Penn Entertainment has just reached a 10-year agreement to license ESPN Bet here in America. Under the agreement, Penn will rebrand Barstool Sportsbook into the ESPN Bet brand this fall. The deal strengthens ESPN's ties to the gambling industry, which may seem odd given that their parent company, Disney, had seemed to oppose gambling expansion over the years. However, Disney acquired a stake in DraftKings via Fox Entertainment assets back in 2019.
In order to make the ESPN Bet deal work, Penn will pay ESPN $1.5 billion in cash over the course of the ten-year term. Additionally, they have agreed to provide them with approximately $500 million worth of warrants, allowing the purchase of roughly 31.8 million common shares of Penn. ESPN will also be granted the privilege of appointing a single non-voting board observer within Penn.
The rebranding includes the mobile app, website, and mobile website, but the company will continue to operate as theScore Bet in Canada. Penn has additionally announced its intention to divest its entire subsidiary, Barstool Sports, to David Portnoy, the founder of the sports and pop culture media company. This transaction will involve the exchange of non-compete clauses and other associated agreements, as reported by Bloomberg.
The Chairman of ESPN, Jimmy Pitaro, said “We are confident that the combination of our unparalleled audience along with Penn's operational expertise and state-of-the-art technology provides us with a tremendous opportunity to serve the ever-growing number of consumers interested in betting.”
Even before the deal to make ESPN Bet possible, the company already had ties to sports betting, although they have never actually participated in the act of taking bets. Their network does carry gambling related programming, and there are links to sportsbooks carried on their website.