ESPN to make bold moves in sports betting

ESPN to make bold moves in sports betting

Walt Disney CEO Bob Chuckle said vaguely at the D23 Expo over the weekend that he had big plans for ESPN, but he hasn’t put any meat on the bone until today. The D23 Fair is an annual event held in Anaheim for Disney fans, which includes experiences, concerts, pavilions, presentations, and special flash points.

In an exclusive interview with CNBC’s David Faber, Bob Chapek, CEO of The Walt Disney Company
The company said the company was already planning to add sports betting – it just wanted a third party to process the bets (commonly referred to as the “handle”) via a partner.

This is likely due to the fact that Disney wants to maintain its healthy family image but is still getting some upside from sports betting, which is expected to be a rapidly growing market. The move to sports betting is likely the reason why 9/11 activist investor Dan Loeb backtracked on his proposal in August (having invested $1 billion in Disney) that they split from ESPN.

At the Communicopia & Technology conference in Goldman Sachs on September 14, Disney CEO Bob Chapek said they could have a link from ESPN to an ESPN-branded sports betting site that “would have no impact on Disney brand ownership but It’s likely to have a very positive impact on ESPN’s brand value because our younger audience is demanding it.”

He also said the company is deeply committed to the sports giant. โ€œThe Walt Disney adds a lot to ESPN, and ESPN adds a lot to Walt Disney… We believe that Walt Disney is a place where ESPN can be maximized relative to… those assets that are elsewhere. And as such, we’ve been pro- Very strong despite the huge market demand for us to sell it or spin it or there are a lot of people interested in getting a piece of ESPN, but we love our hands.โ€

For some history, ESPN was launched by Getty Oil in 1979, ending 1980 with about 8 million subscribers, behind the market leader in ad-supported networking, WTBS, which had nearly 11 million subscribers.

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ABC struck a deal to buy 15% of ESPN for $30 million and received a right of first refusal if the majority stake were sold. At the time, the duo launched a 50/50 pay-per-view joint venture for the PPV sports service, and Getty’s ESPN acquired the rights to one major sporting event.

By 1984, Getty Oil, now owned by Texaco Inc. , dispense with. ABC bought the 85% stake it didn’t already own from Texaco for $204 million. Ted Turner desperately wanted to buy ESPN but he was bidden and bidding for sports rights became very competitive between ESPN and Turner WTBS.

Just five months after taking control of ESPN, ABC sold 20% to Nabisco for $60 million (a $300 million valuation was significantly higher than the $240 million valuation when it bought 85% of Texaco).

In 1985, Capital Cities offered to acquire ESPN for $3.5 billion. In 1989, after a $25 billion debt deal for RJR Nabisco by Kohlberg Kravis Roberts, RJR Nabisco sold its 20% stake to Hearst Corp for $175 millionโ€”Hearst still owns the 20% stake today.

Just five years later, The Walt Disney Company agreed to pay Capital Cities/ABC $19 billion worth of its 80% stake, valued at $2.6 billion. Fast forward to 2022 and the company is now focusing heavily on broadcasting and will soon be in the burgeoning sports betting market.

Sports betting aside, ESPN will strategically need to at least stay within The Walt Disney Company so that cable and satellite no longer become a useful source of income. This is because media companies generally bundle all of their cable networks together which means if you want ESPN, you have to license all of the Disney channels, and that’s huge (see table).

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Cable Networks with The Walt Disney Company’s Ownership Share

network owner

A&E Networks A&E

ACC Walt Disney Company

A&E Networks Crime and Investigation

Disney Channel The Walt Disney Company.

Disney Junior Walt Disney Company

ESPN The Walt Disney Company

ESPN Classic Walt Disney Co.

ESPN Deportes The Walt Disney Company

The Walt Disney Company ESPN2

ESPNews The Walt Disney Company.

ESPNU Walt Disney Co.

FreeForm Walt Disney Company

FX Network Walt Disney Co.

FXM Walt Disney Co.

FXX Walt Disney Co.

FYI A&E Networks

History of A&E Networks

History en Espanol A&E Networks

Lifetime A&E Networks

Lifetime Movies A&E Networks

A&E Networks Real Women For Life

Military History Networks A&E

The Walt Disney Company Nat Geo Mundo.

Nat Geo WILD Walt Disney Co.

National Geographic Walt Disney Company

SEC Walt Disney Company

Deputy on A&E TV Networks

Notes: A&E Networks is a 50/50 joint venture between HearstCommunications and The Walt Disney Company. Hearst Corp holds a 20% minority stake in ESPN Networks.

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