Disney Focusing on Entering the Sports Betting Market
Walt Disney Company CEO Bob Chapek stated that there is a significant opportunity in regards to entering the sports betting market. In the past, the company was extremely against sports betting, but there may be a change of direction on the horizon.
Disney is Looking For a Partner in the Sports Betting Industry
The company’s main consumers revolve around the Magic Kingdom and stand by their tagline of creating “The Happiest Place on Earth”. Venturing in the sports betting industry may go against their stance. It could possibly turn some loyal customers the other way as their brand is exploring a new market to enter.
During their most recent earnings call, Chapek noted that the company has already begun the process of finding a partner in the sports betting market. He went on to say,” Given our reach and scale, we have the potential to partner with third parties in this space in a very meaningful way”.
This could be viewed as counterproductive for those who have examined the company for a long time as it had a tough year due to the global pandemic. Disney’s earnings report was under Wall Street’s expectations; however, it’s hard to deny that the gambling industry has been generating a lot of money for a couple of years. If Disney enters the market, the company has a few cards that will be significant advantages.
The company distributes its content through major brands that include 21st Century Fox, ABC, and ESPN. The company also extended its partnership with Caesars Entertainment in 2019 by creating a studio in Las Vegas.
ESPN will be their main elevator pitch through the help of ESPN. ESPN is the biggest sports network in the United States and ESPN+ can generate profits with content, advertising, and sports betting having ties to their brand.
Over the fiscal year (FY), the ESPN+ has grown with a 66 percent increase in subscribers. On Disney’s acquired television stations, 90 percent of the most watched events revolved around sports. Disney also inked a ten year contract regarding NFL rights that will begin in 2023.
ESPN and the UFC also agreed to a five-year to get the rights of the sport which cost $1.5 billion during that span. As part of the deal, ESPN has the rights to broadcast thirty events a year. If the subscribers watch these events and PPV, there are live betting odds listed as the fights go on as the UFC has a partnership with DraftKings.
Will It be a Good Move for Disney
Chapek believes that entering the sports betting market will create new streams of revenue, especially attracting younger audiences. A partnership with a large operator that received approved licenses in several states will give Disney the opportunity to enter the market.
Rival Fox Cooperation has already made a move as it is a part-owner of FOX Bet. FOX Bet Super 6 is attracting bettors who prefer placing smaller wagers. Disney donated $5 million to Voters In Charge which is a nonprofit group that was for the Florida constitutional amendment.
This group was for giving voters in Florida the choice on casino gaming across the state. Since then, sports betting has been halted after the Seminole Tribe quietly launched the HardRock Sportsbook app.
Disney’s biggest move in the sports betting industry was their $3 billion multiyear licensing deal with DraftKings. DraftKings spends 80 percent of its earnings on advertising but has seen a steady increase in revenue since 2019.