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

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! Sponsors: Vanta: https://bit.ly/acquiredvantaServiceNow: https://bit.ly/acquiredservicenow26Legora: https://bit.ly/acquiredlegoraStatsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates https://www.acquired.fm/email with hints on next episode and follow-ups from recent episodesJoin the Slack http://acquired.fm/slackSubscribe to ACQ2 https://pod.link/acquiredlpMerch Store https://www.acquired.fm/store! © Copyright 2015-2026 ACQ, LLC Topics covered include: What is BAMTech, and why is it, according to The Verge, "the future of television https://www.theverge.com/2015/8/4/9090897/mlb-bam-live-streaming-internet-tv-nhl-hbo-now-espn”? BAMTech’s origins as part of Major League Baseball's Advanced Media division ("MLBAM)”)MLBAM’s founding CEO Bob Bowman https://en.wikipedia.org/wiki/Robert_A._Bowman’s decidedly “non-tech” background, and growth into one of the most important tech leaders of the past 15 yearsInitial technology struggles and learnings from early streaming efforts (including a botched audio package of Ichiro Suzuki https://en.wikipedia.org/wiki/Ichiro_Suzuki’s games with the Mariners for fans in Japan)Landing on a streaming model that works with the launch of MLB.tv in 2002/2003—three years before YouTube is founded! Improvement of the MLB.tv 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 http://www.themoneystreet.com/2016-mlb-advanced-media-revenues-projected-to-reach-1-1-1-2-billion/MLBAM’s initial deals to expand its streaming services beyond baseball, starting with ESPN in 2010, then WWE, the PGA, HBO https://www.wsj.com/articles/hbo-to-use-mlb-advanced-media-for-stand-alone-streaming-product-1418150584 and the NHL https://www.nhl.com/news/nhl-major-league-baseball-advanced-media-form-transformative-digital-rights-partnership/c-776246The importance of media rights, and MLBAM’s transition from a simple tech/infrastructure provider to a full-fledged media company http://www.sportsbusinessdaily.com/Journal/Issues/2017/01/23/Media/MLBAM.aspx 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 2016Disney’s subsequent announcement that they’ll be working with BAMTech to create a direct-to-consumer ESPN streaming service http://variety.com/2016/digital/news/espn-sports-streaming-disney-bamtech-1201834006/BAMTech’s $300M deal with Riot Games http://variety.com/2016/digital/news/bamtech-league-of-legends-mlb-disney-esports-1201944167/ 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 http://variety.com/2017/digital/news/michael-paull-ceo-bamtech-mlbam-disney-1201992713/ Followups & Hot Takes: Facebook’s struggles with Instant Articles https://www.theverge.com/2017/4/16/15314210/instant-articles-facebook-future-ads-videoMicrosoft killing Wunderlist https://thenextweb.com/apps/2017/04/20/microsoft-just-killed-wunderlist-to-launch-a-new-to-do-app/ (David is VERY sad)Instagram continues its torrid growth, passes 700M MAU https://www.nytimes.com/2017/04/26/technology/why-instagram-is-becoming-facebooks-next-facebook.html?_r=0Amazon’s new Look https://www.theverge.com/2017/4/26/15435550/amazon-echo-look-200-smart-camera-mirror-stylist The Cloudera IPO http://www.cnbc.com/2017/04/28/cloudera-valued-at-three-times-rival-hortonworks-after-ipo.htmlConfirmation the ride sharing wars are far from over: Didi raises $5.5B in the largest private funding round ever https://www.bloomberg.com/news/articles/2017-04-28/china-s-didi-raises-over-5-5-billion-in-record-tech-funding The Carve Out: Ben: NYT’s 4th Down Bot https://twitter.com/nyt4thdownbotDavid: Wait But Why on Elon Musk’s “Wizard Hat" http://waitbutwhy.com/2017/04/neuralink.html

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Rosenthal?

  Ah, frickin' Forbes. God, I hate these quotes of the day. Most annoying website ever.

• 0:22Speaker 01

  Welcome back to episode 37 of Acquired, the podcast about technology acquisitions and IPOs. And today, spin outs. I'm Ben Gilbert.

• 0:32David Rosenthal?

  I'm David Rosenthal.

• 0:34Speaker 01

  And we are your hosts. So today, David and I are continuing our journey along sports and technology by diving into Major League Baseball's 2015 spin out of a company called BAMTech from their Advanced Media, or MLBAM Group, and the 2016 minority investment into BAMTech by Disney. So David, I'm ridiculously pumped for this episode.

• 0:56David Rosenthal?

  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's happened in the last decade 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.

• 1:29Speaker 01

  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 had 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 was making bets five years earlier.

• 1:57David Rosenthal?

  Totally, totally agree. This is gonna be fun to dive into.

