Acquired - BAMTech, Disney and -the Biggest Media Company You've Never Heard Of”

0:00Oh, frickin' Forbes. God, I hate these quotes of the day. Most annoying website ever. Welcome back to episode 37 of Acquired, the podcast about technology acquisitions and IPOs. And today, spinouts. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. So today, David and I are continuing our journey along sports and technology by diving into major league baseballs 2015 spin out of a company called BAM Tech from their advanced media or MLBAM group and the 2016 minority investment into BAM Tech by Disney. So David, I'm ridiculously pumped for this episode. Oh, me too. Not only and for listeners, even if you don't care about sports, you should keep listening because not only is this one of the most interesting sports tech deals that happened in the last

1:12decade plus, but this is actually, I think really important to understand from just a pure technology standpoint, you know, when it comes to the future of television and things we've talked about on this show a lot with Twitch and Amazon and YouTube and even Snapchat. So stay tuned for this one. Yeah, it's like there was a secret like big tech company hiding inside of a sports league for like a decade and a half.

1:36and they had more foresight and more premonitions than the best streaming services out there and have better technology and I mean reading into all this I really couldn't believe it like we give a lot of credit to a lot of these other companies Netflix being one of them for for being these sort of digital pioneers and baseball is making bets five years earlier totally totally agree this is gonna be fun to dive into yeah Well, before we get to it, a couple of administrative things as usual, we love iTunes reviews. Listeners, if you like the show, if you've been listening for a long time, or if you're brand new to the show, it's how we grow the show, it's how others find us, and it lets us do more cool things and bring on more cool guests. So if you have a minute, would love a review on iTunes, and thanks so much for that.

2:23our slack has been blowing up recently so we've got a thing called slack and I'm sure many of you use it at work and there's over 600 of us that are hanging out in the acquired slack now you can get to it by going to acquired.fm and there's a little widget on the right and there's a ton of cool conversation in there a lot of great criticism and feedback of of episodes after we release them where we hop in and talk about it with you guys. But then also a lot of people, you know, linked to breaking news and yesterday is a great discussion of Amazon's earnings call. And honestly, we get a lot of great color for upcoming episodes from the community. So thanks to everyone who is an active participant in the Slack. Absolutely. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, LaGora.

3:15the agentic operating system that is redefining how the world's best legal teams work. Yup, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. LaGora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do, operate with obsessive customer focus.

3:44They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love like tabular review where you...

3:57drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Lagores Bed here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work, and this means that the pie can grow even as each individual task takes less time.

4:16And they recently launched LaGora agent offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And LaGora works where you already work. You can use it within Microsoft Word while redlining or drafting the early LaGora numbers essentially.

4:44speak for themselves when they have a head-to-head pilot with their top competitor they win 70% of the time. Legora now has over a hundred thousand lawyers on the platform from 1200 legal teams in 50 countries and crazily they went from one million to a hundred million in ARR in about 18 months. Truly insane numbers and that is the real test.

5:09Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in house at a company, you can learn more at logora.com slash acquired and just tell them that Ben and David sent you. So David, I think we're ready to dive in. Let's do it. History and facts. Okay.

5:37Question number one I bet on many listeners minds is what is Bam Tech? So Forbes calls this the calls Bam Tech the quote biggest media company you've never heard of and this story is you know it's been alluded to they are probably as much as Netflix and Amazon and Twitch doing as much to shape the future of television in America and around the world then Any other company? Well, it's funny. I bet a lot of our listeners haven't heard of Bam Tech. There's some out there that are probably not in their heads that have heard of it. I'd come across it in a lot of research I was doing for some of the things we're working on at Pioneer Square Labs. But it really took kind of like diving in for a few hours yesterday to really understand how the structure of this whole thing works and how the timeline lays out and there's a lot of cool stuff in here. Yeah, and I knew it.

6:33because I have been a baseball fan for a long time and a subscriber to MLB.tv, which is where Bam Tech gets its origins. So all the way back in the year 2000, Major League Baseball, the sports league, had the foresight to start a new division.

6:55within within the league and they called it Major League Baseball Advanced Media and the mission that they gave this new division was to build and operate a website for each of the 30 teams in the league rather than saying you know the Mariners and the Giants and the Yankees you guys all go off and build your own websites We're going to centralize this in the league which is kind of brilliant at this in its own right right like when you think about in that era What what the worst website would have been of 30 sort of random owners who are hiring random web development firms to do the contract work for that It's probably a good thing. They they centralized that function. It certainly it certainly is but it kind of got off to an inauspicious start because the the league and and bam itself

7:46made the same poor decision right off the bat and they like any super corporate IT department because this is basically, you know, Major League Baseball's IT department. They decide to outsource the website building to a consulting firm and pay them a ton of money and, you know, as expected fashion, the consulting firm basically fails to deliver and the website's totally suck. So Robert Bowman, who was the newly appointed CEO of a major league baseball advanced media, which we're just going to call BAM for the rest of the episode. He quickly made the decision, which ends up being probably the best decision that Major League Baseball has ever made to build a tech team in-house, bring on really good developers and start...

8:32owning and building out all the technology inside of BAM. Yeah, pretty interesting. Yeah, very interesting. So that was and also probably I mean for anyone out there that that you know our audience is probably mostly a tech audience but for people that don't work at tech companies It's probably actually hard to know what the right things to hire for are in this area. Not only is it web development, but they're looking to do things in ticket rights, and they're looking to do things not yet in streaming, but very shortly thereafter. And thinking about how do people that have backgrounds in sports, sports law,

9:11Um, you know, contract negotiations, media, you know, how does it, how do they build like a strong tech team inside? Kudos alone to them for that. Yeah. And, and Bowman really...

9:22He really reinvents himself. So he had been before becoming the CEO of BAM within Major League Baseball. He hadn't been a tech guy either. He was the COO and the CFO of a big conglomerate called ITT. It was funny reading about this. I remembered all those commercials growing up for, you know, ITT Technical Institute. Oh yeah. Same thing. So that's where Bowman came from. He also, he'd been the treasurer of the state of Michigan and have thought about running for governor.

9:51and much earlier in his career, he was an investment banker at Goldman Sachs, so he's not your typical Silicon Valley executive. But this was also relatively early days for the Internet and the middle when they started the first tech bubble. So he figures it out along the way. And they pretty quickly start doing a lot of really innovative things with this team that they build in New York. The headquarters of BAM are actually really cool. They're in the Chelsea market in New York, this amazing building.

