PENN Entertainment Signs Exclusive Agreement with ESPN

PENN Entertainment, Inc. has announced an exclusive online sports betting agreement with ESPN, Inc. and ESPN Enterprises, Inc. Under this partnership, PENN will have the exclusive right to the ESPN Bet trademark for online sports betting in the U.S. for an initial 10-year term, which may be extended for another 10 years upon mutual agreement.

Rebranding of Barstool Sportsbook

As part of the agreement, the online Barstool Sportsbook will be rebranded as ESPN Bet in the Fall of 2023. The partnership includes deep integration of ESPN Bet with exclusive promotional services across ESPN platforms, including programming, content, and access to ESPN talent.

PENN will make $1.5 billion in cash payments to ESPN over the initial ten-year term and grant ESPN approximately $500 million of warrants to purchase around 31.8 million PENN common shares that will vest ratably over 10 years. Additional bonus warrants may be granted to ESPN based on ESPN Bet’s market share performance thresholds.

To capitalize ESPN’s audience reach

Additionally, PENN has divested Barstool Sports, selling 100% of the Barstool common stock to founder David Portnoy. In exchange, PENN will receive certain non-compete and other restrictive covenants and will have the right to receive 50% of the gross proceeds from any subsequent sale or monetization event of Barstool.

The partnership between PENN and ESPN aims to capitalize on ESPN’s extensive audience reach and PENN’s operational experience in the sports betting industry to create a leading U.S. sports betting platform.