PENN and Disney target 20% market share by 2027 for ESPN Bet
Jay Snowden and Bob Iger hail potential of partnership as details of 10-year strategic alliance emerge
PENN Entertainment CEO Jay Snowden and Walt Disney Group CEO Bob Iger have talked up the chances of the ESPN Bet brand breaking the dominance of US sportsbook heavyweights FanDuel and DraftKings.
The pair spoke as part of their respective Q2 2023 financial earnings calls, just hours after confirming a groundbreaking 10-year strategic alliance that will see PENN pay $2bn to license the ESPN brand from Disney to develop an ESPN Bet offering.
Both companies have set the goal of 20% US sports betting market share for ESPN Bet by 2027, an ambitious target given the competitiveness of the market and FanDuel already occupying a 47% share. market.
“We’re not doing this deal to be 4%, 5% players,” Snowden said.
PENN will gain access to the full ESPN marketing, trademark, and production machinery to turn the ESPN Bet brand into a potential challenger.
Under the terms of the agreement, PENN’s progress in achieving this aim will be measured by how much market share it generates, with the option for ESPN to walk away from the deal after three years if this share has not been achieved.
“This is not a typical media sportsbook commercial agreement. This is an exclusive and comprehensive alliance that will redefine the sports betting landscape with a highly aligned partner that long term, like us, wants to see ESPN Bet at the top,” PENN Entertainment CEO explained.
“With ESPN, you’re talking about a brand that everybody in the world knows about. It’s not an old brand. It’s not a young brand. It’s an everything brand.
“There’s a lot of affinity for that brand, so we think it’s going to be extremely complementary to what we’ve built over the course of the last three years and yes, we’re excited.”
Snowden continued: “We think this is an opportunity to really appeal to the masses. Over the course of the last three years, we’ve all watched market share in online sports betting continue to consolidate really among the top two players.
“You’ve got to have scale to compete and there’s a certain recipe to get to that scale. We think that we check the boxes with that recipe and we’re ready to compete at a scale level.”
Snowden’s opposite number at Walt Disney Group, CEO Iger, spoke at length about the potential future of the ESPN broadcast brand and ways of greater monetisation of its customer base, which includes 25 million ESPN subscribers and a social media audience of more than 370 million.
There had previously been calls to spin the ESPN business off from the wider Walt Disney Group to greater exploit these opportunities, which include brand licensing to a sportsbook, an opportunity it now realises with the PENN deal.
“On ESPN Bet, you say why now? Well, we’ve been in discussions with a number of entities over a fairly long period of time,” Iger remarked. “It’s something that we’ve wanted to accomplish, obviously, because we believe there’s an opportunity here to significantly grow engagement with ESPN consumers, particularly young consumers.
“Why PENN? Because PENN stepped up in a very aggressive way and made an offer to us that was better than any of the competitive offers by far.
“We like the fact that PENN is going to use this as a growth engine for their business and we actually believe and trust in this partnership to grow their business nicely while we grow ours,” Iger added.
Despite media reports suggesting a potential NFL season opener launch, Snowden confirmed the ESPN Bet brand would not launch until November in a product-based decision, claiming this would prevent the sportsbook from getting “lost” in the operator scramble which punctuates the season.
“Strategically, I like it because we’re going to be out there launching at a time where, maybe with everyone else, new customers have kind of burned through those promotional dollars on first-time deposit matching and we’re going to be mid-season offering something that probably isn’t being offered by others or it’s already been utilised with the other competitors,” Snowden explained.
“So, we like it and we’re fine with this being a show me story,” he added.