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Episode 37: BAMTech, Disney and

Episode 37: BAMTech, Disney and "the Biggest Media Company You've Never Heard Of”

Wed, 10 May 2017 15:41

Ben and David continue Acquired’s “tech and sports” mini-series with Disney’s 2016 acquisition of a minority stake (with the right to purchase a majority stake at a later date) in BAMTech, the internet streaming company originally founded as part of Major League Baseball in the early 2000’s. However the importance of this story goes deeper than just sports, with major ramifications for nearly every major technology company from Amazon to YouTube. Even if you’re not not sure if baseball’s played on a diamond or a gridiron, tune in as we swing for the fences in predicting the future of TV!
Topics covered include:
  • What is BAMTech, and why is it, according to The Verge, "the future of television”?
  • BAMTech’s origins as part of Major League Baseball's Advanced Media division ("MLBAM)”)
  • MLBAM’s founding CEO Bob Bowman’s decidedly “non-tech” background, and growth into one of the most important tech leaders of the past 15 years
  • Initial technology struggles and learnings from early streaming efforts (including a botched audio package of Ichiro Suzuki’s games with the Mariners for fans in Japan)
  • Landing on a streaming model that works with the launch of in 2002/2003—three years before YouTube is founded!
  • Improvement of the service and MLBAM’s streaming expertise over the next ten years through the rise of mobile, and simultaneous growth of MLBAM’s revenues to over $1B annually
  • MLBAM’s initial deals to expand its streaming services beyond baseball, starting with ESPN in 2010, then WWE, the PGA, HBO and the NHL
  • The importance of media rights, and MLBAM’s transition from a simple tech/infrastructure provider to a full-fledged media company
  • The decision to initiate a spin-off process for BAMTech from MLB in August 2015, and Disney’s $1B investment into the newly created spin-out company in August 2016
  • Disney’s subsequent announcement that they’ll be working with BAMTech to create a direct-to-consumer ESPN streaming service
  • BAMTech’s $300M deal with Riot Games in December 2016 for the media rights to League of Legends eSports content
  • Bob Bowman’s announcement in February 2017 that he’ll be stepping back to from a day to day role, and hiring of former Amazon VP of Video Michael Paull as BAMTech’s new CEO
Followups & Hot Takes:
The Carve Out:

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Oh, frickin' Forbes. Gotta hate these quotes of the day. Most annoying website ever. Uh... Welcome back to episode 37 of Acquired, the podcast about technology acquisitions and IPOs, and today, spinouts. I'm Ben Gilbert. I'm David Rosenfall. 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 spinout of a company called BAMTEK from their Advanced Media or MLBAM Group and the 2016 Minority Investment into BAMTEK 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 decade plus, but this is actually, I think, a really important understand from just a pure technology standpoint 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 and 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 being these sort of digital pioneers and baseball is making bets five years earlier. Totally, totally agree. This is going to be fun to dive into. Yeah. 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. Our 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 and there's a little widget on the right. And there's a ton of cool conversation and there are a lot of great criticism and feedback 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's 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 Slack. Absolutely. Our presenting sponsor for this episode is not a sponsor, but another podcast that we love and want to recommend called the founders podcast. We have seen dozens of tweets that say something like my favorite podcast is acquired and founder. So we knew there's a natural fit. We know the host of founders. Well, David Senra, hi, David. Hey, Ben. Hey, David. Thank you for joining us. Thank you for having me. I like how they group us together and then they say it's like the best curriculum for founders and executives. It really is. We use your show for research a lot. I listened to your episode of the story of Akio Marina before we did our Sony episodes this incredible primer. You know, he's actually a good example of why people listen to founders and to acquired because all of history's greatest entrepreneurs and investors, they had deep historical knowledge about the work that came before them. So like the founder of Sony, who did he influence? Steve Jobs talked about him over and over again if you do the research to him. But I think this is one of the reasons why people love both of our shows and there's such good compliments is on acquired. We focus on company histories. You tell the histories of the individual people. You're the people version of acquired and where the company version of founders. Listeners, the other fun thing to note is David will hit a topic from a bunch of different angles. So I just listened to an episode on Edwin Land from a biography that David did. David, it was the third, fourth time you've done Polaroid. I've read five biographies of Edwin Land and I think I've made eight episodes of them because in my opinion, the greatest entrepreneur to ever do it, my favorite entrepreneur, personally, is Steve Jobs. And if you go back and listen to like a 20 year old Steve Jobs, he's talking about Edwin Land's My Hero. So the reason I did that is because I want to find out like I have my heroes who were their heroes and the beauty of this is the people may die, but the ideas never do. And so Edwin Land had passed away way before the apex of Apple, but Steve was still able to use those ideas. And now he's gone and we can use those ideas. And so I think what requires doing what a founder trying to do as well is find the best ideas in history and push them down to generations. Make sure they're not lost history. I love that. Well, listeners, go check out the founders podcast after this episode. You can search for it in any podcast player, lots of companies that David covers that we have yet to dive into here on acquired. So for more indulgence on companies and founders, go check it out. So David, I think we're ready to dive in. Let's do it. History and facts. Okay. So question 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 than any other company. Well, it's funny. I, you know, 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, for, you know, 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 because I have been a baseball fan for a long time and a subscriber to, 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 within, 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 