ESPN Signs Partnership With Penn Entertainment

Disney’s ESPN formed a new partnership with PENN Entertainment earlier this month, a first of its kind for the brand. 

For years, Disney was clearing anti-gambling and sports wagering. For example, Tom Dart at theguardian.com reminded his readers that “Disney’s view of betting changed little in the decades since the 1940 film of Pinocchio, when the puppet visits the cursed Pleasure Island and gambling is one of the vices seducing children who turn into donkeys.”

That long-held opinion has recently changed, however, since ESPN (which has been owned by Disney since 1996) formed a $2 billion deal with Penn Entertainment, one of the largest sports betting and casino gambling brands in the United States. 

According to the agreement, Penn Entertainment will pay ESPN $1.5 billion in cash over the next 10 years. ESPN also gains access to $500 million of warrants to purchase a stake in Penn. The $500 million translated to about 31.8 million shares of Penn. ESPN can also receive additional bonus warrants depending on the performance of ESPN BET, the new name for Penn Entertainment. 

You can expect the rebranding to occur later this year in the 16 states where Penn is licensed. Everything, from the mobile app, website, and retail locations, is expected to receive a facelift. The partnership gives ESPN a dedicated sports betting brand to feature across its website and TV programming. Currently, ESPN is the largest sports broadcasting company on the planet and already features several betting-focused shows on its platforms.

Why Is Disney Pro-Gambling All of a Sudden?

I imagine many readers, like myself, are surprised by the recent news of Disney’s ESPN forming a sportsbook. For years, Disney avoided any connection with the sports betting and casino gambling scene. In 2018, for example, Disney spent over $20m lobbying to make it more difficult for developers to build casinos in Florida. 

Disney’s long-time CEO, Bob Iger even stated in 2019 that, “I don’t see The Walk Disney Company, certainly in the near term, getting involved in the business of gambling, in effect, by facilitating gambling in any way.”

Iger retired from his role at Disney in 2020 but returned after his replacement Bob Chapek, failed to measure up. Iger returned immediately after Chapek’s departure.

After returning from his early retirement, it was clear Iger had changed opinions about sports betting. He was previously quoted saying, “I think that’s important to consumers, particularly young consumers.” Iger continued, stating it wouldn’t be an immediate thing and that he’d “prefer to wait as long as possible, but when I think about them, I think it’s inevitable that there’ll be … basically a seamlessness between sports programming and sports betting.”

Now that sports betting is legal in 34 states and Washington DC, the world’s largest sports entertainment company, ESPN, is finally welcoming the idea of an ESPN-themed sportsbook. 

The Need for an ESPN Sportsbook

The average American far prefers on-demand streaming platforms over the traditional cable route. Just a decade ago, ESPN posted a blog stating how 100 million homes in the United States had access to ESPN. Now, that number has significantly dwindled. According to ratings agency Nielsen, ESPN was available in 83 million households in 2020 and just 71 million in 2023. The cost of airing sporting events has also only increased over the years. Look at the NFL, for example. Amazon and ESPN/ABC are spending $1 billion and $2.7 billion over the next ten years for their rights to NFL broadcasts. 

“We think this is an opportunity to really appeal to the masses,” said Penn CEO and president Jay Snowden on an earnings call. Snowden continued, insisting that the partnership was with “the single best brand and platform in the US to reach sports fans and potential bettors.”

Mike Morrison, ESPN vice president for sports betting and fantasy, also shared his thoughts on the partnership, stating, “This is really just the next step in the process for us … we feel at this point there’s enough national attention and interest. Being able to reference betting odds is a fundamental part of telling the story of the game that’s about to happen. Who’s the favourite, who’s going to win, by how much, what’s the expectation?”

Mac Daniel is a writer for PlayOnlineCasino and PlayOnlineSportsBetting. He has experience writing about a wide variety of topics, including healthcare, tourism, non-profit organizations, and most recently casino and sportsbetting news. To check out more of his work, visit: playonlinemichigan.com