Another week, another billion dollar deal in US sports media. This time it’s The Walt Disney Company forking out the mega-bucks with its accelerated acquisition of an additional 42 per cent stake in BAMTech, Major League Baseball’s market-leading streaming technology business, for a cool US$1.58 billion.
Disney’s increased investment, which ups its stake in BAMTech to 75 per cent and values the business at US$3.76 billion, comes four years ahead of schedule, underlining the entertainment giant’s strategic shift and its eagerness to reposition ESPN, its flagship sports network that continues to battle cable subscriber losses and declining affiliate revenues, as the premier digital destination for sports.
Speaking on Disney’s Q3 earnings call on Tuesday, company chairman and chief executive Bob Iger said betting big on BAMTech enables Disney to take “more control of our own destiny” whilst developing an “even more robust” ESPN-branded over-the-top (OTT) service, which was originally intended to go live later this year but will now launch in early 2018 with rights to around 10,000 live events.
“When you think about live sports and how much a sporting event live is consumed basically concurrently by the masses, you need a very, very robust technology platform to serve that,” said Iger. “BAM is the only one out there that has that.” More on what it all means for ESPN here.
In related news, ESPN rival CBS announced on Monday that it also plans to launch a 24/7 sports streaming channel later this year. Few details regarding programming and pricing have been revealed thus far, but it is understood that CBS is planning to create a sporting replica of its streaming news network, CBSN, which launched in 2014 and now forms part of its US$6-a-month CBS All Access digital service.
“Later this year, we will roll out a 24/7 live streaming channel like CBSN for sports as part of our ongoing [over-the-top] strategy,” CBS chief executive Les Moonves (left) said on the company’s Q2 earnings call. “We think sports fans are looking for something like this, and that opportunity is significant.”
In Olympic news, the City of Los Angeles, LA 2028 and the United States Olympic Committee (USOC) have agreed a memorandum of understanding that sets out the terms of their partnership for the 2028 Olympic and Paralympic Games.
The agreement calls for the city to contribute US$270 million towards projected cost overruns of US$500 million, up from the US$250 million originally earmarked as a contingency for the 2024 Games. It also provides city representation on the LA 2028 board of directors, gives the city consent rights over significant venue changes from the 2024 plan and a greater say in LA 2028’s overall insurance and risk management strategy, and stipulates that a new independent review of the Games’ budget, which totalled US$5.3 billion for 2024, must be conducted in due course.
Despite the budget for the 2028 Games not being finalised or independently reviewed, LA council leaders will vote on the MoU on Friday in order to meet an International Olympic Committee (IOC) deadline and ensure the city’s third Olympics can be rubber-stamped at September’s IOC Session in Lima.
Elsewhere, SoftBank Group is reported to be closing a US$1 billion investment in online sports retailer Fanatics Inc, whose aggressive growth in recent times has radically reshaped the licensed merchandise sector. The Wall Street Journal reports that the investment is being made through SoftBank’s US$100 billion Vision Fund, whose investors include the sovereign wealth funds of Saudi Arabia and Abu Dhabi as well as tech giants such as Apple and Qualcomm.
The Journal reports that the fresh investment, which raises Fanatics’ valuation from US$3 billion to US$4.5 billion, is a show of confidence in the company’s ability to compete in an e-commerce market dominated by Amazon and eBay. Other investors participating in the funding round include the National Football League (NFL) and Major League Baseball (MLB), who stumped up about US$95 million and US$50 million respectively earlier this year.
Meanwhile Jay Z’s Roc Nation Sports agency is embarking on a new strategy whereby it will partner its rookie clientele with brands collectively, thereby creating new endorsement opportunities for athletes who might otherwise struggle to land marketing deals individually. The first company to take up what has been described as a ‘first-of-its-kind’ offering is audio brand Monster Products, which is now being endorsed by major league newcomers such as Leonard Fournette and Josh Hart.
Also this week: golf’s PGA Championship will be staged in May instead of August from 2019 as part of a wider calendar shift that will see the PGA Tour’s Players Championship moved from May to March; the Wilf family, owners of the Minnesota Vikings NFL team, have joined the effort to take Major League Soccer (MLS) to Nashville; and USA Triathlon has a new chief executive in the form of Rocky Harris.