Including cash and stock, ESPN’s 10-year sports betting deal with Penn National has a value of $2 billion. ESPN reportedly wanted more.
A lot more.
According to FrontOfficeSports.com, ESPN accepted “about 50% less than it had ambitiously asked for in a 10-year deal.” That translates to $4 billion over a decade.
Per the report, Penn National also was not ESPN’s first choice. ESPN was unable, however, to strike a deal with major players like FanDuel and DraftKings. Which underscores the point we recently made — either the FanDuels and DraftKings of the world dramatically underestimated what ESPN can do for a sportsbook, or Penn National has dramatically overestimated the extent to which the four-letter network can justify a nine-figure investment.
The goal is market share. Penn National hopes to get from its two-percent piece of the pie under the former deal with Barstool to 20 percent. That seems very ambitious, given the hammerlock FanDuel and DraftKings already have on the industry — especially with Fanatics planning to try to make a major push, too.
Much isn’t known about this new deal, including whether and to what extent Barstool Sportsbooks will be rebranded as ESPN BET locations or as Penn National locations. ESPN representatives hadn’t visited the Penn National properties before doing last week’s deal.
That’s because the focal point is mobile, not bricks and mortar. In the states where gambling is legal and in the states where it eventually will be, ESPN BET will try to get a license (Penn National currently is authorized in 16 states) and then to leverage the brand recognition and loyalty into gamblers choosing to place their money with the leading sports network via an app on their phones.
Will it matter? Ultimately, the product must be better, or the bettor will stay where the experience is easier and more effective. Frankly, it seems a little too late for ESPN to make a big splash — unless Penn National plans to unleash a new mobile platform that will blow the others away.
And if that were the case, there arguably would have been no need to use the ESPN letters and logos to lure people to patronize the Penn National product.
