In a new $1.5 billion licensing deal, the operator of Barstool Sportsbook rebrands as ESPN Bet

As ESPN’s future drifts in the direct-to-consumer wind, a deal with Penn Entertainment will allow the sportsbook to rename existing properties, such as its Barstool Sportsbook, to ESPN Bet. In return, Penn will pay ESPN $1.5 billion over the next ten years, along with $500 million in warrants to buy shares of the operation and the potential to appoint a board member.

In early 2022, then-Disney CEO Bob Chapek stated that Disney’s opportunity “extends to sports betting, gaming, and the Metaverse.” However, Chapek has since left, the metaverse team has been dismantled, and new/old CEO Bob Iger described its gambling strategy in an interview as “…we’re not actually causing the bets to be made. We’re just enabling people to link to companies that do that.” Iger is also seeking partners, including major sports leagues, as ESPN moves towards a direct-to-consumer future and its cable TV customer base continues to shrink with the rise of streaming.

In practice, Iger’s plan involves ESPN providing promotional services, access to ESPN talent, and branding betting content on its platforms under the ESPN banner.

As part of the deal, Penn is terminating its arrangement with Barstool, which it acquired for over $500 million and sold back to founder Dave Portnoy in exchange for certain non-compete and other restrictive agreements. Additionally, Penn will receive half of any deals Portnoy makes to resell or monetize Barstool.

In a social media video, Portnoy confirmed that he now owned 100 percent of Barstool and still owned stock in Penn. He praised Penn for their cooperation and acknowledged the challenges they faced in the process.