ESPN BET launched last week, and former ESPN president John Skipper knows this is an opportunity for the worldwide leader to tap into a new source of income.
Skipper, the CEO of Meadowlark Media, David Samson, and Pablo Torre came together last week to record another episode of the sports business podcast Sporting Class, and the trio discussed the streaming era and the cord-cutting age. Among that broader topic included a discussion on the recent launch of the ESPN-branded sportsbook operated by Penn Entertainment.
John Skipper said given that ESPN over the last year or so has had to make a ton of cost-cutting moves, getting into the gambling space somehow was not an unexpected decision.
“I’m also not surprised to see ESPN do this in the face of the declining pay TV universe,” he said. “They have to look for ways to cut expenses, they have to look for other ways to make money, and they’re exploring here whether they can make money this way. Seems like good business to me, and we’ll see what happens.”
Samson said ESPN already made money before ESPN BET even went live, and that’s thanks to the deal the network cut with Penn.
“It’s like a sponsorship deal if you really want to get down to the definition of ESPN BET,” Samson said. “They’re not launching a fledgling gambling app today or yesterday or whatever day this week, they’re getting paid by Penn Gaming. That was the divorce with Barstool, and then it was the re-up with ESPN where ESPN has a revenue stream, a guaranteed revenue stream, from this.”
The discussion did spotlight the potential for ESPN as a news outlet to impact betting lines with reporting. The network recently instituted new policies for employees, insiders and other journalists in particular, ahead of the launch of ESPN BET. The goal of the policies is to prohibit and deter employees who may have inside information on a particular sport, team or player from profiting off that information.
Samson said the average bettor is like the average stock day trader, they’re not savvy or smart enough to really stand to benefit monetarily from listening to so-called betting experts in the media.
“You think the ordinary guy sitting in his underwear on Main Street has the same right to make money as people who do it for a living, who are market makers and movers?” he said. “If you think that, then you’re gonna have a problem with potential issues with ESPN BET where the market could be moved by someone who would have more information and profit on that versus the guy in his undies on Main Street.”
“I don’t personally believe it’s an unmanageable conflict for ESPN,” John Skipper responded.
“The idea that ESPN would engage in, ‘Oh let’s put out that somebody might be injured. We’ll benefit from the line on that through our association with Penn,’ it’s just ridiculous,” he later added.
