Baseball
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It looks like Major League Baseball owners are about to get paid.

Bloomberg recently reported that Disney (NYSE:DIS) is going to acquire a one-third stake in BAM Tech, the video-streaming arm of MLB Advanced Media. Disney will also have a four-year option to purchase another one-third stake in the company that powers several major video streaming platforms, including Disney's WatchESPN app, according to Bloomberg's unnamed source. The deal reportedly values the company at about $3.5 billion.

But the deal between two sports giants isn't just about sports. Disney would bring an unparalleled portfolio of content to BAM Tech, and MLB would be providing a best-in-class live streaming video infrastructure. That would make this rumored deal a home run for both Disney and MLB.

Disney's big push into streaming

Disney has already made several advances into streaming video. As mentioned, it provides access to the WatchESPN app to cable subscribers, which gives them access to ESPN's live broadcasts on its main networks, additional programming without a large enough audience for broadcast, and archived video of its original productions. ESPN is also reportedly exploring the potential of providing a direct-to-consumer subscription option.

Additionally, Disney owns a one-third stake in Hulu, which is working on a live-streaming video service of its own. Under Disney ownership, BAM Tech would be the likely candidate to provide the back end for the service, migrating its 12 million paid subscribers and millions more free users to the platform.

Disney also launched a Disney-centric streaming service, DisneyLife, in the U.K. and Europe last fall, featuring its movies, TV shows, music, and e-books.

The acquisition of BAM Tech would open the door to more ways for Disney to leverage its content portfolio. Disney would also benefit from the expansion of streaming services from competing media companies as BAM Tech already powers HBO Now, CBS's March Madness, WWE's subscription streaming service, and more.

Bringing more to the table with pay-TV providers

After seeing subscriber declines at its crown jewel, ESPN, over the past couple of years, management finally admitted that the competitive pay-TV environment is affecting its business. Disney says most of the subscriber losses come from consumers who are choosing skinny bundles over the larger cable packages that feature its more expensive networks.

In order to combat that trend, Disney is working with providers to get ESPN and its other high-value networks into the smaller bundles. Most of those bundles are provided by new upstart streaming services such as DISH Network's Sling TV and Sony's PlayStation Vue. If Disney can bring BAM Tech's platform to the table as part of its negotiations with these new services, it has a better chance of getting its networks into more streaming bundles.

Additionally, Disney would get an easier path to bring its networks direct to consumers. That could be used as leverage against pay-TV operators that risk losing high-value customers spending big bucks on higher-priced bundles. HBO successfully leveraged its stand-alone service to get pay-TV providers to create more options for subscribing to HBO without a huge bundle of channels attached.

With the continued growth of streaming video, a Disney acquisition of BAM Tech would be a smart move. Considering the content catalog Disney brings to the table, it provides a lot of room to increase BAM Tech's position with several major streaming services including Hulu, ESPN, and any new products Disney launches. On the flip side, BAM Tech could help Disney in its negotiations with pay-TV companies both new and old. If Disney picked up the option to buy another one-third of the company, these strategic benefits would only become stronger.

Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.