Dan Loeb Pushes Disney for ESPN Spinoff, Sees Sports Betting Opportunity

Daniel Loeb’s Third Point fund initiated a new position in Walt Disney (NYSE:DIS) said to be worth about $1 billion, and is pushing the company to spin-off ESPN — a move that could make it easier for the network to forge into sports wagering.

Dan Loeb ESPN
Dan Loeb ESPN
Third Point founder Dan Loeb at the SALT investment conference. He’s pushing Disney to spin-off ESPN. (Image: Bloomberg)

In a letter today to Disney CEO Bob Chapek, Loeb, whose hedge fund has previously been an investor in the media company, touches on issues beyond a potential separation of ESPN. Those include refreshing Disney’s board and integration of the Hulu streaming service. Still, the billionaire investor is keen to see the sports giant separated from the parent company.

Employees of ESPN could be compensated in a security directly tied to their performance,” wrote Loeb in the letter. “ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting.”

That seems to imply a pursuit of sports betting by ESPN is best with the sports broadcaster standing apart from Disney. But the parent company doesn’t necessarily see things that way.

In remarks made in late 2021, Chapek said a deeper move by the company into sports wagering isn’t likely to damage its iconic brand — one often associated with family friendliness and compatibility. Rather, a more overt association with betting could prop up the ESPN brand.

No Secret About Disney Sports Betting

Disney isn’t shy about its desire to get more deeply involved with sports betting and it sees value in such a move for its thriving ESPN+ streaming service.

The sports network has long signaled that fantasy sports and wagering are avenues to bolster the streaming service and the network at large. ESPN accelerated its exposure to the sports betting space in September 2020, inking separate, multi-year accords with Caesars Entertainment (NASDAQ:CZR) and DraftKings (NASDAQ:DKNG).

Last year, reports surfaced that ESPN was shopping use of its highly recognized brand to sportsbook operators in an effort to land a multi-year deal valued at least $3 billion. But nothing came of that speculation.

For his part, Loeb sees other compelling reasons why ESPN should be a standalone company and some of those are relevant to sports wagering.

“Customers of ESPN and sports leagues would be better served by a focused management team driving a leadership position in sports distribution,” wrote the Third Point founder. “We believe that most arrangements between the two companies can be replicated contractually, in the way eBay spun PayPal while continuing to utilize the product to process payments.”

Disney Long-Running Sports Betting Rumors

Loeb’s letter to Chapek arrived just days after Disney reported fiscal third-quarter earnings. On the ensuing conference call, Chapek acknowledged the company held sports betting conversations with different platforms and a related announcement could be on the way.

He didn’t further elaborate. But he appears to see value in sports betting in some form, and Disney has long been rumored to be a potential a suitor for several sportsbook operators.

“We have found that basically our sports fans that are under 30 absolutely require this type of utility in the overall portfolio of what ESPN offers. So we think it’s important,” added Chapek on the call. “We’re working hard on it, and we hope to have something to announce in the future in terms of a partnership there that will allow us to access that revenue stream.”

The post Dan Loeb Pushes Disney for ESPN Spinoff, Sees Sports Betting Opportunity appeared first on Casino.org.

Leave a Comment

All the data shown above will be stored by www.rajpostexam.com on https://www.rajpostexam.com/. At any point of time, you can contact us and select the data you wish to anonymise or delete so it cannot be linked to your email address any longer. When your data is anonymised or deleted, you will receive an email confirmation. We also use cookies and/or similar technologies to analyse customer behaviour, administer the website, track users' movements, and to collect information about users. This is done in order to personalise and enhance your experience with us. Click here to read our Cookie Policy.