10:24Pretty quickly thereafter, once he brings it in house. So in 2002, the season before Ichiro Suzuki had joined the Mariners from Japan. And oh man, Ichiro is so much fun to watch. And his first season, he had won the Rookie of the Year and the AL MVP. And of course, he had this huge following in Japan, you know, pretty much the whole country was and still is obsessed with Ichiro. And they wanted to follow They wanted to follow his games. And so Bowman decided and Bam decided that they were going to start streaming audio of the Mariners games on the internet so that people in Japan could could follow each hero. And unfortunately though, that also doesn't go too well. They spend millions of dollars building on the tech to do this. Millions of dollars advertising it. And they only get about a thousand subscribers. So

11:16were two years into BAM at this point, and they kind of have two fails. They made the bad, the wrong call on outsourcing the websites, and then they sunk a ton of money into streaming audio. And that failed. And David is probably worth talking about the way that the agreement is structured between BAM and the teams, because Major League Baseball, I believe, is owned by the owners of the teams. Each team has committed $1 million for four years.

11:45for a total of between the 30 teams for a total of 120 million dollars to capitalize this project. And so, you know, they draw their first 30 million dollars, they draw their second 30 million dollars. Here we are 2002 big failure. They've drawn 60 million dollars from the teams that they've promised. You know, this is gonna be a, I think they've actually said this is gonna be a revenue generating organization within Major League Baseball and like, Big flop, $60 million. Yep. And so this is where things start to turn around and where, you know, I have to imagine Bowman really kind of gets forged through the fire and to, you know, learns how to be a great executive and technology executive. So he makes one really good decision later in 2002. And that's that he realizes that because of, as you were saying, been this the way the deal was struck between BAM and all the teams,

12:44that they have the rights to sell tickets to games online via the company's website. And so they do. Bowman does a deal with ticket master in mid 2002 to partner with them.

12:58to power the sale of tickets on the team's websites. And still to this day, if you go to the Mariners or the Giants of the Yankees website to buy a ticket, it's done in partnership with Ticketmaster. And as part of that deal, Ticketmaster pays BAM $10 million up front. And that's...

13:15really the moment where things start to turn around. And they can now invest that money. They stop drawing money down from the teams. They now have their own revenue stream and can start to do even more innovative stuff. Yeah, it's a nice cash flow. Yeah. So towards the end of that same season in 2002, so where they they've had this horrible failure with audio. But what they learned from that is that Audio failed because people really wanted to watch the game. You know, that's why people watch baseball on TV and live. They didn't just want to hear it. They wanted to see it. So unlike most of these sort of like online media failures, you think about the technology didn't fall down or anything. It was actually just insufficient. Like they didn't have enough people willing to pay for just the audio. Yep.

13:58So again, this is where it's really impressive. By the end of the season, same season in 2002, they start experimenting with streaming video online. And nobody's doing this in these days. So this is 2002, three years before YouTube.

14:11They stream the first game that they stream is in late August. They stream a Texas Rangers in New York Yankees game online. The quality is terrible, but people love it. And then they kind of race to build a product around this. And by the end of the season, they sell a nine game pennant race package. So streaming games online, people are paying for this. And then they sell a $20 postseason package.

14:35and people love it. And so then they scramble during the off season. And by the start of the 2003 season, they launch up to a full launch of MLB.tv. And for $80 for the whole season, you can stream every out-of-market game on the internet. And this is huge. You know, until this point, whenever people wanted to watch baseball, they had to turn on ESPN or their local sports, regional sports network. And they could only watch what was being shown. Now all of a sudden, You pay $80 directly to Major League Baseball and you can watch every out of market game, you know, whenever you want at any time on the internet. It's pretty awesome. Yeah, and the speed at which they were able to do that is pretty laudable in the way that they were able to do it because you sort of think.

15:20In a business that's dangerously cyclical and seasonal like this, where you sort of only have one shot per year to introduce something new for the season, the idea that they did their first little test with just streaming one game, and then another little test with a postseason package you can buy, and then came out with a real deal for that $80 full season package, which I think got 100,000 subscribers, so like 8 million in revenue from that first season that went fantastically well.

15:48I mean, that's that's a narrative development and they were able to do it even within the constraints of this You could you could very easily see management saying well, you know, we're gonna try that for next year Yep, and I think what's super impressive, like two things. One, this is 2003. You know, again, we're years before YouTube. Nobody else is really doing streaming video at this time. It's four years before Netflix went online. Yep, absolutely. No streaming Netflix. And like you said, they get 100,000 subscribers right off the bat. That's $8 million in subscription revenue.

16:24But then they're also selling ads on top of the game. So this pretty quickly becomes a really interesting, high margin business for Major League Baseball. And they're building, bam, is building all this expertise. You know, this is hard. They're streaming, you know, 15 games every single day all around the world. They're building all this expertise in streaming live video. And not just...

16:47you know live video but live video where it matters that, you know, it can't be 10 minutes delayed because if the score changes and you hear about it, you know, somewhere else and you're delayed watching the game, people get upset about that.

16:59Yep, and they a big selling point for them is is effectively handling that that multi platform handoff because for them they they I was just listening to a podcast that we'll throw in the show notes where the the commissioner of major league baseball is on one of fortune's podcasts and he's mentioning that one big you know core asset to this it's not just the raw Sort of like video encoding and fallbacks and relationships with the CDNs to distribute the video files themselves It's actually the the expertise of hey, I'm watching this on my TV and I or my call it my Apple TV and I switch over to my phone It better pick up exactly where I left off and it can't pick up like in the middle of the next inning where I accidentally see the score like that's a huge that destroys the experience Yep, so they they have sort of like developed expertise in in this thing that is initially quite specific

17:50to their use case, but then we'll see in the future, you know, as it becomes more important to be able to stream live events in sort of this real-time way cross-device over the internet, that's a huge asset. Absolutely. And they really ride the wave, not as bad as you point out, not only of video growing on the internet over the next 10 years, but also of mobile and devices.

18:17Major League Baseball's app gets featured by Apple basically every major developer announcement. So when they announce the app store for the iPhone, Major League Baseball is one of the first partners and first apps featured on stage with Steve Jobs during the announcement featured during the launch on stage during the launch of the iPad on stage during the launch of the Apple Watch.

18:41they really become one of the best technology teams in the business and in terms of bringing video to consumers devices wherever they are. Yeah. Boy, and I'll say I do so far I've just been incredibly praiseworthy and it's good to be a little bit more balanced. I totally remember sometimes call it eightish years ago where I was like tuning into a game on the streaming service And like it did have some weird hiccup and like I saw I think actually the use case was I was watching like an hour delayed or something and then it flash forward to the the real time and then I saw the score and then I think that actually

19:26I seem to remember that bug being pretty widespread because I remember it sort of blowing up on on Twitter as a big problem but like they've totally had these hiccups on the way where they've had to learn how to be really good at this this sort of ensuring a consistent experience quote unquote live viewing yep good point it definitely did not happen overnight but the business you keep growing year-over-year they eventually do raise prices from $80 a year for for ammo.

19:51MLB.tv they raised that over time, but the subscriber base keeps growing to the point where in an interview in 2012, Bowman is quoted as saying that BAM makes about 620 million in annual revenue, which is really meaningful for the league. Yeah, so think about this. I mean, they were...