• 2:00Speaker 01

  Yeah. Well, before we, before we get to it, a couple of administrative things as usual. We love iTunes reviews. Listeners, if you, if you like the show, if you've been listening for- 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 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

• 2:44Speaker 01

  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 from the community. So thanks to everyone who is an active participant in Slack.

• 3:05David Rosenthal?

  Yep, absolutely.

• 3:07Ben Gilbert?

  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.

• 3:26David Rosenthal?

  Yep, your risk surface changes every week now. A vendor turns on an AI feature or someone writes in a new model without telling IT and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote unquote "shadow AI" running with no security review at all.

• 3:47Ben Gilbert?

  Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 4:09David Rosenthal?

  In half?

• 4:10David Rosenthal?

  Which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor and Snowflake all stay audit ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 4:27Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance and the work to earn and prove trust. We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V A N T A dot com slash acquired for $1,000 off and just tell them that Ben and David sent you. So David, I think we're ready to dive in.

• 4:57David Rosenthal?

  Let's do it. History and facts. Okay, so question number one, I bet on many listeners' minds is what is BAMTech? So Forbes calls this, calls BAMTech the quote, "biggest media company you've never heard of." And this story is, as Ben 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.

• 5:32Ben Gilbert?

  Well, it's funny, I, you know, I bet a lot of our listeners haven't heard of BAMTech. There's some out there that are probably nodding 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.

• 5:56David Rosenthal?

  Yeah. And, and I knew it because I have been a baseball fan for a long time and a subscriber to MLB.TV, which is where BAMTech gets its origins. So all the way back in the year 2000, Major League Baseball, the sports league.

• 6:16David Rosenthal?

  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.

• 6:45Speaker 01

  Which is kind of brilliant 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.

• 7:02David Rosenthal?

  It certainly, 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

• 7:47David Rosenthal?

  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.

• 8:01Speaker 01

  Yeah, pretty interesting.

• 8:02David Rosenthal?

  Yeah, very interesting. So that was-

• 8:04Speaker 01

  And also probably, I mean, for anyone out there that, that, you know, our, 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, not only is it web development, but they're, 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, a strong tech team inside? Kudos alone to them for that.

• 8:44David Rosenthal?

  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 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 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. No.

• 9:25David Rosenthal?

  But this was also, you know, relatively early days for the internet 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 it in-house, so in 2002, the season before, Ichiro Suzuki had joined the Mariners from Japan. Mariners. And, oh man, Ichiro is so much fun to watch. And his first season, he had, he had won the Rookie of the Year and the AL MVP. And of course, he had this huge following

• 10:08David Rosenthal?

  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 Ichiro. 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 it, and they only get about 1,000 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.

• 10:52Speaker 01

  And David, it's 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

• 11:37Speaker 01

  within Major League Baseball and like, big flop, $60 million in.

• 11:41David Rosenthal?

  Yep. And so, this is where, 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 into, you know, learn 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 Ticketmaster in mid-2002 to partner with them to power the sale of tickets on the teams' websites.

• 12:26David Rosenthal?

  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 Ticketmaster. And as part of that deal, Ticketmaster pays BAM $10 million upfront. 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.

• 12:52Speaker 01

  Yeah, it's some nice cash flow.

• 12:54David Rosenthal?

  Yeah. So, towards the end of that same season in 2002, so where 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.

• 13:11Speaker 01

  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.

• 13:22David Rosenthal?

  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. This is 2002, three years before YouTube. They stream, the first game that they stream is in late August. They stream a 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

• 14:02David Rosenthal?

  the off season. And by the start of the 2003 season, they launch, do 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.

• 14:38Speaker 01

  Yeah. And the speed at which they were able to do that is pretty laudable and 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 the real deal for that, you know, $80 full season package, which I think got 100,000 subscribers. So like 8 million in revenue from that, that first, you know, season that went fantastically well. I mean, that's, that's iterative development. And they were able to do it even within the constraints of, of this, you could, you could

• 15:21Speaker 01

  very easily see management saying, well, you know, we're going to try that for next year.

• 15:24David Rosenthal?

  Yep. And I think what's super impressive, like two things. One, this is 2003. You know, again, we're, we're years before YouTube. Nobody else is really doing streaming video at this time.

• 15:36Speaker 01

  It's four, it's four years before Netflix went online.

• 15:38David Rosenthal?

  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, 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, and not just, you 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.

• 16:23Speaker 01

  Yep. And 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, and fallbacks and relationships with the CDN's 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, that destroys

• 17:08Speaker 01

  the experience.

• 17:09David Rosenthal?

  Yep.

• 17:09Speaker 01

  So they, they have sort of like developed expertise in, 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.

• 17:28David Rosenthal?

  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. Major League Baseball's app gets featured by Apple at basically every major developer announcement. So when they announced the App Store for the iPhone, Major League Baseball is one of the first partners and first apps featured onstage with Steve Jobs during the announcement, featured during the launch, onstage during the launch of the iPad, onstage during the launch of the Apple Watch. They really become one of

• 18:07David Rosenthal?

  the best, one of the best, you know, technology teams in the business and in terms of bringing video to consumers' devices wherever they are.

