Disney Nearing Deal to Own One-Third of MLB’s $3.5 Billion Digital Business

The Walt Disney Company is nearing a deal that will net it a one-third stake in Major League Baseball Advanced Media, the streaming division of MLB whose business is valued at around $3.5 billion (via Bloomberg). According to those close to the deal, an agreement between the two companies has not yet been officially finalized, but once it is the contract will allow Disney to purchase another 33 percent of MLB’s digital sector over the next four years.

Disney currently owns ESPN, which has been reported recently to be facing troubles with its traditional, broadcast viewing numbers with the rise of streaming and web-only packages. WatchESPN offers viewers the option to watch live sports broadcasts on platforms like the Apple TV, as long as they have a cable package that includes ESPN’s content channels.

Disney has also been a key Apple content partner over the years, due in large part to Disney’s partnership with and ultimate 2006 acquisition of Pixar that made Steve Jobs the largest individual Disney shareholder and gave him a seat on the company’s board. Long-standing rumors of Apple seeking to launch an over-the-top streaming television service have generally included Disney as one of the key early content partners on board with the project, although Apple has so far been unable to secure all of the deals it would need to launch the service at the price point it wants to hit.

Given that the deal between Disney and MLBAM is not yet official, there’s no word yet on what the ultimate outcome of the acquisition would entail for the company’s streaming services. Still, some knowledgable of the deal and the streaming sports world see the move as a way for Disney to continue to bolster ESPN’s streaming offerings if MLBAM were to be rolled into the company’s online video platforms.

“MLBAM has some great assets that could help ESPN build a robust over-the-top offering,” said Bernard Gershon, a media consultant based in New York.

“You see the biggest sports media company moving to greater digital delivery,” said Chris Russo, a former National Football League executive who now heads sports investment banking at Houlihan Lokey Inc. in New York. “It really shows they’re trying to get ahead of the digital phenomenon rather than being left behind it.”

Disney currently offers a number of its services as streaming options on the fourth-generation Apple TV, including Watch ABC, Disney Channel, Disney XD, Disney Jr, and Watch ESPN. MLB has also been a strong Apple content partner, with an advanced live streaming app being one of the key demos during the introduction of the fourth-generation Apple TV.

Tags: ESPN, Disney
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