Casino owner PENN Entertainment has announced that it will no longer be associated with sports website Barstool and has entered into a $2 billion agreement with ESPN to create ESPN Bet. This move will see the online Barstool Sportsbook rebranded as ESPN Bet starting in the fall, according to a report by Cnn.com.
Exclusive Rights and Integration with ESPN
PENN secured exclusive rights to the ESPN Bet trademark for the next 10 years, with the option for a further 10-year extension. The betting service will be highly integrated with ESPN’s broad editorial, content, digital, linear product, and sports programming ecosystem, stated Jay Snowden, CEO and president of PENN.
Financial Terms of the Agreement
As part of the deal, PENN will make $1.5 billion in cash payments to ESPN over the next decade. Additionally, ESPN will receive around $500 million worth of PENN’s shares. After three years, ESPN will have the ability to designate a Penn board member, further solidifying their partnership.
Transitioning from Barstool
To dissolve its previous agreements with Barstool, PENN sold all of its Barstool common stock to the founder, David Portnoy. In an “emergency press conference” posted on X, previously known as Twitter, Portnoy expressed his satisfaction with the deal, stating that he now owns “100%” of Barstool Sports after a decade. He acknowledged the challenges of operating within the regulated gambling industry and believes that PENN’s deal with ESPN is the best way forward for the type of content Barstool produces.
Potential Future Revenue from Barstool
PENN also included a clause in the agreement stating that if Portnoy decides to sell Barstool, the company will receive 50% of the gross proceeds. However, Portnoy emphasized that he has no intention of selling the sports site, proclaiming, “By the way, I am never going to sell Barstool Sports ever. I’ll hold it till I die.”
Having acquired an initial 36% stake in Barstool Sports in 2020, PENN completed its full acquisition of the company in February. The deal with ESPN marks a significant shift for PENN Entertainment as it severs ties with Barstool in favor of a partnership with a major sports media brand.
Key Takeaway:
– PENN Entertainment has dropped its association with sports website Barstool and formed a $2 billion partnership with ESPN to create ESPN Bet.
– The online Barstool Sportsbook will be rebranded as ESPN Bet in the fall.
– PENN secured exclusive rights to the ESPN Bet trademark for the next decade, with potential for extension.
– PENN will make $1.5 billion in cash payments to ESPN over the next 10 years, and ESPN will receive approximately $500 million worth of PENN shares.
– Barstool founder David Portnoy purchased all of PENN’s Barstool common stock to dissolve previous agreements.
– PENN will receive 50% of the gross proceeds if Portnoy decides to sell Barstool in the future.
Facts about the keyword of the news article:
- Casino owner PENN Entertainment drops its association with Barstool in favor of a $2 billion deal with ESPN.
- The online Barstool Sportsbook will be rebranded as ESPN Bet in the fall.
- PENN secures exclusive rights to the ESPN Bet trademark for the next 10 years, with the option for another 10-year extension.
- PENN will provide $1.5 billion in cash payments to ESPN over the next decade and grant ESPN shares worth approximately $500 million.
- If Barstool is sold in the future, PENN will receive 50% of the gross proceeds.
Credit: cnn.com
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Barstool in FebruaryBarstool SportsBarstool SportsbookDavid PortnoyESPN BETExclusive RightsFinancial Terms of the AgreementJay SnowdenKey TakeawayPenn EntertainmentPotential Future Revenue
