Disney’s Iger: PENN Entertainment Outbid Competitors ‘By Far’

It wasn’t a mob movie, but Disney CEO Bob Iger still received an offer he couldn’t refuse when it came to forming ESPN Bet.

Speaking with analysts on the company’s quarterly earnings call Wednesday, Iger said the $2 billion-plus deal with PENN Entertainment to create the new ESPN-branded sports betting service came down to overwhelming economics — and a desire to drive additional reach and consumption on ESPN platforms.

“We believe there’s an opportunity to significantly grow engagement across ESPN consumers, particularly young consumers,” Iger said. “And why PENN? Because PENN stepped up in a very aggressive way and made an offer to us that was better than any of the competitive offers — by far.”

The agreement ends Disney’s long-running reluctance to enter the sports betting space, followed by a lengthy internal consideration with “a number of entities over a fairly long period of time,” Iger said, before settling on PENN.

“We like that PENN is going to use this as a growth engine for their business, and we actually believe and trust in their ability to use this partnership to grow their business nicely, while we grow ours,” Iger said.

Potential Partners

Meanwhile, interest from potential equity partners in acquiring a portion of ESPN also remains strong. But Iger said the ongoing consideration to sell various linear television assets is driven more by strategic considerations.

“We’re not necessarily looking for a cash infusion when it comes to potential partners,” Iger said. “We are looking for partners that are going to help ESPN transition to a [direct-to-consumer] model. That can come in the form of content, or distribution and marketing support, or both.”

Iger’s deliberation in this space is being supported by a pair of former senior colleagues.