Disney to acquire majority of BAMTech in $1.58 billion deal, sets launch of ESPN, Disney OTT services

Disney is ending its distribution agreement with Netflix for new movie releases, while it's also buying majority ownership of BAMTech — the streaming-video company founded by Major League Baseball — in a $1.58 billion deal.

The moves set a clear course for the media giant to launch Netflix-style direct-to-consumer internet services from ESPN and Disney. Disney said will end its distribution agreement with Netflix for subscription streaming of new movie releases, beginning with the 2019 theatrical slate.

"This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands," Disney CEO Bob Iger said in a statement. The company announced the plans as part of issuing its fiscal Q3 earnings.

The media conglomerate said it will launch an ESPN-branded multi-sport video streaming service in early 2018, followed by a new Disney-branded direct-to-consumer streaming service in 2019, powered by BAMTech. The current plan is for Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN, in app stores, and from authorized pay-TV partners.

RELATED: The best foods at Disney World:

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Coolest Disney World and Disneyland snacks
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Coolest Disney World and Disneyland snacks
Killer shot!!!! #thisisdisney 📷: @the_little_pixie. ••• (#DisneyFoodBlog to see your pic featured)
Owl isn't sure about this rose cake pop 😂🌹#Disneyland
#GROOT BREAD!!! Find it in #disneycaliforniaadventure! Thanks for the pic, @sandyruns26.2!! #Disneyland
Well this is gorgeous!!! #Ghirardelli Strawberry Soda Float 🍓🍦Find it in #disneycaliforniaadventure and #disneysprings! 📷: @dolewhipdollies_ (#disneyfoodblog to see your pic featured)
These mini Mickey waffles are pretty much everything right now. #gottagettotokyo #tokyodisneyland 📷: @tableforlily 🙌🏻 (#disneyfoodblog to see your pic featured)
#mickeymouse shave ice from #Disney's Aulani in #Hawaii!!! My life is complete. 📷: @aly_sf #disneyfood #aloha #obsession . (#DisneyFoodBlog to see your pic featured)
Haha! Love this pic by @thejentravels!! #disneyfoodblog to see your shot featured! #Disney #disneyfood #ComeAndGetIt
Waffle bowl pattern at Clarabelle's in #disneycaliforniaadventure ❤️ 📷: @diningindisney #disneyland #disneyfood
No Way Jose from Beaches & Cream at Disney's Beach Club Resort!
#Breakfast at #TokyoDisneyland: PERFECT #Mickeymouse waffles with chocolate and whipped cream 😍 📷: @diningindisney #disney #disneyfood
Raspberry lime macaron from Les Halles in #Epcot's France. #Disney #disneyfood
Mickey #Pizza Bread at #tokyodisneyland!!!! 📷: @tokyodisneylorien (<-- Follow! She's super cool!)
Still loving this lotus blossom glow cube! Now available at several #Disney's #AnimalKingdom locations including Thirsty River Bar and Snacks.
Apple --> Caramel --> Chocolate --> #MickeyMouse!! #Disney #DisneyFood Here's a TIP: Ask the cast member to cut up the apple for you for easier eating!
Meanwhile, in #AnimalKingdom 😍 #dolewhip #whynot #cantstayaway #justsayyes
Loving this #MickeyMouse cinnamon-sugar #donut from #disneylandshanghai! 📷: @snowflakespalmtreesandpretzels. (#DisneyFoodBlog to see your pic featured) #shanghaidisneyland #disneyfood #disney #breakfast
Berry Brickle at the #epcotflowerandgardenfestival is still a winner
#Pandora Night Blossom from Pongu Pongu #disney #disneyfood The "light up cup" is a souvenir cup with a glow pod that clips on. I like it since previous light up cups just break when you wash them.
Hello, old friend. I haven't had one of these cuties in a loooooong time. It's classic; soft and sweet with a touch of almond flavor. Don't overlook this one. #cookie #mickeymouse #disney #disneyfood #eatthis
The sparkles. Na'vi blueberry cheesecake at Satu'li Canteen in #Pandora #diseyworld #disneyfood
Finally tried this #limoncello #mule at Via Napoli last night! Soooo good, even if you're not a #gingerbeer person. #Disney #booze #waltdisneyworld #vianapoli #epcot
#TokyoDisneyland goodies!! 📷: @hungryhugh (who I'm totally meeting someday). #Disney #disneyfood (#DisneyFoodBlog to see your pic featured)
#MinnieMouse cupcake at Gasparilla Grill in #Disney's Grand Floridian Resort has forgettable cake but dense and delicious cookies and cream frosting on top and as filling! Plus #cutebow
Chili Mac and Cheese -- secret menu item from Refreshment Corner in #Disneyland! #yum #sourdough #boudinbakery #macncheese
This #peanutbutter pie is still my second favorite dessert in #disneyworld! (After #Ohana bread pudding!) Get this at Contempo Cafe ❤️
Who's tried this crazy-town Seven Seas Lagoon cocktail at The Wave Lounge in #Disney's Contemporary Resort?? #booze #yum #sharingiscaring
Best Krispie ever @lynleesmmt!!!!! #mainstreetelectricalparade #disneyland
We're talking #Disneyland #icecream in an upcoming YouTube video! What's your favorite??? This one is a #hotfudge #sundae at Golden Horseshoe! #disneyfood #disney
Lapu Lapu at Tambu Lounge in Disney’s Polynesian Village Resort!
Beautiful shot of the #icecream #martini from @artisandesglace!! Get yours with one of three alcohol toppers! 📷: @caitlinmcaninch (#DisneyFoodBlog to see your pic featured)
Dinner!! Find @ghirardelli sundaes and chocolate on both coasts: #DisneySprings in #disneyworld and #disneycaliforniaadventure in #disneylandresort. 📷: @stitchlovesdolewhips . (#DisneyFoodBlog to see your pic featured) #icecream
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The new Disney-branded service will become the exclusive home in the U.S. for subscription VOD access to new releases from Disney and Pixar beginning with the 2019 theatrical slate. Those are set to include "Toy Story 4," the sequel to "Frozen," and "The Lion King" from Disney's live-action division.

