ESPN to Launch ESPN BET in $1.5 Billion Deal With PENN, Former Barstool Operator
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ESPN is launching its own branded sportsbook named ESPN BET in the fall in partnership with PENN Entertainment, the company said in a statement Tuesday.
ESPN BET will be live in the 16 states in which PENN is already licensed with Barstool. As a part of this deal, PENN will divest its ownership in Barstool, which will return as a sole proprietorship under founder Dave Portnoy.
PENN agreed to pay $1.5 billion to ESPN as a part of this deal, the Action Network's Darren Rovell reported. In addition, ESPN will be granted roughly $500 million in warrants over the next 10 years.
“This agreement with ESPN and collaboration on ESPN BET allows us to take another step forward as an industry leader," Chief Executive Officer and President of PENN Entertainment Jay Snowden said in a statement released by ESPN PR. "Together, we can utilize each other’s strengths to create the type of experience that existing and new bettors will expect from both companies, and we can’t wait to get started.”
Barstool Sports CEO Dave Portnoy took to Twitter to alert his followers. "PENN entertainment and Barstool sports have gone our separate ways," Portnoy said. He added that he now owns "100% of Barstool sports" after the deal with ESPN.
The divestment occurred after a series of public relations mishaps slowly severed the relationship between PENN and Barstool, including allegations of sexual harassment, improprieties regarding the marketing of some betting options and other behavioral issues involving Portnoy and his staff.
As a result of these issues, PENN's stock price was affected — primarily negatively — at times. And Barstool had more trouble than other sportsbooks procuring licenses on the backs of these character concerns.
Meanwhile, ESPN's foray into the space is a long time coming. The most powerful sports network in the country — owned by Disney — had carefully planned its entrance over the years, waiting for its opportunity to pounce.
While no specific launch date was specified, ESPN said in a statement that it expects to launch some time this football season.
Caesars Sportbook had been the exclusive odds provider for ESPN prior to Tuesday's news. That includes all odds found on the website, on air, during broadcasts or via audio. There has been no announcement as to the status of that partnership.
We will continue to update this story as it develops.