The House of Mouse is reportedly hard at work on an online sports betting app tied to ESPN.
Walt Disney Co. is the majority owner of ESPN and its chief executive officer, Bob Chapek, apparently told Bloomberg over the weekend that the company’s younger audience is interested in sports betting and that they are “working very hard” on an app linked to the channel.
ESPN already has partnerships with Caesars Sportsbook-owner Caesars Entertainment Inc. and DraftKings Inc. but the comments from the CEO follow Disney coming under pressure from an activist investor to spin the sports network off from the parent company.
“ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting,” Third Point LLC CEO Daniel Loeb wrote in an August 15 letter to Chapek.
However, on Sunday, Loeb fired off a tweet that suggested the investor is content to let ESPN remain under the Disney umbrella.
“We have a better understanding of @espn's potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues,” Loeb said on the social media network. “We look forward to seeing [ESPN chief James] Pitaro execute on the growth and innovation plans, generating considerable synergies as part of The Walt Disney company.”
We have a better understanding of @espn's potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues. We look forward to seeing Mr. Pitaro execute on the growth contd. https://t.co/Gobvf8KS2w— Daniel S. Loeb (@DanielSLoeb1) September 11, 2022
Whether on its own or as part of Disney a deeper dive by ESPN into legal sports betting, including the possibility of actually taking wagers, would deliver a significant jolt to the online gambling industry. ESPN is home to many of the games bettors are wagering on, and the network can nudge players towards the sportsbooks of its choosing.
From Pixar to parlays?
Yet ESPN also remains a part of Disney, which is well-known for creating family-friendly entertainment. Building a gambling business within arm’s length of Pixar movies and the Little League World Series could run the risk of rubbing customers the wrong way, hence the comments by Loeb.
Even so, Disney has continued its dalliance with sports betting.
"We feel the Disney brand is broad enough to have an ESPN business under our roof and have ESPN in the business of sports betting," Chapek told the Financial Times last November. "That's not harmful to the mother brand and is beneficial for the ESPN brand."