When your legacy franchise cable channel is struggling some after being the mainstay of cable sports since the beginning, making a considerable change, and embracing the now solidly legal and fast-growing sports gaming industry as a corporate entity, it makes a ton of sense to make a significant and potential game-changing deal.
Disney owns 80% of ESPN
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That is precisely what The Walt Disney Company (NYSE: DIS), the owner of ESPN, is doing. With consumers fleeing cable for streaming services and Disney taking some big hits on horrible offerings from their entertainment segment, it’s no surprise they embraced sports gambling, especially when they get paid in a big way for their brand.
ESPN will team up with PENN Entertainment
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Under a recently signed deal, the legacy sports broadcasting giant and casino owner PENN Entertainment Inc. (NASDAQ: PENN) agreed to launch a sports betting business under the brand ESPN BET.
PENN Entertainment paid a considerable price to partner with ESPN
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Under the terms of the deal, Penn will pay ESPN $1.5 billion in cash over the next ten years and offer about $500 million worth of warrants to purchase its shares over an initial 10-year term in exchange for the brand, promotional services and other rights. While expensive, the sheer magnitude of ESPN’s reach is a potential game changer for the sports gaming business. Penn believes it will receive severe media and betting integration throughout ESPN’s multi-platform sports complex.
DraftKings is rolling now.
Source: Scott Eisen / Getty Images for DraftKings
DraftKings and FanDuel control an estimated 75% of the online sports betting market, and DraftKings posted a staggering 57% jump in third-quarter earnings as revenues soared to $790 million from $288 million in 2022. In addition, the company raised 2023 guidance to $3.72 billion from the former guidance of $3.5 billion.
ESPN’s consumer reach is vast, and the right demographic
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ESPN has a staggering 25 million subscribers, and a stunning half of all Americans between 30 and 49 watch ESPN via either cable or streaming services. 75% of ESPN’s audience base is male. In addition, ESPN led all other networks in daytime viewership by a considerable margin.
ESPN BET will be in all of the big markets
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ESPN Bet will be in all the top betting markets in these states.
- Arizona
- Colorado
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maryland
- Massachusetts
- Michigan
- New Jersey
- Ohio
- Pennsylvania
- Tennessee
- Virginia
- West Virginia
Fighting ESPN will be very expensive for DraftKings
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While DraftKings has aggressively fought off the competition, they have yet to face a challenger with the reach, strength, and deep pockets of ESPN and PENN Entertainment. While DraftKings currently holds an estimated 34% share of sports betting and iGaming, ESPN BET could severely challenge that.
Will ESPN BET offer better odds?
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While likely offering some early teaser odds and action, it is expected that ESPN Bet will provide lines comparable to the competition. But, given the network’s massive reach and personalities, you can expect to see some of the best-known on-air talent pitching bets. Elle Duncan was touting a chance for the Georgia Bulldogs to win yet another National Championship with good odds, while Mike Green had a “Seeing Green” bet on the board for customers.
ESPN BET’s opening offer is incredible.
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The main offer to get gamblers and clients onboard is enormous. Make any bet, and get $250 in free bets in five $50 multiples. This isn’t just for new customers. According to reports, all PENN Entertainment’s current customers will also get the same offer. In addition, new customers will get an up-to-deposit match of an incredible $1000. The catch is you have 30 days to get your trades done, and the money unlocks at a 5% rate. So you would have to bet a lot to receive all of the bonus, according to reports.
Experienced Gamblers will likely embrace ESPN BET.
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With very liberal withdrawal and deposit terms, a very smooth betting app with an incredible look and feel, and a vast ESPN partnership, you can bet that PENN Entertainment will go all in to become the market leader. While pulling ahead of DraftKings, FanDuel, and the rest of the competition won’t be easy, it probably makes sense not to bet against ESPN BET.
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