• 18:16Speaker 01

  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 some times, call it eight-ish years ago, where I was like tuning into a game on the, the streaming service, and like it did have some weird hiccup. And like, I, I saw, I think, actually, the use case was, I was watching like an hour delayed or something, and then it, it flashed 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 sort of blowing up on, on Twitter as a big problem. But like, they've totally had these hiccups along the way, where they've had to learn how to be really good at this, this sort

• 19:01Speaker 01

  of ensuring a consistent experience, quote unquote, live viewing.

• 19:05David Rosenthal?

  Yep. Good point. It, it definitely did not happen overnight. But the business, it keeps growing year over year. They eventually do raise prices from $80 a year for, for MLB.TV. 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.

• 19:31Speaker 01

  Yeah. So think about this. I mean, they're, they were promised to be capitalized with 120 million. It's an interesting stat that they only ended up taking 77 million from, from the teams after the Ticketmaster deal, and then that $8 million in revenue from, from, you know, that, that 100,000 subscribers in that, that first season. And so, you know, they, they really, they did really well by the, the teams, the league.

• 19:57David Rosenthal?

  Yep. And along the way, as we've been saying, they build all this expertise in streaming video, and particularly 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 ESPN3, 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

• 20:38David Rosenthal?

  all sports that ESPN is streaming online. And so they do that for a couple of years just as the technology backend provider. And then in 2014, a bunch of really interesting things happened. 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?

• 21:18Speaker 01

  It's one of my favorite rebrands ever because the WWF, the World Wildlife Federation, had the trademark, and then the WWE had to get off of it.

• 21:28David Rosenthal?

  They sued them, right?

• 21:29Speaker 01

  I think so. Also, WWE is like World Wrestling Entertainment. Like, it needs an organization, or like you even just said, the World Wrestling

• 21:40David Rosenthal?

  Yeah, it's awkward.

• 21:41Speaker 01

  Entertainment organization, because entertainment's not a noun.

• 21:44David Rosenthal?

  Right, right. Anyway, the point is, this is a big deal because for the first time now, you have 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 seam of the live sports cable bundle package that it could actually be coming online.

• 22:25Speaker 01

  Yep.

• 22:26David Rosenthal?

  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 the momentum is kind of continuing. And then, and then later in 2015, and this might've been, if you've heard of BAM, Major League Baseball, Advanced Media before, this might've 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 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-

• 23:09Speaker 01

  And that was HBO Go.

• 23:11David Rosenthal?

  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 BAM in the background that is powering all of that.

• 23:23Speaker 01

  Yeah. And fans of Game of Thrones 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 dropped, like there was an episode of Game of Thrones where there was 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 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 MLB AM.

• 24:00David Rosenthal?

  Yep. 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, this is where really the cable industry really starts to get nervous, is it's not just powering-

• 24:36David Rosenthal?

  Back end, but they actually do a rights deal. So at the NHL takes a rumored to be about a seven to 10% equity stake actually in BAM, in 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 content. So the subscriptions that people pay to subscribe to NHL, that's BAM that's monetizing that, just like it's 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.

• 25:20Speaker 01

  Yeah, you can totally see why this is, this makes you nervous. Cause 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, 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,

• 26:05Speaker 01

  you can see that, 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.

• 26:25David Rosenthal?

  Yep. This is disruption of the middleman. This is the internet at work here.

• 26:29Speaker 01

  Yep.

• 26:30David Rosenthal?

  And so when this, when this happens, The Verge, actually, so The Verge does a really great, long piece that we'll, we'll link to in the show notes, covering kind of the history of BAM, that we've taken a lot of this history from. And, and they, 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: live sports." And Bowman himself is actually quoted as saying, "We knew we wanted BAMTech, 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,

• 27:13David Rosenthal?

  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?

• 27:26Speaker 01

  Totally.

• 27:27David Rosenthal?

  And BAM is so well-positioned.

• 27:30Speaker 01

  Totally. And in that, that Rob Manfred podcast I mentioned earlier, Rob, 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 broadcast in cable bundles. As that gets, you know, skinnier and skinnier, and live 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 gets distributed. And this is kind of our own way to, to do that, instead of outsourcing it. Two is, hey, this is actually a really great technology company that, that happened to be invented inside Major League

• 28:13Speaker 01

  Baseball. That could be a services organization for other, other content plays, which is what we saw with the PGA, with WE, 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, 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.

• 28:52David Rosenthal?

  It 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. Like, it doesn't make sense for the collective 30 teams of Major League Baseball to own basically the future of internet television.

• 29:11Speaker 01

  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.

• 29:20David Rosenthal?