in its own 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 centralize that function. It certainly is, but it kind of got off to an inauspicious start because the, the league and BAM itself made 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 websites totally suck. So Robert Bowman, who was the newly appointed CEO of 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 owning 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, 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. I mean, it 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 like, you know, how do people that have backgrounds in sports, sports law, 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 Bowman really... He 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 going 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 had thought about running for governor. And much earlier in his career, he was an investment banker at Goldman Sachs. So, you know, he's not... He's not your typical Silicon Valley executive. But this was also, you know, relatively early days for the internet and... And kind of in the middle when they start of 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. And pretty quickly thereafter, once he brings in house. So in 2002, the season before Itchiro Suzuki had joined the Mariners from Japan. And, oh man, Itchiro 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 Itchiro. And 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 follow Itchiro. And unfortunately though, that also doesn't go too well. They spend millions of dollars building all the tech to do this, millions of dollars advertising at. And they only get about a thousand subscribers. So we're 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 for a total of between the 30 teams for a total of $120 million to capitalize this project. And so, you know, they draw their first $30 million, they draw their second $30 million. Here we are 2002 big failure. They've drawn $60 million from the teams that they've promised. You know, this is going to be a... I think they've actually said this is going to 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, Ben, this, the way the deal was struck between BAM and all the teams that 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 to power the sale of tickets on the team's websites. And still to this day, if you go to the Mariners or the Giants or the Yankees website to buy a ticket, it's done in partnership with ticket master. And as part of that deal, ticket master pays BAM $10 million up front. And that's really 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 some nice cash flow. Yeah, so towards the end of that same season in 2002, so 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. So again, and this is where it's really impressive. By the end of the season, same season in 2002, they started experimenting with streaming video online and nobody's doing this in these days. So this is 2002, three years before YouTube, they stream the first game that they stream is in late August. They stream Texas Rangers and 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 and 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 And for $80 for the whole season, you can stream every out of market game on the internet. And this is huge. At all 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 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 lotable in the way that they were able to do it because you sort of think in 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. I mean, that's that's a narrative development and they were able to do it even within the constraints of this, you could very easily see management saying, well, we're going to 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. So they're going to be doing a lot of streaming Netflix and like you said, they get 100,000 subscribers right off the bat. That's $8 million in subscription revenue. But then they're also selling ads on top of the game. So this pretty quickly becomes a really interesting high margin business for 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 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. Yep. And a big selling point for them is effectively handling that multi platform handoff because for them, they, they, I was just listening to a podcast that will throw them the show notes where 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. They better pick up exactly where I left off and it can't pick up like in the middle 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 this thing that is initially quite specific to their use case, but then we'll see in the future, you know, as, as, as it becomes more important to, 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, and they really ride the wave, not, you know, as Ben, as you point out, not only of video growing on the internet over the next 10 years, but also of, of mobile and, and devices, majorly 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 feature during the launch on stage during the launch of the iPad on stage during the launch of the Apple watch. They really become one of the best, one of the best, you know, technology teams in the business and not 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, 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, the real time and then I saw the score and then I think that actually, I seem to remember that bug being pretty widespread because I remember it, it's 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 They raise 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 promised to be capitalized with 120 million. It was 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, you know, that that 100,000 subscribers in that first season. And so, you know, they really, they did really well by the teams of the league. Yep. 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, a 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 been trademarked. And then the WWE had to get off of it. They sued them, right? I think so. So the WWE world wrestling entertainment, it needs an organization or like you even just said the world wrestling entertainment or organization because entertainment is not a noun. Right, right. Anyway, 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. 