ESPN Eyeing Potential $3 Billion Sports Betting Deal

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ESPN Eyeing Potential $3 Billion Sports Betting Deal

News broke on Friday afternoon that ESPN has discussed a potential $3 billion deal with sports betting providers including DraftKings and Caesars Entertainment, both of whom have existing partnerships with the sports media giant. As a part of a family-centric organization, it was previously believed that the Walt Disney Company’s ESPN would be hesitant to enter the sports betting space.

ESPN and the Walt Disney Company

On an earnings call in 2019, former CEO Bob Iger said he didn’t see “the Walt Disney Company, certainly in the near term, getting involved in the business of gambling, in effect, by facilitating gambling in any way.” However, he did say that he believed there would be “plenty of room” for ESPN to provide coverage that would be relevant to sports betting. Disney has refused to put casinos on their ships and has worked against the legalization of gambling in Florida to “protect the brand and market of theme parks”, per Richard Schuetz, a veteran casino executive.

ESPN has been a boon for Disney over the past several years, but with cord-cutting an increasing trend in the United States, both companies have worked to pivot their market offerings. Streaming has become a major piece of the puzzle with Disney+ and ESPN+ among the more popular streaming services, particularly for millennials who have forgone cable television in recent years. Sports betting could be the next logical industry for ESPN and Disney to explore with the industry expected to generate about $4 billion in revenue in the United States in 2021 per Chris Grove, a gambling industry analyst for research firm Eilers & Krejcik Gaming.

Disney reported sales of $17 billion for the quarter ending July 3, up 45% from the same quarter in 2020. These results were helped by a strong rebound in visitors to the reopened parks. Disney+ has seen great success from its Disney+ streaming service with now 116 million subscribers, up from 103.6 million in the prior quarter. ESPN+ has also reached 15 million subscribers, an increase of 75% from the same period in 2020. These streaming services could become even more successful with some kind of sports betting integration.

What Would an ESPN Sports Betting Partnership Entail?

It’s easy to see why sports betting providers would have an interest in the ESPN brand. With a subscription base of over 11.5 million and media rights partnerships with all of the major leagues including the NFL, NBA, and MLB, ESPN is incredibly well-positioned in the sports media space. ESPN is the leading sports television network in the United States. ESPN is also home to well-recognized and established media names such as Stephen A. Smith, Adam Schefter, and Adrian Wojnarowski, among many others.

ESPN is reportedly looking for a $3 billion deal over multiple years and is offering the right for a sports betting partner to utilize the ESPN name for branding purposes. ESPN is also reportedly interested in the possibility of a sportsbook being renamed with the “ESPN” title. It remains to be seen whether a sportsbook like DraftKings or Caesars would actually be interested in a potential rebranding with their already strong market share in the sports betting space.