In addition, Disney said it expects to make a "significant investment" in an annual slate of original movies, TV shows, short-form content and other Disney-branded exclusives for the service. The subscription service also will feature library content, including Disney and Pixar movies and shows from Disney Channel, Disney Junior and Disney XD.

The revised plans for the ESPN-branded multi-sport service are much broader than the over-the-top play Disney originally had slotted for the end of 2016. The new service will include about 10,000 live games from leagues including Major League Baseball, the National Hockey League and Major League Soccer. It also will include collegiate sports and Grand Slam tennis coverage.

"For many sports fans, this app will become the premier digital destination for all their sports content," Disney said in its announcement.

Even with the launch of ESPN's subscription sports service, Disney said OTT packages for individual sports will also be available for purchase, including MLB.TV, NHL.TV and MLS Live.

Under terms of the deal for BAMTech, Disney will pay $1.58 billion to acquire an additional 42% stake in the New York-based streaming and video infrastructure company from MLB Advanced Media, the interactive media and internet unit of Major League Baseball. A year ago, Disney acquired a 33% stake in BAMTech for $1 billion under an agreement that included an option to acquire a majority stake.

"We're very proud of the content distribution innovations driven by MLBAM and BAMTech over the past 15 years," MLB commissioner Rob Manfred commented. "Major League Baseball will continue to work with Disney and ESPN to further grow BAMTech as it breaks new ground in technologies for consumers to access entertainment and sports programming."

The BAMTech transaction is subject to regulatory approval. Once the deal closes, Iger will serve as chairman; MLBAM and NHL will continue as minority stakeholders in BAMTech, with seats on the board.

BAMTech CEO Michael Paull — a former senior video exec at Amazon who joined earlier this year — will report to Kevin Mayer, Disney's senior executive VP and chief strategy officer. Disney said that John Skipper, ESPN president and co-chairman of Disney Media Networks, will manage the new ESPN-branded service.

"This is an exciting validation of our team, its achievements and the customer-centric platform it's built," Paull said in a statement. "Yet, we've merely scratched the surface of what can be accomplished in a future where we combine Disney and ESPN's world-class [intellectual property] and our proprietary direct-to-consumer ecosystem."

Currently, BAMTech designs, develops, and delivers direct-to-consumer streaming services for partners including HBO Now, MLB, NHL, MLB, PGA Tour, WWE Network, and Riot Games' "League of Legends." Through a partnership with Discovery Networks, BAMTech Europe will provide technology services on the continent, including Eurosport's digital products.

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