Buried in a story about the Disney/ESPN embrace of gambling resides news that one of ESPN’s top information gatherers now owns a piece of a gambling company.
Via Timothy L. O’Brien of Bloomberg.com, Adam Schefter recently invested in Boom Entertainment. It makes sports and casino gambling apps, and it also is developing “real money gaming products.”
The situation gives rise to multiple questions, starting with the fact that one of the other investors in Boom Entertainment is Patriots owner Robert Kraft. Others in the media already are asking whether and to what extent this business relationship will impact Schefter’s coverage of the Patriots.
In our view, that’s not a huge issue. For nearly 20 years, the NFL has hired reporters who cover the league and its teams, a clear conflict of interest with which few seem to be troubled. Also, Schefter rarely articulates strong opinions, primarily because that can impede the flow of text messages from a broad network of sources who provide him with a head’s up on looming transactions five minutes or so before they’re officially announced. That’s his thing, telling us information we’re about to find out about anyway through official tweet, email, or press release. Rarely (but not never) he reports something that wouldn’t otherwise be revealed in due course, if not a lot sooner.
The other problem comes from the tentacles connecting his work to gambling. As explained (articulately and effectively) by O’Brien: “Schefter’s stock in trade are football scoops such as new contracts, trades, injuries, starting line-ups and the other gossipy stuff that gives viewers a sense of who’s up or down, and who might win or lose. That information is also valuable to gamblers — or anyone who might own, say, a sizeable stake in a newfangled gambling company interested in digital sports betting. Viewers, and Schefter’s 8.5 million Twitter followers, might end up wondering whether he will shade his opinions or bury important information if he directly or indirectly has money riding on games and athletes.”
O’Brien reports that ESPN declined to say whether it has a policy that outlines “ethically acceptable investments” for employees, or whether Schefter’s investment complies with any such policy. ESPN likewise declined to comment on whether “any social or business lines are getting crossed” as the lines between sports, media, and gambling blur toward obliteration.
Four years ago, Schefter accepted a spot on the advisory board of Don Yee’s Pacific Pro Football League. After questions emerged about a potential conflict of interest (Yee’s clients include Tom Brady), Schefter stepped down -- even though ESPN said that his involvement violated no company policies.
And so it makes sense to see whether the next development in this story involves ESPN or Schefter issuing a statement that he has cashed in his investment in Boom Entertainment. Some would say that Schefter’s smartest move would be to divest his interest in the company before, yes, Boom goes the dynamite.