Could MLBAM Be Making a Push to Become the Next Sling TV?

By now, you may have heard that the NHL has partnered up with MLB Advanced Media (MLBAM) in a new distribution deal. It’s a bold move for both leagues, and one that shows that the NHL is serious about increasing their online presence and offerings. But hidden in the details are even bigger revelations about the future of MLBAM. From the CBS article:

NHL COO John Collins would not confirm these figures, but word is the league valued the deal at $200 million per year.

The annual breakdown: a $100M rights fee to the NHL, $20M in savings from the league not having to invest in the capital resources/expertise it would take to go on its own, and $80M in equity in MLBAM’s technology business.

The equity portion may not figure in revenue calculations for the purposes of the salary cap. “We were told to expect $120M per year in added revenue… $4M per team,” one governor said.

This new deal is indicative of a fairly serious pivot. MLBAM made a name for itself as a content partner — a company that provided the infrastructure for those who wished to offer online content streaming. The massive system that they built to host their MLB.tv service was essentially leased out to the likes of ESPN, HBO, and WWE.

But with the NHL deal, MLBAM is no longer serving as the back end. They aren’t the ones being paid for hosting, they are paying for distribution rights. And they are buying everything lock, stock, and barrel. Besides being in charge of streaming NHL Center Ice, MLBAM is taking over NHL Network, NHL.com, and individual team web sites. Basically, if you want to view NHL content online, you have to go through MLBAM.

And there’s more. According to Forbes:

Along with the deal, the NHL would have equity in what is now called BAM Tech, a wholly new digital company that will be spun-off of MLB Advanced Media.

There’s the other shoe. What once started as a distribution channel for baseball games has become a lucrative technology business.

But I doubt this is the end for BAM Tech. They could certainly take their subscription fees from baseball and hockey fans along with their licensing fees from HBO and be content being a very profitable company for some time. But if that was the plan, they would have just taken the NHL’s money for distribution rather than paying them for the rights. Sure, they’ll make money from Center Ice and the NHL Network, but it could be indicative of a bigger move.

The “problem” with MLBAM’s business model is that it’s easily repeatable. Any company with enough capital and infrastructure can get in on the action. What MLBAM has that others don’t is partnerships. Right now, it works with two major sports leagues, *edit: I originally neglected to mention that MLBPA also hosts streaming for the PGA*, the biggest name in professional wrestling, the largest sports media company in the world, and the most popular premium cable channel. If one were inclined to, say, start their own over-the-top online TV provider, this would be a pretty good start.

It’s speculation at this point, but it wouldn’t be surprising to see a BAM app available on smartphones and set-top boxes in the near future. While they’d be competing against the likes of Sling TV and PlayStation Vue, the already-formed partnerships along with their world-class technology platform would certainly make them a formidable opponent. And don’t forget that HBO owns Cinemax and is a subsidiary of Time Warner (which just merged with Charter)*, while ESPN happens to be owned by Disney. There are a lot of fingers in a lot of pies here.

* – a studious commenter pointed out my mistake here.

Say you want to pay $120 for MLB.tv. What if BAM Tech could offer that plus HBO, NHL games, the Disney channel, and ESPN offerings for an extra $40 a month? Would the availability of live sports be enough to convince you to cut the cord?

MLBAM already built the gun, and now they’re starting to buy the bullets. There isn’t much stopping the once-quaint sports video service from becoming one of the biggest players in TV.





David G. Temple is the Managing Editor of TechGraphs and a contributor to FanGraphs, NotGraphs and The Hardball Times. He hosts the award-eligible podcast Stealing Home. Dayn Perry once called him a "Bible Made of Lasers." Follow him on Twitter @davidgtemple.

5 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
John Thacker
8 years ago

MLBAM operates Playstation Vue, so it would be competing with one of their customers. I guess it’s still possible, though.

Dave
8 years ago

“And don’t forget that HBO owns Cinemax and is a subsidiary of Time Warner (which just merged with Charter)”

This second statement isn’t accurate. Yes, HBO is a subsidiary of Time Warner. But it’s Time Warner Cable – a separate, independent company since 2009 – that is being acquired by Charter. (That deal has been announced by but isn’t yet closed.)

That said, HBO’s parent Time Warner does own lots of additional cable channels that would be of interest to an over the top service. It owns CNN, TNT, TBS, and others.

another Dave
8 years ago

As someone that cut the cord at the end of last winter, and who sometimes misses sports on TV, I’m interested. But I cut the cord to save money, not to spend more money. I did just add SlingTV this week, and I must say that I’m impressed… and my first thought was: this is pretty cool, and cable TV could be (is?) in very real trouble.

With Sling’s basic “best of live TV”, for 20 bucks I’m already getting the ESPNs, and Disney (and quite few other “cable” channels). I also added the $5 a month sports package, so I can watch F1, soccer, and volleyball. I could add HBO for $15 (which would put me squarely at your $40 proposal level)… but I’m not interested, as I already get Netflix for $8.

So I wouldn’t want the $40 package that would only really add NHL games… and I assume out of market NHL games only.

I’m also not going to get the MLBtv package until they get rid of the out-of-market only limitation… so, I assume I will never be getting MLBtv.

If they did offer in-market games, I would subscribe to MLBtv and NHL Center Ice in a heartbeat. (assuming near current pricing)

That said… I’m curious to see what shakes out. And its good to see the NHL jump onboard with a rising platform.

mark monforti
8 years ago

They have to get rid of blackouts though.