Disney CEO Chapek Says Sports Betting Announcement in the Works
One of the most burning questions in the sports wagering industry is when Walt Disney (NYSE:DIS) will make its long-awaited arrival in the space. Today, CEO Bob Chapek shed some light on the topic, but didn’t reveal a hard and fast time line.
On the company’s fiscal third-quarter earnings conference with analysts, Chapek touched on sports betting in response to a question from Bank of America analyst Jessica Reif Ehrlich.
Well, in terms of sports betting 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 for that for our guests,” said Chapek on the call.
California-based Disney is the parent company of ESPN — a status that makes the entertainment and media conglomerate a frequent epicenter of sports betting rumors.
ESPN Synergy Drives Disney Betting Allure
ESPN is the dominant US sports broadcaster, providing viewers with access to heavily wagered on sports, including college basketball and football, the NFL and the NBA, among others.
ESPN has separate, multi-year accords with Caesars Entertainment (NASDAQ:CZR) and DraftKings (NASDAQ:DKNG). Additionally, the network broadcasts some wagering-related shows. But analysts and investors widely expect Disney will ultimately leverage the sports network’s brand in more significant fashion in the sports wagering industry.
“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. So we think it’s important,” addead Chapek on the call. “We’re working hard on it, and we hope to have something to announce in the future in terms of a partnership there that will allow us to access that revenue stream.”
By way of ESPN+, ESPN also brings a coveted streaming platform to the sports betting table. Including the sports streaming service, Disney added 15.5 million streaming customers in the most recently completed quarter, bumping its total to 221 million subscribers across its related portfolio, including Disney+
Disney Sports Betting Rumors
As noted above, Disney has long been a hotbed of sports betting rumors, mainly centering around potential acquisitions. That speculation previously included Rush Street Interactive (NYSE:RSI) and Australia’s PointsBet. But no deal was struck and Chapek didn’t mention those companies on the call.
Disney owns about 6% of DraftKings equity, which it inherited when it acquired 21st Century Fox for $71.3 billion in 2019. However, DraftKings makes for an unlikely takeover target because cofounder and CEO Jason Robins owns about 93% of the operator’s voting equity.
Disney has more than $13 billion in cash and cash equivalents, indicating it can easily digest any number of sportsbook operators, should it choose to use a takeover to cement its presence in the space.
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