ESPN agreed to a $2 billion deal to allow its brand to be used in Penn Entertainment’s online sportsbook, a strategic turn for both companies as they try to tap into the sports-betting sector’s growth. Penn Entertainment, whose shares surged more than 20% after hours on news of the pact, said its Barstool Sportsbook app would be rebranded as ESPN Bet this fall as part of the 10-year agreement. In addition to $1.5 billion in cash over the term of the agreement, ESPN will receive warrants worth about $500 million to purchase shares in Penn. The ESPN Bet app will be promoted on the broadcaster’s platforms and will have access to ESPN programming and talent. Penn planned to use the Barstool brand to acquire bettors from the Barstool audience, a strategy Penn said would be a lower-cost alternative to expensive marketing campaigns used by bigger competitors.

Source: Wall Street Journal August 09, 2023 11:54 UTC