While the top-level headline is easy to interpret as MLB just getting over $1 billion in cash, the likelihood of this money actually making its way into the owners’ bank accounts is pretty low. MLB isn’t selling off part of BAM Tech because owners need to raise capital; as their acquisition of the NHL’s streaming rights show, the business sees its best path forward as becoming a rights-holder, not just a technology company. Streaming-media rights are of course quite expensive, and with this equity sale, BAM Tech is now positioned to bid on all kinds of streaming-video content, potentially setting themselves up to be the dominant player in the space.
Long-term, this is definitely good news for the owners’ revenue streams, as the partnership with Disney will allow BAM Tech to grow beyond what it is now, and the league is set up to reap significant revenues from the venture if it becomes what Disney is hoping they can help turn it into. In the short-term, though, this probably isn’t a cash-out for the owners; as Dave Cameron noted in his THT Annual piece on the collective-bargaining negotiations, the owners probably don’t want to be sitting on a mountain of newfound money right as they negotiate the new CBA.
Of course, it’s also going to strain credibility for the league to cry poverty in any negotiations given that they have a secondary asset worth billions, but given that BAM Tech is essentially a separate business outside of baseball, it isn’t clear that the players have a strong claim that this is baseball-related revenue. With the infusion of cash likely to be invested back into BAM Tech, this money probably won’t filter through to the teams and players. But long-term, this definitely serves to put the league and its 30 owners in a very favorable position, now that they don’t rely solely on the popularity of the sport of baseball for their profits.
