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The Biz of Diz – How Major League Baseball Indirectly had a Hand in Disney’s Newest Business Strategy

It’s the year 2000, and we’re knee-deep in the midst of the Dot-Com Bubble and Major League Baseball commissioner Bud Selig has just formed Major League Baseball Advanced Media (MLBAM). 

Selig wanted to bring everything from team web sites to ticket sales under this tech umbrella, creating an ecosystem of online presence. MLBAM was funded by $1 million from each team for four years, giving them a budget of $120 million to work with.

In 2002, MLBAM produced and streamed a game between the Texas Rangers and New York Yankees. A “pennant race” package was sold two weeks later, then a postseason package. In 2003, MLB.TV was launched to stream a full season for $79.95. That year, more than 100,000 subscriptions were sold. 

In 2015, MLBAM spun off its streaming technology division into a new company called BAMtech. The company signed deals with the NHL (which included an ownership stake) and WWE. Fox Sports, PlayStation Vue and Hulu also signed deals with BAM. HBO tried to launch its own streaming service, but then worked with BAMTech to launch HBO Now. (The current HBO Max service is tied to AT&T’s technology, as AT&T is the parent company of HBO).

In 2016, Disney paid BAMTech $1 billion BAMTech for a 33% ownership stake in the company. The goal was to create a streaming option for ESPN which was seeing heavy losses as customers were cutting the cord from cable, thus reducing ESPN’s subscription income. 

This deal was attractive to Disney as a turnkey service while other competitors built their own systems. Les Moonves, then CEO of CBS, has been quoted as saying, “We didn’t go and buy BAMtech for a zillion dollars.” Instead, CBS All Access and Showtime’s streaming platforms were built internally.

Kevin Meyer, chief strategist for Disney at the time, stated “(Streaming is) going to be a massive business, and BAMtech is going to be a massive winner in it.”

When CEO Bob Iger decided to reposition Disney’s television division in 2017, BAMTech and Disney accelerated the option for a controlling stake. In August 2017, Disney invested an additional $2.58 billion dollars to increase their ownership percentage to 75%. 

In my next article, I’m going to focus on the increasing number of subscribers to Disney+, the new business strategy, and the subsequent increase in stock price despite the world being stuck in a pandemic.

One of the most famous quotes from Walt Disney is, “I hope we never lose sight of one thing—that it was all started by a mouse.”  It’s interesting to think that Disney+ was started by a fastball.

At the time of writing, the author owns shares of Disney.