20:10promised to be capitalized with 120 million. It's an interesting stat that they only ended up taking 77 million from the teams after the ticket master deal and then that $8 million in revenue from that 100,000 subscribers in that first season. And so they really did really well by the teams that league.

20:33Yep. And along the way, as we've been saying, they build all this expertise in streaming video and particular live video. And so back in 2010, they make kind of the first move that starts setting them down another path, which is not just streaming baseball and major league baseball, but they do a deal with ESPN and they become the technology provider that powers ESPN 3, which is ESPN's new site that they launched then that covers all of their internet streaming. So you still have to be an ESPN subscriber via your cable service. But it's now BAM and Major League Baseball in the background that's powering all sports that ESPN is streaming online. And so they do that for a couple years, just as the technology backend provider. And then in 2014,

21:24A bunch of really interesting things happen, things happen. So one, that's the year that Amazon buys Twitch, as we've talked about, which obviously is another form of sports in eSports and live video streaming on the internet. But BAM makes a pretty big move. So they announce a partnership with WWE, the Worldwide Wrestling. I forget what it stands for now. It's not the Worldwide Wrestling Federation. It's wrestling entertainment or something like that. It's one of my favorite rebrands ever because the WWF, the World Wildlife Federation had a trademark and then the WWE had to get off of it. They sued them, right? I think so. Also, WWE is world wrestling entertainment. It needs an organization or like you even just said the world wrestling entertainment organization because entertainment's not a noun. Right, right.

22:21Anyway, the point is this is a big deal because for the first time now you have multiple sports, multiple sports leagues putting their content powered by the same backend onto the internet. And this is when cable companies and media companies are really starting to worry for the first time. It's been going on for years, but about cord cutting and the only thing that's holding the cable bundle together at this point really is live sports. And so this is the first crack you can start to see in the scene of the live sports cable bundle package that it could actually be coming online. Yep. And then in 2015, early the next year, BAM kind of continues that trend and they do a deal with golf with the PGA tour. And they announced that they're bringing golf online too. And so

23:15the momentum is kind of continuing. And then later in 2015, and this might have been, if you've heard of Bam Major League Baseball Advanced Media before, this might have been where you've heard of it, if you're not a baseball fan, they do a major partnership with HBO and HBO decided to bring their own...

23:35Sort of cord cutting service online for the first time. You had been able to watch HBO shows on the internet. But again, only if you were a cable subscriber, they do their first- And that was HBO Go. That was HBO Go. They announce HBO Now, which is you're able to subscribe as a non-cable subscriber directly to HBO. And it's, and it's BAM in the background that is powering all of that.

23:59Yeah, and fans of Game of Thrones who who had HBO now will remember that there was some some big issues with HBO building out their own their own in-house streaming and they actually draw like there was an episode of Game of Thrones where there's too many concurrent viewers and you basically just couldn't watch it and people were furious and Twitter's blowing up and people had to wait till the next morning to watch it and yada yada yada and you know they popped their head up and looked around and said we're not willing to take a chance on this for our true over the top product and outsourced it to MLBAM. Yep, that's what

24:36Advanced Media has gotten really good at over the past decade. So that was in April of 2015. And then later in 2015, the first really big other big four professional sports league does another deal with BAM. And this is the NHL. And so the NHL announces that they're going to contract with BAM to power all of their streaming. But what's interesting here, and this is where really the cable industry really starts to get nervous, is it's not just powering the back end, but they actually do a right steel. So the NHL takes a rumored to be about a 7% to 10% equity stake actually in BAM in a major league baseball advanced media.

25:24And in return, BAM promises to pay them a certain amount of money each year and then they get to monetize all of the contents. So the subscriptions that people pay to subscribe to NHL, that's BAM that's monetizing that. Just like its ESPN that gets the cable subscription fees and all the advertising that they run on top of it. This is really A watershed moment where BAM starts to look like a next generation cable provider itself. Yeah, you can totally see why this makes you nervous because if you're an ESPN or any sort of rights acquirer, your whole business model is taking a look and saying, okay, well, if we buy these rights, what can we get for them in terms of

26:14the advertisements we're gonna show viewers and the subscriptions, whatever vehicle you wanna use to monetize that. Like, okay, I'm gonna pay hundreds of millions of dollars upfront for these rights for X years.

26:25I really hope we can architect a business that's going to generate more than that. And I think that on its own feels kind of like a tenuous business model. But as that moves closer and closer to the source of the actual rights holder, you can see that that totally looks like it's going to disintermediate you as someone whose business it is to take on the risk of buying those rights and monetize it if those organizations themselves are getting better and better at monetizing their own own unique IP rather than potentially licensing it out to you to figure out. This is disruption of the middleman. This is the internet at work here. When this happens, the verge, actually. The verge does a really great long piece that we'll link to in the show notes covering the history of BAM that we've taken a lot of this history from. They say this is a quote from them.

27:20The new approach moves BAM beyond just being a white label service provider, putting them in position to become an ESPN of the Internet age, competing against the likes of Netflix, Hulu, and Amazon, where they have the one thing that those services lack, live sports.

27:35And Bowman himself is actually quoted as saying, we knew we wanted BAM tech over the long term to be not just a vendor, but also a rights holder, exactly what you're saying, Ben. And that also being a buyer of rights was the best business model. So getting these rights has obviously been important. So this is something that they were working on kind of for many years. And this is the vision of this next generation, like, what is the ESPN of the internet, locally? And BAM is so well positioned.

28:05Totally. And in that that Rob Manfred podcast I mentioned earlier Rob Manfred's the Commissioner of Major League Baseball. He mentions that there's kind of a they look at this in three different ways. One is the the obvious way that hey baseball is going to be broadcast right now it's broadcasting cable bundles as that gets you know skinnier and skinnier and live sports provides more of the value. This is a hedge against that.

28:31Right, it's just a simple, you know, we need to have a little bit of option value for the future on how our content gets distributed, and this is kind of our own way to do that instead of outsourcing it.

28:44Hey, this is actually a really great technology company that happened to be invented inside Major League Baseball. That could be a services organization for other content plays, which is what we saw with the PGA, with WWE, and potentially more to come. And then what we saw with the NHL is their sort of third business model of actually being that rights holder and monetizing other people's rights. And that, you know, you could imagine a scenario, this is getting into themes later, but like, what if Baseball declines in popular But Major League Baseball on its own, or BAM, is an even more valuable organization because they own the rights to many other forms of entertainment and they own the pipes to distribute it. That's kind of a crazy future. That is kind of a crazy future. But it's also one that, and this is the next thing that kind of happens in the history and facts here. One that doesn't make a lot of sense. It doesn't make sense for the collective 30.

29:42teams of major league baseball to own basically the future of internet television um totally and that hamstrings them right because they can't really issue stock to employees they can't uh they don't control their own destiny as much exactly and uh and this has become you know a tech company at this point and so they're competing with engineers and executives with you know Facebook and amazon and netflix you know all of whom are issuing stock compensation um but bam bam can't do that so they realize they need to they need to fix this. And so immediately after the announcement of the NHL deal, Major League Baseball announces that they're spinning advanced media out into its own separate company called BAM Tech and that they're going to start talking to investors to buy a stake in the company and finance it. And they'll retain a large equity stake. Major League Baseball will, but it will finally become its own independent company.

