Acquisitions

BAMTech

In August 2016, the Company acquired a 15% interest in BAMTech, an entity which holds Major League Baseball’s streaming technology and content delivery businesses, for $450 million. The Company is committed to acquire an additional 18% interest for $557 million in January 2017. The Company accounts for its interest in BAMTech as an equity method investment. In addition, the Company has an option to increase its ownership to 66% by acquiring additional shares at fair market value from Major League Baseball between August 2020 and August 2023.

Vice/A+E

Vice is a media company targeting a millennial audience through news and pop culture content and creative brand integration. During fiscal 2016, A+E acquired an 8% interest in Vice in exchange for a 49.9% interest in one of A+E’s cable channels, H2, which has been rebranded as Viceland and programmed with Vice content. As a result of this exchange, A+E recognized a net non-cash gain based on the estimated fair value of H2. The Company’s share of the Vice Gain totaled $332 million and was recorded in “Equity in the income of investees” in the Consolidated Statement of Income in fiscal 2016. At October 1, 2016, A+E had a 20% interest in Vice.

In addition, during fiscal 2016, the Company acquired an 11% interest in Vice for $400 million of cash.

The Company accounts for its interests in A+E and Vice as equity method investments.

Maker Studios

On May 7, 2014, the Company acquired Maker Studios, Inc. (Maker), a leading network of online video content, for approximately $500 million of cash consideration. Maker shareholders were eligible to receive up to $450 million of additional cash upon Maker’s achievement of certain performance targets for calendar years 2014 and 2015. At the date of the acquisition, the Company recorded a $198 million liability for the fair value of the contingent consideration (determined by a probability weighting of potential payouts). In fiscal 2015 and fiscal 2016, the Company paid $105 million and $70 million, respectively, for the contingent consideration. The majority of the purchase price was allocated to goodwill, which is not deductible for tax purposes. Goodwill reflects the synergies expected from enhancing the presence of Disney’s franchises and brands through the use of Maker’s distribution platform, advanced technology and business intelligence capability. The revenue and net income of Maker included in the Company’s Consolidated Statements of Income for fiscal years 2016, 2015 and 2014 were not material.

Hulu

At the end of fiscal 2015, the Company had a 33% interest in Hulu, a joint venture owned one-third each by the Company, Twenty-First Century Fox, Inc. and Comcast Corporation. In August 2016, Time Warner, Inc. (TW) acquired a 10% interest in the venture from Hulu for $583 million diluting the Company’s ownership interest to 30%, which results in a deemed sale by the Company. For not more than 36 months from August 2016, TW may put its shares to Hulu or Hulu may call the shares from TW under certain limited circumstances arising from regulatory review. The Company and Twenty-First Century Fox, Inc. have agreed to make a capital contribution for up to approximately $300 million each if required to fund the repurchase of shares from TW. The Company expects to recognize a gain of approximately $175 million associated with the deemed sale of a portion of its ownership interest in Hulu if the put and call options are not exercised.

In addition, the Company has guaranteed $113 million of Hulu’s $338 million term loan, which expires in October 2017.

The Company accounts for its interest in Hulu as an equity method investment.

Goodwill

The changes in the carrying amount of goodwill for the years ended October 1, 2016 and October 3, 2015 are as follows:



	Media Networks			Parks and Resorts		Studio Entertainment			Consumer Products & Interactive Media			Total
Balance at Sept. 27, 2014	$	16,378		$	291	$	6,856		$	4,356		$	27,881
Acquisitions	3			—		2			—			5
Dispositions	—			—		—			(1		)	(1		)
Other, net	(27		)	—		(22		)	(10		)	(59		)
Balance at Oct. 3, 2015	$	16,354		$	291	$	6,836		$	4,345		$	27,826
Acquisitions	1			—		1			—			2
Dispositions	—			—		—			—			—
Other, net	(10		)	—		(7		)	(1		)	(18		)
Balance at Oct. 1, 2016	$	16,345		$	291	$	6,830		$	4,344		$	27,810