Jovan Thomas, Pune
Under the brand name Worldwide Leader in Sports, ESPN will run the sportsbooks as part of a groundbreaking $2 billion agreement that the sports media giant Penn Entertainment declared.
The promotion of sports gambling by ESPN is at its height at this time. The deal is a 10-year agreement.
Penn Entertainment saw its shares rise by 20% just hours after the deal was announced. The company informed me that its Barstool Sportsbook app is planned to be changed to ESPN Bet as its new brand name.
ESPN will be receiving warrants that are close to $500 million for buying shares in Penn Entertainment. In addition, ESPN will also receive an amount of $1.5 billion over the term of the agreement.
Penn considers the move to be pivotal as it has struggled to gain market share in the US sports gambling industry which has tight competition. The company sold its ownership of Barstool Sports to its founder David Portnoy to trade 50% of the proceeds on any sale of the brand in the future. Portnoy spoke of how tough it would be for Barstool to function in a gambling industry under strict regulation. Penn made its acquisition of Barstool through a pair of transactions that amounts to a combined total of $550 million.
The ESPN Bet app will receive advertising on the network’s platforms and will have access to ESPN talent and programming.
Over the past few years, ESPN has been looking into methods to strengthen its position in the sports betting industry. Because of Disney’s strong brand association with family-friendly entertainment, the business has refrained from launching its own sportsbook.
The deal, according to Disney CEO Robert Iger, answers a crucial query for ESPN as he seeks a strategic investor for the sports media group. ESPN has discussed partnerships with several professional sports organisations and looked into joint ventures that would raise money and aid in the company’s shift to a streaming-driven revenue model.