Twitter is reportedly exploring offers to sell itself. Last week, Reuters reported that Alphabet and Salesforce were among the early candidates.
Disney would be wise to bid.
CNBC, Re/code and others have floated Disney as a potential Twitter buyer before, along with other big media companies like NewsCorp. But of all the media giants, Disney is the best fit, thanks chiefly to its ESPN and MLBAM connections.
Disney is mostly a media company these days: it owns ABC, ESPN, and A&E Network, with ownership stakes in Hulu (30%) and Vice (10%). Parks and resorts make up just 20% of Disney’s profit. And Twitter, too, is a media company, much more so lately than it is a social networking platform.
In the past six months, Twitter has cut deals with the NFL, NBA, MLB and NHL to live-stream sports events. The NFL deal is the most prominent: Twitter gets to show 10 Thursday Night Football games, and it reportedly got the package for just $10 million. Its two NFL streams so far have been relatively successful.
Disney, Twitter, and streaming video became even more interconnected when Disney spent $1 billion this summer to buy a 33% ownership stake in Bam Tech, the streaming-video business recently spun off from Major League Baseball Advanced Media (MLBAM, or “Bam”).
Disney’s investment was a wise move; the deal will mean new streaming products for ESPN, and, further down the road, Disney film franchises likely popping up on the digital streaming realm. (See below Yahoo Finance video from last month.)
Bam Tech quietly provides the back-end streaming technology for a growing number of power players in sports and entertainment video, including HBO Now, PGA Tour, WWE, and the entire NHL.
And who is powering Twitter’s NFL live streams? Bam Tech.
Bam Tech will also power the streaming technology when Twitter live streams the presidential debates next month, a source confirms to Yahoo Finance. (Neither MLBAM nor Twitter would confirm that; with some clients, MLBAM can confirm its involvement, with others it cannot.)
So: Grabbing Twitter makes great sense for Disney because it would add to the Mouse’s media empire, and to its streaming video dominance. That’s all without even mentioning the sports social-content benefit.
Disney needs to take greater steps to get younger audiences hooked on ESPN. It’s obvious that traditional television won’t be the best avenue for that. Instead, social, shareable content is key. ESPN highlight clips and short videos are all over Twitter already, but so are clips from the pro leagues’ official accounts, and from other sports news sites. If Disney owned Twitter, it could flood the stream with ESPN media.
Disney wants ESPN to be the de facto place where people experience sports (but it has lost that mantle somewhat in recent years, due to cord-cutting) and Twitter wants to be the same thing; together, both are stronger.
As part of its investment in Bam Tech, Disney will get the option to buy another 33% stake in four years. Expect it to do so. And if Disney were to own Twitter, too, all of these properties would get tied together nicely.