Disney’s boss, Bob Iger, said they got an offer they just couldn’t turn down to start ESPN Bet.
On a recent call about how the company is doing, Iger talked about a huge $2 billion deal with PENN Entertainment to make a new sports betting service with the ESPN name. He said the offer was too good financially and would help more people use ESPN.
Iger believes that this will make more people, especially young ones, engage with ESPN. He chose PENN for the partnership because they gave the best offer, much better than what others proposed.
Before this deal, Disney didn’t want to get into sports betting in the U.S. They took a long time thinking about it and spoke to many companies before choosing PENN.
Iger also said they like how PENN sees this as a way to grow, and they trust PENN to do well with this joint venture, benefiting both companies.
ESPN’s Chairman, Jimmy Pitaro, said in a statement: “Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products,”
Pitaro said that they look to give fans what they’ve been expecting from ESPN. He says PENN Entertainment is the perfect partner to “build an unmatched user experience for sports betting with ESPN BET”.
Big Changes Are Coming
The deal includes a makeover for Barstool Sportsbook (from Penn Entertainment). They’re going to relaunch it as “ESPN BET” this coming fall.
Penn’s CEO, Jay Snowden, mentioned that they’re aiming to launch right in the thick of the NFL season, probably before Thanksgiving.
The change isn’t just about the name though. All the Barstool Sportsbook platforms, like their mobile app, main website, and mobile site across 16 states, are getting revamped as per Penn’s announcement.
And Penn’s paying ESPN a whopping $1.5 billion over the first decade of their deal. Plus, ESPN’s getting a chance to buy $500 million of Penn’s shares.
Penn is also giving a fresh look to their online casino app. They’re branding it with the Hollywood name, especially in places like Michigan and New Jersey, where it’s legal.
The Deal is Good For Penn
Basically, this deal is good news for Penn. They usually struggle in places where companies like DraftKings and FanDuel are big. Teaming up with ESPN might not make them as big as DraftKings or FanDuel, but it could help them pass other betting companies like Caesars and BetMGM.
Plus, even though fewer people have been watching ESPN over the last five years, it’s still a big deal in the world of sports TV. So, Penn can benefit from that large audience.
What’s Next For The Worldwide Leader in Sports?
Other companies are still very interested in buying a part of ESPN. However, Iger mentioned that the decision to possibly sell some TV assets is more about their big-picture plan than anything else.
“We’re not necessarily looking for a cash infusion when it comes to potential partners,” Iger said. “We are looking for partners that are going to help ESPN transition to a DTC [direct-to-consumer] model. That can come in the form of content, distribution and marketing support, or both.”
As for Barstool Sports, Penn has sold all its shares of Barstool Sports, their sports betting brand, back to the founder, Dave Portnoy. However, there’s a catch: if Portnoy sells or makes money from Barstool in the future, Penn gets half of the profit.
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