The Walt Disney Company announced Tuesday that it is acquiring a 33 percent stake in streaming services company BAMTech, Inc., a spinoff company from Major League Baseball’s MLB Advanced Media business.

Under the terms of the deal Disney will pay $1 billion for its stake, with half the amount paid now and the remainder paid in January 2017. In addition, Disney also gains the option to acquire majority ownership should it so desire at a later date.

BAMTech provides direct-to-consumer video solutions with a focus on live events with high viewership, using back-end technology capable of serving real-time content to tens of millions of consumers around the world.

Despite being originally setup to stream MLB games, the company’s excellence in streaming services has seen it grow to provide services to clients including HBO NOW, the National Hockey League, the PGA TOUR, WWE Network and Ice Network.

A large part of the deal would appear to be due to Disney’s interest in delivering a new online subscription product for its fully owned flagship sports network ESPN, which is described as a direct-to-consumer service that will include live regional, national and international sporting events but interesting will not include content currently featured on ESPN’s linear networks.

“Bringing a multi-sport service directly to fans is an exciting opportunity that capitalizes on BAMTech’s premier digital distribution platform and continues ESPN’s heritage of embracing technology to create new ways to connect fans with sports,” ESPN President and Co-Chair John Skipper said in a statement. “As WatchESPN continues to grow and add value to the multichannel video subscription, this new service will be an outstanding complement.”

Successful

The investment by Disney into BAMTech is indicative of faith in a company that many had thought would struggle to be successful when it was founded. After all, sporting leagues are not exactly known for being tech innovators.

To their credit, MLB Advanced Media/ BAMTech has excelled at delivering live online sports streaming, and if not the market leader today one of its leading suppliers as is indicated via its strong client list of leading sports.

As part of the deal, the National Hockey League has also taken a minority stake in BAMTech as well.

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