ESPN is getting about $2 billion from Penn Entertainment - (PENN) -) in its deal to create ESPN Bet, but a new report reveals ESPN wanted a lot more.
A report by Front Office Sports revealed that ESPN’s deal is “about 50% less” than it had originally wanted from a partner that was going to get exclusive rights to the sports network’s branding for sports betting.
DON’T MISS: What the ESPN Bet deal could mean to the sports media and betting industries
ESPN had explored partnerships with other bigger players, but ultimately settled on a deal with Penn for Barstool Sportsbook. The deal sees Penn paying $150 million a year to ESPN for the next 10 years while also providing around $500 million worth in share options.
The Walt Disney Co. - (DIS) -) had been reluctant to make a full commitment into sports betting, instead settling for smaller partnerships with the likes of DraftKings and Caesar Sportsbook since the 2018 U.S. Supreme Court ruling that legalized sports gambling.
More ESPN:
- Former MLB exec explains why ESPN Bet is a 'win' for ESPN and Dave Portnoy
- ESPN's Ex-President John Skipper gives honest thoughts on ESPN’s future and potential sale
- ESPN is exploring a unique partnership with NBA and NFL, report says
ESPN’s challenge with Penn and Barstool Sportsbook is gaining market share. It currently only has about 2-3% of the current market share compared to the likes of DraftKings (DKNG) -) and FanDuel, who combined own about two-thirds of the market.
According to the presentation of Penn from its Q2 earnings report, the company is eyeing having 20% market share by 2027.
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