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Published: Fri, August 12, 2016
Economy | By Melissa Porter

Disney Invests $1B in BAMTech, Plans ESPN Subscription Service


In a separate transaction, Disney announced that it was acquiring a 33% stake in video streaming and technology services company BAMTech that was formed by Major League Baseball.

Disney, which bought a third of BAMTech for $1 billion, said the new streaming service will feature live sporting events, but also said it would not include content from ESPN's linear networks.

Overall, Disney's net income rose 5 per cent to $2.6 billion, or $1.62 per share, excluding one-time items.

Revenue at Disney's cable networks business rose 1.4 percent to US$4.20 billion in the third quarter ended July 2, but missed an analyst consensus of US$4.31 billion.

The Walt Disney Company incorporated on July 28 1995 together with its subsidiaries and affiliates is a diversified global family entertainment and media enterprise with five business segments: media networks parks and resorts studio entertainment consumer products and interactive media.

The two-part US$1 billion investment, which includes an option for Disney to become a majority stakeholder, provides what Macquarie analyst Tim Nollen considers a "commanding position" on future content ownership. It will also collaborate with ESPN to launch and distribute a new ESPN-branded multi-sport subscription streaming service in the future. Hulu, part owned by Disney, said Monday will stop offering free TV episodes as it readies a live-streaming service.

Other Hedge Funds, Including, Edgemoor Investment Advisors added DIS to its portfolio by purchasing 28,346 company shares during the most recent quarter which is valued at $2,723,767.

BAMTech will take over the day-to-day streaming for Disney properties including the ABC Television Group and ESPN.

Despite beating analysts' estimates on higher third-quarter profit from motion-picture hits and theme parks, Disney fell as much as 0.9 percent to $95.85 in NY trading Wednesday before closing at $97.86, up $1.19, or 1.2 percent, for the day.

Operating income at ESPN increased during the quarter because of growth in advertising revenue.

Disney CEO Bob Iger was bullish Tuesday on Shanghai Disneyland, which opened in June.

Disney's shares fell to US$94.92 (RM379.10) in extended trade on Aug 9, down from a close of US$96.67 (RM386.09).

Disney shares fell 1.8 percent in the after-hours session, to $94.94, after closing regular trading up 1 percent.

Film studio earnings soared 62 percent to $766 million. The May 6 release "Captain America: Civil War" is No. 1, with worldwide sales of $1.15 billion, according to researcher Box Office Mojo.

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