11/6/2025
Penn Ends $2 Billion ESPN Bet Deal After Just Two Years
InGame (11/06/25) O'Boyle, Daniel
ESPN Bet will be no more in a matter of weeks, as Penn Entertainment (PENN) and ESPN have canceled their $2 billion partnership, the companies revealed in a press release Thursday. The partnership will end on Dec. 1, a month before the end of the NFL regular season. From that point on, Penn will rebrand the ESPN Bet app as theScore Bet, taking the name of the Canada-founded sportsbook that Penn acquired in 2021. The Penn-ESPN partnership was first announced in 2023. Under the deal, Penn would pay $150 million per year for 10 years, plus warrants to buy Penn stock that bumped the value of the deal up to $2 billion, for the right to use the ESPN name and branding. However, ESPN Bet struggled to ever gain significant market share. According to Casino Reports’ sports betting database, ESPN Bet made up only 2.6% of the online sports betting market in August, and has been hovering around that level since mid-2024. The deal included a provision to terminate the agreement after the third year if specific market share performance thresholds were not met, though it turns out the termination is now happening even sooner. “When we first announced our partnership with ESPN, both sides made it clear that we expected to compete for a podium position in the space,” Penn CEO Jay Snowden said. “Although we made significant progress in improving our product offering and building a cohesive ecosystem with ESPN, we have mutually and amicably agreed to wind down our collaboration.” Snowden said Penn will refocus on the company’s areas of “strength,” including Canada — where Penn already operates under the theScore Bet brand — and online casino. That focus on online casino at the expense of U.S. sports betting was one of the requests made by activist investor HG Vora, which currently holds two seats on Penn’s board and has been locked in a battle with management over a third. ESPN will still have warrants to purchase almost 8 million Penn shares, at a price of $28.95. Penn shares are currently trading at $16.35, meaning that they would have to rise by almost 80% for the warrants to be worth executing. One hour after the Penn-ESPN Bet announcement, at 8 a.m. ET Thursday, ESPN announced a new multi-year deal with DraftKings (DKNG) to be “the official sportsbook and odds provider of ESPN,” effective Dec. 1. The announcement came alongside Penn’s third-quarter results. In terms of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), the digital business — including both online sports betting and iGaming, across the U.S. and Canada — made a loss of $76.6 million, moderately lower than the $90.9 million loss a year earlier. Revenue was lower than expected, at $297.7 million, partly due to “customer-friendly” sports results, as well as “lower than anticipated” betting volume. The company as a whole made $1.72 billion in revenue for the quarter, up 4.7% from 2024, with adjusted EBITDA of $194.9 million. However, the company had to write down the value of its interactive division because of the end of the ESPN deal. When the $825 million non-cash loss on that write-down — as well as other non-recurring costs — is included, Penn made a net loss of $865.1 million over the three-month period, a 23-fold increase from its loss in the third quarter of 2024. The company also announced a $750 million share buyback — aligning with another HG Vora demand. Penn will buy back the shares between 2026 and 2028, returning more money to shareholders. Penn had previously warned that a large share buyback program could cause its leverage — its ratio of debt to assets — to get too high, once rent is accounted for.
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