By Kenny Burgess Contributor
Updated 8/11/23 12:15pm ET
In a two-billion-dollar move that reverberated across sports, entertainment and business sectors, ESPN struck a sportsbook deal that likely alters the company’s trajectory and will have a domino effect on competitors and the gaming industry.
ESPN announced a partnership with U.S. gambling company, Penn Entertainment, which will relaunch its sportsbook as ESPN BET and end its relationship with Barstool Sports. Penn has a betting license in 16 different states and plans to launch ESPN BET in those states this Fall.
Penn agreed to pay ESPN $1.5 billion in cash over 10 years, as well as grant ESPN $500 million of warrants to purchase approximately 31.8 million common shares of Penn.
The move also necessitated Penn selling Barstool Sports back to founder Dave Portnoy, who had sold the company for $551 million over a five-year period. Barstool Sportsbook had encountered licensing barriers that facilitated this multi-layered deal.
“We underestimated how tough it is for me and Barstool to operate in a regulated world,” Portnoy said in a video on Twitter.
Portnoy also claimed he will not sell Barstool Sports again but if he does, Penn is guaranteed 50% of any sale proceeds or dividends.
The deal gives Penn Entertainment the exclusive rights to the ESPN BET trademark for the next decade with the possibility of 10 more years, if the two sides mutually agree.
Photo credit: Penn Entertainment’s Instagram