PENN Entertainment’s stock has surged 14% since yesterday’s licensing deal announcement to create ESPN BET. Penn’s Barstool Sportsbooks will be rebranded as ESPN Bet under the landmark agreement to get legacy sports network go full-in on legalized sports betting after some initial trepidation from parent company Disney.
PENN will will make $1.5 billion in cash payments to ESPN over the next decade and grant ESPN roughly $500 million worth of its shares. Below is the 13-page deck PENN shared to its investors on its ESPN partnership, which projects that ESPN Bet will reach as high as a 20% share of the domestic online sports betting market by 2027.
The deal merges PENN’s existing database of 27 million gaming customers with the front-facing brand of ESPN, whose lean into gambling content included hiring on-air personality Pat McAfee away from the sports betting company FanDuel.
As noted in the deck, ESPN Bet will have access to reach the network’s 370 million social media followers, 100 million monthly digital unique viewers, and 25 million ESPN+ streaming subscribers. ESPN’s fantasy sports app, a natural bridge to meet potential sports bettors, reached 11 million users during last year’s football season.
ESPN and Penn had been winding down discussions of its deal a week ago before Tuesday’s announcement, a source told Front Office Sports. The betting agreement comes nearly one month after Disney CEO Bob Iger said he would consider finding a strategic partner to take an equity stake in ESPN, with potential suitors including tech companies Apple and Amazon as well as major sports leagues.
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