The family-oriented Walt Disney Co. has been gradually dipping its toes into sports betting with ESPN. Now it could be diving head-first into the lucrative industry, say sources.
ESPN and sports betting giant DraftKings are close to signing an exclusive deal that would greatly expand the Worldwide Leader’s sports gambling portfolio.
ESPN signed co-exclusive deals with DraftKings and Caesars two years ago. But Darren Rovell of The Action Network reported Thursday night that ESPN and the nation’s No. 2 sportsbook are “on the cusp” of forging an exclusive partnership.
“Specific terms of this deal are unknown, but the deal is a massive, exclusive partnership that will have shows and perhaps odds integrated into game broadcasts,” Rovell wrote.
Front Office Sports first reported in June 2021 that ESPN wanted to go “all-in” on sports betting, and that ESPN was exploring the launch of its own branded sports book.
The Wall Street Journal later reported ESPN wanted to license its famous four-letter brand to DraftKings or Caesars in a deal worth $3 billion over several years.
Disney owns about 5% of DraftKings after purchasing more than 18 million shares of the betting company in 2020, which saw its stock surge nearly 14% in after-hours trading on Thursday. That boosted the value of Disney’s stake in DraftKings to about $340 million.
DraftKings declined to address reports of the potential new deal with ESPN that Bloomberg also reported on Thursday.
“We have a great, long standing relationship with ESPN,” DraftKings said in a statement to FOS. “However, we speak to a variety of companies on a regular basis and don’t comment on the specifics of those conversations.”
Caesars did not return multiple messages left by FOS.
ESPN declined to comment. But Disney chief executive officer Bob Chapek has been telegraphing a belated, but ambitious, move into sports betting on quarterly earnings calls.
Chapek said in August that that company would “have something to announce in the future in terms of a partnership” that would allow for better integration with ESPN.
“We have been in conversations for quite a long time now with a number of different platforms to add some utility to sports betting and take away some friction,” Chapek said on the call. “We have found that basically our sports fans that are under 30 absolutely require this type of utility in the overall portfolio of what ESPN offers.”
There has been immense speculation from within the betting industry on just how ESPN would go about its new sports betting strategy, insiders told FOS.
One option sources said included Disney exploring an acquisition of an existing sports betting company, although a source with knowledge of Disney’s dealings said there was no interest internally for such a deal.
One thing ESPN would look to avoid was what Fox has gone through with its partnership with Flutter — the parent company of FanDuel — to create FoxBet. Their legal dispute is currently in arbitration, which has resulted in the stagnation of FoxBet.
“We don’t control it because we’re not allowed to,” Fox CEO Lachlan Murdoch told investors in March. “It’s only rolled out in four states, which we’re disappointed in, and we’d like to see it rolled out in many more.”
The sports betting and online casino market in the U.S. generated gross revenue of $7.75 billion in 2021, according to The Action Network, and is on track to hit $24.3 billion by 2026.
