With the expansion of sports gambling in the U.S. (and soon in Canada), plenty of sports betting companies have struck licensing or acquisition deals with content companies to help boost their books’ profiles. A key couple of examples on the acquisition side come from Penn National acquiring a stake in Barstool Sports and then acquiring The Score (the latter deal saw them pick up that company’s own betting operations as well), while there are countless licensing and marketing deals, including the Bally’s naming deal for the former Fox regional sports networks, the newly-named Caesars Superdome in New Orleans, the Blue Wire deal with Wynn, and the Field of 68/Field of 12 deal with BetRivers. ESPN has done some more limited licensing and advertising deals in the past, especially on the daily fantasy side with DraftKings (but that particular one didn’t last too long), and now it seems that they’re looking to go into licensing their brand to sports betting companies on a much larger basis. Here’s more on that from Cara Lombardo and Benjamin Mullin of The Wall Street Journal:
Walt Disney Co.’s ESPN is seeking to license its brand to major sports-betting companies for at least $3 billion over several years, according to people familiar with the matter, aiming to capitalize on the fast-growing online gambling industry.
The sports-media giant has held talks with players that own major sportsbooks, including casino operator Caesars Entertainment Inc. and online gambling company DraftKings Inc., the people said. ESPN has existing marketing partnerships with both companies.
On offer is the right for a suitor to use the ESPN name for branding purposes and potentially rename its sportsbook after the leading sports TV network in the U.S., the people said. A deal could come with an exclusive marketing commitment that would require the sports-betting firm to spend a certain amount of money advertising on ESPN’s platforms, one of the people said.
As Lombardo and Mullin go on to note, there’s no certainty of a deal here. This is a significant amount of money to ask for just for licensing the ESPN name, even if that involves putting that name on a sportsbook. And just putting an ESPN name on something doesn’t guarantee its success (see the ESPN phone and the ESPN Zone for a couple of examples). Moreover, Caesars and DraftKings in particular already have their own names they’re spending a fair bit of money on promoting, and they’re already reasonably well-known. This might seem to make more sense for a less-prominent brand looking to get itself out there, but that brand might also have challenges coming up with this kind of money.
This kind of deal certainly does seem to make some sense from ESPN’s standpoint. There’s clearly money to be made from gambling licensing deals, and a licensing deal comes with far less headaches than trying to launch a full betting brand themselves. That’s especially true considering that most legalized sports betting operates on state-by-state rules, and that there are already plenty of players in many of the states in question here.
Also, a full ESPN betting brand might come with some pushback from leagues they have rights deals with (that hasn’t been the case for Fox, at least not publicly, but ESPN’s a different player), and it might come with some government scrutiny given how much of the sports and entertainment marketplace Disney already controls. So it’s definitely logical for them to explore putting the ESPN brand on a book rather than trying to launch their own book. But the question is how much a book is willing to pay for that, and if that will be enough to make it worth ESPN’s while.