In buying a 33 per cent stake in video-streaming firm BAMTech for $1 billion, Disney is hoping to lure online viewers.
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A large part of the deal would appear to be due to Disney’s interest in delivering a new online subscription product for its fully owned flagship sports network ESPN, which is described as a direct-to-consumer service that will include live regional, national and global sporting events but interesting will not include content now featured on ESPN’s linear networks.
Disney also said it’s struck a deal for seven of its networks, including ESPN, ABC, Freeform and Disney Channel, to be carried on all the plans offered by AT&T Inc.’s forthcoming DirecTV Now streaming service. It will feature content provided by both BAMTech and ESPN and include live regional, national and worldwide sporting events.
Current content on ESPN’s roster of cable networks will not appear.
The deal will see Disney pay out the purchase price in two installments, now and in January 2017, with the option to acquire majority ownership in the coming years. ESPN’s impact at Disney is huge because it leads the cable-network division that accounted for almost half of Disney’s operating income a year ago.
For the last several weeks, news reports have indicated that such as move was likely, as MLB looked to separate BamTech from MLB Advanced Media (MLBAM). Disney is making its full effort to bring back ESPN’s golden days.
Revenue in the media networks for Disney increased by 2.4% to end the quarter at just over $5.91 billion. It will air content such as Major League Baseball, National Hockey League, tennis and college sports.
Walt Disney Co DIS.N reported better-than-expected quarterly profit and revenue on Tuesday, fueled by a near 40 percent jump in revenue at its studio unit.
ESPN – the company’s cash cow – outperformed in the quarter because of affiliate and advertising revenue growth, but number of subscribers fell and it had higher programming costs, Disney said.
Revenue rose to $US14.28 billion from $US13.10 billion.
Disney parks and its resorts segment posted growth in revenue of more than 6% ending the quarter at $4.38 billion.
Excluding items, the company earned US$1.62 (RM6.47) per share. That topped the $1.61 a share average of analysts’ estimates compiled by Bloomberg.
For its third quarter, Disney posted a $2.6 billion profit equal to $1.59 per share, compared to previous year during the same period of $2.48 billion equal to $1.45 per share.
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Film studio earnings soared 62 percent to $766 million.
