This sports betting company ended its ESPN deal early, and investors like it. Here's why.
Penn Entertainment has decided it is ready to operate independently, ending its exclusive sports betting agreement with ESPN nearly eight years ahead of schedule. The move signals the company’s confidence in its own growth and brand strength.
The partnership, originally announced in August 2023, was meant to last ten years. It marked a major shift for Penn (PENN) as it separated from Barstool Sports and sold its full stake in that company to Barstool founder David Portnoy. ESPN, a subsidiary of Walt Disney Co., received licensing payments as part of the deal.
“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,”
said Penn Chief Executive Jay Snowden.
After making “significant progress in improving its product offering and building a cohesive ecosystem,” Snowden said the two parties agreed “amicably” to end the collaboration.
Following the announcement, investor confidence surged. Penn’s shares climbed 7.4% in premarket trading, suggesting optimism about the company’s independent path. Penn also confirmed it will stop all cash payments to ESPN after this year.
Key Takeaways
- Penn Entertainment ended its ESPN deal nearly eight years early.
- The partnership had been expected to last a decade, starting from 2023.
- The company had previously sold Barstool Sports back to its founder.
- Shares of Penn rose 7.4% following the news.
- No further payments to ESPN will be made after 2025.
Author’s Summary
Penn Entertainment’s early end to the ESPN deal highlights its confidence in self-reliance, while investors rewarded the move with a sharp stock uptick.