It is no secret that ESPN is kicking the tires on sports betting.
Media outlets like the Wall Street Journal and Front Office Sports have speculated about the company’s plans for the sector, whether that be a licensing deal or M&A.
But the company itself has been relatively tight-lipped on its plans — that is, until Disney CEO Bob Chapek clarified a few things at an investor conference Tuesday.
How does ESPN get into sports betting?
Goldman Sachs analyst Bret Feldman asked Chapek about ESPN’s plans for US sports betting.
Specifically, Feldman asked whether ESPN might just license its name to an operator, as the WSJ reported, or go further and “embed [betting] into the ESPN business model.”
Chapek suggested the answer was somewhere in-between.
“There’s a long way between embedded into the ESPN business model and licensing the name out,” he said.
“Let’s just say our fans are really interested in sports betting. Let’s say our partners in the leagues are interested in sports betting, so we’re interested in sports betting. Strategically, sports betting gives us the ability to appeal to a much younger sports fan who has a very strong affinity for those sports. So it’s definitely a place we want to be.”
Chapek added that the company was getting “more and more aggressive” in pursuing sports betting partnerships.
“It is not something that we would do necessarily solo in the gambling area,” Chapek said.
Who will partner with ESPN?
ESPN has been linked with Rush Street Interactive as a potential betting partner by both the Action Network and analyst firm Eilers & Krejcik.
Eilers said in a recent note:
“There’s logic to a [deal between the two]. BetRivers has struggled to make a dent in markets where it doesn’t have a big retail casino gaming presence and ESPNBet would surely change that.”
However, a partnership between those two would still be missing the all-important sportsbook technology piece.
Chapek did not give specifics on partners but added that ESPN was “starting to take some pretty big steps along that way.”
Another Disney spin-off?
Research firm LightShed Partners has argued Disney should spin out ESPN and merge it with a sportsbook.
“That would help change the narrative of ESPN from subscriber losses, viewership declines and advertising headwinds to new market launches and expanding the TAM of sports bettors,” LightShed wrote in a recent research piece.
How would ESPN Sportsbook fare?
As LSR noted back in July, there is no guarantee an ESPN Sportsbook would be a success.
The company has a hugely valuable brand and customer database. But those users do not already have funded wallets like those at FanDuel and DraftKings.
The jury is still out on the media/operator model in general. Companies like theScore and Fox Bet have delivered somewhat underwhelming returns to date.