30:38And so they work on that deal takes a whole year. And then finally in August of 2016, it's announced that they have found that that partner, that investor that's going to, going to help spin the company out. And it is surprise, surprise Disney, which of course owns ESPN and ESPN, which for 20 years at this point has been the largest part of Disney. Yeah, almost dangerously so in this era too.

31:08Yup, and so Disney announces, this is August of 2016, that they're going to acquire a one-third stake in the company for a billion dollars, so they're valuing BAM tech at $3 billion. And then they also have the option to acquire a majority stake in the future. And this is just classic Disney. The similar thing happened with ESPN, you know, Disney.

31:30doesn't own 100% of ESPN, they own 80% of ESPN. And actually the first corporation owns a minority stake. Oh, they do currently? Yep. I thought the ESPN was wholly owned. Nope, not wholly owned. So Disney is very happy to do deals like this. And this is one of the reasons I'm sure why they end up...

31:49We sort of winning the investment here and becoming the partner. They're happy, you know, Major League Baseball, as we were talking about, this is such a valuable asset. They, I'm sure, want to retain their equity stake. And Disney says, as long as we have a path to controlling this, yeah, we're happy to have minority shareholders. Yep. And boy, Disney gets great option value here, too. I mean, they just get to see how I don't know.

32:12every source I've read says over the next few years to decide if they want to buy another third to give them a majority share of the company, but. Yeah, it's not probably exactly what the deal is, but it has been announced they have an option to acquire a quote majority stake in BAM tech. Yeah, and I think could it have been anyone else like we're going to get into that in another section, but like Disney is just the absolute perfect partner for this, right? Yeah, to BAM and to baseball.

32:42Yes, because they have a history of, and it was kind of what we saw with Lucasfilm, right? It was really important to George Lucas, who the buyer of Lucasfilm was going to be. And for Major League Baseball, even though they have a different set of motivations, they are very motivated to want to retain an equity stake over time. And Disney can say, yeah, we've done that many times. We're happy to do that. And so concurrently with the announcement that Disney is going to invest and have this path towards control ownership of BAM. They also announced that they're going to start working on a direct consumer ESPN subscription service powered again by BAM tech. But this is huge. This is going to be the first time ESPN, the first time that ESPN is going to be available directly to consumers outside of a cable bundle. And it's really, you know, it's been at this point

33:38years that ESPN is the only reason so many people continue to subscribe to cable. So this is Disney saying, okay, we now is finally the time we're going to move past linear television. Yeah. So David, I saw that too. But there's this weird thing that they also follow that with that sounds like it's hamstringing the deal. And it's got to be just like ease the concern of the cable company. So they're not going to include any current ESPN content. But You know, the door is open as and I'm sure the other reason for that is that all these rights deals have already been negotiated for the next several years and are locked up, but as those rights deals come up, you can bet for sure that Disney's going to be moving large portions of their content into their direct to consumer service. Yeah, and actually this we keep having this like very serendipitous timing with episodes. We definitely didn't know anything about the ESPN layoffs that were coming.

34:35but this last week, there were very large scale layoffs inside of ESPN, particularly around a lot of baseball tonight's programming. And one really interesting thing that Ben Thompson pointed out in Stratekry this week is that the internet and the availability of instant replay all the time has really taken away a lot of the initial value prop of sports center. I mean, you'd have to wait to go see highlights on sports center.

35:04you know, the next morning after the sporting event occurred. And that's really just not necessary now. I mean, if I freaking confined, well, it used to be vines. I can find, you know, tweets with embedded videos or gifts of that insane diving save seconds after that happens. Yeah. I mean, remember growing up when like, you know, staying up till 10 or 11 p.m. to, you know, to first sports center to come on watch what the frantic editors had put together and a couple of hours since the game. Yeah. Yeah. Yeah. So the point I'm driving at here is that like, You know, maybe it doesn't matter that much that that ESPN's current content is not going to be repurposed for this, you know, direct over the top service and that it's much more like who cares because their, their current content isn't what's going to matter in five years. Yeah. And don't forget, you know, bam, by now is not just, you know, direct.

35:55TV style streaming, it's all of the apps. They're on every device with all different types of experiences from highlights to stats overlays and data through to full video.

36:08Yep, and I want to make two points here that I think I just want to make sure before we move on. One is I don't know if we disclosed the enterprise value of BAM tech at Spinout when Disney bought a third of it was $3.5 billion. So think about that. Initially capitalized with was $77 million inside of Major League Baseball, you know spun out at a value of $3.5 billion. And the other thing that I want to clarify is we keep talking about this over the top service.

36:38A lot of listeners are probably familiar, but that basically refers to the idea that number one, I think OTT is like the stupidest name of all time, but everyone's talking about the move to OTT service. This is like my doctrine, and my doctrine that it's not a wave as long as you have a...

36:55a title for it that your average person doesn't understand exactly exactly but basically it refers to the idea that everyone has a set top box and that set top box is controlled by their cable company and that cable company sells them a cable bundle and then that cable bundle consists of a whole bunch of affiliate or carriage fees that that are charged to the cable company by the channels basically. And what over the top does is basically saying, we don't need your set top box. We're going over the top. We're going direct, direct to consumer. Yeah, this is, this is serious. This is the business model innovation I was talking about in the Clippers on our last show. Okay. So August 2016, the spin-off happens. Disney is the partner very shortly thereafter in November of 2016.

37:43BAM announces that they're expanding beyond the US and they're coming to Europe. They're partnering with Discovery Communications, the Media Company that owns the Discovery Channel and many other, many other forms of content to buy the rights to...

37:57stream the Olympic Games in Europe. So big announcement, they're going global. And then shortly thereafter in December, and this is really interesting going back to Twitch, they do a direct rights deal with Riot Games, the owners and publishers of League of Legends for BAM to have the rights to stream all official League of Legends competitions through 2023.

38:21Yep, and that is a big big deal. That is a guaranteed $50 million per year deal that BAM tech is going to pay riot and in the esports space right now We're all wondering what does this mean because right now you go and you can watch a lead championship series game with millions of other people for free That's ad supported on either twitch or youtube and There's this company Bammtech that's paying $50 million to riot per year and So far nothing like they're they have these rights But we haven't seen anything with it. And we're going to, we're really going to see something I would assume in the next six months, where there's a, a direct offering that is built by BAM tech, that is the, maybe the one and only way to go and watch these League of Legends matches. And I think we will, we will probably get into eSports and future episodes. But that Disney slash BAM tech is making these like big bets throughout their history.

