Family-friendly content has long been a focus of The Walt Disney Company. From its digital media to its theme parks, most of the attractions, shows, movies, and experiences are created so that fans of all ages can enjoy them. But that’s not the case with one of Disney’s current projects.
For a few years now, Disney has been playing with the idea of getting involved in sports betting. Although executives were initially hesitant to associate the Disney brand with gambling, it appears that this is no longer the case, and we may see it become part of the Disney live sports experience sooner rather than later.
The United States Supreme Court essentially legalized sports betting in May of 2018 with the Murphy v. National Collegiate Athletic Association case. Since then, several companies have jumped on the opportunity to build profits with sports gambling.
When the change occurred, executives at both ESPN and Disney expressed their hesitancy about their brands’ involvement with sports betting. Then Disney CEO Bob Iger said, “I do think that there’s plenty of room, and ESPN has done some of this already and they may do more to provide information in coverage of sports…But getting into the business of gambling, I rather doubt it.”
Now, however, the story seems to have shifted quite a bit. In this article, we’ll first examine what the current CEO has said about sports gambling and then look back at Disney’s past interest in the business. Finally, we’ll delve into how sports betting would actually fit into the Disney brand in a practical way.
What Has CEO Bob Chapek Said About Sports Gambling?
About 2 years after Bob Iger expressed his doubts that Disney would get involved in the gambling business, the new Disney CEO Bob Chapek said during a 2021 earnings call that Disney was “moving toward a greater presence in online sports betting.” He said that leadership within the company believes “that sports betting is a very significant opportunity for the company.” In fact, he went as far as to say that Disney was “keenly interested in and are pursuing aggressively” involvement in sports gambling.
Those comments were made about a year ago, and since then, Chapek has confirmed on a number of occasions that Disney is still interested in sports betting. During the Goldman Sachs Communacopia + Technology Conference 2022, Chapek said, “There are several long-term initiatives that we’re looking at that really make [keeping ESPN] a great proposition to sort of counter some of the headwinds that we have from a cable universe shrinkage standpoint, but sports betting is certainly one of those propositions.”
During the same conference, Chapek said that sports betting is “really one of many things that we’re entertaining to maximize ESPN’s value – shareholder value within The Walt Disney Company.”
Chapek also spoke during the recent Wall Street Journal Tech Live conference, and he was asked about the future of sports betting and why Disney was interested in that business. Chapek pointed to consumer demand as the main reason for their interest. He said that younger ESPN viewers (specifically those who are 35 years old and younger) want “a robust, lean-forward sports experience” rather than “their grandfather’s lean-back experience.”
In other words, younger viewers want to be more involved in what they’re watching — they don’t just want to sit back and watch passively. Offering sports betting as part of the entertainment may be a way to create a more involved experience.
Disney’s Interest in Sports Gambling Is Not New
We mentioned briefly that the first possibility of Disney becoming involved in gambling was after sports betting was legalized in 2018. Although Disney was initially hesitant about this option, some statements by Disney leadership indicate that their changed opinion was not as recent as it may seem.
Chapek commented during the Communacopia conference that Disney has been “looking at [sports betting] for quite a long time.” The first indication that Disney could enter this business appears to be in late 2021, when Chapek commented that “sports betting is a very significant opportunity for the company” (Variety).
Since that time, Disney has continued to pave the way for sports betting to become a part of the ESPN experience. When many investors thought that Disney should sell ESPN, the company decided to keep the brand. In fact, according to Deadline, “Disney, along with Paramount Global, NBCUniversal, Fox, and Amazon, signed up for a record-smashing $110 billion rights deal for NFL games over the next 11 years.”
Disney acquired new data that shows “surging levels of engagement on top of the massive tune-in” to Monday Night Football games. They partnered with EDO (“a data and analytics company that measures predictive outcomes for convergent TV”) in order to continue monitoring consumer engagement.
Danielle Brown (who works in Disney Advertising Data Enablement & Category Strategy) told Deadline, “It really does emphasize the power of live sports.”
As Disney has continued to work towards more experiential products in other parts of their brand, it follows suit that an interactive element would be ideal for live sports coverage as well.
How Would Sports Betting Fit Into the Disney Brand?
It’s clear that Disney is looking at sports betting as a very real future for ESPN. But how could gambling fit into a brand that is — in all other ways — geared towards families? Chapek has previously expressed “some concerns as a company about our ability to get in it without having a brand withdrawal,” so this isn’t a problem that the Disney leadership is unaware of.
However, it sounds like some of Disney’s research has indicated that sports betting will strengthen the ESPN brand and have no impact whatsoever on the Disney brand. Separating those two brands is a key part of preserving Disney’s integrity as a family brand while still incorporating a new and profitable gambling element into ESPN.
Chapek said during the Communacopia conference, “Putting a link out […] to a sports betting site, ESPN-branded, would have no impact on brand equity for Disney but will have a very positive impact on the brand equity for ESPN because our younger audience is demanding that.”
Still, Chapek has confirmed that neither Disney nor ESPN will become bookies. For now, the plan is for both brands to stay out of the actual betting and instead rely upon third-party groups to manage it. In an interview with CNBC, Chapek said, “We’re going to need a partner to do that, because we’re never going to be a book, that’s never in the cards for the Walt Disney Company. But at the same time, to be able to partner with a well-respected third party can do that for us.”
So who might that well-respected third-party partner be? One of the current frontrunners is DraftKings Inc, with whom Disney is nearing a large, new partnership deal (Reuters). Disney already holds a stake in DraftKings, “which it acquired as part of its acquisition of Twenty-First Century Fox’s entertainment assets in March 2019.”
Although details have not been revealed about this potential partnership, it makes sense in many ways (not the least of which is DraftKings’ existing relationship with ESPN) for Disney to partner with DraftKings for this project.
From what Disney executives have shared, it looks like sports betting is solidly in the cards for ESPN. With a third-party partner, this project may be already well planned out. However, it’s also clear that Disney executives are concerned about the integrity of the Disney brand and will rely on the separation of that brand from ESPN in order to preserve its reputation as a family-friendly haven.
We’ll continue to watch for more updates from Disney, so stay tuned to DFB for all the latest news.
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What do you think about Disney entering the sports betting business? Let us know in the comments.