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 court 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 announce that they're bringing golf online too. And so the momentum is kind of continuing. And then later in 2015, and this might have been if you've heard of BAM Major League Baseball Advance 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 sort of court 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 direct go that was HBO go. They announced 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. Yeah, and fans of Game of Thrones who had HBO now will remember that there was 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, 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'll pop 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. Yeah, that's what advanced media has been gotten really good at over the past decade. So that was in April of 2015. And then in 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 percent equity stake actually in BAM and a major league baseball advanced media. And 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 cable provider, like a next generation cable provider itself. Yeah, you can totally see why this is this makes you nervous because if you're 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 if we buy these rights, what can we get for them? You know, in terms of the advertisements we're going to show viewers and the subscriptions, whatever vehicle you want to use to monetize that, like, okay, I'm going to pay hundreds of millions of dollars upfront for these rights for X years. I really hope we can architect a business that's going to generate more than that. And I think, you know, that 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 a 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, you know, unique IP rather than potentially licensing it out to to you to figure out. Yep, this is disruption of the middleman. This is the internet or care. Yep. And so when this when this happens, the verge actually so this is the verge does a really great long piece that we'll willing to in the show notes covering kind of the history of BAM that we've taken a lot of this history from and they say this is a quote from them. The 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 life sports. And 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 of this next generation like what is the ESPN of the internet look like and BAM is so well positioned. And in 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 obvious way that hey baseball is going to be broadcast right now is broadcasting cable bundles as that gets you know skinnier and skinnier and life sports provides more of the value. This is a hedge against that right. It's just a simple you know we need to have a little bit of option value for the future on how we our content district gets distributed. And this is kind of our own way to do that instead of outsourcing it to is hey this is actually a really great technology company that that happen to be invented inside Major League Baseball. That could be a services organization for other other content plays which is what we saw with the PGA with WWE and potentially more to come. And then what we saw with 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 popularity but Major League Baseball on its own or BAM is 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. 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 like it doesn't make sense for the collective 30 teams of Major League Baseball to own basically the future of internet television. Totally and that hamstrings them right because they can't really issue stock to employees they can't they don't control their own destiny as much exactly. 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 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'll finally become its own independent company. And 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. Yep and 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 three billion dollars 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 doesn'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 ESPN was wholly owned. Nope not wholly owned. Disney is very happy to do deals like this and this is one of the reasons I'm sure why they end up sort of winning the investment here in 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 every 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. Yep to BAM and to baseball yes because they have a history of and it's kind of what we saw with with Lucasfilm right you know it was really important to George Lucas who the buyer of Lucasfilm was going to be and for for major league baseball even though they have a different set of motivations you know there they are 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 to 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 years that ESPN is the only reason so many people continue to subscribe to cable so this is Disney saying okay we 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 like thing that they also follow that with it sounds like it's hamstring the deal and it's got to be the just like ease the concern of the cable companies 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 right deals have already been negotiated for the next several years and are locked up but as those right deals come up you can bet for sure that Disney is going to be moving large portions of their content into their direct to consumer service. Yep 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 but you know this last week there were very large scale layoffs inside of ESPN particularly around a lot of a lot of baseball tonight's programming and one 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 you know the next morning after the sporting event occurred and that's really just not necessary now I mean if if I freaking confined well 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're staying up till 10 or 11 p.m. to you know for sports center to come on watch what the frantic editors had put together and a couple of hours since the game. Yeah. Yeah so I 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 they're current content isn't what's going to matter in five years. Don't forget you know bam by now is not just you know direct TV style streaming it's all of the apps you know they're on every device with all different types of experiences from highlights to you know stats overlays and data through to to full video. Yep 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 disclose the enterprise value of BAM tech at spin out when Disney bought a third of it was 3.5 billion dollars so think about that initially capitalize with was 77 million inside of major league baseball you know spun out at a value of three and a half billion dollars and the other thing that I want to clarify is we keep talking about this over the top service a lot of listeners are probably familiar but that basically refers to the idea that that number one I think OTT is like the stupidest name of all time but the every everyone's talking about the move to OTT service is like this is like my doctor and my doctor and that it's not a wave as long as you know you have a you have a a title for it that your average person doesn't understand exactly exactly but basically it refers 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 and we're going to direct direct to consumer yeah this is this is