Disney Executive Joins Penn: A Strategic Move Explored
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00:00Oh boy, a fascinating move at the hierarchy for Penn to see an individual from Disney,
00:10which has not been a company that is huge in favor of sports betting, especially here
00:14in Florida, Matt.
00:15They don't want to have anything to do with sports betting.
00:16They want to keep Disney World going strong, stay away from sports bets, use your money
00:20on us, not on them.
00:21Right?
00:22You've heard that before.
00:23So an executive here from Disney goes to Penn.
00:25What do you make of this move here?
00:27Is this an upward move, by the way, for this individual or just someone trying to jump
00:31into the sports gaming universe?
00:32You know, it's really interesting what we have going on here, Craig, because obviously
00:37Disney is Penn's partner in ESPN bet.
00:40So you have to wonder how this conversation went down and when it really started.
00:44You look at it from Penn's perspective.
00:46They knew that they were losing Benji Levy, the head of their interactive division, in
00:50April.
00:51Benji is part of the Levy family that owned the score, which Penn bought for $2 billion
00:56back in 2021.
00:59And so Penn has known that this was coming to an end for the Levy family here and that
01:04they were going to be moving on.
01:06And an interesting point came out last month at a forum where Penn CEO Jay Snowden said
01:14that they had picked the new lead of their interactive division and that he had already
01:19weighed in on the roadmap for ESPN bet.
01:23That was really interesting because obviously you're not going to get into specifics about
01:27what's going on with your brand when you're just in for an interview, right?
01:32So that kind of said, you know, oh, this guy must be related to Penn somehow.
01:37And now we see that it was the chief technology officer of Disney, Aaron LaBerge.
01:42And so I think the fact that they're bringing over somebody who has already been involved
01:47in this game planning and scheming for ESPN bet, I think that's a huge win for Penn.
01:52And the stock market agrees, the stock was up about 5% in early trading this morning.
01:58And that just tells you that, look, people are happy to see this move.
02:04It's hard to be disappointed when you talk about getting an executive from Disney for
02:09almost any role in your company, right?
02:11When you talk about big companies that do stuff right, Disney is one of them.
02:16And so this is definitely, so strip out the fact that he was already related to ESPN bet
02:22in some way, getting a name from Disney is huge.
02:25So I think this is a massive win for Penn.
02:28Look, Penn is focused on two main things, right?
02:32On the Penn side of ESPN bet, they're focused on getting the parlay product better and deeper
02:39enough to compete with DraftKings and FanDuel when it comes back time for NFL and college
02:44football betting this season.
02:46On the Disney side, they're focused on that integration.
02:50They're focused on getting sports betting integrated into the ESPN app.
02:56And Craig, we've talked about it before.
02:58The parlays are important.
03:00Obviously, you're not going to, you know, hold your market, your customers that come over.
03:05You're not going to hold them.
03:06You're not going to retain them if the product isn't there.
03:10But the fact that this is all coming together now, I think this is really good for ESPN bet.
03:20I think this is really going to be positive.
03:23Now, I've read a report this morning, Craig, that ESPN bet in March has about 8% of handle
03:30when you strip out all the promotions that they've been giving away.
03:33Those promotions are coming down.
03:35So that's good enough for fourth right now in the hierarchy when you look at that stat.
03:40FanDuel was first.
03:41DraftKings was second.
03:42BetMGM was just ahead of ESPN bet.
03:45And then you had Caesars behind ESPN bet.
03:48That 8% mark isn't bad.
03:50Look, they said in three years they want to be somewhere between 10% and 20% of market share.
03:56So if they're going to get and stay at ESPN at 8% for now for ESPN bet, that's looking pretty good to get to where they want to go.
04:05This is a 10-year deal between Penn and Disney.
04:10And so they can opt out at three years.
04:12And if they don't, I think it's seven years at that point that they could opt out again.
04:18But everything right now is trending the right way.
04:21And so you're looking at can they get those parlays going?
04:26And can they get that integration in the ESPN app figured out to let you access ESPN bet right from there, place your bet, and go?
04:36We had that survey from Truist that came out not too long ago where 98% of people that were interested in seeing that integration into ESPN
04:47said that if they get it right, it either will or probably will become their sportsbook of choice.
04:54So a lot is still hinging here on how exactly Penn pulls off the product.
05:01But so far, it's lining up pretty nicely.