The Walt Disney Company and Penn Entertainment recently came to terms on a partnership to launch an ESPN-branded sportsbook – ESPN BET – which is expected to be released sometime in this year’s fiscal fourth quarter. The 10-year, $1.5 billion deal contains various performance incentives with a goal of yielding a 20% share of the total addressable domestic online sports betting marketplace. Furthermore, Disney will receive warrants worth nearly $500 million that will allow them to purchase shares in the gambling company. Disney chief executive officer Bob Iger was originally against the idea of expanding into sports betting, but as time passed, he realized that its growing influence on the marketplace was simply too powerful to ignore.
Disney engages in cross-platform integration and promotion across its various brands, and ESPN has recently started various alternate-style broadcasts. Jimmy Kimmel, for example, recently appeared on Monday Night Football with Peyton and Eli, while Stephen A. Smith will occasionally welcome celebrities on First Take and the secondary game presentation, NBA in Stephen A’s World. ESPN Chairman Jimmy Pitaro was cognizant of the implications a betting partnership could have in the marketplace and does not take the responsibility of serving the sports fan lightly.
“My job is to protect the brand at all costs,” Pitaro told The Wall Street Journal in an interview. “I am the custodian of the ESPN brand, and we needed to make sure that whoever we went with on this journey was someone that we could trust.”
The in-depth report, which is authored by Robbie Whelan, Katherine Sayre and Jessica Toonkel, shared that Disney began thinking about immersion into the sports betting space upon its $71.3 billion acquisition of Twenty-First Century Fox and other segments of the company. The transaction included a 6% stake in DraftKings, which it sold within the third financial quarter.
Previous Disney CEO Bob Chapek explored a partnership with DraftKings, which has a 27.3% share of gross gaming revenue in the marketplace. The companies, however, were reportedly far apart as it pertained to financials, complicating the negotiating process. In the end, DraftKings reportedly offered approximately $100 million annually for ESPN to use the sportsbook, but a provision of the deal indicated that DraftKings wanted its branding on the app and marketing materials. The Wall Street Journal reports that Pitaro felt it was “nonstarter” and wanted solo ESPN branding across the endeavor. Later on, Rush Street Interactive is said to have offered Disney more than $100 million per year, but no deal ever materialized.
As Disney engaged in laying off 3% of its global workforce to slash $5.5 billion in costs, Pitaro was reportedly informed by Iger that he could continue efforts of trying to find the company an operating partner. Following a 90-minute meeting with PENN Entertainment chief executive officer Jay Snowden, he directed ESPN employees to converse with the entity to discover the specifics of a potential partnership.
Once PENN sold Barstool Sports back to founder Dave Portnoy for $1, along with a bevy of provisions, the company was able to finalize its deal with Disney and forge ahead. The partnership can be severed after three years, which Snowden indicated was around 10%, as the companies attempt to leverage the ESPN brand and react to growing consumption trends in sports media.
“There’s only one ESPN,” Snowden said. “If we were going to make a pivot, there was really one option to do that, and that was with what is the only name that is truly anonymous with sports in the United States.”
Pitaro shared that ESPN will soon announce an expanded talent lineup to host and promote gambling-related products and content. The company recently exited its Las Vegas studios, launched a new afternoon radio show with betting personality Joe Fortenbaugh and is frequently featuring betting intel from analyst Erin Dolan within its football programming. As it pertains to alternate broadcasts, the network is reportedly considering alternate broadcasts focused on the practice and will also look to promote ESPN BET through its daily programming and fantasy sports users.
They have Daily wager an sports betting show as well as Fanatsy Focus a betting and fantasy sports themed show for NFL Sundays they also have sports betting themed podcasts the most popular was Stanford Steve and the Bear but when “the Bear” left for fix at the endvof last College football season so did that podcast. They also leverage betting on Sports Center SVP with segments like bad beats and Winners during the football season.