serious this is the business model innovation I was talking about and the Clippers and our on our last show okay so August 2016 the spin off happens Disney is the partner very shortly thereafter in November of 2016 BAM 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 by the rates to stream the Olympic Games in Europe so big announcement they're going global and then shortly thereafter in December and this is 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 yep and that is a big big deal that is a guaranteed 50 million dollar 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 league championship series game with millions of other people for free that's ad supported on either twitch or YouTube and there's this company BAM tech that's paying 50 million dollars 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 direct offering that 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 on 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 Paul 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 over the top on the internet. Absolutely absolutely. So with that should we move on to category? Yeah I that couldn't have been the more perfect segue because originally as I started to 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 of a business here where they're actually the right 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 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 for for Disney and their hedge 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 you know right now all Disney content is mediated through through a movie theater or through through 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 well it's the ESPN and the cable company of the and the ESPN and the Comcast of the right 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 mode 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 and have the ability to go much more direct and that happens in every business. Yep and it's so ironic here this is I believe over 10 years ago at this point Comcast actually wants me to hostile takeover offer for Disney and tried to buy Disney and that you know fate is a fate is a cruel mistress here and it's not that's making the play to not you know not by Comcast but just obsolete them. Yep I mean it's the smiling curve right I think I feel like half of my life is informed by Bentom so right now but that piece was so great about about self driving cars and making the reference that way upstream you have the the kind of 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 a 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 dramatically lessen it. Yep 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 spin-off 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 MLB for the longest time you know over a decade now has known that this thing's probably different enough from what we do and serves us as one customer but is really a horizontal they 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 the television network of before 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 I mean we talked about why Disney was in many ways a perfect fit is there anybody else and maybe Netflix but like they have so much duplication with Netflix like when you think about the the people that are really good at this in the world this sort of video content distribution right now it's Bam Tech and they historically have been more back end because they sort of they sort of white label their front end whereas Netflix really aggregates all users into one front end but there 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 Bam Tech Netflix Amazon yep can you think of any others maybe Verizon well Twitch obviously as part of Amazon and I mean Verizon's sort of like one layer deeper in the stack when you actually start and start to go look at the telcos but they they actually own the the pipes where this gets distributed so you can see that being an interesting partner yeah I mean Google and YouTube but I 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 and then they were so press in the acquisition of Twitch and maybe the 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 hard to run it bang bam here yeah and maybe they did it maybe there was some kind of bidding war we don't know I mean it's it's not a crazy enterprise value for the spin out right if they're generating 900 million in revenue to have sort of a three and a half four X multiple on that I mean that's really very reasonable relative to other tech company valuations I guess the only thing I can think of is that you know historically Amazon is pretty cheap when it comes to M&A and so maybe they just weren't willing to go higher but but I have to imagine giving given 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 yeah 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 uh tech themes tech names I'm per usual yeah yeah I uh 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 in 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 the important content out there for live sports specifically like I if I'm usually baseball like I find majorly baseball's shareholders and this is probably where the nuance comes in I would love to own that for the next 20 years and maybe this is all sort of a artifact of the fact that mid-duly baseball is not a publicly traded company it's a I think I keep saying this I'm pretty sure I'm right that's the way it is another league it's actually owned by all of the owners of the team it is 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 in a very high growth tech company way like 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 you know 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 you know being fully owned by by major league baseball here right but could they have found a partner where like they they weren't at risk of losing the majority of this business yeah but you know again and this I think probably comes down to we weren't privy to the negotiations but why 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 you know 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 I also wonder to like what is maybe there just will be a fantastic return let's say Disney by by takes their option in two years and it's doubled by then or maybe three years it's doubled by then I mean if it's if it's a seven billion dollar you know seven billion dollar company and Disney's buying another inspiration like you know maybe MLB is like wow awesome like great we got well actually what do they what do they do with that money paid as a distribution out to well and again think about you know who who is MLB right like they're a bunch of rich you know people who who own baseball teams right like right what they're not you know maybe some of the martyx investors but you know certainly not they're not living this and thinking it every day like we are here on acquired