PENN Entertainment and ESPN, Inc have entered a sports betting agreement which will see PENN dispose of Barstool Media and rebrand its existing sportsbook to ESPN BET.

What are they key headlines?

The two key headlines are as follows:

  • PENN has agreed to make $1.5 billion in cash payments to ESPN over the initial ten-year term, and grant ESPN approximately $500 million share warrants (31.8 million PENN common shares) that will vest after 10 years
  • PENN has sold 100% of the Barstool Sports, Inc common stock to the grand’s founder, David Portnoy, in exchange for “certain non-compete and other restrictive covenants”. PENN also has the right to receive 50% of the gross proceeds received by Portnoy should Barstool subsequently be sold

In addition to the above financial terms, ESPN has the potential, upon the company meeting certain online sports betting market share performance thresholds, to receive bonus warrants to purchase up to an additional 6.4 million PENN common shares.

PENN has notified investors that it believes the value creation potential is an estimated $500 million to $1.0 billion of annual long-term adjusted EBITDA in the company’s interactive segment.

What will the transaction bring to PENN?

The deal is one of the most seismic in US sports betting history, but the jury remains out on whether or not it can be a success given previous examples of similar partnerships which failed to achieve desired results (eg: FOX and FanDuel, plus Sun Bet in the UK). Additionally, two of ESPN’s biggest clients themselves are DraftKings and FanDuel – thus potentially creating a messy market environment whereby PENN doesn’t necessarily get the amount of love as initially thought.

Nevertheless, following the immediate announcement the PENN stock surged to a recent-high of over $30 per share.

Here’s what can be expected from the deal:


Through the hefty aforementioned payments, PENN has secured the exclusive right to the ESPN Bet brand for online sports betting. The term is an initial ten years which, upon mutual agreement, can be extended for an additional ten year term.


The deal will not see any market access revoked. PENN will keep access to the 20 states in which a sportsbook currently operates under the Barstool Sportsbook brand. All online Barstool Sportsbook will be rebranded ESPN Bet in coming months, while PENN will continue to operate under theScore in Canada. With Wynn considering an exit from New York online sports betting, ESPN BET will hope to secure a license spot in the Big Apple.

In addition, the new reskinned mobile application will include a separate Hollywood branded iGaming product in states which PENN has market access and iGaming is legalized such as Pennsylvania online casino.

As of 30 June 2023, PENN operated 43 properties across 20 states, online sports betting in 17 jurisdictions and iGaming in 5 jurisdictions.

Jay Snowden, Chief Executive Officer and President of PENN, commented, “This transformative, exclusive agreement with ESPN marks another major milestone in PENN’s evolution from a pure-play U.S. regional gaming operator to a North American entertainment leader. ESPN Bet will be deeply integrated with ESPN’s broad editorial, content, digital and linear product, and sports programming ecosystem. ESPN Bet will also benefit from PENN’s operational experience, extensive market access and proprietary technology platform, which successfully debuted in the U.S. this July.”

Jimmy Pitaro, Chairman of ESPN, said, “After meeting with Jay and the PENN team, it was clear that they were the right long-term strategic partner to build ESPN Bet into a leading U.S. sports betting platform. 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.”

Snowden concluded: ““Our agreement with ESPN will provide us access to the largest ecosystem in sports, with 105 million+ monthly unique digital visitors, an audience of more than 370 million across social platforms, 25 million ESPN+ subscribers, and the nation’s #1 fantasy database. PENN’s ability to leverage the leading sports media brands in both the U.S. and Canada with ESPN and theScore, combined with our newly launched sports betting app, will allow us to significantly expand our digital footprint and catapult ESPN Bet into a strong podium position in this space. We believe we can achieve substantial adjusted EBITDA in our Interactive Segment over the coming years – and this will translate to very strong free cash flow generation for the Company and value creation for our shareholders.”