Edition 27: The Worldwide Leader In Sports (Betting?)
What’s brewing in Bristol?
This week’s edition is going to be our last until 2022, so we’re sending you off with a bang. The Worldwide Leader in Sports Betting Newsletters written by college kids presents to you a deep dive on the Worldwide Leader in Sports, ESPN, and their potential foray deeper into the gaming industry.
The Handle newsletter is presented by our friends over at Wagers.com, a hub for all things U.S. sports betting.
ESPN’s Place In The Market
Over the past 40+ years, ESPN has grown dramatically becoming America’s home for consuming sports content and live programming. Due to it’s monthly affiliate fees, advertising dollars, and the rise of ESPN+ as a prominent DTC platform, ESPN brings in billions of dollars each year and reaches the homes of millions of sports fans on top of acquiring media rights for the MLB, NHL, NFL, La Liga, and College Football (SEC). With the rise of cord cutting and shift towards OTT streaming and away from cable television networks, ESPN’s viewership has dipped significantly in recent years, shown by the following chart (h/t Hollywood Reporter).
Sports betting would allow ESPN to replenish their brand and add an alternative, multi-billion dollar revenue stream into their ecosystem. With an audience centered around the biggest stories and live events in sports, ESPN has the infrastructure in place to expand their brand reach into sports betting most likely through a third-party partnership. Over the years, Disney and ESPN have pushed back on their interest and likelihood of getting directly involved in the gambling business, especially under the leadership of former CEO Bob Iger.
New CEO Bob Chapek mentioned sports betting in the opposite light at Disney’s 3Q21 results:
“[it] strengthens the brand of ESPN when you have a betting component, and it has no impact on the Disney brand. Therefore, to go after that demographic opportunity plus the, of course, not insignificant revenue implications, that is something that we're keenly interested in and are pursuing aggressively.”
There are certainly questions about the fit of Disney, ESPN’s parent company, and their family-oriented brand mixing with the traditionally frowned-upon industry of sports betting. While we’re unlikely to see a mickey mouse branded sportsbook, Bob Chapek’s remarks indicate a willingness and yearning to dive into the market and cement ESPN as a powerhouse in sports betting.
ESPN Dipping Its Toes Into Gaming
For years at ESPN, one-off personalities and writers would sprinkle in sports betting content including former employee and The Ringer founder Bill Simmons, who used to make weekly NFL picks to go along with his “Guess The Lines” podcast with Cousin Sal (The Ringer is partnered with FanDuel).
On March 11th, 2019 ESPN announced the launch of Daily Wager. A show focused on betting news, information, and picks airing on ESPNNews with anchor Doug Kezirian. This was their first stab at approaching the gambling community and connecting with sports fans and degenerates alike. It aired Monday-Friday, and at the start of the 2019 NFL season adjusted to include a Sunday show while also switching from ESPNews to ESPN2. Almost three years later, I can wholeheartedly say I’ve never watched Daily Wager or interacted with anyone in our younger audience who says they do. With all of the in depth, hard analysis out there, I’ve never been inclined to turn to ESPN personalities for my betting picks or insights. I have watched shows like College Gameday which include picks from celebrities and gambling “experts” such as Stanford Steve and The Bear. For the most part their records have been below 50% and the plays seem like square picks (full disclosure my favorite SportsCenter bit is “Bad Beats” with Stanford Steve and SVP).
Regardless of whether you view Daily Wager as a success, it was a big first step for the worldwide leader in sports to get their feet wet in this growing space. Recently, despite being strapped for cash and losing top talents such as Mike Golic Sr. and Kenny Mayne they have continued to make gambling and connecting with the gambling community a priority. Fast forward to April 2021, and ESPN introduced its first NBA betting broadcast. In a matchup between the Nets and 76ers (two star studded teams in the coveted Northeast corridor), ESPN used the Daily Wager crew as commentators to enhance the stream for all bettors out there. The game telecast featured live and future odds, along with betting lines for other games. This vision from ESPN reminds me of the MNF Manning Cast - ESPN taking relatively mainstream sports, and finding ways to incorporate all their channels to bring in a wider audience and connect with newer fans. Instead of listening to Mark Jackson or Louis Riddick, I get to hear broadcasters talk about things that are meaningful to me, the viewer (also the bettor). Given the growth of gambling, I wouldn’t be surprised if these streams continued to rise. Gambling is one of the main ways to make a June Baseball game between the Orioles and Royals or November hockey match between the Coyotes and Stars have meaning to all fans. While I might not support any of those teams, if I have money on the game I’ll most certainly be watching and rooting for one side.
Adding these details has only contributed to the gamification of both sports and media. As the sports gambling world continues to grow, gamification of every contest is inevitable. Now, when you open the ESPN app next to every game is the listed line, and if you click the game the O/U pops up. With larger and larger media deals, it will be impossible to avoid integrating gambling into every platform.While some arenas and stadiums are already building sportsbooks inside the venue, think what the future might hold. Going to a sporting event you’ll have a tablet at your seat where you can bet on every individual pitch, drive, shot, putt, or run. It will not only appeal to sports fans, but gamblers and competitors alike. This is the future of sports, I’m just not sure ESPN will be a part of that.
