The unexpected divorce between Penn National and Barstool created most of the buzz on Tuesday, but then they would make another move that raised eyebrows in and around Bristol.
ESPN is set to launch its new betting platform “ESPN BET” in partnership with Penn Entertainment.
Via Axios.com, Penn National will pay ESPN $1.5 billion over 10 years for the new arrangement, which will result in the many Barstool Sportsbooks being rebranded as ESPN BET. On top of that, ESPN also will receive $500 million in stock warrants over the next decade, for purchasing 31.8 million shares of Penn National.
This is an enormous amount of cash coming to the Worldwide Leader that comes on the heels of widespread layoffs of both on-air and behind-the-scenes employees. It also makes sense why they gave Pat McAfee so much money knowing they were working on this deal behind the scenes.
More money is expected as Axios.com also reports that the Penn National deal does not prohibit ESPN from selling ads to competitors like FanDuel and DraftKings, which will allow ESPN to generate even more revenue.
Penn National desperately wants to tap in more into the gambling market, which never came about when they partnered with Barstool Sports. If it works, ESPN BET could become one of the top gambling platforms in the world.
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Even if it doesn’t, ESPN will still end up with an extra $1.5 billion over the next decade.
