ESPN on Tuesday announced a betting joint venture with casino operator PENN Entertainment, which soon will rebrand its Barstool Sportsbook to ESPN Bet.
Why it matters: This is the sports network’s first major gambling deal, and comes after Fox closed down its own sportsbook.
Details: As part of the deal, Penn is selling sports media group Barstool back to founder Dave Portnoy.
What they’re saying: “We underestimated just how tough it is for myself and Barstool to operate in a regulated world,” Portnoy said in a video announcement.
By the numbers: Penn agreed to make $1.5 billion in cash payments over 10 years to ESPN, which also gets granted $500 million of warrants to purchase 31.8 million Penn common shares that vest over the same decade-long period.
The bottom line: ESPN has wanted to get into betting for years, but hasn’t wanted to itself operate a sportsbook, out of fear of editorial conflicts of interest.
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