Disney Buys BAMTech for $1.5 Billion

Disney LogoThis has been an interesting week for Disney, which never ceases to amaze us. While we usually associate Disney with classic animated movies they’re more than that. This company is changing business, technology, and video streaming game before our eyes. This week, Disney has become the hottest topic again with their surprising business move. Keep reading to find out more.

Disney leaves Netflix

Netflix LogoEverything started on August 9, 2017, when Disney announced it will stop selling its movies to Netflix. Investors weren’t the only ones who expressed their concerns. Viewers were worried whether this decision means they won’t be able to watch their favorite Disney movies on Netflix.

The answer is – yes, you will be able to watch your favorite Disney movies, but for a specific period of time only. According to the reports, Disney movies that are currently available on Netflix will be available for streaming through the end of 2019, this seems reasonable you have to admit. Moreover, new Disney movies released through the end of 2018 will also be available on Netflix until the end of 2019.

The Disney – Netflix relationship was relatively short. Just last year, in 2016, Netflix announced it will be the base or home for Disney movies as well as content from Disney-owned companies like Marvel and Pixar. The relationship with Marvel will still continue, Netflix said.

Disney purchases BAMTech

Major League Baseball Advanced Media MLBAM - LogoNo, Disney didn’t leave Netflix just because they felt like it. In fact, it is a part of their plan that culminated with purchasing BAMTech. It’s important to clarify that Disney already had its stake in BAMTech, they just made a purchase to own the majority.

Previously, Disney held a one-third stake in BAMTech paid in two installments totaling $1 billion, but now they will pay $1.58 billion to raise their stake to 75%. Major League Baseball (MLB) and 30 team owners will retain 15% of the company, and other partners will still be able to retain some of their interests too.

It is important to bear in mind that Disney’s transaction has to wait for regulatory approval and money won’t move toward MLB’s bank accounts until their move is approved. The same thing happened the very first time Disney purchased BAMTech stake.

One reason behind the decision to purchase BAMTech is because Disney reported a decline in sales and profit which correlated with the rise of online streaming services such as Amazon.com and Netflix. At the same time, ESPN (also owned by Disney) recorded a significant drop in revenue and had to get laid off a number of their employees. The reason for decline of ESPN’s revenue is also attributed to rival streaming services.

Now that Disney purchased BAMTech it is not clear whether they will see the same potential in broadcasting Riot Games’ tournaments. Riot Games still didn’t comment on this new partnership between BAMTech and Disney, but we can expect their statement soon when we will find out whether their events will be streamed this way or Disney won’t go in an esports-related direction.

After the news about Disney’s business move was announced, the value of BAMTech increased to $3.75 billion. While Disney always had the option to purchase the majority of stake during a specific period of time, they accelerated the process because the growth of streaming services is developing at a faster rate than expected.

Bottom line

After just a year on Netflix, Disney announced they will abandon this streaming service in favor of purchasing their own. Disney is about to pay about $1.5 billion to own 75% of BAMTech after they bought one-third stake earlier. It is not clear whether the new ownership of BAMTech will have an influence on Riot Games’ tournaments streaming rights.

About the Author: Aman El TawilAmna El Tawil is a news reporter and a technology blogger. For the past five years, she has worked for major publications and TV networks in the Middle East, covering one of region’s hotspots. When Amna is not chasing after the truth amidst gas canisters, she can be found cheering her favorite football team on, or unwinding with some online gaming.

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