  And, 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 BAMTech, and that they're going to start talking to investors to, to buy a stake in the company and finance it. And, and they'll retain a large equity stake, Major League Baseball will, but it'll finally become its own independent

• 30:02David Rosenthal?

  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.

• 30:30Speaker 01

  Yeah, almost dangerously so in this era, too.

• 30:33David Rosenthal?

  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 BAMTech at $3 billion. And then they also have the option to acquire a majority stake in the future. And this is just classic Disney. A similar thing happened with ESPN. You know, Disney doesn't own 100% of ESPN, they own 80% of ESPN. And actually, the Hearst Corporation owns a minority stake.

• 31:01Speaker 01

  Oh, they do currently?

• 31:03David Rosenthal?

  Yep.

• 31:03Speaker 01

  Oh, I thought ESPN was wholly owned.

• 31:05David Rosenthal?

  Nope, not wholly owned. So Disney is very happy to do deals like this. And this is, you know, one of the reasons I'm sure why they end up sort of winning, 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, um, yeah, we're happy to have minority shareholders.

• 31:31Speaker 01

  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 a, um, another third to give them a majority share of the company. But, um,

• 31:46David Rosenthal?

  Yeah, it's not public exactly what the deal is, but it has been announced. They have an option to acquire a quote, majority stake in BAMTech.

• 31:54Speaker 01

  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, the absolute perfect partner for this, right?

• 32:03David Rosenthal?

  Yep. To BAM and to baseball, yes, because they have a history of, and it's kind of what we saw with, um, with Lucasfilm, right? You know, it was really important to George Lucas, who the buyer of Lucasfilm was going to be. Um, and for, for Major League Baseball, even though they have a different set of motivations, you know, they're, 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, uh, and, 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

• 32:44David Rosenthal?

  to consumer ESPN subscription service powered again by BAMTech. Um, but this is huge. This is going to be the first time, you know, ESPN, uh, 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.

• 33:14Speaker 01

  Yeah, so David, I saw that too, but there's this weird like thing that they also follow that with that sounds like it's hamstringing the deal and it's gotta be to just like ease the concern of, of.

• 33:26David Rosenthal?

  The cable companies, yeah, so they're not gonna 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 gonna be moving large portions of their content into their direct to consumer service.

• 33:49Speaker 01

  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 Strategery 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 SportsCenter. I mean, you'd have to wait to go see highlights on SportsCenter, you know, the, the next morning after the sporting event occurred, and that's really just not

• 34:33Speaker 01

  necessary now. I mean, if, if I freaking can find, well, it used to be vines, I can find, you know, tweets with embedded videos or gifs of that insane diving save seconds after that it happens.

• 34:44David Rosenthal?

  Yeah, I mean, remember growing up when like, you know, staying up till 10 or 11 PM to, you know, to, for SportsCenter to come on?

• 34:51Speaker 01

  To watch what the frantic editors had put together in a couple of hours since the game.

• 34:55David Rosenthal?

  Yeah.

• 34:56Speaker 01

  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 gonna be repurposed for this, you know, direct, over the top service and that it's much more, like, who cares? Cause their, their current content isn't what's gonna matter in five years.

• 35:13David Rosenthal?

  Yeah, and 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.

• 35:33Speaker 01

  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 disclosed the enterprise value of BAMTech at spinout when Disney bought a third of it was $3.5 billion. So think about that. Initially capitalized with 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. 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 everyone's talking about the move to OTT services.

• 36:13David Rosenthal?

  This is like, this is like my doctrine, my doctrine that it's not a wave as long as, you know, you have a, you have a title for it that your average person doesn't understand.

• 36:22Speaker 01

  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 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 with it and we're going direct.

• 36:49David Rosenthal?

  Exactly. Direct to consumer. Yep. This is, this is serious. This is the business model innovation I was talking about in the Clippers on our, on our last show. Okay. So August 2016, the spinoff 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 buy the rights 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.

• 37:33David Rosenthal?

  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.

• 37:46Speaker 01

  Yep, and that is a big, big deal. That is a guaranteed $50 million per year deal that BAMTech 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, BAMTech, that's paying $50 million to Riot per year, and so far, nothing. Like, they have these rights, but we haven't seen anything with it. And we're gonna, we're really gonna see something, I would assume,

• 38:27Speaker 01

  in the next six months, where there's a direct offering that is built by BAMTech 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 in future episodes, but that Disney/BAMTech 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.

• 39:04David Rosenthal?

  Yep, and this is something, you know, 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 know, 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 rights space.

• 39:23Speaker 01

  Yep.

• 39:23David Rosenthal?

  So the last thing that happens, just a couple of months ago, in February 2017, Bowman, after a 17-year run as CEO of BAM, steps back from day-to-day operations as CEO, and they hire a man named Michael Paull 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.

• 39:56David Rosenthal?

  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 is Apple and others. But 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, a very compelling full-service video provider to consumers over the top on the internet.