39:25on things that are before their time and that's shown here yet again with a big purchase of these rights. In fact, some of the biggest dollars that are moving around in the entire esports space probably years before most people have any idea that that's even a thing. Yeah, and this is something, you know, for, for BAM to be able to start to do this, they really need a partner. You know, this is another reason why Major League Baseball, you couldn't finance doing this, but with Disney and the you know, the balance sheet that Disney brings to this, they can really start to be a player in this, this right space. Yep. So the last thing that happens just a couple months ago in February 2017, Bowman after a 17 year run as a CEO of BAM, steps back from, from day to day operations as CEO, and they hire a man named Michael Paul to be the new CEO. And this is really interesting.

40:18Paul had been the VP of video at Amazon and was the person responsible for the development of prime video with Amazon's Netflix competitor. And of course was super involved with Amazon's acquisition of Twitch. And before Amazon, he'd been a TV exec at Sony and Fox and Time Warner. But this is really interesting when you think about The rest of Disney's streaming catalog Netflix is obviously a big partner of theirs as his Apple and others. But you know, Pixar, Lucasfilm, Marvel, all the Disney videos. And now you have the guy coming from Amazon who built their Netflix competitor. You can start to see how BAM and Disney together could really be the full service, you know, a very compelling full service video provider to consumers.

41:07Over the top on the internet. Absolutely. Absolutely. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI first world, that doesn't hold up anymore. Yep. Your risk surface changes every week now.

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42:59Should we move on to category? Yeah, that couldn't have been the more perfect segue because originally as I started doing this research I was thinking oh a technology acquisition or you know not quite an acquisition but a technology investment because it's you know the best technology that provides these services to anyone that wants to do their back end streaming but really I mean they've been they've been expanding and they've been kind of taking over a much more significant part of a business here where they're actually, the rights holder and they're actually distributing this content on their own. So I mean, I think they're really their own business line here at this point that Disney so far has invested in and we will see what they continue to do with it. Yeah, I totally agree. Business line and right now it's sort of a mirroring the ESPN business line.

43:53for Disney and their heads against the decline of the cable model to be the ESPN of the internet age. But as we talked about, when you think about all the content that Disney has, there's really potential here to be business model disruption for the whole company and how they, their relationship to consumers of that content. Right now, all Disney content is mediated through a movie theater or through.

44:18through cable or through Netflix or some other distributor, this is really a way for Disney for the first time for their content to start to have a direct relationship with customers. Yep. And the magic of these internet business models is shortening value chains where when we start to say, Oh, it's sort of the Disney of the era, I'm sorry, the ESPN of the internet era.

44:39Well, it's the ESPN and the cable company of the internet. Right. Because in these previous, previously, you just need so many more steps because distribution is hard. Like offline distribution is hard. And so these cable companies have an incredible moat around them against other cable companies, but not against low end disruption from internet-based services where, you know, in that old world, the model is content. And then, They sell that to a rights holder, and then the rights holder gets a carriage fee from selling that into or distributing it through a cable company, and then it goes to consumer. But you really combine those middlemen here with the internet and have the ability to go much more direct, and that happens in every business. Yep, and it's so ironic here. I believe over 10 years ago at this point.

45:30Comcast actually once made a hostile takeover offer for Disney and tried to buy Disney. Faith is a cruel mistress here and it's Disney that's making the play to not buy Comcast, but just obsolete them. Yep. I mean, it's the smiling curve, right?

45:51I feel like half of my life is informed by Ben Thompson right now, but that piece was so great about about self-driving cars and making the reference that way upstream you have the component makers or in our case the content producers way downstream you have the actual Whoever goes direct to the consumer and everyone in the middle their value gets diminished over time So if you're in Netflix and you're effectively all you have is distribution Well, like the internet changes that right the internet makes it so you become much less valuable and if you're the content producer Disney You've dramatically grown your value and if you're in the middle the Comcast you've dramatically lessened it

46:32Yep, yep, and Netflix of course gets this and this is why they and Amazon too were investing so much in producing their own content but You know, it'll be interesting now that that Disney the 800 pound gorilla has really Also stepped in as a direct competitor in this space. Yep Okay, so what would it happen otherwise? Yeah, so I really like I'll just kick it off with this one excerpt that I grabbed from that verge article that I thought was really great Bam has been flirting with the idea of a spinoff since 2005 when it made the round with investors and bankers, but his revenue at the time was under 250 million and streaming video was far from mainstream. A decade later, Bam is on pace to earn 900 million dollars and it's been turning a steady profit. And so it's really interesting to think about

47:19MLB for the longest time over a decade now has known that this thing is probably Different enough from what we do and serves us as one customer but is really a horizontal that could serve a lot of customers or in fact be a right holder itself that We got to get this thing out of here, but it sort of took until now for them to find the right partner and Make it a big enough business on its own to make it happen And I wanted to get your thoughts on that. You know, why couldn't they do it any sooner? Yeah, I mean, I think the opportunity here is so much larger than just being the streaming service for Major League Baseball, but that you actually could build the television network of for the internet. Yeah. Yeah, absolutely. So yeah, in terms of, you know, who else do you think could have been, could have been the investor here for the spin-off?

48:11I mean, we talked about why Disney was in many ways a perfect fit. Is there anybody else? It may be Netflix, but they have so much duplication with Netflix. When you think about the people that are really good at this in the world, this video content distribution right now, it's BAMTAC, and they historically have been more back end because they sort of white label their front end, whereas Netflix really aggregates all users into one front end.

48:39There are differences between them, but the people that are really good at this streaming technology and have all the right agreements and infrastructure in place across all the different, you know, CDNs and everything necessary to distribute this content are BAMTech, Netflix, Amazon. Yep. Can you think of any others? Maybe Verizon?

48:58Well, Twitch obviously is part of Amazon. And I mean, Verizon's sort of like one layer deeper in the stack when you actually start to go look at the telcos. But they actually own the pipes where this gets distributed. So you can see that being an interesting partner. Yeah, I mean, Google and YouTube. But you know, the only, the one that comes to mind for me and I'm sure they must have looked really hard at it. And quite honestly, I'm surprised they didn't didn't really try to make a run and how bid Disney because I think Disney probably got a pretty good deal valuation wise here relative to the potential is Amazon. And especially with Michael Paul coming over to be the CEO, I mean, clearly he had been thinking about this. But if you look at Amazon and then they were so precious in the acquisition of Twitch.

49:48And maybe the path that they're taking is that they want to broaden out Twitch and compete directly here, too. But again, the rights are so important for physical sports. I'm very surprised that Amazon didn't try and make a harder run at Bang Bam here. Yeah. And maybe they did. I mean, maybe there was some kind of bidding war. We don't know. I mean, it's not a crazy enterprise value for the spinout, right? If they're generating 900 million in revenue to have sort of a three and a half 4x multiple on that.

