Posted on: November 23, 2022, 04:08h.
Last updated on: November 23, 2022, 04:08h.
Walt Disney Co. (NYSE:DIS) stunned the entertainment industry and the investment community Sunday, announcing the return of Bob Iger as chief executive officer and the departure of Bob Chapek from that role.
Disney said Chapek, who replaced Iger at the helm of the media giant in 2020, stepped down of his own accord, but it’s widely believed the board of directors pushed him out. Either way, speculation is now running rampant regarding ESPN’s entry into the world of sports betting.
As recently as August, Chapek teased a significant sports wagering announcement. A month later, he made clears that sports betting is definitely part of ESPN’s future, though not as sportsbook operator. In October, the rumor mill centered around a potential partnership between the sports media giant and DraftKings (NASDAQ:DKNG).
Now, attention to turns to just how high of a priority sports wagering is for the newly reinstated Iger and speculation is emerging Disney may have missed the sports betting boat.
Iger Has Other Fish to Fry
Chapek’s brief tenure at the helm of Disney will be remembered for a variety of missteps, including ending up on the wrong end of a “woke” political debate in Florida and, yes, sports wagering miscalculations.
Disney lost out on hundreds of millions, if not billions, in sports-betting dollars thanks to Chapek’s strategy,” said Eilers & Krejcik Gaming (EKG) Partner Emeritus Chris Grove in the most recent addition of the research firm’s weekly “EKG Line” report.
With Iger back as chief executive officer, sports betting could fall by the wayside, at least for the time being. He’s already reorganizing Disney’s media unit and there’s some chatter that he’s going to take a heavy-handed approach at Disney Studios, pushing for content that’s more appealing to broader swaths of consumers, including families, not just those with left-leaning political views.
With the streaming service ESPN+ thriving and the list of reforms needed to bolster Disney’s sagging stock long, sports wagering may not be a near- or medium-term priority for Iger. More details are expected next Monday, when the new Disney boss holds a town hall meeting from its Burbank, Calif. studio.
Where DraftKings, Caesars Fit In
Last year, ESPN was rumored to be seeking a $3 billion licensing pact with a sportsbook operator, and it’s believed the network held talks on that subject with Caesars and DraftKings.
EKG noted that price is likely $300 million for a sportsbook operator to exclusively leverage the ESPN brand, but DraftKings — under pressure to rein in marketing spending — may not want to pony up that level of capital.
One move that could be made is eliminating Caesars from its current relationship with ESPN — something the gaming company would likely embrace. That could also pave the way for more exclusivity with DraftKings.
“Caesars will be watching closely,” concluded EKG. “The company is currently the co-exclusive sports betting partner of ESPN and keen to get out of the deal, having said recently it wants to cut $200 million from its OSB marketing expenses in the next couple of years. If DraftKings (or anyone else) were to take up an exclusive deal with ESPN, Caesars would happily be bought out.”