• 40:34Ben Gilbert?

  Absolutely, absolutely. 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.

• 40:50David Rosenthal?

  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.

• 41:04Ben Gilbert?

  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.

• 41:14David Rosenthal?

  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.

• 41:32Ben Gilbert?

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise. The workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 41:48David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 42:05Ben Gilbert?

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 42:14David Rosenthal?

  So 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/acquired and tell them that Ben and David sent you.

• 42:25David Rosenthal?

  Should we move on to category?

• 42:26Speaker 01

  Yeah, 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 not quite an acquisition, but a technology investment, because it's the best technology that provides these services to anyone that wants to do their backend 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.

• 43:09David Rosenthal?

  Yeah, I totally agree. Business line, and right now, it's sort of mirroring the ESPN business line 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 a movie theater, or 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.

• 43:55Speaker 01

  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, or I'm sorry, the ESPN of the internet era. Well, it's the ESPN and the cable company of the internet era.

• 44:07David Rosenthal?

  ESPN and the Comcast of the internet era.

• 44:09Speaker 01

  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.

• 44:50David Rosenthal?

  Yep, and it's so ironic here. This is, I believe, over 10 years ago at this point, Comcast actually once made a hostile takeover offer for Disney and tried to buy Disney.

• 45:01Speaker 01

  Wow.

• 45:02David Rosenthal?

  You know, fate is a cruel mistress here and it's Disney that's making the play to not, you know, not buy Comcast, but just obsolete them.

• 45:12Speaker 01

  Yep. I mean, it's the smiling curve, right? I think, I feel like half of my life is informed by Ben Thompson right now, but that piece was so great about self-driving cars and making the reference that way upstream, you have 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 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.

• 45:57David Rosenthal?

  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 Disney, the 800-pound gorilla, has really also stepped in as a direct competitor in this space.

• 46:14Speaker 01

  Yep.

• 46:16David Rosenthal?

  Okay, so what would have happened otherwise?

• 46:18Speaker 01

  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 its 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 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 that could serve a lot of customers, or in fact, be a rights holder itself, that we gotta get this thing

• 47:02Speaker 01

  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?

• 47:15David Rosenthal?

  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.

• 47:27Speaker 01

  Yeah, yeah, absolutely.

• 47:28David Rosenthal?

  So, yeah, in terms of, you know, who else do you think could have been, could have been the investor here for the spinoff? I mean, we talked about why Disney was in many ways a perfect fit. Is there anybody else?

• 47:40Speaker 01

  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 BAMTech, and they historically have been more backend because they sort of, they sort of white label their frontend, whereas Netflix really aggregates all users into one frontend, 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 BAMTech, Netflix, Amazon.

• 48:20David Rosenthal?

  Yep.

• 48:20Speaker 01

  Can you think of any others? Maybe Verizon?

• 48:23David Rosenthal?

  Well, Twitch, obviously, is part of Amazon.

• 48:25Speaker 01

  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 pipes where this gets distributed, so you can see that being an interesting partner.

• 48:38David Rosenthal?

  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 outbid Disney, because I think Disney probably got a pretty good deal valuation-wise here relative to the potential, is Amazon, and especially with Michael Paull 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 prescient in the acquisition of Twitch, and 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.

• 49:22David Rosenthal?

  I'm very surprised that Amazon didn't try and make a harder run at buying BAM here.

• 49:27Speaker 01

  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 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.

• 49:42David Rosenthal?

  I mean, that's really very reasonable relative to other tech company valuations. And I guess the only thing I can think of is that, you know, historically, Amazon is pretty cheap when it comes to M and A. And so maybe they just weren't willing to go higher. But, um, but I have to imagine, given, 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.

• 50:25Speaker 01

  Yeah. And, and we're sort of going to, we're bridging here. Let's just call a spade a spade and say that we're into tech themes.

• 50:31David Rosenthal?

  Tech themes, per usual.

• 50:34Speaker 01

  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, 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, the important content out there, um, for, for live sports specifically. Like I, if I'm Major League Baseball, like, or if I'm Major League Baseball shareholders, and this is probably where the nuance comes in. I would love to own that for the next 20 years and.

• 51:19Speaker 01

  Maybe this is all sort of a artifact of the fact that Major League 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 in other league. It's actually owned by all of the owners of the teams.

• 51:32David Rosenthal?

  Yep, it is.

• 51:33Speaker 01

  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. 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, 1/30th ownership in a league.

• 52:00David Rosenthal?

  Yeah. As we talked about it before, there was no way that BAM was going to be able to realize its full potential, you know, being fully owned by, by Major League Baseball here.

• 52:10Speaker 01

  Right. But could they have found a partner where like, they, they weren't at risk of losing the majority of this business?

• 52:16David Rosenthal?

  Yeah. But, you know, again, in this, I think probably comes down to, we weren't privy to the negotiations, but why 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 its potential.

