Walt Disney’s ESPN is looking to generate more than $3 billion in sports-betting licensing deals. Once reluctant to associate with gambling, the multimedia company has gradually changed its tune. Initially tentative to offer sports-betting content, the company is now looking to leap into ESPN-branded sportsbooks.
According to the Wall Street Journal, ESPN has been in talks with a number of major sportsbooks to explore possible licensing deals. Sources estimate the deals could be worth more than $3 billion. It;s not known whether Disney would collect standalone licensing fees, or whether licensing would be made in exchange for advertising on its networks.
How Anti-Gambling Disney Ended Up Owning a Sportsbook
Even after the US Supreme Court lifted the ban on sports-betting, ESPN was slow to embrace sports-betting’s changing landscape. Many blamed ESPN’s inertia on the conservative culture found at its parent company, Walt Disney. Then CEO Bob Iger was explicit about the company’s anti-gambling stance during an earnings call in Feb. 2019.
“I don’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,” Iger said.
But just one month later, Disney made a huge move into sports betting — as almost an afterthought.
When Disney acquired the assets of 21st Century Fox in March 2019, it got more than just film and television studios. Disney also acquired 18 million shares of DraftKings, making it the largest owner of the sports-betting operator. It was like the flip of a switch. That same month, ESPN launched “Daily Wager,” its first sports-betting themed program. And ESPN never looked back.
Likely ESPN Sports-Betting Partners
The two likeliest targets for ESPN sports-betting licenses are Caesars Entertainment and DraftKings. Last September, ESPN signed separate, co-exclusive, deals with Caesars and DraftKings, Per those agreements, Caesars became ESPN’s exclusive odds provider while DraftKings became ESPN’s exclusive fantasy sports provider. But those deals were just the start.
During Disney’s Investor Day in Dec. 2020, Jimmy Pitaro, Chairman, ESPN and Sports Content made it clear that ESPN — and Disney — were now ready to “lean into” sports betting.
“Sports betting also continues to be an important area of growth for us. Our all-new ESPN studio in Las Vegas debuted in August, and, in September, we announced market-leading partnerships with both Caesars and DraftKings. We’ll continue to lean into sports betting, as it represents a key opportunity to better serve our most passionate fans and appeal to a younger audience.”
Both Caesars and DraftKings are anxious to build out their sportsbooks as states continue to legalize sports betting. They already have existing relationships with ESPN. And both are good prospects for a license-for-advertising structured deal.