ESPN To Enter Sports Betting Market

ESPN logo displayed on a phone screen and a basketball are seen in this illustration photo taken in Krakow, Poland.

Disney-owned ESPN, the self-proclaimed “world’s leading multiplatform sports entertainment brand,” has finally entered the lucrative U.S. legal sports betting market that online betting sites are fueling after a long wait.

PENN Entertainment, Inc. recently announced a groundbreaking partnership with ESPN for exclusive online sports betting in the United States. As part of the agreement, Penn Entertainment will be rebranding its sportsbooks in 16 states to ESPN Bet in the coming months.

Over the past few years, ESPN had been discussing a potential partnership with DraftKings, one of the top sportsbooks, but ultimately the talks did not result in a collaboration.

“Our partnership with ESPN represents a significant step forward in PENN’s journey from a regional gaming operator to a leading entertainment company in North America,” stated Jay Snowden, CEO and President of PENN. “ESPN Bet will be seamlessly integrated into ESPN’s various media platforms and will leverage PENN’s expertise, market reach, and cutting-edge technology to provide a top-notch betting experience for users.”

More on the deal

Penn has agreed to pay ESPN an incredible $1.5 billion for the exclusive rights to the ESPN Bet brand. The deal is expected to last for 10 years with the possibility of a 10-year extension. In addition, ESPN will receive around $500 million in warrants to purchase approximately 31.8 million shares of Penn common stock.

If ESPN reaches certain market share performance goals, they may receive additional warrants as a bonus. Additionally, the sports media giant has the opportunity to appoint a non-voting board observer to the PENN Entertainment board.

After facing financial challenges, Disney has been searching for new revenue opportunities. Partnering with PENN will help diversify their platform and bring in additional income streams.

According to Snowden, our partnership with ESPN will grant us access to the largest sports ecosystem, reaching over 105 million unique digital visitors each month, engaging with an audience of over 370 million on social platforms, connecting with more than 25 million ESPN subscribers, and tapping into the nation’s premier fantasy database.

By combining the strong sports media brands of ESPN and theScore in the U.S. and Canada with our new sports betting app, PENN is poised to greatly expand our online presence and establish ESPN Bet as a top player in the industry. We are confident that this strategy will lead to significant growth in adjusted EBITDA for our Interactive Segment in the future, resulting in strong free cash flow generation and increased value for our shareholders.

Penn receives extensive media and marketing services from ESPN in exchange for its investment, as well as exclusive rights to the ESPN Bet brand.

What about Barstool?

The once beloved Barstool underscoreg, under the PENN Entertainment umbrella, has now been acquired by David Portnoy, the face of the Barstool brand. ESPN will maintain a 50% stake in gross proceeds should Portnoy choose to sell the Barstool brand in the future.

Snowden announced that as part of the transaction, Barstool is being sold back to its founder David Portnoy. He expressed gratitude to the Barstool team, including Dave Portnoy, Erika Ayers, and Dan Katz, for their partnership in expanding the company’s digital presence across 16 U.S. jurisdictions and promoting their retail and digital products to their audience. The divestiture will enable Barstool to focus on delivering original and genuine content to its dedicated followers without the constraints of being a publicly traded, licensed gaming entity.

PENN couldn’t resist the opportunity to form a partnership with ESPN.

Cautionary tales

Thus far, partnerships between media companies and sports betting providers in the U.S. market have not met expectations. Recently, Flutter Entertainment PLC, based in Dublin, closed its FOX Bet brand due to its failure to capture a significant market share nationwide.

Despite initially seeming like a sure thing, PointsBet had to sell its U.S. assets to Fanatics in June after its partnership with NBC Universal fell through. Other media companies such as Fubo and Maxim have also struggled to establish themselves in the rapidly growing U.S. legal sports betting market.

More on ESPN Bet

Take a look at our review of ESPN Bet and use our promo code to get the latest information on the sportsbook.

Written By:
Perry Sandra

Perry Sandra and betting go hand-in-hand. Both are characterized by “odds”. Dave fancies himself as one of the most dedicated sports and pop-culture junkies around, to the chagrin of his family and friends. Following sports for 50 years and writing about it for 20, Dave hasn’t found a sport yet that can’t contribute to 2-3 straight hours of couch time. That search remains ongoing. As a good old Canadian boy, hockey is in Dave’s heart, as is curling sadly. But evolution is a real thing and that’s why football, baseball, and just about every sport on the planet has become a passion. Dave isn’t afraid to kill some time obsessing over politics or the far-too-frequent awards shows the consume the airwaves.