• 52:51Speaker 01

  Right. I also wonder too, like, what is, maybe there just will be a fantastic return. Let's say Disney buys, takes their option in two years and it's doubled by then, or maybe in three years and it's doubled by then. I mean, if it's, if it's a $7 billion, you know, $7 billion company and Disney's buying another third.

• 53:09David Rosenthal?

  Enterprise valuation.

• 53:10Speaker 01

  Like, you know, maybe MLB is like, wow, awesome. Like, great. We got, actually, what do they, what do they do with that money? Pay it as a distribution out to?

• 53:17David Rosenthal?

  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,

• 53:25Speaker 01

  Right.

• 53:25David Rosenthal?

  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 like we are here on acquired.

• 53:33Speaker 01

  And it's it's much older money too than than 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 um, my follow up is going to be, boy, do I wish I had listened to that Bill Simmons interview with Steve Ballmer 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 and but it was just super enjoyable to listen to. Ballmer is incredibly candid, and I think that um, and Bill's obviously an amazing interviewer, but you really get a sense of who the owners are in different leagues, like in in um, Ballmer says, 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

• 54:18Speaker 01

  families may have owned the team, 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 BAMTech 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, it's a lot of old money. They they're not dumb by any means, but it's just not, it's not why they own the team.

• 54:55David Rosenthal?

  Yep, totally agree.

• 54:58Speaker 01

  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, even after the BAMTech 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, you know, with baseball, the MLB posting record earnings and teams getting more and more valuable. In fact, the average 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 the Slack and we can talk about it as feedback in the next, next

• 55:41Speaker 01

  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 in value and, and are even more valuable than other sports leagues.

• 55:56David Rosenthal?

  Yeah, 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 waning there and, and business model innovation. And this is, you know, we talked about this on the Clippers episode and the NBA has their own streaming tech with, with League Pass that maybe, maybe they will, you know, think about outsourcing to BAMTech or selling the rights to BAMTech 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, and developing a direct relationship with your customer, a direct paid subscription

• 56:41David Rosenthal?

  relationship with your customer. That's probably accounting for a lot of the increase in value here.

• 56:47Speaker 01

  Yeah, I agree. Do you think that Disney is going to take their option in the next couple of years and buy another third?

• 56:54David Rosenthal?

  I mean, I don't see how they don't, right? I mean, I guess we're, this is bleeding into grading 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, that what 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.

• 57:36Speaker 01

  Yeah, so then I'll pose this to you. So if BAMTech, 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, BAMTech is 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 BAMTech. Right now, all their pre-recorded content is locked up in deals with Netflix and others. And I think those go through 2019, 2020.

• 58:18David Rosenthal?

  Yep.

• 58:18Speaker 01

  Will Disney renew those agreements with those other content aggregators? And 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 BAMTech, 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?

• 58:45David Rosenthal?

  Yeah, this is super interesting. And 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's 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 have to pay for all the stuff you don't want. It's a much better experience, really in the current world that we live in, for consumers where you can choose, hey, if I care about baseball, I'll subscribe to baseball.

• 59:28David Rosenthal?

  If I care about basketball, I'll subscribe to League Pass. If I care about movies, I'll subscribe to Netflix and TV shows. Are we going to see a rebundling here that actually would be negative for consumers?

• 59:41Speaker 01

  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 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 when all the content is too disparately scattered around everywhere and we have, you know, like, you remember like 10 years ago when every network had their live TV or their like, like ABC had Lost available to watch on ABC.com and some other company, you know, NBC had The Office available on NBC.com.

• 1:00:26Speaker 01

  And like, it took Hulu and then Netflix and like these rebundling 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 there's going to need to be a rebundling and who's going to do that?

• 1:00:46David Rosenthal?

  How many subscriptions are you going to have? Do you really want to pay Netflix and MLB and League Pass and, 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? That could be very compelling as well.

• 1:01:05Speaker 01

  Yep. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 1:01:19David Rosenthal?

  Yep. 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. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 1:01:36Speaker 01

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 1:01:51David Rosenthal?

  And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Legora's bet 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.

• 1:02:15Ben Gilbert?

  And they recently launched Legora 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.

• 1:02:34David Rosenthal?

  And Legora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Legora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 1:03:04Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty 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 legora.com/acquired and just tell them that Ben and David sent you. All right, let's grade the thing.

• 1:03:30David Rosenthal?

  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.

• 1:03:46David Rosenthal?

  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 Ichiro and they solved that problem poorly at first and then better. You know, and then the problem was, well, there are 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

• 1:04:31David Rosenthal?

  example of stair stepping your way up into a enormous company by, by solving real problems, kind of one at a time.

• 1:04:38Speaker 01

  And the, the counterfactual to that, or more of just the, 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 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 Acquire, but boy, has it sure become one, especially hot on the heels of the Oculus episode.

• 1:05:12David Rosenthal?