you know it's it's much older money to then then the NBA I um this is going to be actually I'm going to dance 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 oh yeah so good the last episode and the good news is I'm not like radically changing any my thinking I think it reinforces a lot of the same points and um but it was just super enjoyable to listen to Balmer's incredibly candid and I think that um and it bills obviously an amazing interviewer but you really get a sense of who the owners are in different leagues like in in uh Balmer says it talks about the NFL but I think the MLB 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 things like that and when you look at at the NBA it's like a bunch of hedge fund managers investment bankers tech tech billionaires and like they're sort of looking at these businesses in a very different way and I really think that you know if um 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 like yep that it's it's a lot of old money they they're not done by any means but it's just not it's not why they own the team yep totally agree um but then coming back I have this this uh this other question that baseball so the MLB is growing year over year it's it's it itself regret even after the the BAM tech spin out is a great growing business and I'm a little bit I have a little bit of dissidence here because it seems like of all the major sports baseball seems to be declining and so you 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 and are even more valuable than other sports leagues save without being an expert on this by any means you know my hypothesis would be that there really is a difference here between the game on the field and innovation and interest growing or or or waning there and and business model innovation and this is you we talked about this on the Clippers episode and the NBA has their own streaming um tech with with league pass that maybe maybe they will you know 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 do you think that um Disney is going to take their option in the next couple years and and buy another third I mean I don't see how they don't right yeah I mean I guess we're this is bleeding into grating a little bit but working on through this episode both in our discussions and the research you know I kind of had this aha moment like we talked about when we were introducing the episode the 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 networks division and which is of which ESPN is the crown jewel has been the vast majority of the profits the EBITDA and you know accounts for the vast majority of the market cap of the entire Walt Disney company for for the past 20 years yeah so then I'll pose this to you so if BAM tech so you say it's all it's all about television well television is a 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 BAM tech right now all their you know pre-recorded content is locked up in deals with Netflix and others and I think those go through 2019 2020 yep will Disney renew those agreements with those other content aggregators and and keep all of their non live content you know going out through those channels or are they going to try and build a direct to consumer offering through BAM tech where they're actually a portal and they're aggregating live or bundling live and non live together you know way that that consumers want going direct to the the content owner yeah this is um this is super interesting and then we were 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 is taking here from a consumer perspective that are they just recreating that cable bundle online 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 it's 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 gym bark still 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 if if 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 win all the content is to desperately scattered around everywhere and we have you know like you remember like 10 years ago when every network had their live TV or they're like like ABC had lost available to watch on ABC dot com and some other company you know NBC had the office of a one NBC dot 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 maybe 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 going to have fatigue of that and they're going to be a re bundling and who's got to get many subscriptions are you going to have do you really want to pay Netflix and MLB and league pass and and and yep or could a really compelling you know I don't know 20 dollars a month 30 dollars a month 40 dollars a month package from Disney that includes all of that that could be very compelling as well yep 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 and for entrepreneurs bam started 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 and the the counterfactual to that or more of just the the counter you theory all 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 majorly baseball isn't trying to hamstring BAM tech by not allowing BAM tech to serve majorly based majorly baseball competitors and until now it made entire it made tons of sense for for BAM tech to prioritize or for BAM to prioritize the needs of MLB because that was a really 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 man 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 you 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 all 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 like whether whether this episode is 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 spin out is so clearly like I'm David now we're like no brainer like that's an A that's a great decision a while why wouldn't you on the part of major league baseball to spin it out yeah like that they they they totally would have hamstrung that thing by keeping it in a house and it's just like value destruction to not spin the thing out so we've decided is we're we're going to grade it from from the Disney perspective which I actually David I want to hear your thoughts first on that okay I'll go first I I think this is an incredible acquisition by Disney you know we're somewhat hamstrung in in greeting 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 for arguments say sort of the latest number we have is it's kind of 900 million in revenue and 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 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 tech to typically see in in the technology space that's very low and then think about that relative to the massive opportunity that that Disney has here to really have a have a credible shot at building the future of long form you know video customer relationships on the internet this feels like a great purchase to me and then I also wanted to you know think about this through if you go back to some of our earlier episodes on Disney you know Pixar and Lucas film and Marvel we