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ESPN announced it has agreed to a 10-year partnership with Penn Entertainment to launch ESPN BET, the popular sports network’s first foray into legal sports betting.
“Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products,” ESPN Chairman Jimmy Pitaro said in a statement. “The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN. PENN Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN BET.”
Penn Entertainment’s Barstool Sportsbook will undergo a rebrand and relaunch as ESPN BET this fall. On Penn Entertainment’s Q2 earnings call Wednesday, Penn CEO Jay Snowden said it will launch in the middle of the NFL season, likely before Thanksgiving. The rebrand will affect Penn’s mobile app, website and mobile website in the 16 states where Barstool Sportsbook was operating, according to a Penn statement.
ESPN will receive $1.5 billion in payments from Penn over the first 10 years of the contract, as well as the rights to purchase $500 million in Penn stock.
Penn also announced that its online casino app would be rebranded as a Hollywood-branded iCasino product in the legal online casino states it is operating, including Michigan and New Jersey.
How ESPN finally landed a sportsbook deal
ESPN’s announcement is a particularly interesting one, as it’s the most prominent media outlet to nail down a branded sportsbook deal. FOX launched FOX Bet in 2019, but this month it announced it was shutting down the sportsbook.
Adding to the intrigue that is ESPN’s entry into sports betting are numerous statements and walk-backs by Disney execs regarding sports wagering.
In September, then-CEO Bob Chapek said at the company’s yearly fan expo that Disney’s younger audience wanted sports betting. And, when asked if the company was developing an ESPN sports betting app, Chapek said, “we’re working very hard on that.”
The impression from that statement was that ESPN was going to be its own sportsbook operator; it wouldn’t partner with an existing operator.
Within two weeks, Chapek cleared up his statement, telling CNBC, “We’re going to need a partner [for sports betting] because we’re never going to be a book; that’s never in the cards for the Walt Disney company.”
Chapek’s ambitions came to a screeching halt when he was fired last fall. Former CEO Bob Iger took over and, in subsequent months, he echoed some of Chapek’s comments about sports betting.
Iger said he believed that merging sports programming with sports betting was “inevitable,” according to the popular Disney site Walt Disney World News.
What the future looks like for ESPN and Penn sportsbook
All things considered, this is a win for Penn. The operator is often trails badly in states where DraftKings and FanDuel operate. While the ESPN partnership won’t help it surge into the upper stratosphere of sports betting revenue like DraftKings and FanDuel, it might be able to help the company put some daylight between it and sportsbooks such as Caesars and BetMGM.
Another advantage ESPN and Penn have is ESPN’s massive audience. While the company’s viewership has declined over the past five years, it remains the premier name in sports broadcasting.
Snowden noted in Penn’s news release that ESPN has an audience of more than 370 million people across all its platforms.
“This agreement with ESPN and collaboration on ESPN BET allows us to take another step forward as an industry leader,” Snowden said. “Together, we can utilize each other’s strengths to create the type of experience that existing and new bettors will expect from both companies, and we can’t wait to get started.”
As for Barstool Sports, Penn’s sports betting brand, Penn announced it sold all of its shares in the company back to founder Dave Portnoy with the caveat it gets 50% of the gross profit Portnoy makes on any future sale or monetization of Barstool.
