Report: ESPN Explores $3B Sports-Betting Deal

NY Post Graphic 8/28/21

Walt Disney Co.’s ESPN is seeking to license its brand to major sports-betting companies for at least $3 billion over several years, according to The Wall Street Journal citing people familiar with the matter, aiming to capitalize on the fast-growing online gambling industry.

The sports-media giant has held talks with players that own major sportsbooks, including casino operator Caesars Entertainment Inc. and online gambling company DraftKings Inc., the people said. ESPN has existing marketing partnerships with both companies.

On offer is the right for a suitor to use the ESPN name for branding purposes and potentially rename its sportsbook after the leading sports TV network in the U.S., the people said. A deal could come with an exclusive marketing commitment that would require the sports-betting firm to spend a certain amount of money advertising on ESPN’s platforms, one of the people said.

There is no guarantee ESPN will reach a deal. It remains to be seen whether gaming companies have an appetite to pay for the ESPN name when they are already investing to establish their existing brands.

ESPN has been cautious about entering the sports-betting arena. It has struck partnerships to integrate odds and betting-related content into some of its shows, and has podcasts and telecasts dedicated to gambling, including “Daily Wager.” But executives have said they want the company to avoid being directly involved in gambling transactions.

A brand-licensing deal would allow ESPN to profit from the boom in sports gambling without taking bets and making payouts to winners, which requires licenses in individual states.

Sports-betting is on track to generate revenue of about $4 billion in the U.S. in 2021, said Chris Grove, a gambling-industry analyst at research firm Eilers & Krejcik Gaming. The industry has grown since a 2018 Supreme Court decision cleared the way for states other than Nevada to legalize sports betting. Now, 32 states and the District of Columbia have legalized wagering on sports.

The major players in the online sports-betting industry include DraftKings, FanDuel and BetMGM. There has been a flurry of deals in the industry and investors have been piling into companies with the potential to be major players.

ESPN has been the dominant sports-media player for decades and a growth engine for Disney, having profited handsomely off the growth of cable television. The erosion of the cable TV market, as consumers cut the cord and switch over to streaming, is pressuring ESPN along with all other major networks.