Another angle ESPN has taken is via ESPN+. Now this is one I can get behind. Whether it is out of market hockey, UFC Cards, or a random Serie A fixture, ESPN+ has enhanced both my sports viewing AND gambling experience. Every single night I can watch my New York Rangers play, then bet Senators/Oilers over and actually watch the game, not just follow on NHL.com. Yes, it hasn’t been great for my school work but at the end of the day who cares (sorry mom and dad).
The product is only $6.99/month or $69.99/year, can be used on multiple devices, and gives you access to almost every sporting event out there. On ESPN’s website they describe the program as, “exclusive UFC events, hundreds of MLB and NHL games, college sports (including football, basketball and nearly a dozen other sports from 20 conferences), top domestic and international soccer (LaLiga, Bundesliga, Serie A, FA Cup, MLS, Copa Del Rey, EFL Championship, Carabao Cup, Eredivisie, and more), Golf (coverage from PGA Tour, The Masters and PGA Championship), Top Rank Boxing, Grand Slam tennis, international and domestic rugby and cricket, exclusive ESPN+ Original series and studio shows (including ESPN+ NFL PrimeTime, Peyton’s Places, Stephen A’s World, SportsNation, The Fantasy Show, Why Not Us, America’s Caddie, Detail, ESPN FC, Bettor Days, Our Time, The Ultimate Fighter, Dana White’s Contender Series, and many more), plus exclusive access to the entire library of ESPN’s award-winning 30 for 30 films.”
It is essentially a sports fan's heaven. Unless someone plans on illegally streaming and dealing with viruses and bugs, I can’t think of a good reason not to have ESPN+. It’s cheaper than a bowl at Chipotle and provides more utility than your Chegg account. Some quick hitters on ESPN+. As of October 2021 they had 14.9 million subscribers, 3,000 films, episodes and features, 14,000+ live sporting events per year, 3,000+ sporting event replays on demand, and 100+ 30 for 30 documentaries. With that large of a following and viewership data, an ESPN sportsbook might be the key to ESPN surviving. Think if they could translate even half those subscribers into sportsbook users where they’d be starting. Then, think if they could somehow integrate their sportsbook with ESPN+ and the endless amount of live content. It may seem like a stretch given all the competitors out there, I’m just not sure what ESPN’s endgame looks like if it doesn’t somehow incorporate using all the data they own and incorporating it into optimizing a sportsbook.
With that being said, I certainly have my reservations. First, what kind of conflict of interest might arise given a Woj or Scheftybomb might completely change a line. Given they are ESPN employees, I'm not sure how it would work regarding disclosing information as at the end of the day ESPN is looking to make money off the book. Similarly, I always feel uncomfortable taking Barstool Promos or Fox Bet Promos as ultimately they are looking to take money from you. They might offer an Overs Club Jacket, or a free play, but they aren’t really looking out for you. I’m not sure how that would work with Daily Wager or College Football Pick em. How could anyone trust the picks they are giving out are in their best interest when in reality they make money if you lose. All interesting points to think about, and I’m sure ESPN and Disney will do their best to address all of them as they embark on their next phase of growth into the gambling industry.
How Can Disney Get Involved In The Industry?
Chapek’s Q3 indication leads us to believe ESPN is significantly more interested in partnering with a sportsbook rather than purchasing a sportsbook, with reports coming out in August regarding ESPN regarding a floor price of $3 billion for a brand licensing deal. As we know (check out Edition 01 of The Handle, Content is King), sportsbooks are acquiring media arms and partnering with media personalities left and right in the last 18 months. Amongst many others, Penn Gaming purchased Barstool Sports and DraftKings purchased VSiN, just two examples of sportsbooks spending downstream to own media arms as well. For ESPN, as a media behemoth they have an opportunity to partner or license their own sportsbook and move upstream to own and monetize their audience as sports bettors.
From a partner perspective, ESPN has content and ad deals with both DraftKings and Caesars. Disney has already dipped their toes into sports betting and currently owns 6% of DraftKings’ stock following their purchase of 21st Century Fox in March, 2019. Fox invested in now publicly traded $DKNG in July, 2015, so Disney and DraftKings are already familiar with each other on a behind-the-scenes business level.
Whether ESPN enters into the fray with their own ESPNBet sportsbook or continues to explore an exclusive partnership with an existing sportsbook and their ESPN+ product, the mainstream adoption and investment in the industry is exciting and we’re monitoring Bob Chapek’s next moves closely.
Miscellaneous Content Consumption
Press
Sports betting exchange platform Sporttrade has partnered with geolocation and compliance provider Xpoint. Yahoo Finance has the scoop here.
BetMGM and the PGA TOUR have extended their partnership through 2024. Gaming America has more information here.
Vivid Seats announced their acquisition of Betcha Sports on Monday, a real money sports app with social and gamification features for $25M + earnout. Check out their press release here.
Gambling.com Group announced their purchase of RotoWire, a fantasy sports news and advice site for $27.5M. Read the press release here.
MGM sold the Mirage hotel and casino for $1.08B to Hard Rock. Check out the press release here.
Tweets of the week
Pods of the week