There is only a remote possibility that Disney is actually working on building a sports betting app, according to US sports betting expert and investor Chris Grove.
Yesterday (12 September), Bloomberg reported that Walt Disney CEO Bob Chapek said sports betting is a constant request among Disney’s under-35 sports-loving audience, and when asked if the company was developing a sports betting app for its ESPN brand, Chapek stated: “We’re working very hard on that.”
ESPN has received a lot of attention in recent weeks after US investor and founder of the Third Point hedge fund, Daniel Loeb, suggested that Disney should spin off ESPN as this would give America’s best-known sports media entity a better chance to embrace sports betting than it has under its current corporate umbrella.
In a Linkedin post, Chris Grove commented on the Bloomberg story and said that he thinks the “headline is getting very far ahead of the story”.
“The tricky part here is that Chapek could mean a few things by ‘that’,” he added.
According to Grove, Chapek could have referred to various options, including sports betting in general, layering in some kind of sports betting component to the existing family of ESPN apps, layering a sports betting component to the ESPN viewing experience or developing an actual sportsbook app.
“The last one is by far the least likely one,” Grove wrote.
He outlined that building a sportsbook app is a time-consuming and resource-intensive process, which does not seem to follow Disney’s modus operandi at the moment.
“No one I talk to has seen any meaningful footprints of Disney developing this kind of app,” Grove added and pointed out that there has not been any visible related hiring or M&A activity.
In addition, running a sportsbook is “a challenging business where capital expenditure is intense and profits are uncertain”, which also does not seem to follow Disney’s policy, according to Grove.
“Disney would also be absorbing a ton of opportunity cost by operating its own sportsbook,” he said as the network would take away “marketing dollars from sportsbooks”.
Lastly, he concluded: “It is highly unlikely that Disney would be interested in opening up another front with state policymakers,” whereby running its own sportsbook would leave Disney “exposed to regulators and potential political pressure in every state where they operate.”
Disney is recruiting a New York-based senior sports betting manager to work for its ESPN subsidiary.
The job description, posted 30 January, says the successful applicant will be responsible for the day-to-day partner management of betting and licensing deals for ESPN.
The individual will also be expected to act as the go-to project manager for existing and new partnerships while overseeing key external relationships with betting partners.
In November, Walt Disney Company CEO Bob Chapek said the company was “aggressively pursuing” building a bigger presence in online sports betting via the ESPN brand.
“Given our reach and scale, we have the potential to partner with third parties in this space in a very meaningful way,” he said at the time.
“We do believe that sports betting is a very significant opportunity for the company and it is all 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.”
Last year, it was reported that ESPN was looking to cash in on its brand reach by exploring a multi-year $3bn licensing deal with the likes of DraftKings and Caesars Entertainment.
We have already seen regulated operators forgo their flagship brands in the US to launch in partnership with an established American media outlet. 888’s Sports Illustrated sportsbook and Carousel Group’s MaximBet are just two examples.
iGaming NEXT contacted Disney to ask if the new ESPN sports betting manager would be tasked with sub-licensing the brand out to a regulated gambling operator in the US.
Disney – via ESPN – declined to comment on this occasion.
Notably, the requirements for the senior sports betting manager role barely mention sports betting.
Basic qualifications include a minimum of seven years’ experience in either business strategy, business development, product or partnerships and experience of working in a fast-paced environment with changing requirements.
Meanwhile, experience with media, gaming and technology-oriented business models and industry leaders is listed as a preferred qualification, as is an understanding of the emerging areas of sports business, with esports and sports betting listed as examples.
It is worth pointing out that ESPN is already aligned with sports betting to some extent.
The media giant has launched a dedicated sports wagering YouTube channel that boasts more than 10,000 subscribers and features content from its televised sports betting programme Daily Wager.
It has also gone live with betting-focused linear broadcasts on sports events, including basketball games in partnership with the NBA, and struck a sports betting programming partnership with Caesars back in 2019.
The majority of deals to date for ESPN have been focused on content. It is unclear at this point whether ESPN would consider a direct-to-consumer sports betting business.
Chapek insisted last year that ESPN branching out into sports betting would not diminish the brand reputation of Disney, which is primarily aimed at those under the age of 21, and that the company had engaged in expansive market research to that effect.
Here is what the Disney careers website has to say about ESPN and sports betting:
“The ESPN sports betting and fantasy team is responsible for managing and operationalising the ESPN sports betting and fantasy business.
“The team is also responsible for identifying, developing and executing new business opportunities that further enhance ESPN’s sports betting and fantasy content and product offerings.
“The team continually evaluates prospective partners in sports betting, as well as season-long and daily fantasy, that drive best in class fan experience and advance ESPN’s market leadership.”
See the full job ad here.