top of page

A Kingdom-Sized Gamble: Disney’s Integration of Sports Gambling into their overall Brand and Communication Strategy

By Cody T. Havard, Ph.D.

The University of Memphis


 

Fig. 1: ESPN, Disney, and Hulu Services

On Monday October 16th, 2023, The Walt Disney Company celebrated its 100th anniversary. As a company that has lasted a century, it has by that virtue played a major role in the foundation of societal norms in our contemporary society. However, Disney has also experienced a myriad of challenges, especially over last two years. For example, Disney has experienced a plateau and even retrenchment in subscriber growth for their streaming services (Contreras & Sakoui, 2023), a growing portfolio of rival parks competitor Universal Resorts (Bushard, 2023; Huston, 2023), and the merger of Six Flags and Cedar Park which will increase competition in the themed entertainment marketplace (Nerkar, 2023). Finally, the decline in terrestrial television subscribers has put pressure on the once-revered Entertainment and Sports Programming Network (ESPN) brand (Battaglio, 2023).


It is the relationship between The Walt Disney Company and its ESPN brand that is the focus of this post. With the number of challenges facing the sports entertainment studio, Disney has started discussing potential strategic relationships with technology and telecom companies to invest in the brand (McCaskill, 2023). Another move made by The Walt Disney Company, in part as a way to ensure the financial viability of ESPN, is to enter the competitive market of live sports gambling. The rest of this post will focus on a brief history of the Disney/ESPN relationship, the emergence of legal sports gambling in the United States (US), and potential future implications of the family-centric Disney brand participating in live sports gambling. 


 

 

History of the Disney/ESPN Relationship

 

When ESPN launched in 1979, they quickly became a preferred brand for sport fans in the US (ESPN, Inc., n.d.). ESPN wasted no time in growing their reach and brand, highlighted by international distribution in 1983, being acquired by Capital Cities/ABC in 1984, and launching various radio and television channels throughout the 1980’s and 1990’s.


As the major network in sports entertainment, ESPN also soon became a target for companies wishing to enter the market. On February 9th, 1996, ABC/Capital Cities-which owned 80% of ESPN, was acquired by The Walt Disney Company. Disney’s purchase of ABC/Capital Cities, thus bringing ESPN into the company’s portfolio, was much celebrated in the industry, even receiving applause from the Oracle of Omaha himself Warren Buffett (Gara, 2017).

 

The reason why ESPN was so important to The Walt Disney Company was the way its subscription was included in cable bundles. As the premier sports entertainment brand, ESPN had the cache to negotiate that every subscriber to a cable bundle pay for the network regardless if they ever consumed live sports or not (Poindexter, 2021). Further, the large influx of cash flow allowed The Walt Disney Company to invest resources into needed areas of the company and look for future acquisitions (Hagy, 2023). This relationship proved very beneficial for Disney and played a role in the continued improvement of associated brands and properties. It also allowed Disney to enter the competitive sports event marketplace with the opening of ESPN Wide World of Sports in Florida’s Walt Disney World in 1997. Since opening, the sports complex has hosted competitive youth sports events, competitive cheerleading competitions, was home of the Atlanta Braves spring training through 2019, and even worked with the National Basketball Association (NBA) and Major League Soccer (MLS) during the summer of 2020 to host competitions amid the Covid-19 pandemic (Havard, 2020; Quinn & Wimbish, 2020).


Since the purchase of ESPN, The Walt Disney Company has been widely lauded for including sports entertainment in their portfolio (Hagy, 2023). Jumping forward to the present day, as more people started to drop subscriptions of cable programing in favor of a la carte streaming services, analysts and consumers started to question the role of ESPN within the Disney family. Some even speculated that the company may sell off the ESPN property (Gentrup, 2022). In fact, as of writing, Disney has started looking for strategic partners to invest in ESPN, potentially selling up to 10% of the property which could bring as much as $24 billion to the company (Mehta, 2023).

 

 

ESPN, Sports Gambling, ESPNBET, and Synergy

 

Recently, various industry analyst have advised that Disney sell off parts or the whole of ESPN to help their bottom line (Sherman, 2023). CEO of the Walt Disney Company Bob Iger seems hesitant to do so and instead has looked for ways to make the subsidiary more profitable and relevant in an ever-changing sports entertainment landscape (in fact, Bob Iger got his start in television working with sports entertainment and helped produce the Wide World of Sports broadcast on ABC pre-Disney acquisition). Disney has also used the streaming bundle in an attempt to add more subscribers to ESPN+ in hopes that consumers see value in adding the sports programming to their entertainment options.

