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Monday, June 24, 2024

Disney Targets Younger Fans with Sports Betting

  • Disney is looking to sports betting to boost ESPN as people drop their cable subscriptions.
  • It could license its name to a sportsbook.
ESPN
ESPN/Design: Alex Brooks

ESPN is caught between the two major forms of media distribution — and may turn to sports betting to move forward.

Disney CEO and Chairman Bob Chapek indicated that he doesn’t see sports betting clashing with the parent brand’s family-friendly image because there is “a very significant isolation” in how customers view ESPN and Disney.

The sports media giant has long been a major revenue driver for Disney through the high prices it charges cable companies — around $10 per month per subscriber — but that source is waning as people drop cable subscriptions for streaming services.

While ESPN had around 100 million cable subscribers in 2011, that number had shrunk to 77 million at the end of last year.

  • ESPN+ grew 24.6% quarter-over-quarter and 76% year-over-year to 21.3 million subscribers in the fiscal quarter ending Jan. 1. 
  • The streaming service brought in $5.16 per paying subscriber.
  • ESPN+ is still in the red, however: Disney’s streaming division took a $593 million operating loss in the quarter.

Betting on Fan Engagement

While ESPN has reportedly sought to license its name to a sportsbook for around $3 billion, Chapek sees additional reasons to move into sports betting. 

He described the push toward gambling in a recent earnings call as “driven by the consumer, particularly the younger consumer that will replenish the sports fans over time, and their desire to have gambling as part of their sports experience.”

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