Disney CEO Chapek Sees Sports Betting in ESPN Future, But not as Bookmaker
Walt Disney (NYSE: DIS) CEO Bob Chapek reiterated he sees sports wagering in ESPN’s future, but added the sports media entity won’t be directly involved in bookmaking.
Chapek made the remarks yesterday at the Goldman Sachs Communacopia + Technology Conference. In response to a question from Goldman Sachs equity analyst Brett Feldman, the Disney chief executive officer said sports betting is one of the options Disney is looking at to counter “cable universe shrinkage” while maintaining the view that ESPN’s exposure to wagering isn’t harmful to the broader Disney brand.
Putting a link out, for example, which would probably be the most likely application – a link out, not app as an app, but application, a link out to a sports betting site, ESPN-branded, would have no impact on brand equity for Disney but will have a very positive impact on the brand equity for ESPN because our younger audience is demanding that,” said Chapek.
He didn’t elaborate on how a link-related effort could materialize for ESPN. Last year, it was reported the sports media giant was searching for a $3 billion, multi-year licensing accord with a sportsbook operator and that it held talks with Caesars Entertainment (NASDAQ:CZR) and DraftKings (NASDAQ:DKNG), but a deal didn’t materialize.
Good Timing for Chapek Comments
It’s likely just coincidence because the Goldman Sachs conference was scheduled months out, but Chapek delivered those comments just two days after activist investors Daniel Loeb abandoned plans to push Disney to spin-off ESPN.
Part of the Third Point founder’s rationale for such a move was that ESPN could better capitalize on sports wagering opportunities as a freestanding entity. On Sunday, Loeb said his hedge fund has “a better understanding” of ESPN’s value to Disney. At the conference, Chapek reiterated that the sports network will remain in-house.
“The Walt Disney Company adds a lot to ESPN, and ESPN adds a lot into The Walt Disney Company. And you can look at it something as simple as the soft bundle, but you can also look at the tremendous benefits that live sports brings to the company, whether it’s from an advertising standpoint or from an audience standpoint or from a fandom standpoint,” he said in response to a question from Feldman. “And we think that’s very important.”
Last month, Chapek told Disney investors the company could soon make a significant sports betting announcement.
Waiting on ESPN Sports Betting Splash
Today, ESPN isn’t bereft of sports betting exposure. It has relationships with Caesars Sportsbook and DraftKings and is increasingly tilting content across its various platforms toward younger viewers perceived as enthusiastic about wagering.
Still, the network isn’t directly tied to sportsbook operations and it’s unclear if and when that will happen.
Disney has long been rumored to be a potential buyer of a number of smaller sportsbook operators — all of which it can easily afford to acquire — but Chapek didn’t mention deal-making to that effect at the Goldman Sachs conference.
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