Disney Eyes Online Sports Betting Presence, Sees Boost for ESPN Brand
Posted on: November 11, 2021, 05:00h.
Last updated on: November 11, 2021, 09:30h.
The Walt Disney Company (NYSE:DIS) continues its embrace of sports wagering, and is looking to expand its online wagering footprint, perhaps in dramatic fashion.
On the company’s fiscal fourth-quarter earnings conference call Wednesday afternoon, CEO Bob Chapek said Disney — the parent company of ESPN — can leverage scale to partner with third parties in the regulated sports wagering industry “in a very meaningful way.”
Suffice to say, we continue to see enormous opportunity in sports, and all of this, the right steels, our innovative programming, and the flexibility achieved through our DTC business, which saw ESPN+ subscribers, increased by 66 percent over the past fiscal year alone,” Chapek told analysts. “All of this is a testament to the clear ambition we have in sports.”
ESPN+ is the streaming platform bearing the name of the “worldwide leader in sports.” The sports network has long signaled that fantasy sports and wagering are avenues to bolster the streaming service and the network at large. ESPN accelerated its exposure to the sports betting space in September 2020, inking separate, multi-year accords with Caesars Entertainment (NASDAQ:CZR) and DraftKings (NASDAQ:DKNG).
No Impact to Disney Brand
There was a time when the idea of a Disney/gambling marriage would have been off-putting to investors and, more importantly, consumers.
However, attitudes towards sports wagering in the US are changing, with surveys and studies revealing adults don’t have the negative view of betting that were held in years past. For its part, Disney is researching the matter, with Chapek noting a deeper move by the company isn’t likely to damage its iconic brand — one often associated with family friendliness and compatibility. Rather, a more overt association with wagering could prop up the ESPN brand.
“We have done substantial research in terms of the impact to not only to the ESPN brand, but the Disney brand, in terms of consumers changing perceptions of the acceptability of gambling,” said the Disney chief executive. “And what we’re finding is that there’s a very significant isolation.”
Chapek adds that in following consumer trends, Disney finds it has “to seriously consider getting into gambling in a bigger way,” adding that ESPN is the ideal platform for doing that.
In terms of brand recognition, ESPN has plenty of that. Earlier this year, it was reported the network held talks with gaming companies, including Caesars and DraftKings, regarding use of the ESPN brand at a $3 billion price tag. No deal on that front has been announced.
No Acquisition Talk…Yet
On the conference call, Chapek noted sports wagering is something Disney is “pursuing aggressively.” However, no mention of a potential acquisition related to that effort was made.
In September, speculation surfaced that ESPN could be a player for Rush Street Interactive (NYSE:RSI) — an operator Disney could easily afford, and one that would significantly raise the buyer’s sports wagering profile.
Fanatics was recently tied to acquisition rumors involving RSI, confirming ESPN could face competition in a potential pursuit of the gaming company. Recently, speculation about RSI’s fate as a possible takeover target cooled. But consolidation remains a prime theme in the sports betting industry.
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