Will Disney Owned ESPN Fetch $3 Billion From Sports Betting?

Major sports-betting companies have been offered the opportunity by ESPN to license its brand. The large sports media network is a division of Walt Disney and has recently held talks with players that own major sportsbooks. On that list are DraftKings and casino operator Caesars Entertainment.

Cost

The price tag is massive. According to the Wall Street Journal and other sources, they seek to license the ESPN brand, over several years, for $3 billion. The idea is that Disney could profit from the licensing arrangement while the gaming companies could gain wider recognition with larger audiences as a result of ESPN’s footprint.

Is the $3 billion price tag too steep for any company that would be interested in immediately gaining this level of brand strength, marketing, and media coverage? That remains to be seen. Eilers & Krejcik serves as a research firm focused on the gaming equipment, sports, and interactive gaming sectors of the industry; according to their data, sports betting is on track to generate revenue of about $4 billion in the U.S. in 2021.

Brand Considerations

There is no guarantee Disney’s ESPN will find a suitor to accept its terms. Gaming companies that are large enough to consider the offer have already built respectable brand names of their own – perhaps brand recognition that better resonates with their audiences.

The ESPN brand has already incorporated gambling and betting lines into some of its studio programming and even offered betting-themed shows. But it has not launched its own sportsbook, which would mean handling payouts to winners and collecting money. They currently even have marketing partnerships with both Caesers and DraftKings; however, any deal now would come with an exclusive marketing commitment that would require the sports-betting firm to spend a specified amount of money advertising on the ESPN platform.

Take-Away

Not many years back, gambling was rarely mentioned on sports media outlets. During football games, if an announcer mentioned a point spread at all, it was not taken far enough for the untrained ear to tie it to gambling. It would be mentioned more in a way that suggested the outcome of the game may have been misjudged. There is now new thinking at the media outlets. TV broadcasts of some sports today play ads from leading U.S. sportsbooks such as DraftKings (DKNG), or FanDuel. In many instances, odds for games are shown on television.

As mentioned, there are also sports betting TV shows. ESPN has been involved here with a show dedicated to sports gambling called the “Daily Wager.” Viacom has a gambling show called “SportsLine Edge.” This change in acceptance of what are still considered “vices” is allowing a lot of money to change hands. As with other vices, once they’re mainstreamed, they often prove to be relatively stable businesses as people turn to their products in good economic times as well as bad.

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