Disney CEO Confirms Sports Betting Plans
The Disney CEO has confirmed the company has advanced sports betting plans. Bob Chapek states they are “working very hard” on a new sports betting app. Third Point, investors in the company are recommending an ESPN spin-off to provide greater flexibility.
Bob Chapek Confirms Sports Betting App Development © Pixabay.
Entertainment giant Disney has confirmed the company has an ESPN sports betting app in development as they look to diversify income streams.
While speaking at Disney’s D23 fan event in California, Walt Disney Group CEO Bob Chapek confirmed the company intended to use its ESPN brand to enter the sports betting arena sooner rather than later.
Almost a year ago, the company, which has a host of brands, including 20th Century Fox, Marvel, Star Wars and the sports-oriented ESPN, first informed investors that it had ambitions to enter the sports betting vertical. At Disney’s Q4 2021 earnings call, Chapek said they were exploring options, including licensing the ESPN brand for betting purposes, adding that the stigma surrounding sports betting had diminished over the years.
“We’re also moving toward a greater presence in online sports betting, and given our reach and scale, we have the potential to partner with third parties in this space in a very meaningful way,” he explained.
“Suffice to say, we continue to see enormous opportunity in sports and all of this, the rights deals, our innovative programming and the flexibility achieved through our direct-to-consumer business, which saw ESPN+ subscribers increase by 66% over the past fiscal year alone,” Chapek added.
ESPN’s parent company Disney has deals in place that would be a perfect fit for any future foray into offering a product similar to gambling sites. They have a 10-year rights agreement with the National Football League, and last year they signed a five-year deal with them to show the Monday night wild card game, which is fronted by NFL legends Peyton and Eli Manning.
In August last year, the Wall Street Journal reported that Disney was proactively seeking a licensing deal for the ESPN brand with DraftKings and Caesars Entertainment mooted as possible suitors, from a burgeoning pool of US sportsbooks. Furthermore, the Wall Street Journal reported that such a deal would be worth $3bn to Disney.
Speaking about the speculation at the time, Chapek said that sports betting was a “very significant” opportunity for the company driven by consumer demand.
“It’s driven by the consumer, particularly the younger consumer that will replenish the sports fans over time and their desire to have gambling as part of their sports experience,”
“It’s not necessarily a lean back, it’s a little bit of a lean forward-type experience that they’re looking for and as we follow the consumer, we necessarily have to seriously consider getting into gambling in bigger way, and ESPN is a perfect platform for this” Chapek explained.
Last month, one of Disney’s investors, a New York-based hedge fund Third Point, encouraged the company to spin off ESPN as a separate entity to help them realise their sports betting goals.
Daniel Loeb, Third Point CEO and chief investment officer, said: “ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting.
“Customers of ESPN and sports leagues would be better served by a focused management team driving a leadership position in sports distribution.”
Chapek revealed that the company had received over 100 interested parties in a sports betting partnership.
“If you have a house that you’re going to put up for sale and you have a hundred buyers, you’ve probably got a pretty cool house.” The Disney CEO said.
Daily fantasy sports offerings are incredibly popular with American audiences and are likely to be a focus for the ESPN sports betting brand if it is realised. In addition, bookmakers in other territories are increasingly trying to replicate this success in other regions, such as the highly competitive UK market.
