Investment intended to enhance Disney, ABC programming, will launch ESPN digital subscription network.

The Walt Disney Company will acquire a 33 percent stake in BAMTech, a technology service and video streaming company previously formed by Major League Baseball.

As part of the transaction, Disney will pay $1 billion in two installments, now and in January 2017, and will have the option to acquire majority ownership in the coming years.

BAMTech was also separated by MLB’s broader digital business, MLB Advanced Media, and will become a key partner for Disney in the delivery and support of streaming video and other digital products from Disney|ABC Television Group and ESPN, as well as any future digital initiatives across the company.

According to BAMTech, it has nearly 7.5 million paid subscribers for its OTT products.

Disney’s investment in BAMTech will also provide capital to accelerate growth of its proprietary video delivery platform, allowing the company to deliver greater flexibility to clients and develop new technologies and capabilities, according to The Walt Disney Company.

“Our investment in BAMTech gives us the technology infrastructure we need to quickly scale and monetize our streaming capabilities at ESPN and across our company,” says Robert Iger, chairman and chief executive officer, The Walt Disney Company. “We look forward to working closely with BAMTech as we explore new ways to deliver the unmatched content of The Walt Disney Company across a variety of platforms.”

BAMTech will also collaborate with ESPN to launch and distribute a new branded multi-sport subscription streaming service in the future. The direct-to-consumer service will include content provided by both BAMTech and ESPN, as well as live regional, national and international sporting events. However, current content on ESPN’s linear networks will not appear on the new service. More details will be announced in the coming months.

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

Following Disney’s stake in BAMTech, the National Hockey League received a minority interest in BAMTech as a result of a previous agreement.