50:17I mean, that's really very reasonable relative to other tech company valuations. And I guess the only thing I can think of is that historically Amazon is pretty cheap when it comes to M&A. And so maybe they just weren't willing to go higher, but I have to imagine giving the huge investment that Amazon has made in video over the last few years and you know, Bezos talks about it potentially being he always talks about how he's looking for the looking for the fourth pillar for Amazon that's going to be the next big business unit and and that video could be that Again, I'm very surprised that they they let this get acquired by somebody that can can threaten them as much as Disney

50:59Yeah, and and we're sort of gonna we're bridging here. Let's just call a spade a spade and say that we're into Tech themes Tech themes, but I'm pretty usual Yeah, yeah, I I think one thing that I've been thinking about is did MLB screw up in giving Disney the option to Buy the whole thing at some point or at least buy a majority share because you look at the growth of this business and you look at the potential ahead and the very clear wave that they're surfing on and going over the top and actually starting to own a lot of these rights and at the very least do a lot of the distribution for the important content out there for live sports specifically. Like, if I majorly baseball, like if I majorly baseball shareholders, and this is probably where the nuance comes in,

51:48I would love to own that for the next 20 years. And maybe this is all sort of an artifact of the fact that Majority Baseball is not a publicly traded company. It's a, I think, I keep saying this, I'm pretty sure I'm right, because that's the way it is another league. It's actually owned by all of the owners of the team. And so maybe, you know, you don't have the same sort of investor pressure because a lot of these owners of baseball teams aren't really in the business of owning an asset that needs to appreciate over the next 20 years in a very high growth tech company way. That's just not the business they're in. And if they were going to do that, they are going to invest elsewhere other than their 130th ownership in a league. Yeah. As we talked about it before, there was no way that BAM was going to be able to realize it's full potential being fully owned by Major League Baseball here.

52:44Right, but could they have found a partner where they weren't at risk of losing the majority of this business? Yeah, but again, I think probably comes down to, we weren't privy to the negotiations, but I have to imagine that Disney ended up being the perfect partner in that they're very willing to let Major League Baseball retain a minority ownership stake in the future, which even though it's not a majority ownership stake, but But they're going to realize, be able to participate in the economic benefits here without having to control it. And again, like we talked about, the control structure was definitely hampering, hampering, bam, you know, from realizing it's potential. Right.

53:26I also wonder too, what is, maybe there just will be a fantastic return. Let's say Disney takes their option in two years, and it's doubled by then, or maybe three years, and it's doubled by then. I mean, if it's a $7 billion company and Disney's buying another version, maybe MLB's like, wow, awesome, great, we got, actually what do they, What do they do with that money? Pay it as a distribution out to... Well, and again, think about, you know, who is MLB, right? Like, there are a bunch of rich, you know, people who own baseball teams, right? Right. What they're not, you know, maybe some of them are tech investors, but, you know, certainly not, they're not living this and thinking it every day. No. Like, we are here on acquired, you know. And it's much older money too than the MBA. I, this is going to be, actually, I'm going to...

54:14dance forward to follow up and then come back to tech themes here. But my follow up is going to be, boy, do I wish I had listened to that Bill Simmons interview with Steve Balmer before we recorded the last episode. And the good news is I'm not like radically changing any of my thinking. I think it reinforces a lot of the same points. But it was just super enjoyable to listen to. Balmer is incredibly candid. And I think that and Bill's obviously an amazing interviewer. But You really get a sense of who the owners are in different leagues like in in Balmer says it talks about the NFL, but I think the

54:48MLB is the same way. It's a lot of older money from sort of varying industries that families may have owned the team, things like that. And when you look at the NBA, it's like a bunch of hedge fund managers, investment bankers, tech billionaires, and they're sort of looking at these businesses in a very different way. And I really think that if owning a majority share of BAM tech as it grows as a tech company, through your 130th ownership of Major League Baseball by the nature of you owning a team. It's just not the thing they're optimizing for. It's a lot of old money. They're not dumb by any means, but it's just not why they own the team. Yep, totally agree. But then coming back, I have this other question that Baseball, so the MLB,

55:40is growing year-over-year. It's itself, even after the BAM tech spin-out, is a great growing business. And I'm a little bit... I have a little bit of dissonance here because it seems like of all the major sports baseball seems to be declining. And so...

55:55you know, with baseball, the MLB posting record earnings and teams getting more and more valuable. In fact, the average, uh, uh, major league baseball team is more valuable than the average NBA team. Like the sport itself doesn't seem to be growing. So I'm a little bit, maybe listeners can help us out with this in this lack and we can talk about it as feedback in the next next episode. But I'm trying to figure out why I feel like baseball is less prevalent in my generation than it was in my parents generation. And yet, The teams continue to appreciate and value and are even more valuable than other sports leagues. Yeah, and without being an expert on this by any means, my hypothesis would be that there really is a difference here between the game on the field and innovation and interest growing or waning there and business model innovation. And we talked about this on the Clippers episode and the MBA has their own streaming

56:54tech with league pass that maybe they will think about outsourcing to BAM tech or selling the rights to BAM tech in the future. But I think it's this business model innovation and developing, again, collapsing the middleman, taking an internet based business model approach and developing a direct relationship with your customer, direct paid subscription relationship with your customer. That's probably accounting for a lot of the increase in value here. Yeah, I agree.

57:23Do you think that Disney is going to take their option in the next couple of years and buy another third? I mean, I don't see how they don't, right? I mean, I guess this is bleeding into grading a little bit, but working on through this episode, both in our discussions and the research, I kind of had this aha moment like we talked about when we were introducing the episode that we're talking about here is the future of television. We're not talking about just sports. And that is so core to Everything that Disney is, I mean their cable network's division and which is of which ESPN is the crown jewel has been the vast majority of

58:02the profits, the EBITDA, and accounts for the vast majority of the market cap of the entire Walt Disney company for the past 20 years. Yeah. So then I'll pose this to you. So if Bam Tech, so you say it's all about television, well, television is a bundle of live and pre-recorded content. So let's say that the cable bundles in X number of years don't exist or are unimportant. For Disney, Bam Tech is their their replacement for live. Rather than selling into the bundle and taking a carriage fee, like Disney is able to put all their live content directly through BAMTEC. Right now, all their pre-recorded content is locked up and deals with Netflix and others. And I think those go through 2019, 2020. Yep. Will Disney renew those agreements with those other content aggregators?

58:59and keep all of their non-live content going out through those channels or are they going to try and build a direct to consumer offering through BAMTEC where they're actually a portal and they're aggregating live or bundling live and non-live together in a way that consumers want going direct to the content owner.

59:21This is super interesting, and we're alluding to this at the end of history and facts. But I think this is the question, right? My mind is coming back to superior consumer experiences here, and I wonder if there is some danger in the path that Disney's taking here from a consumer perspective that are they just recreating that cable bundle?