talk a lot about the Disney flywheel and and the playbook that that Walt Disney you know so many years ago laid out that really was the 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 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 relationship with the consumers so consumers are paying them both for and NHL and anything they do in the future now right oh yes I see but on a per on in a siloed basis yeah yeah right like they don't they don't necessarily have some who can audience a consumer eyeball portal where Disney can plug their content in and get that distribution no bam tech itself isn't a consumer portal but through it Disney it mageley baseball and the NHL and now Disney can operate a direct consumer relationship where consumers are paying them a subscription for the content that 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 can you know over the internet just pay pay Disney directly yep and 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 yeah I predicts we'll go down as one of the most important most transformative acquisitions in Disney history uh 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 I agree with you I also I'm giving it an A and um 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 BAM tech already owns and that this is a bet on whatever their future content and this this distribution mechanism to go to direct consumers is yep and I'm one last thing I do and it's kind of been a while here in acquired since we've talked about the people aspects of acquisitions which going back to our early shows we focus so much on and so many of our guests talk about all you know BAM tech as an organization has this history of operating within a you know not as a startup as a as a part of a much larger conglomerate which it now will continue to as part of Disney so I wonder if you know a lot of times you see startups get acquired by a large company and then you know the mojo gets lost and you know equity compensation isn't as much as it once was in this case that there's going to be more equity compensation and probably a more innovative culture that BAM tech will be joining versus versus you know baseball so I wonder I wonder if from a people standpoint the company is also well positioned to succeed here yep I think that's right okay 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 have 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 see here say unfortunately he doesn't do a doesn't do a you know head coaches head coaches head coaches champ the classic the classic bomber enthusiasm is is on display as always yeah bunch of real quick ones for me a whole lot has happened in the last couple weeks we won't analyze any of these but just to to list out and and would love to jump in the slack and chat about him 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 to Microsoft is killing wonder list very very sadly it is my to do list app I love it and I'm bummed that it's it's going away three Instagram is on fire growth is just continues to accelerate they passed announced that they passed 700 million ma use this past week which is you know they're starting to rival you know the same size as as the parent company as Facebook yeah I mean Instagram is just crushing it up being snapchat nobody does snapchat better than Instagram next the echo look so Amazon announced an actually big shout out to to our good friends 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 and I don't know I can't decide if it's creepy yet or awesome probably but as with everything the I mean as with everything and the you know 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 if you're at Amazon and you know you have the encryption keys then you get a first look at this episode at first like at the episode right which they don't you know we say we're we're just joking but it is one of those things like it I 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 price their IPO yesterday at $15 a share enterprise value market cap of about just under two billion which is sort of flat from their their actually it's half of their last private raise but the last private raise was more of a secondary that that Intel did so big enterprise IPO happening which finally what the six or six of this year and the march goes on yeah the march goes on the public 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 weeks but dd yesterday raised five point five billion dollars in the largest private company fundraising round ever the five point five billion dollars in one fundraising round man if you know if you are on team uber and you thought that we talked about this on the show with with Brad Stone but if you thought that doing the quote unquote merger with dd meant that the war was over you know and you didn't have anything to worry about like guess again the dd giant is and this 5.5 billion dollar specifically was raised to expand internationally dd is is coming and gunning to be a competitor to uber and everyone else in this base so watch watch what happens in the future yep carvets carvets okay real quick I have a real quick carvets 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 at 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 coming it's like the new star wars yeah it'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 40 h 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 these days I just assume something has a data scientist doing machine learning behind it and that 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 the statistics to pop this out but basically it tweets for every NFL game what decision they would make on fourth down and it is awesome 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 go for it on fourth down rather than punting or going for a field goal more often that is commonly accepted because they will if they fail faith faith the wrath of of fans and and potentially the owner of that which we were lamenting on the last episode and in the slide right but you know but if you if you quote unquote money ball and if you really you know look at all the data that you possibly can coaches should go for it on fourth much more often than they do and so the this this is a live actually working bot that analyzes every NFL game and every decision on fourth down so I followed it it's a fun so great and actually I saw it and found out about it you you might have to in the slack so thank you to everyone for posting about it yeah yeah all 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 have 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 all right you know open up Apple podcasts and and leave us a review and thanks so much we we'd love for you to join the slack and 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 oh yeah plenty plenty plenty what's an embarrassment of riches over here required thanks everyone we'll see you next time