  Absolutely.

• 1:05:13Speaker 01

  Interestingly enough, like, it doesn't really seem to be an issue in this case. Like, Major League Baseball isn't trying to hamstring BAMTech by not allowing BAMTech to serve Major League Baseball's competitors. And until now, it made entire, it made tons of sense for, for BAMTech 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.

• 1:05:43David Rosenthal?

  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 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 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.

• 1:06:21Speaker 01

  Yeah. Well, it seems like they've got the incentives lined up right now, especially if Disney in pretty short order here buys the rest of it and then it's really a non-issue.

• 1:06:29David Rosenthal?

  Yeah. All right. Should we grade it?

• 1:06:33Speaker 01

  Yeah. So listeners, David and I were having a debate before this show over over iMessage 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 share 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 and I were like, uh, no brainer. Like that's an A. That's a great decision. Why wouldn't they do that?

• 1:07:08David Rosenthal?

  On the part of Major League Baseball to to spin it out?

• 1:07:10Speaker 01

  Yeah, like they totally would have hamstrung that thing by keeping it in-house and it's just like value destruction to not spin the thing out. So what we've decided is we're going to grade it from from the Disney perspective, which I actually, David, I want to hear your thoughts first on that.

• 1:07:26David Rosenthal?

  Okay, I'll go first. I I think this is an incredible acquisition by Disney. You know, we're somewhat hamstrung in in grading it.

• 1:07:40David Rosenthal?

  As thoroughly as we would like, given that we don't know exactly how much revenue is coming along with BAMTech versus staying with Major League Baseball. But let's just say for, for argument's sake, sort of the latest number we have is, is 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 $3.5 billion 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, in the technology space. That's very low. And then think about that relative to the massive opportunity that Disney has here

• 1:08:24David Rosenthal?

  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 Lucasfilm and Marvel, we talk a lot about the Disney flywheel and, and the playbook that Walt Disney, you know, so many years ago laid out that really was the, the forefather of, 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, of content that they have throughout the rest of the company and start to push

• 1:09:07David Rosenthal?

  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-

• 1:09:19Speaker 01

  Is it a direct customer relationship? Like BAMTech doesn't have any audience.

• 1:09:23David Rosenthal?

  Well, BAMTech doesn't have any audience, but they're managing the subscription for relationship with the consumers. So consumers are paying them, both for MLB.TV and NHL and anything they do in the future now, right?

• 1:09:37Speaker 01

  Oh, yes, I see. But on a, in a siloed basis.

• 1:09:40David Rosenthal?

  Yeah, yeah, right.

• 1:09:41Speaker 01

  Like, they don't, they don't necessarily have some consumer eyeball portal where Disney can plug their content in and get that distribution.

• 1:09:49David Rosenthal?

  No, BAMTech itself isn't a consumer portal, but-

• 1:09:55David Rosenthal?

  Through it, Disney, 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, whether that was Comcast or movie theaters, or Apple, or Amazon, or whomever. Now, there's finally a vehicle that consumers can, over the internet, just pay Disney directly.

• 1:10:23Speaker 01

  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?

• 1:10:28David Rosenthal?

  Oh, yeah. I said everything except the actual grade. Yeah, A. This is, I predict will 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.

• 1:10:43Speaker 01

  And it's only in process. We'll have to revisit this when they buy the rest of it.

• 1:10:46David Rosenthal?

  Yeah.

• 1:10:47Speaker 01

  Yeah, I think, I agree with you. I also am giving it 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 BAMTech already owns, and that this is a bet on whatever their future content and this distribution mechanism to go direct to consumers is.

• 1:11:22David Rosenthal?

  Yep. And then, one last thing I throw in. It's kind of been a while here on Acquired since we've talked about the people aspects of acquisitions, which, going back to our early shows, we focused so much on, and so many of our guests talk about. BAMTech as an organization has this history of operating within, not as a startup, as a part of a much larger conglomerate, which it now will continue to as part of Disney. So 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

• 1:12:04David Rosenthal?

  culture that BAMTech will be joining versus baseball. So I wonder, I wonder if, from a people standpoint, the company is also well positioned to succeed here?

• 1:12:16Speaker 01

  Yep. I think that's right.

• 1:12:18David Rosenthal?

  Okay. Should we move on to follow-ups?

• 1:12:21Speaker 01

  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 Ballmer on the Bill Simmons Show.

• 1:12:39David Rosenthal?

  Yeah, it's a great episode. And, uh, um, yes, hear him say, unfortunately, he doesn't do a, doesn't do a, you know, head coaches, head coaches, head coaches chant, but the classic, the classic Ballmer enthusiasm is, is on display as always.

• 1:12:55Speaker 01

  Yep.

• 1:12:56David Rosenthal?

