Walt Disney Co. agreed to buy an additional 42% stake in video-streaming company BAMTECH, LLC in a deal worth $1.58 billion.
Disney previously bought a 33% stake in BAMTech under an agreement that included an option to acquire a majority stake in BAMTech in the future.
Disney is also set to launch its ESPN-branded multisport video streaming service in early 2018, followed by a new Disney-branded direct-to-consumer streaming service in 2019.
The ESPN-branded multisport service will offer various sports programming, featuring around 10,000 live regional, national and international games and events a year, including Major League Baseball, National Hockey League, Major League Soccer, Grand Slam tennis and college sports. Individual sport packages will also be available for purchase, including MLB.TV, NHL.TV and MLS Live.
The new service will be accessed through an upgraded version of the current ESPN (US) app.
The new Disney-branded service will become the exclusive home in the U.S. for subscription-video-on-demand viewing of content from Disney and Pixar, beginning with the 2019 theatrical slate.
As part of the strategic shift, Disney will end its distribution agreement with Netflix Inc. for subscription streaming of new releases, beginning with the 2019 calendar year theatrical slate.
Upon closing of the transaction, Disney Chairman and CEO Bob Iger will serve as chairman of the BAMTech board. MLBAM and NHL will remain as minority stakeholders in BAMTech, with seats on the board. BAMTech CEO Michael Paull will report to Disney Chief Strategy Officer Kevin Mayer. John Skipper, ESPN president and co-chairman of Disney Media Networks, will manage the new ESPN-branded service. The BAMTech transaction is expected to be modestly dilutive to Disney’s EPS for two years.