June 29, 2022

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Walt Disney Getting Into the Sports Betting Industry

4 min read
Walt Disney Getting Into the Sports Betting Industry

According to Forbes, “the company that is famous for creating “The Happiest Planet On Earth which is currently seeking to place bets.” The announcement that Walt Disney plans to join the world of sports betting was a big news story across the world, particularly in Japan which is where Japan’s love for Walt Disney is well known. In fact, the Tokyo Disney Resort has had over 550 million people visit it since its beginning in 1983. Japan is making plans to build the nation’s first integrated casino resort. This is not difficult to comprehend Japan’s excitement for Walt Disney’s sports betting plan, but how is this all about?

Disney’s Recent Performance

The announcement was made in Disney’s Fourth-quarter financial report for 2021. Although the entertainment giant’s performance was deemed to be weak in the past year, its sports business witnessed a significant increase. Its ESPN+ streaming service, under the supervision of the Walt Disney Company, saw an astonishing 66% rise in subscribers in the year.

Furthermore, research suggests that the majority of programs viewed on Disney-owned TV networks in the last year were sports events. Perhaps in reaction to this trend, Disney has signed an agreement together with National Professional Football (NFL) and plans to acquire television broadcast rights by 2023.

Why do we gamble?

According to CEO Bob Chapek, gambling can assist Disney to develop new revenue streams and drawing an audience that is younger. Betting on sports is heavily influenced by the consumer, particularly among the younger crowd, and is a major part of the sports fanatics who see it as an integral part of the sporting experience.

Therefore, ESPN is the perfect platform for Disney to venture into the gambling world. The revenue generated by advertising for this channel was not much during the final quarter of 2021 and gambling is an additional source of revenue. Even with the increased number of viewers, the trend of growth in the last decade has been slowing as the population continues to move away from pay TV.

Furthermore, the development of betting at Disney is not brand new. It has been in operation since 2020 which is when ESPN signed agreements with the gambling majors DraftKings as well as Caesars Entertainment to link their sportsbooks to ESPN. ESPN website. The licensing agreement is a shrewd move to ensure that the parent brand’s image remains secure. This will allow ESPN to play a greater influence in the market, as DraftKings and Caesars remain in charge of the betting aspects.

Additionally, there was also The Wall Street Journal reported the possibility of a three billion dollar brand licensing agreement with Walt Disney and the two companies, which is expected to be signed in August 2021! But there’s a problem How do the family-friendly business intend to join betting on sports?

Disney and Betting: Catch-22 or Perfect Combo?

Disney’s traditional, family-friendly image could appear to be a hiccup as it prepares to join the world of sports betting. Chapek provided a vague answer when asked whether ESPN would begin placing bets directly on its website.

So, it’s probable that Walt Disney will stick to licensing for the moment however it’s falling in comparison to competitors such as FOX Corporation, which provides an integrated betting option on its subsidiary FOX Sports.

However, the stigma that surrounds betting on sports is currently being challenged by an order by the Supreme Court lifting the betting ban on sports. Since that time more than 30 U.S states such as Washington D.C., have developed new avenues for the field with the help of legal betting sites on sports. In the last calendar year, Americans placed bets of around $2.4 million during the first half of the fiscal year as per the American Gaming Association.

Although there is a strong likelihood that the American gambling industry is expected to bring 30 billion dollars in revenue but it’s still not clear whether Disney will ever make a bet on direct betting platforms. The integration of it into betting on sports could challenge its conventional image.

However, the company’s principal revenue stream is believed to be derived from the DraftKings advertising program. The company has a huge budget for advertising expenditures and concentrates on 80% of its growing revenues on this.

As Walt Disney struggles with its efforts without ruining its image as a family-friendly place, a number of businesses have already made changes to their trajectories and have entered the betting sports industry, Sports Illustrated.

It is also crucial to think about how Disney’s licensing strategy could help keep its fans engaged and drawn to their televisions, possibly expanding ESPN’s core cable business. The company is continuing to chart its course, based on CEO Chapek’s optimistic and bold perspective It will be fascinating to find out the way Walt Disney fares in coming years.

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