CBS Acting CEO: Sports Betting Is a "Huge" Opportunity

Joseph Ianniello- CBS Publicity-P 2019
Courtesy of CBS

"It’s already generating millions of dollars of advertising revenue for us," Joe Ianniello spoke at the Credit Suisse Annual Communications Conference in New York.

CBS Corp. sees sports betting as a "huge" and growing business opportunity as it gets legalized in more states, particularly in terms of advertising revenue, acting CEO Joe Ianniello told an investor conference Wednesday.

Speaking at the Credit Suisse Annual Communications Conference in New York in a session that was webcast, he said: "It’s an advertising play for us. It’s digital advertising, the demographics are very favorable, so we are leaning into that with our trusted brands — CBS Sports HQ, CBSN, ET Live.”

Highlighting that sports betting is now legalized in seven U.S. states, Ianniello mentioned that CBS has stations in two of those states, "and it’s already generating millions of dollars of advertising revenue for us."

And he expects more upside. "As that expands, there is a huge advertising opportunity, particularly in local advertising," he said. "But then more broadly, with our platforms, CBS Sports HQ or our CBS Sports cable network, and we own Sportsline, as [betting] becomes legal state by state, I do think there is a bigger platform opportunity. And we are having multiple discussions with several partners to make sure we get the opportunity right."

Ianniello didn't disclose what kind of partners the company was talking to. How big a revenue opportunity is sports betting for CBS? "It has got to be legalized in more than seven states, I think, to be big, but it clearly appears to be on its way," he said.

Rupert Murdoch's newly formed Fox Corp. unveiled a deal May 8 between its Fox Sports unit and online gambling giant Stars Group to launch Fox Bet this fall, the first national media and sports wagering pact in the U.S. amid the growth in the number of states legalizing sports betting.

Ianniello had highlighted during the company's recent earnings conference call that streaming has become a "core strategy" for CBS, calling it a "leader in the space." On Wednesday he called direct-to-consumer services "by far the biggest opportunity" for CBS. 

Ianniello reiterated his recent comments that the upside opportunity for international streaming growth for CBS was a new area of concentration for management, saying it would be getting "more and more focus" over time."

Ianniello on Wednesday didn't get any questions on potential mergers or acquisitions. Word leaked May 17 that CBS Corp. informally offered Lionsgate $5 billion for premium TV brand Starz. Meanwhile, industry watchers expect CBS and Viacom, both controlled by vice chair Shari Redstone's family, to start their latest talks about a possible combination by mid-June. The two companies have been separate since 2006, but had discussions about a recombination twice before.

On April 23, CBS  extended Ianniello's employment contract for an additional six months without naming him permanent CEO, fueling further speculation that a deal may be in the cards. Ianniello has been running CBS since the ouster of Leslie Moonves in September, but observers have predicted that Viacom CEO Bob Bakish would likely lead a combined company.