 

To keep up with rivals and competitors and not lose market share (Havard, 2014; 2020), it has long been rumored that Disney may enter the sports gambling market in an attempt to add more value to the ESPN brand. With many states in the US legalizing gambling, the perception of betting on sports has experienced a change for many consumers (Ake, 2023). One of the biggest concerns regarding gambling is that many participants may be unable to control their gambling behavior, which carry many negative outcomes such as financial, emotional/physical abuse, and the impact on the family unit (Compulsive gambling, n.d.). With the legalization of gambling in several states, books are now required to use language about gambling addiction and resources to impacted consumers in their print and televisual promotions (Hernandez, 2022). However, the dangers of including such an activity in a company’s portfolio remain. 

 

In summer 2023, Disney-through their ESPN subsidiary-announced a multi-year partnership with Penn Entertainment to incorporate sports gambling into their sports entertainment offerings (Smith, 2023). Under the agreement, Disney announced that Penn Entertainment would run their sports betting arm under the name ESPNBET (Dart, 2023). On November 2, 2023, Disney officially announced ESPNBET, and the service launched on November 14th, 2023 (ESPN BET, 2023). As part of the launch, ESPN networks began using gambling lines and information exclusively from ESPNBET in televised and printed content, and their sports gaming show was renamed ESPNBET Live.


 

What does this mean for the Disney Brand?

 

With the launch of ESPNBET, some interesting questions are presented about the future of Disney’s attempt to enter the sports gambling market. Sports gambling is large business in consumer culture, with the global market size being estimated at $84.6 billion in 2022 and potentially reaching as high as $288.2 billion by 2032 (Lukas, 2022). Further, one report indicated that more than 73 million people in the US planned to place a wager on an NFL game in the 2023 season (Golden & Brewer, 2023). Following these figures, it is reasonable to expect that ESPN and Disney will see profits from including sports gambling in their collective profiles. However, questions remain regarding how gambling is integrated into the Disney brand and how the company communicates this to consumers.

 

It has long been discussed that once Disney purchased Comcast’s remaining stake in Hulu, the two streaming services may formally be combined in the US so that consumers would only need one streaming platform similar to that of many international markets. In fact, CEO Bob Iger announced in summer 2023 that a one app experience was expected to launch by the end of the year for those that subscribe to the Disney+/Hulu bundle (Spangler, 2023). During a soft-launch at the end of 2023, consumers subscribing to the Disney bundle or those that use the same email address to subscribe to Disney+ and Hulu outside of the bundle deal saw a sixth tile added to the Disney+ platform-Hulu on Disney+ (Roth, 2023). The combined service will officially launch in March, 2024. This leads to the first and second of three major questions; (1) how will Hulu and ESPN+ be incorporated into the Disney+ app experience and (2) will more sports entertainment show up on Disney+ and Hulu in the near future?

 

To address the first question, many believe that at some point in the future, the Disney+ app in the US may include seven tiles-the five main tiles available now, along with a Hulu tile and an ESPN+ tile. How the two additional tiles are included will be interesting to find out. For example, as subscribers in the US presently pay for Disney+, Hulu, and ESPN+ separately or as part of a bundle, if all seven tiles are included on the same Disney+ platform, will the additional Hulu and ESPN+ tiles be visible only to people that pay for those services, or will the tiles appear for everyone but only be accessible to people that have relevant subscriptions? This method may entice people not paying for Hulu and/or ESPN+ to subscribe to those services if they are regularly presented with the option. 


 

Second, when the all-in-one app experience is introduced, will Disney begin to include more live sports entertainment on the Disney+ and Hulu portions of the service? Consumers can now experience live sports using Hulu with Live TV, but in the future will the non-live service include such entertainment options. Regarding Disney+, to this point the service has featured select sports entertainment documentaries and stories from ESPN, and two live sport presentations with the alternate broadcasts NHL Big City Greens Classic (Wynshynski, 2023) and Toy Story Funday Football (Reedy, 2023) meant to attract younger audiences. These two programs were alternate broadcasts of live National Hockey League (NHL) and National Football League (NFL) games featured on the Disney+ service. The success of these broadcasts suggest that Disney would begin featuring more such programing on its premier streaming platform (Havard & Ryan, 2023).

 

If more live sports entertainment is featured on Hulu and Disney+ in the future, how will the company choose to navigate the inclusion of gambling into such broadcasts. Both Hulu and Disney+ have settings that allow users to control the types of programs available on the services (e.g., the Marvel Studios presentation of Echo requires TV-MA viewing), and will consumers have to opt into such content settings if they want to watch live sports entertainment? Further, will live sports entertainment be available to all users of Hulu and Disney+, but someone wanting to see gambling lines and advertisements have to opt-into such information using their content settings on the ser

vice? To avoid this, would Disney make sports betting available only on the ESPN+ app or tile so that people not subscribing to the sports service would not be exposed to such information? 

