ESPN just partnered with Penn Entertainment to launch a sportsbook

August 08, 2023 04:27 PM PDT | By Invezz

ESPN just partnered with Penn Entertainment to launch a sportsbook — Image source: Invezz

ESPN Bet will launch in the U.S. this fall

The deal creates a new revenue stream for ESPN at a time when cord-cutting is hurting the traditional TV business.

It will also enable the Walt Disney Co (NYSE: DIS) to bring in cash as its streaming unit continues to lose money. The stock market news arrives shortly after CEO Bob Iger confirmed that the mass media giant was open to selling its TV assets and was looking for a strategic partner for ESPN (read more).

ESPN Bet is now slated to launch in 16 U.S. states that have legalised betting this fall.

Penn will have an exclusive right to the rebranded sportsbook in the United States for ten years. Its shares jumped as much as 25% in extended hours on Tuesday.

Penn will pay over a billion-dollar to ESPN

The Penn-ESPN transaction will see former pay $1.5 billion in cash to the latter over ten years. ESPN will also receive warrants worth about $500 million to buy 31.8 million common shares (approx.) of Penn Entertainment over the same period.

The betting company is convinced that its interactive segment could note a $500 million to $1.0 billion boost to annual long-term adjusted earnings because of this deal. Its press release also revealed to today:

Penn sold 100% of Barstool common stock to David Portnoy … and has the right to receive 50% of the gross proceeds received by Portnoy in any subsequent sale or monetisation event of Barstool.

Both Disney and Penn Entertainment are scheduled to report quarterly results on Wednesday.

The post ESPN just partnered with Penn Entertainment to launch a sportsbook appeared first on Invezz.

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