- PENN Entertainment and ESPN agreed to a $1.5 billion, ten-year deal for a partnership in an ESPN-branded online sportsbook.
- The deal marks the first time that ESPN has entered the sports betting sphere. Meanwhile, rival network, FOX, is closing FOX Bet after failing to gain market share.
- Dave Portnoy bought back Barstool Sports from PENN Entertainment for $1 after ESPN announced the sports betting deal with PENN.
ESPN is throwing their hat into the budding online sports betting industry. In a partnership with PENN Entertainment, Disney’s ESPN will have its first branded online sports betting product, ESPN Bet. The news comes years after ESPN started promoting sports betting across their platforms with shows and segments.
Only days after Fox announced they were backing out of sports betting, ESPN signed a mammoth deal to enter the market. In a deal that will last ten years, PENN Entertainment will develop an online sports betting product under ESPN branding.
PENN Entertainment will be responsible for the software and day-to-day operations of the sports betting app and sportsbook. They will be paying ESPN $1.5 billion for the licensing rights to the brand. It isn’t the first foray into sports betting apps for PENN Entertainment.
In February, PENN Entertainment gained total control of Barstool Sports, three years after purchasing a 36 percent stake in the company. The Barstool Sportsbook, which launched in 2020, was partially owned by PENN Entertainment until buying Barstool Sports outright earlier this year.
Barstool Sportsbook Rebranding As ESPN Bet
PENN Entertainment will not be entering this endeavor blindly. However, there is plenty of work to be done to improve their sports betting offerings.
According to reports, PENN Entertainment will not be developing a brand-new app, rather rebranding their current sportsbook to ESPN Bet. PENN Entertainment is planning on turning the existing Barstool Sportsbook brand into ESPN Bet.
ESPN has entered an agreement with @PENNEntertain to launch ESPN BET, a branded sportsbook in the U.S.
ESPN BET will be available for fans this fall
Details: https://t.co/evaUbfn5Nh pic.twitter.com/UqIkME4Lyk
— ESPN PR (@ESPNPR) August 8, 2023
Currently, it remains to be seen how ESPN Bet will differentiate itself from the former Barstool Sportsbook. At the least, we should expect to see similar odds and lines. Initially, when the app launches this fall, there is unlikely to be much difference.
If you like Barstool Sportsbook, then you should like what ESPN Bet has to offer. With input from ESPN, it is unlikely that this is going to simply be a reskinned sportsbook in the long run, though.
Barstool Sportsbook had a small market share compared to the majority of their competition. The brand was never able to compete in marketing with DraftKings, FanDuel, MGM, Caesars, and other well-known sportsbooks.
Marketing Game Changer For PENN Entertainment
The shift to ESPN will provide PENN Entertainment with a tenfold increase in advertising opportunities than they had with their Barstool Sportsbook-branded app.
With the biggest games in sports on ESPN and ABC, there will be a heavy dose of ads for ESPN Bet. Additionally, ESPN has embraced putting sports betting odds on the scoreboard tickers and for previews of events.
In 2020, the “Worldwide Leader in Sports” signed a multi-year sports betting deal with Caesars Entertainment. The deal included ESPN having the power to present Caesars’ sports betting odds during their shows and sporting events.
As a result of the contract with PENN Entertainment, Caesars Entertainment will no longer be affiliated with ESPN. Moreover, DraftKings will not have a presence in ESPN programming. For the next ten years, ESPN will promote their own branded sportsbook.
As of August 10, though, ESPN still has these advertising contracts with Caesars Entertainment and DraftKings. The deals will have to be terminated prior to the launch of ESPN Bet. This should not be difficult, as ESPN included language in the contracts that can be terminated if they launch their own sportsbook.
PENN Entertainment struggled mightily to market Barstool Sportsbook properly. It is all going to change, though. ESPN programming will constantly push ESPN BET at every opportunity.
There is a good reason why PENN Entertainment was fine with selling Barstool back to Dave Portnoy for a buck.
Dave Portnoy Buys Barstool Sports Back For $1
PENN Entertainment was thrilled to wash their hands of Barstool Sports in exchange for this mega-deal with ESPN. After six months of full ownership, PENN Entertainment is willing to take a $850 million hit on Barstool Sports.
With the ESPN agreement a done deal, PENN Entertainment will incur a substantial loss. The $850 million will be written off, as they focus on their newfound relationship with ESPN. Meanwhile, the Barstool Sports’ founder swooped in to buy it back for $1.
In February, Portnoy sold the remaining rights to the brand for $551 million. Now, he’s back in control of Barstool Sports with a 100 percent stake. Portney can focus on what he knows best, while PENN Entertainment should be in a better spot with ESPN.
“For the first time in a decade, I own 100 percent of Barstool Sports,” proclaimed Portnoy. “Not since the Chernin deal have I been in total control of everything.”
It’s a huge win for Portnoy, as Barstool Sports is all his again after pocketing $551 million only months ago.
FOX Bet Quietly Folds
ESPN’s biggest rival, Fox Sports, quietly announced that they will be shuttering their online sports betting app. On July 31, FOX and their partner, Flutter Entertainment, said that they would be wrapping up FOX Bet.
Despite a new FOX Bet Super 6 game expected to launch later this summer, the sports betting platform will shut down. A phased closure is scheduled to occur from between July 31 and August 31, 2023.
FOX is not getting out of sports betting entirely. The company still owns an 18.6 percent share of FanDuel. FOX Bet was never able to generate enough momentum to overtake their rivals, and now it’s dead.
Is FOX Bet’s failure a cautionary tale for ESPN? ESPN’s marketing plan should at least be considerably more efficient than FOX. FOX Bet only operated in the shadows, while ESPN Bet is expected to be a focal point of their broadcasts and sports betting programming.
ESPN Bet is scheduled to start accepting bets from the public this fall.