59:44Online and doing it with better economics for themselves But what consumers hate about cable right is you get all this you have to pay for all the stuff. You don't want you know is a much better experience Really in the current world that we live in for consumers where you can choose, you know, hey, if I care about baseball, I'll subscribe to baseball. If I care about basketball, I'll subscribe to League Pass. You know, if I care about movies, I'll subscribe to Netflix and TV shows. Are we going to see a re-bundling here that actually would be negative for consumers? Well, it's like, it's like that Jim Barksdale quote, right? There are two ways to make money in business. You can unbundle or you can bundle. And I mean, I really think like

1:00:24If your entire business strategy is read what consumers will want in the next five to 10 years and unbundle or bundle appropriately, like if you can execute on that, you're going to do well. And right now what consumers want is unbundling, but big open question to when All the content is to desperately scattered around everywhere and we have, you know, like I remember like 10 years ago when every network had their live TV or their like ABC had lost available to watch on ABC.com and some other company, you know, NBC had the office available on NBC.com and like it took Hulu and then Netflix and like these re bundling all this content back together in a way that you want to view it.

1:01:08maybe right now, what we want is unbundling and to be able to nicely get content directly from the source. But at some point, we're gonna have fatigue of that. And they're gonna be a re-bundling. And who's gonna do that? How many subscriptions are you gonna have? Do you really wanna pay Netflix and MLB and League Pass and and or could a really compelling, you know, I don't know, $20 a month, $30 a month, $40 a month, package from Disney that includes all of that.

1:01:38that could be very compelling as well. Yep. All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team and deploying them is no longer the hard part. Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern, like the risks are real. Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower. Yep, AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent visible and secure in one place.

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1:03:18So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out servicenow.com slash acquired and tell them that Ben and David sent you. All right. Let's grade the thing. Let's do. Before we do one quick tech theme, I wanted to tack on. We've talked about this so many times in other shows, but I just think this is another really good example of a kind of lesson for me in terms of building companies and for entrepreneurs. Bam.

1:03:47started by solving a real problem they didn't start out by trying to invent the future of television they started out with like the teams needed websites and they solved that problem poorly at first and then better and then the problem was you know a lot of fans in Japan wanted to see each year and they solved that problem poorly at first and then better you know and then the problem was well there a whole bunch of other you know folks on the internet that folks that have live content that want to stream it on the internet. And well, BAM had a good solution to that problem. And then it was, you know, consumers wanted a new way, a new relationship to, to sports and wanted to find, have the final reason to cut the cord. And BAM solved that problem. And I think it's just a great example of stair stepping your way up into a enormous company by, by solving real problems kind of one at a time.

1:04:38and the counterfactual to that or more of just the counter-ethereal to that is yes, it's a really great way if you want to become a platform to solve one problem first and then figure out what under there you can serve other people by doing but boy you have to make sure you don't get into a vertical or versus horizontal mess there and then be both a services provider and care about your own core business that utilizes the services provider and this is like this is I don't think we anticipated this being a theme when we started acquired, but boy has it sure become one, especially hot on the heels of the Oculus episode. Absolutely. Interestingly enough, like, it doesn't really seem to be an issue in this case. Like, Major League Baseball isn't trying to hamstring BAM tech by not allowing BAM tech to serve Major League Baseball's competitors. And until now, it made entire, it made,

1:05:32tons of sense for BAM tech to prioritize or for BAM to prioritize the needs of MLB because that was an early customer. And so with this spin out, I mean, it's really like a great way to solve for that problem. And I hadn't quite thought about it. I mean, you've been right to be asking this question and bringing it up throughout the episode. I think this might be why the deal took a year to get done. You know, they announced that they're going to spin it out in August of 2015. The Disney deal doesn't happen until August of 2016.

1:06:01Man, that must have been such a negotiating process to wrangle all 30 owners and get everybody's interests aligned here. And I'm sure not everybody, you know, Ben is going to take the rational, you know, thoughtful approach that you just out, you know, laid out about why this should be a horizontal play, not a vertical play. Yeah. Well, it seems like they've got the incentives lined up right now, especially if Disney in pretty short order hereby is the rest of it and then it's really a non-issue. Yeah.

1:06:31All right, so we grade it. Yeah. So listeners, David, now we're having a debate before this show over a over I message of whether we were going to grade whether this episode was going to be grading the spin out or grading Disney's minority investment with the option to buy a majority shirt later. And I was kind of pushing for like, well, you know, I think the thing that's fairly well understood is the spin out and it's highly speculative to talk about the future purchase. But Like, the spinout is so clearly, like, I'm David and I were like, uh, no brainer. Like, that's an A. That's a great decision. Why wouldn't they do that? On the part of Major League Baseball to spin it out. Yeah. Like, they, they, they totally would have hamstrung that thing by keeping it in a house and it's just like value destruction to, to not spin the thing out. So we've decided it is we're, we're going to grade it, um, from, from the Disney perspective, which I actually, David, I want to hear your thoughts first on that. Okay. I'll go first.

1:07:29I think this is an incredible acquisition by Disney. We're somewhat hamstrung in grating it. As thoroughly as we would like, given that we don't know exactly how much revenue is coming along with BAM tech versus staying with Major League Baseball. But let's just say for arguments, they sort of the latest number we have is kind of 900 million in revenue. And of course, they have to pay a lot for rights to go along with that revenue. But still, they're essentially paying what is that for three and a half billion dollar enterprise value, you know, call it four times, just under four times revenue for this. Think about that relative to, you know, the multiples that we typically see in the technology space that's very low. And then think about that relative to the massive opportunity that Disney has here to really have a credible shot at building the future of long form, you know, video

1:08:32customer relationships on the internet. This feels like a great purchase to me. And then I also wanted to think about this through, if you go back to some of our earlier episodes on Disney Pixar and Lucasfilm and Marvel, we talk a lot about the Disney flywheel and the playbook that Walt Disney, so many years ago laid out that really was the forefather of the Bezos flywheel and how Disney is going to be able to take all of their all of their other activities and pieces of content that they have throughout the rest of the company, and start to push it through this direct customer relationship that they've now just acquired. For the first time, really, in company history. And I think the potential is enormous here. So both easy to direct customer relationship, like, Bam Tech doesn't have any audience. Well, Bam Tech doesn't have any audience, but they're managing the subscription for

1:09:29relationship with the consumers. So consumers are paying them both for MLB.tv and NHL and anything they do in the future now, right? Oh, yes, I see. But on an in a siloed basis, yeah, yeah, right. Like they don't they don't necessarily have some consumer eyeball portal where Disney can plug their content and get that distribution. No, bam tech itself isn't a consumer portal. But through it, Disney, a major league baseball and the NHL and now Disney can operate a direct consumer relationship where consumers are paying them a subscription for the content that in the past Disney had to mediate everything through, you know, whether that was Comcast or movie theaters or Apple or Amazon or whomever. Now there's finally a vehicle that consumers can, you know, over the internet just pay, pay Disney directly. Yep.