  Bunch of real quick ones from 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, and would love to jump in the Slack and chat about them with folks. Uh, some of this has already been talked about in the Slack. Apparently, a lot of publishers are now abandoning Facebook instant articles, uh, for a whole bunch of reasons. Uh, two, Microsoft is killing Wunderlist. Very, very sadly. It is my to do list app. I love it. And I'm bummed that it's, it's going away. Uh, three, Instagram is on fire. Uh, growth is just continues to accelerate. They passed, announced that they passed 700 million MAUs, um, this past week, which is, you know, they're, they're

• 1:13:38David Rosenthal?

  starting to rival, you know, the same size as, as the parent company is Facebook.

• 1:13:42Speaker 01

  Yeah. I mean, Instagram is just crushing it up being Snapchat.

• 1:13:48David Rosenthal?

  Nobody does Snapchat better than Instagram. Uh, next, uh, the Echo Look. So, uh, Amazon announced, uh, and actually a big shout out to, to our good friend Zoe, uh, 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, uh, I don't know. I can't decide if it's creepy yet or awesome. Probably both.

• 1:14:13Speaker 01

  As with everything. The, I mean, and the,

• 1:14:14David Rosenthal?

  As with everything.

• 1:14:15Speaker 01

  And the, you know, as I record this episode, uh, in my apartment in Capitol Hill in Seattle, like my Alexa is listening to the entire thing. So, um, listeners, uh, if you're at Amazon and, um, you know, you have the encryption keys, then, uh, you get a first look at this episode.

• 1:14:31David Rosenthal?

  A first look at the episode, right?

• 1:14:32Speaker 01

  Which they don't, you know?

• 1:14:34David Rosenthal?

  Yeah, we, we, 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.

• 1:14:43Speaker 01

  Yeah.

• 1:14:44David Rosenthal?

  Next, two more real quick ones. One, Cloudera priced their IPO yesterday at $15 a share, enterprise value, market cap of about just under $2 billion, which is sort of flat from their, 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.

• 1:15:06Speaker 01

  Which is about the fifth or sixth of this year. The march goes on.

• 1:15:10David Rosenthal?

  Yeah, the march goes on. The IPO window is open. And then finally, follow up on our Uber Didi episode. Obviously, there's been lots of Uber news over the past couple of weeks, but Didi yesterday raised $5.5 billion in the largest private company fundraising round ever. B, $5.5 billion 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 Brad Stone, but if you thought that doing the quote unquote merger with Didi meant that the war was over, you know, and you didn't have

• 1:15:49David Rosenthal?

  anything to worry about, like, guess again, the Didi giant is, and this $5.5 billion specifically was raised to expand internationally. Didi is coming and gunning to be a competitor to Uber and everyone else in the space. So, watch, watch what happens in the future.

• 1:16:07Speaker 01

  Yep. Carvouts?

• 1:16:10David Rosenthal?

  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 Neuralink 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.

• 1:16:34Speaker 01

  I feel like Elon companies at this point are like the blockbuster hit of the summer, like, coming this July.

• 1:16:46David Rosenthal?

  It's all, it's all coming full circle here.

• 1:16:49Speaker 01

  It is. And while you chose one that is largely about the future of humanity and incredibly important, mine is quite trite, but fun. So, uh, the New York Times operates a Twitter account called the NYT4DownBot, N-Y-T-F-O-R-T-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-

• 1:17:23David Rosenthal?

  It's really just a man behind the curtain.

• 1:17:26Speaker 01

  Yeah. Somebody applying, uh, 20-year-old mathematics and, um, statistics to, 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, uh, NFL owners play it safe and punt because that's the, the accepted wisdom. And they don't want to risk it and go for fourth more often than is generally accepted. Uh, go, go for it on fourth down, um, rather than punting or going for a field goal, um, more often than is commonly accepted because they will, uh, if they fail, face, face the wrath of, of fans and, and, uh, potentially the owner.

• 1:18:09David Rosenthal?

  Which we were lamenting on the last episode and in the Slack.

• 1:18:12Speaker 01

  Right. But you know, but if you, if you quote unquote moneyball 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-

• 1:18:33David Rosenthal?

  So great. And actually, uh, I saw it and found out about it. You, you, you might've too in the Slack. So thank you to everyone for, uh, for posting about it.

• 1:18:42Speaker 01

  Yeah, yeah.

• 1:18:44David Rosenthal?

  All right, listeners, now is a great time to talk about one of our favorite companies, Statsig.

• 1:18:50Ben Gilbert?

  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.

• 1:19:01David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next.

• 1:19:21Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved.

• 1:19:34David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 1:19:45Speaker 01

  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 longtime 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, 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 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.

• 1:20:28David Rosenthal?

  Oh, yeah, plenty.

• 1:20:29Speaker 01

  Plenty, plenty.

• 1:20:30David Rosenthal?

  It's an embarrassment of riches every year at Acquired.

• 1:20:35David Rosenthal?

  Thanks, everyone. We'll see you next time.