Here’s an educated hunch: I think Disney is going to announce it has bought a piece of Major League Baseball’s video streaming company, for around a billion dollars, this afternoon.
I say this because sources have indicated that the deal, which I first told you about last spring, should be wrapped up this month. And because several people who would normally talk to me about this kind of thing have gone comically silent in the last 24 hours. And because Disney’s earnings call is this afternoon, after the market closes.
But the timing of the deal’s announcement doesn’t matter. What does matter is why Disney thinks it makes sense to do the deal, which will be its biggest digital investment of the Bob Iger era.
Disney’s investment should give it about a third of BAM Tech, the video streaming unit that pro baseball arm MLBAM has been trying to spin off, and the ability to invest even more, and control of a majority stake in the company.
The idea, presumably, is that both Disney and its ESPN unit have big ambitions to create their own streaming services, and they’d rather own the tech that will help them do that, instead of renting it. Right now, for instance, ESPN pays BAM Tech to power its WatchESPN streaming service.
You can debate the actual value of BAM Tech’s tech if you want — the $3.5 billion valuation Disney’s investment implies is less than what pro baseball was hoping for last year, but some Disney rivals, like Time Warner, say the business is worth considerably less than that.
Here’s the main question: What does Disney think it can sell on these streaming services it wants to build?
In the near term, its choices look constrained. Disney, for instance, has already agreed to let Netflix show its latest movies, including the new Star Wars output.
And while pundits and analysts keep bringing up the idea of selling ESPN directly to customers over the web, as HBO has done with HBO Now, executives say that’s not happening anytime soon. For now, ESPN will try to create new products, featuring stuff it doesn’t already put on TV, and sell that over the Web.
So if BAM Tech is going to form the backbone of big new streaming products, they’re going to have need some very out-of-the-box ideas about what those products could be. Maybe Iger can share some of those today.
This article originally appeared on Recode.net.