more.
Although the deal does not included plans to provide ESPN services directly to consumers just yet, Disney is positioning themselves to be able to, at a moment’s notice.