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MLBAM MLB IPO sale baseball
AP Photo/Charlie Riedel
Swinging for the bleachers?
PITCH PERFECT

Big media should want a piece of baseball’s best business

By John McDuling

MLB Advanced Media (or BAM as its known) is the digital offshoot of professional baseball that  was set up in the 1990s to manage pro baseball team websites. Since then it has become a genuine force in streaming video, and also one of the most compelling stories in media and technology.

The company, which is owned by the 30 Major League Baseball franchises, makes millions of dollars from outsourcing the streaming video technology it developed for the league’s mlb.tv service to sports cable channels such as ESPN, as well as organizations that have nothing to do with baseball, such as World Wrestling Entertainment and the premium cable channel HBO. It was on track to generate $800 million in revenue last year, has been profitable for about a decade, and has increased the dividend it has paid to its owners.

Now, according to a Wall Street Journal interview, it could soon be sold. Or at least part of it, and most likely to other giant media companies.

Rob Manfred, commissioner of Major League Baseball, said in an interview that the conversations about a new [ownership] structure have heated up in the past six months as a result of interest from “a number of very significant companies” in U.S. media.

MLB Advanced Media declined to comment further to Quartz.

Rumors about an IPO of BAM have been around for many years. But its CEO, Bob Bowman, ruled one out when he spoke to me for this Quartz story last year. So emphatic was his denial, in fact, that it did not even make it into my final story, but here’s what he said: “Not going to happen. You do an IPO because you want to raise money which is not an issue to us. Or you want to pay off investors, and we have already done that. I can’t think of a reason why we would do an IPO.”

Presumably, this logic would also apply to an outright trade sale, or the sale of a minority stake to other media companies (the Journal says all options are on the table, and mentions Sony and Time Warner, both BAM clients, as possible strategic investors).

What’s changed? For one thing, Major League Baseball has a new top executive, commissioner (Rob Manfred) who could influence a decision to sell part of the unit.

Secondly, streaming video is absolutely booming, arguably beyond what anyone expected this time a year ago. All the big media companies are rushing to stream their content online, through their own services or new ones developed by distributors.

If it were to happen, a partial sale could provide a nice windfall for BAM’s owners (the MLB clubs). Or it could provide funds for further investment to keep the company’s surprisingly dominant position in streaming video technology intact.