Disney CEO says ESPN looking for a sports betting partner

Disney CEO Bob Chapek said its sports network ESPN is looking for a partner to help it enter the booming U.S. sports betting market.

The executive told CNBC’s David Faber in an interview that ESPN would never be a sportsbook that accepts its own bets, but could partner with a third-party to do so.

Chapek told analysts on an August call that the company has been in conversations for “quite a long time” with sportsbook platforms.

Since sports betting was legalized in the U.S. in 2018, media companies have raced to reach agreements with gambling firms and sports leagues.

According to a report from consultancy KPMG, the addition of legalized betting increases viewer interest in live sports programming by expanding the audience and driving greater retention during events. Sports fans with a wager may watch for longer, even if the outcome of a game has largely been decided and casual fans tune out.

KPMG put the size of the combined sports, betting and media market at $135 billion in 2021 and said that firms completed 18 deals in the first half of that year, matching the total for the whole of 2019.

Protecting the Disney brand

However, ESPN, ranked as the most valuable U.S. sports broadcasting network, has been slow to follow.

ESPN President Jimmy Pitaro said in a June Sports Media podcast that sports betting was a “must-have” for the network, but said that company is proceeding with caution to ensure it gets things right.

Disney has been careful not to have its family friendly brand linked to any form of gambling.

ESPN does have partnerships to integrate betting-related content into its shows and has podcasts dedicated to gambling. It also has marketing accords in place with Caesars Entertainment and DraftKings, which have the right to advertise their betting offerings on ESPN’s platforms.

CNBC reports that Chapek’s comments appear to follow the acquisition of a $1 billion, or 0.4 percent stake, in Disney by activist investor Daniel Loeb in 2Q22. Loeb initially pushed for Disney to spin off the sports network, arguing it would be easier for it to take part in sports betting.

The investor has since said that he now understands ESPN’s potential as another vertical to help Disney reach a global audience to generate ad and subscriber revenues.

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