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The Walt Disney Co. (NYSE: DIS) said that it will acquire an additional 42% stake in video streaming company BAMTech for around $1.58 billion, bringing its overall ownership stake to 75%. Disney first invested $1 billion for a 33% position last year in Alexandria, Va-based BAMTech, which had spun out as an independent company from Major League Baseball's advanced media unit. In related news, Disney said that it will launch its own branded streaming service and end its a major portion of its distribution agreement with Netflix (Nasdaq: NFLX), effective in 2019.
- Why it's the BFD: Because hopes for a "skinny bundle" are fast being replaced by a fat streaming bill. At some point consumers will demand a consolidated option that looks a lot like digital cable.
- Bottom line: "Disney has been behind some of its competitors in transitioning into a digital-first, direct-to-consumer business model. One of the biggest rivals of Disney's ABC and ESPN — CBS — has had a streaming network for nearly three years and most of the major sports networks have been operating on streaming networks for years as well. BAMtech, which powers streaming for MLB and other entertainment properties like the WWE, will give Disney access to a data-based platform that will transform the way Disney can sell ads, service content and connect with consumers." — Sara Fischer, Axios