Media powerhouse Disney, owner of US networks ESPN and ABC, has secured full ownership of live streaming technology company BAMTech after acquiring Major League Baseball’s (MLB) remaining 15% stake in the firm.
BAMTech, launched by MLB, powers Disney’s direct-to-consumer streaming services including Disney+, ESPN+, and Hulu. It also operates platforms for the likes of Worldwide Wrestling Entertainment, the National Hockey League, and Warner Bros. Discovery’s HBO.
In the company’s annual report filed yesterday (November 29), Disney said it paid $900 million to Major League Baseball earlier this month to buy out the league’s stake in the company.
The company will now be known as Disney Streaming.
Disney’s interest in the company started in 2016 with a $1-billion investment in BAMTech, giving it a 33% stake. A year later it paid an additional $1.58 billion to seal an overall 75% stake.
Last year, the NHL sold its 10% interest in BAMTech to Disney for $350 million.
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As of October 1, 2022, MLB’s remaining 15% stake in BAMTech was recorded in Disney’s financial statements at $828 million.
BAMTech’s origins can be traced back to 2000, with MLB’s decision to launch a digital hub for the league and help develop online ticket sales leading to the creation of MLB Advanced Media.
MLB Advanced Media saw the development of in-house streaming video technology to bring baseball highlights and full games online with its MLB.TV service, with its first game streamed during the 2002 season.
The league split off its streaming video division as BAMTech in 2015, setting up its eventual takeover by Disney.
The move comes soon after the company’s surprise announcement that Bob Iger would return as chief executive following the board’s removal of Bob Chapek after less than three years.
Iger has said one of his top priorities is to make the company’s streaming business profitable as part of his mandate to “set the strategic direction for renewed growth.”
Iger announced Disney is dismantling its separate Disney Media and Entertainment Distribution arm as part of a restructuring, with chairman Kareen Daniel leaving the company.
In the filing, Disney said: “While the plans are in early stages, changes in our structure and operations, including within DMED (and including possibly our distribution approach and the businesses/distribution platforms selected for the initial distribution of content), and be expected.
“The restructuring and change in business strategy, once determined, could result in impairment charges.”
According to the annual report, the ESPN+ streaming service has around 24 million paid subscribers as of October 1, 2022, a 42% increase from the 17.1 million subscribers recorded in 2021.
The average monthly revenue per paid subscriber on ESPN+ increased from $4.57 to $.4.80 – a 5% increase from last year.
The deal, meanwhile, has injected a further $900 million into MLB’s revenue. Earlier this month, MLB commissioner Rob Manfred said the league will post gross revenue of nearly $11 billion for 2022, returning to pre-pandemic levels.
The ongoing 2022 season is the first year under the league’s domestic media rights renewal with ESPN, Fox, and TBS, valued at a combined $1.76 billion annually, an increase of nearly $250 million per year from the previous agreements.
This year, MLB also agreed streaming rights deals with Apple and NBC-owned Peacock.
Apple’s tie-up with the league, the tech giant’s first foray into live sports, is understood to be worth $85 million per season for seven years, while Peacock’s two-year contract is valued at $30 million annually.