 

This brings us to the third and biggest question regarding how the company will integrate and communicate their involvement in sports betting to consumers? When The Walt Disney Company announced they were launching an ad-supported tier for Disney+, they indicated that advertisements such as alcohol, tobacco, and other elements covered under a sin tax would not be included on the service. With the introduction of ESPNBET, how will the company navigate excluding advertisements not appropriate for children on Disney+ while including such messaging on the ESPN+, and potentially even Hulu portions of the service?


To this point, The Walt Disney Company could also choose not to include ESPN+ in the all-in-one app because it would contradict their stance of only including advertisements appropriate for all ages on the Disney+ streaming service? However, during the latest investors call, CEO Bob Iger suggested that not only will the new joint-venture sports application Disney entered into with Warner Bros. and Fox can be included in Disney+, set to launch in fall 2024, he also said that ESPNBET will be available to consumers when the ESPN-specific app launches by fall 2025. Finally, will an official press release be one of the few announcements made by The Walt Disney Company regarding their new ESPNBET gambling service? To date, aside from the announcement regarding the launch of ESPNBET, Disney has remained somewhat quiet about the service, suggesting the company may continue doing so as to not promote that the family-friendly company also runs a sports gambling book. Many consumers of Disney probably are not aware that the company owns ESPN and has long been involved in sports entertainment, and that is possibly the way the company would like to continue to operate with regards to sports gambling. 

 

As The Walt Disney Company celebrates its 100-year anniversary and looks toward the future, they have incorporated many changes to remain relevant in consumers’ minds. As one of the premier-if not the premier family-friendly brands, Disney must show great caution in the way they integrate sports gambling into the ESPN experience, and the overall perception of the Disney brand. ESPNBET, and sports gambling in general, will most definitely bring positive outcomes for The Walt Disney Company in the form of revenue and attractiveness to future strategic partners. However, Disney has also been known as a family-friendly brand for the last 100 years, and by including an activity that has proven to have negative implications for families at times, it will be very interesting to see how the company navigates this new consumer experience.



 

But wait! There's MORE!


If you love all things Disney, if you had a presentation that you would love to see written down (and citable) come out into the world, email Bee! Do you have a book coming out and would love to have a launch with us? Email Bee! Did your book, or someone else's book, come out and you want to see us do a book review or an author interview...that's right, email Bee!


Check out our Want to Write for DisNet post.


(Bee's email is also disnetblog@gmail.com)


 

References


Ake, C. (2023, Feb. 16). What’s the spread? – American’s changing attitudes towards sports betting. The Harris Poll. https://theharrispoll.com/briefs/whats-the-spread-americans-changing-attitudes-towards-sports-betting/ 



Bushard, B. (2023, Jan. 11). Universal plans new attractions in Texas and Las Vegas. Forbes. https://www.forbes.com/sites/brianbushard/2023/01/11/universal-plans-new-theme-parks-in-texas-and-las-vegas/?sh=2f3523f2f129 



Contreras, B. & Sakoui, A. (2023, Feb. 15). It’s not just Disney: Hollywood slashes jobs as streaming bubble pops. Los Angeles Times. https://www.latimes.com/entertainment-arts/business/story/2023-02-15/what-disney-layoffs-say-about-the-state-of-entertainment 


Dart, T. (2023, August 19). Disney and ESPN bet big on entering gambling arena – but will they win? The Guardian. https://www.theguardian.com/sport/2023/aug/19/disney-espn-sports-betting-deal 


ESPN BET to debute with a planned launch on Nov. 14. (2023, Nov. 2). The Walt Disney Company. https://thewaltdisneycompany.com/espn-bet-launch/ 

ESPN, Inc. Fact Sheet (n.d.). ESPN News Room. https://espnpressroom.com/espnuk/espn-inc-fact-sheet/ 


Gara A. (2017, May 23). Disney’s 1995 deal for ABC made Buffett billions by marrying Mickey Mouse with SportsCenter. Forbes. https://www.forbes.com/sites/antoinegara/2017/05/23/disneys-1995-deal-for-abc-made-buffett-billions-by-marrying-mickey-mouse-with-espn/?sh=bdc6a6b7ffd8 


Gentrup, A. (2022, Dec. 20). Analyst: ESPN spinoff ‘probable’ in 2023. Front Office Sports. https://frontofficesports.com/analyst-espn-spinoff-probable-in-2023/ 


Golden, J. & Brewer, C. (2023, Sept. 6). A record 73 million Americans plan to bet on the NFL this season, survey says. CNBC. https://www.cnbc.com/2023/09/06/nfl-week-1-record-number-of-americans-to-bet-on-nfl-this-season-.html#:~:text=The%20association%20said%20its%20survey,bet%20at%20a%20physical%20sportsbook.  


