DraftKings and Disney are reportedly closing in on a sports betting partnership to leverage ESPN’s mainstream might.
Such a deal would make a great deal of sense for a great deal of reasons, including the companies’ existing relationship.
At the Disney D23 Expo in Anaheim, Calif., in September, Disney chief executive officer Bob Chapek said his company was “working on” a sports betting app but later clarified that the company was seeking a branding partner.
“We at ESPN have the ability to do that. Now we’re going to need a partner to do that, because we’re never going to be a (sports)book, that’s never in the cards for the Walt Disney Company,” Chapek told CNBC later. “But at the same time, to be able to partner with a well-respected third party can do that for us.”
Disney gained 6% of DraftKings, one of the largest national sports betting brands, when it acquired Fox’s entertainment properties in 2019.
DraftKings stocks spiked 8.8% by midday Friday after a series of media reports citing anonymous sources. Disney’s fell around 2%. Bloomberg was among the outlets to report news of the partnership.
Said DraftKings in a statement: “We have a great, longstanding relationship with ESPN. However, we speak to a variety of companies on a regular basis and don’t comment on the specifics of those conversations.”
Disney did not comment on the reports.
Oppenheimer analyst Jed Kelly told Seeking Alpha that DraftKings is “the only operator with the budget scale to meet DIS partnership standards, following FanDuel’s investments in its own over-the-top channel, and operators like Caesars and BetMGM scaling back advertising.”
Bloomberg Intelligence analysts Brian Egger and Geetha Ranganathan said the move could widen both ESPN’s and DraftKings’ audiences.
Disney/ESPN and DraftKings are Already Partners
ESPN already has sports betting partnerships, including one with DraftKings ahead of this potential landmark deal.
DraftKings is currently ESPN’s exclusive daily fantasy provider and co-exclusive link-out provider. Caesars is the sports network’s exclusive odds provider and also a sportsbook link-out provider.
A recent study by Odds Assist suggests that ESPN would be worth DraftKings’ while. In a survey of 660 US respondents, aged 25 and older who currently patronize legal sportsbooks, 73.3% said they would use an ESPN sportsbook app. Just 15.8% were unsure.
The ESPN app also demonstrated its might in the first week of the NFL season.
According to an ESPN release:
- The ESPN Fantasy App was the No. 1 free sports app and the No. 2 overall free app in the Apple App Store before the NFL season began.
- The ESPN Fantasy App is “consistently the No. 2 most-used sports app in the U.S. during football season,” behind only the ESPN App at No. 1.
- Last season, the ESPN Fantasy App had 55% more users than its closest competitor, Yahoo! Fantasy. (Source: Comscore)
- The median age of ESPN Fantasy App users last year was 37.5. That’s almost five years younger than the average mobile app user and just two years older than a typical TikTok user, one year younger than users of Instagram, and nine years younger than Facebook users. (Source: Comscore)