Walt Disney Co. insiders are concerned that recent sports betting efforts could hurt the company’s brand, anonymous sources told The Wall Street Journal. One investor also said Disney could sell its stake in the entertainment conglomerate if it moves forward with a new gambling business.
The company, which owns ESPN among its many television properties, plans to launch the first sports betting app in sports network history in mid-November. A Disney spokesperson told The Messenger in an email. Disney signed a 10-year licensing agreement with Penn Entertainment in August, rebranding the company’s betting app Barstool Sportsbook to ESPN BET.
Penn Entertainment, which owns casinos and operates gambling and sports betting apps, said it will pay Disney $1.5 billion in cash and an option to buy $500 million in Penn stock over the course of a 10-year agreement. ESPN said in its announcement that the ESPN BET app, website and select retailers will allow ESPN fans to place bets in the 16 states where Penn is licensed.
Details of how the app will work and how many physical betting locations it will offer are still being worked out by ESPN, a spokesperson told the Messenger. ?
“This licensing agreement will provide sports fans with compelling new experiences that increase consumer engagement,” said Disney CEO Bob Iger. We’re excited to be able to deliver this,” Disney CEO Bob Iger said in a post-closing call with investors. The deal with Penn was first announced in August.
But Disney insiders, including executive Jenny Cohen, who was named the company’s first vice president of social responsibility in February 2021, expressed concerns about the deal last year while it was still in discussions. sources told The Wall Street Journal. It was also at this time that Disney’s investor BlackRock informed the company that its European fund would reduce its stake in Disney stock. Entertainment company if the deal goes through, according to the Journal.
Disney and ESPN did not respond to Messenger’s requests for comment.
ESPN BET is the first gaming platform run by Disney, but the company has been gaining a foothold in the sports betting space for years. In 2020, Disney signed deals with sportsbooks operated by DraftKings and Caesars Entertainment to link to the platform within ESPN’s online content.
ESPN BET could be a revenue boost for Disney as the company faces ongoing issues, including declining profits, declining stock prices and declining ESPN+ subscribers.