Hagy, P. (2023, August 3). ESPN used to be Disney’s cash cow. Now its revenue is declining, and Bob Iger is looking to see a stake. Yahoo Finance. https://finance.yahoo.com/news/espn-used-disney-cash-cow-190702041.html 


Havard, C. T (2014). Glory Out of Reflected Failure: The examination of how rivalry affects sport fans. Sport Management Review, 17, 243-253. doi: 10.1016/j.smr.2013.09.002.


Havard, C. T. (2020). Disney vs. Comcast: Lessons learned from the corporate rivalry. Graziadioi Business Review, 23(1). Retrieved from: https://gbr.pepperdine.edu/2020/05/disney-vs-comcast/ 


Havard, C. T., & Ryan, T. D. (2023). From Andy’s room to Big City and Nickelodeon: Extending the brand to new consumers through alternate broadcasts of live sports entertainment. Manuscript under review. 


Hernandez, J. (2022, June 18). Sports betting ads are everywhere. Some worry gamblers will pay a steep price. NPR. https://www.npr.org/2022/06/18/1104952410/sports-betting-ads-sports-gambling 


Huston, C. (2023, Sept. 14). NBCUniversal exec reveals details of Epic Universe Florida theme park planned for 2025. The Hollywood Reporter. https://www.hollywoodreporter.com/business/business-news/epic-universe-florida-theme-park-1235591019/ 


Lukas, M. (2022, Oct. 14). Report has global sports betting market size at $84.6B with 2.4% annual growth. WSN. https://www.wsn.com/betting/global-sports-betting-market-annual-growth/ 



McCaskill, S. (2023, Oct. 17). Report: Disney seeks tech and telecoms partners for ESPN ahead of full DTC launch. Sports Pro Media. https://www.sportspromedia.com/news/espn-tech-telecoms-apple-amazon-partner/ 


Nerkar, S. (2023, Nov. 2). Six Flags merges with Cedar Fair, and rival amusement park. The New York Times. https://www.nytimes.com/2023/11/02/business/six-flags-cedar-fair-merger.html 


Poindexter, O. (2021, Oct. 11). ESPN walks line between cable and streaming. Front Office Sports. https://frontofficesports.com/espn-in-perplexing-position-as-streaming-network-grows/ 


Quinn, S., & Wimbish, J. (2020, June 6). NBPA approved plan to resume NBA season at Disney World, sets plan for coronavirus testing. CBS Sports. https://www.cbssports.com/nba/news/nbpa-approves-plan-to-resume-nba-season-at-disney-world-sets-plan-for-coronavirus-testing/ 


Reedy, J. (2023, Sept. 29). ‘Toy Story’ meets the NFL: Sunday’s Falcons-Jaguars game to feature alternate presentation for kids. Associate Press. https://apnews.com/article/espn-nfl-toy-story-falcons-jaguars-d08c151b98d85d52f63f643eaa83d9c0 


Roth, E. (2023, Dec. 6). Disney Plus and Hulu’s one-app experience is launching in beta. The Verge. https://www.theverge.com/2023/12/6/23990787/disney-plus-hulu-one-app-experience-beta-launch 


Sherman, A. (2023, August 2). Disney CEO Bob Iger ants minority partners for ESPN, but landing a deal won’t be easy. CNBC. https://www.cnbc.com/2023/08/02/disney-ceo-bob-iger-wants-espn-minority-partners-but-deal-wont-be-easy.html 


Smith, G. (2023, August 8). ESPN plunges into sports betting in deal that is complicated by parent Disney trying to preserve its family-friendly image. Fortune. https://fortune.com/2023/08/08/espn-sports-betting-deal-disney/ 


Spangler, T. (2023, May 10). Disney+ to add Hulu content in ‘one-app experience’ later in 2023, prices for Disney+ to increase. Variety. https://variety.com/2023/digital/news/disney-hulu-one-app-experience-later-in-2023-1235609003/ 


Wyshynski, G. (2023, March 14). Behind the scens of the ‘Big City Greens Classic’. ESPN. https://www.espn.com/nhl/story/_/id/35853088/behind-scenes-big-city-greens-classic 


 

Images


Fig. 1: From Wix UnSplash.


Fig 2: "Sept 7, 1979: George Grande (L) and Lee Leonard ESPN’s first SportsCenter show on September 7, 1979." ESPN. By Teri Couch, "#TBT: ESPN & SportsCenter turn 38" (ESPN Images) https://www.espnfrontrow.com/2017/09/tbt-espn-sportscenter-turn-38/#jp-carousel-141775


Fig. 3: "Disney's Wide World of Sports Complex." https://commons.wikimedia.org/wiki/File:Disney%27s_Wide_World_of_Sports_(7426504780).jpg. Accessed on 15 Feb 2024.




 

47 views0 comments

Comments


bottom of page