1:10:24And I think it's a brilliant hedge by Disney. I mean, I think I'm assuming you're driving in an A there. Oh, yeah. I said everything except the actual grade. Yeah. A, this is, this is, I predict we'll go down as one of the most important, most transformative acquisitions in Disney history, of which we have already covered several that they've done. And it's only in process. We'll have to revisit this when they buy the rest of it. Yeah. Yeah, I think I agree with you. I also am giving in an A and I think the biggest thing is their mastery of positioning. To me, it's sort of a hedge, like it's a hedge that, oh, what if cable bundles decline? But like, cable bundles are going to decline. They already know that they don't currently own their highest value content, and that will come in the future, and that will come through a lot of the rights that that BAMTech already owns, and that this is a bet on whatever their future content and this distribution mechanism to go direct to consumers is.

1:11:22Yep. And then one last thing I'd throw in, it's kind of been a while here and acquired since we've talked about the people aspects of acquisitions, which going back to our early shows, we focus so much on it. And so many of our guests talk about all, you know, BAM Tech as an organization has this history of operating within, you know, not as a startup, as a part of a much larger conglomerate, which it now will continue to as part of Disney.

1:11:49So I wonder if a lot of times you see startups get acquired by a large company and then the Mojo gets lost and equity compensation isn't as much as it once was. In this case, there's going to be more equity compensation and probably a more innovative culture that BAM tech will be joining versus baseball. So I wonder if from a people standpoint, the company is also well positioned to succeed here. Yep, I think that's right.

1:12:19Okay, should we move on to follow ups? Yeah, let's do it. So I mentioned it earlier. I'll just call it out one more time. If you liked the last episode or you want to hear more, or you just want to hear from a very honest and clear thinker about the current state of the NBA and how he operates his basketball team, go listen to Steve Balmer on the Bill Simmons show. Yeah, it's a great episode and, you know, hear him say, unfortunately he doesn't do a...

1:12:46doesn't do a, you know, head coaches, head coaches, head coaches, champ. The classic, the classic bomber enthusiasm is on display as always. Yeah. A bunch of real quick ones for me. A whole lot has happened in the last couple of weeks. We won't analyze any of these, but just to list out and would love to jump in the Slack and chat about them with folks. Some of this has already been talked about in the Slack. Apparently a lot of public series are now abandoning Facebook instant articles for a whole bunch of reasons.

1:13:16Two, Microsoft is killing WonderList very, very sadly. It is my to-do list app. I love it. And I'm bummed that it's going away. Three, Instagram is on fire. Growth is just continues to accelerate. They passed, announced that they passed 700 million MAUs this past week, which is, you know, they're starting to rival, you know, the same size as the parent company as Facebook. Yeah, I mean, Instagram is just crushing it up being Snapchat.

1:13:46Nobody does Snapchat better than Instagram. Next, the Echo Look, so Amazon announced an actually big shout out to our good friend Zoe in Seattle who had a big role in playing and developing the Echo Look. So now you can not only talk to Alexa, but Alexa can watch you in your home.

1:14:09I don't know, I can't decide if it's creepy yet or awesome, probably both. As with everything. As with everything. As I record this episode in my apartment in Capitol Hill in Seattle, like my Alexa is listening to the entire thing. So listeners, if you're at Amazon and you have the encryption keys, then you get a first look at this episode. At first look at the episode, right? Which they don't. We're just joking. But it is one of those things like it.

1:14:38I think a lot of people will think this seems creepy right now, but I bet it will be surprised at how quickly it becomes normal. Yeah. Next two more real quick ones. One cloud era priced their IPO yesterday at $15 a share. Enterprise value market cap of about just under two billion, which is sort of flat from there. Well, actually it's half of their last private raise, but the last private raise was more of a secondary that Intel did. So big enterprise IPO happening.

1:15:07which is what the fifth or sixth of this year and the march goes on. Yeah, the march goes on. The the IPO window is open. And then finally follow up on our Uber DD episode. Obviously, there's been lots of Uber news over the past couple of weeks. But DD yesterday raised $5.5 billion in the largest private company fundraising round ever.

1:15:30the $5.5 billion in one fundraising round. If you were on Team Uber and you thought that we talked about this on the show with Brad Stone, but if you thought that doing the quote-unquote merger with DD meant that the war was over and you didn't have anything to worry about, guess again, the DD giant and this $5.5 billion specifically was raised to expand internationally.

1:15:59Dede is coming and gunning to be a competitor to Uber and everyone else in this base, so watch what happens in the future. Yep. Carvouts? Carvouts. Okay, real quick. I have a real quick carve out that will take many hours to read and I'm still not done, but the latest wait but why was months in the making and is just fascinating. All about the new Elon Musk company Neural link that wait, but why refers to as the quote wizard hat. I won't even get into it here, but it's very worth reading and very thought provoking. I feel like Elon companies at this point are like the blockbuster hit of the summer, like, like coming. It's like a new story. Yeah.

1:16:47It's all, it's all coming full circle here. It is. And while you chose one that is largely about the future of humanity, an incredibly important mine is quite right, but fun. So the New York Times operates a Twitter account called the NYT fourth down bot NYT 4th down bot. And it basically crunches a whole bunch of numbers. And I'm sure I haven't really looked into the At these days, I just assume something has a data scientist doing machine learning behind it. And that is just like, oh yeah, well, everything that involves data is surely machine learning now. But basically, it's really just a man behind the shirt. Yeah, somebody applying 20 year old mathematics and statistics to pop this out. But basically, it tweets for every NFL game, what decision they would make on fourth down. And it is

1:17:40Awesome because there's this non-data-driven Basically, there's this trope going around that NFL owners play it safe and punt because that's the accepted wisdom and they don't want to risk it and go for fourth more often than is generally accepted. Go for it on fourth down rather than punting or going for a field goal more often than is commonly accepted because they will, if they fail, face the wrath of fans and potentially the owner. Which we are lamenting on.

1:18:11the last episode and in the slide. Right. But, you know, but if you, if you quote, unquote, money ball it and if you really, you know, look at all the data that you possibly can, um, coaches should go for it on fourth much more often than they do. And so the, this, uh, this is a live, uh, actually working bot that analyzes, um, every NFL game and every decision on fourth down. So I followed it. It's a fun, uh, so great. And actually, uh, I saw it and found out about it.

1:18:38You might have to in the Slack, so thank you to everyone for posting about it. Yeah, yeah. All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig. Yes. There is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep. In the...

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1:19:45All right, well listeners, that is all we've got for you today. Thank you so much as usual for joining us. And if you've been a long time listener or if you're just joining us, we would love a review. Seriously, if you've got two minutes right now and you're bored on your phone and you're trying to decide what app to open next, please open. Actually, it's actually not iTunes reviews anymore. We're technically on Apple podcasts. So, you know, open up Apple podcasts and and leave us a review. And thanks so much. We'd love for you to join the Slack and help us decide how to pick the next episode. We will likely continue on kind of the sports tech trend for maybe one or two more episodes. And then there's plenty of other great stuff to cover. So yeah, plenty, plenty, plenty. What's an embarrassment of riches every year required? Thanks everyone. We'll see you next time.