There has been a lot of chatter in recent months about ESPN being sold off. Activist investor Daniel Loeb made a lot of noise when he said that Disney should spin off the sports channel. More recently Bob Iger himself has hinted at selling linear TV networks which would include ESPN. However, their most recent launch suggests that ESPN is here to stay.
During Bob Chapek’s reign he floated the idea of sports betting. Many Dismissed the idea as unlikely, others were vehemently opposed. Still, a large portion of people found it to be an interesting idea to make the floundering sports network profitable again. Bob Iger must have been one of those people.
Yesterday The Walt Disney Company announced that it was launching a sportsbook in partnership with PENN Entertainment. PENN will rebrand their sportsbook as ESPN BET and launch later this fall in the 16 states that allow sports betting. This will include a mobile app, website, and mobile website. When it launches, ESPN BET will become the official sportsbook for ESPN. ESPN has added betting programming, such as commentary on odds and editorial coverage but they have never actually taken bets before.
Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products,” said Jimmy Pitaro, Chairman, ESPN. “The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN. PENN Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN BET.”
Jay Snowden, Chief Executive Officer and President, PENN Entertainment said: “This agreement with ESPN and collaboration on ESPN BET allows us to take another step forward as an industry leader. Together, we can utilize each other’s strengths to create the type of experience that existing and new bettors will expect from both companies, and we can’t wait to get started.”
The platform will remain commited to responsible gaming and will implement procedures to ensure users know the risks involved in gambling and how to seek help if they feel their gambling has become a problem. These initiatives are (but not limited to):
- Continuing ESPN’s high standard of journalistic integrity when covering the sports betting space.
- Developing an ESPN committee of responsible gaming, representative of a diverse cross-section of the business, to regularly review compliance, programming, and policies.
- Implementing responsible marketing policies and guidelines to safeguard fans.
- Working with industry experts on best practices and continual review of responsible gaming programming
Whether ESPN remains a subsidiary of The Walt Disney Company or not, remains to be seen but their stake in ESPN BET is certainlya last ditch effort to make the acquisition profitableagain. When Disney bought ESPN in the mid 1990s, it was a cash cow. The influx of funds helped launch careers and Disney’s expansion decade that saw the creation of multiple parks around the world. In recent years, ESPN has been a liability. We expect to hear more at today’s Earnings Call.