ESPN is making its biggest commitment yet to sports betting.
Walt Disney's (DIS) -) sports network has agreed to a deal with Penn Entertainment, Inc. to rebrand “Barstool Sportsbook” as “ESPN Bet,” Penn announced on Tuesday, August 8.
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The deal is slated to be for 10 years and could extend for another decade given a “mutual agreement.” The deal sees Penn agreeing to pay $1.5 billion to ESPN over the 10 year term, alongside about $500 million in warrants to purchase 31.8 million PENN common shares.
ESPN has had partnerships in the past with other sportsbooks like DraftKings and Caesar Sportsbook, but its latest deal with Penn would be its first foray into creating its own branded sportsbook.
“Our agreement to create ESPN BET with PENN Entertainment is a natural extension of what ESPN is currently doing in the sports betting space,” a spokesperson for ESPN told The Street. “We’re excited to bring sports fans a more streamlined experience by linking out to ESPN BET, powered by PENN Entertainment, from various digital properties. We will work closely with PENN to grow this evolving business by taking advantage of the incredible reach, value and trust that the ESPN brand offers."
The announcement comes less than a month after Disney CEO Bob Iger said the company is looking for strategic partnerships for ESPN. Major tech companies like Apple and Amazon are reportedly candidates to partner with the sports network, while sports leagues like the NBA and NFL are also in talks to potentially acquire a stake.
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As a part of the agreement, Penn has also divested all of Barstool Sports, Inc. back to Dave Portnoy, just a few months after acquiring the company. Penn would receive 50% of the gross proceeds should Portnoy choose to sell Barstool again.
Portnoy took to social media to announce the reacquisition of his brand, saying the two have gone their "separate ways" given the difficulties of sports betting regulations.
"We underestimated how hard it is for myself and Barstool to operate in a regulated world," Portnoy said. "The regulated industry, probably not the best place for Barstool Sports and the kind of content we make."
He also declared that he will be keeping the company for good.
"I am never going to sell Barstool Sports ever," Portnoy said.
Emergency Press Conference - Dave Portnoy Bought Back Barstool Sports @stoolpresidente pic.twitter.com/JnAHaZo607
— Barstool Sports (@barstoolsports) August 8, 2023
