Walt Disney Co.’s ESPN has signed a long-term exclusive partnership for sports betting with Penn Entertainment Inc., a regional casino operator.
Penn will have the 10-year exclusive right to use the ESPN Bet name for sports betting in the US, the company said in a statement Tuesday. Penn will rebrand its Barstool sportsbook with the ESPN name starting this fall. The company will continue to operate as theScore Bet in Canada.
Penn will make cash payments of $1.5 billion during the 10-year term and grant ESPN $500 million of warrants to purchase Penn shares.
Meanwhile, Penn said it’s selling all of its Barstool Sports Inc. subsidiary to David Portnoy, who founded the sports and pop culture media company, in exchange for a non-compete and other agreements. Penn also has the right to get half of the proceeds received by Portnoy in any subsequent sale of Barstool.
“The divestiture allows Barstool to return to its roots of providing unique and authentic content to its loyal audience without the restrictions associated with a publicly traded, licensed gaming company,” Penn Chief Executive Officer Jay Snowden said in the statement.
(Updates with details of Barstool divestiture)
