BAMTech valued at $3.75 billion following Disney deal

BAMTech, the company that powers streaming for MLB, HBO, NHL, WWE, and now, Disney’s and ESPN’s upcoming streaming services, is valued at $3.75 billion following Disney’s new investment. This afternoon, Disney announced it would acquire an additional 42 percent stake in the streaming infrastructure provider for $1.58 billion.

The company last year had invested $1 billion in BAMTech, giving it a minority stake (33%).

The earlier deal had included an option that would allow Disney to acquire a majority stake over several years, and it’s fairly telling that the company has chosen to exercise that option so soon.

Disney now owns 75 percent of the company that will power its shift into streaming.

Even Disney admitted the move was “an acceleration of that timetable for controlling ownership” – a signal that consumer adoption of streaming services over traditional TV is moving at a much more rapid pace than perhaps expected.

BAMTech itself is a spin-out from MLBAM (MLB Advanced Media), MLB’s digital media business. MLBAM operates the official website at MLB.com and related properties, as well as the popular MLB At Bat mobile application, among other things. Video streaming, however, became such a big business that BAMTech was approved to become its own entity back in August 2015.

The business has long since grown beyond being a streaming technology provider for baseball.

The company has also been tasked with powering streaming for HBO NOW, the National Hockey League, the PGA Tour, the WE Network, and others.

When Disney bought a minority interest in the company last summer, BAMTech began to work in the streaming infrastructure needed to run a new ESPN streaming service. (It was already powering WatchESPN, as one of its many clients.)

That new streaming service was also announced today, and will include approximately 10,000 live regional, national, and international games and events a year. It will feature events from Major League Baseball, National Hockey League, Major League Soccer, Grand Slam tennis, and college sports. ESPN said individual packages will be available for purchase, too, including MLB.TV, NHL.TV and MLS Live.

The service will launch in 2018, and be accessible through an upgraded version of ESPN’s app. The new app will let pay TV subscribers also watch ESPN’s networks, but cord cutters would not have that option.

Disney’s deal to own the infrastructure player behind its next big investments in streaming is a smart move, especially as it dares to go head-to-head with Netflix, which has promised to spend $6 billion on original content in 2017. It also just made its first acquisition by picking up a comics book publisher and its IP – a move meant to head off Disney’s plans to go head-to-head with Netflix, that will see it keeping its next big super hero franchise for itself.

Though Disney doing a streaming service is huge news, it’s not the first time the company has dabbled with digital delivery of its content. It has its own Disney Movies Anywhere app that lets it sell its content direct to consumers for viewing on any device. And it had already dipped its toe into the streaming business with the limited launch of its subscription video platform DisneyLife back in 2015.

But DisneyLife is only live in the UK. Disney’s new service will be global, and will go live in 2019 – just when Disney has the rights to pull its content from Netflix, apparently, as that’s just what it’s doing. BAMTech will power this too.

BAMTech’s rise and now its control by Disney has come incredibly fast. Only two years ago, the company was spun out of MLBAM. A year after that, Disney bought a minority stake. And now, just about two years after becoming its own entity, Disney controls it.

As a result of Disney’s deal, BAMTech’s originator, MLBAM, will own just 15 percent of the streaming technology company. It has not given up any stake in the MLBAM digital media business, however.