You know ESPN the sports media giant. Now brace yourself for ESPN Bet, a rebranding of an existing sports-betting app owned by Penn Entertainment, which is paying $1.5 billion plus other considerations for exclusive rights to the ESPN name.
The deal, announced Tuesday, could take Walt Disney Co.-owned ESPN into uncharted waters. Disney is fiercely protective of its family-friendly image, not typically associated with the world of sports gambling.
Penn will operate ESPN Bet, which ESPN has agreed to promote across its online and broadcast platforms in order to generate “maximum fan awareness” of the app. ESPN Bet will also have unspecified “access” to ESPN talent, the companies said.
Penn's rights to the ESPN brand will initially run for a decade and can be extended for another decade by mutual agreement. In addition to the $1.5 billion licensing deal, which will be paid out over a decade, Penn will also grant ESPN rights worth about $500 million to purchase shares in Penn.
“Penn Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN Bet,” ESPN chairman Jimmy Pitaro said in a statement.
Disney has wrestled with the issue of adult-oriented entertainment in the past. Until about 15 years ago, its Walt Disney World park in Orlando, Florida, featured a gated late-night area known as Pleasure Island — actually a reference to the 1940 film “Pinocchio,” whose characters visited a den of iniquity by that name. Pleasure Island featured bars, music venues and nightclubs in addition to restaurants, shopping and a nightly countdown to “New Year's Eve” complete with fireworks.
When attendance waned, Disney closed down the Pleasure Island nightclubs in 2008 and redeveloped the site as a restaurant and shopping district now known as The Landing at Disney Springs.
ESPN added that it will use its platforms “to educate sports fans on responsible gaming” — for instance by continuing to cover the sports betting industry with “journalistic integrity,” creating a “responsible gaming” committee within the company and developing marketing guidelines that “safeguard” fans.
Penn also announced that it sold Barstool Sports, an irreverent sports media site, back to its founder Dave Portnoy. Penn took a 36% stake of Barstool Sports in February 2020 for about $163 million and subsequently acquired the remainder of the company for about $388 million in February 2023. Neither Penn nor Portnoy disclosed terms of the divestment deal.
In a video posted on X, the site formerly known as Twitter, Portnoy radiated excitement over the site's regained independence. The regulated gambling industry, he said, “was probably not the best place for Barstool Sports and the kind of content we make.” Portnoy added that he will “never” sell the company. As part of the divestment deal, Penn would be owed 50% of the gross proceeds from any future sale or “monetization” of Barstool.
Join Cheddar News as we break down the top headlines this morning including updates on the Jan. 6 hears, the PGA suspension of 17 of the world's best golfers, and NASA's plans to study UFOs.
The PGA Tour has announced that it will suspend players that are competing in the LIV Golf event that teed off today. At least 17 players, including names like Phil Mickelson, Dustin Johnson, and Sergio Garcia are banned from the PGA Tour competition. Hilary Fordwich, a business analyst and golf expert, joined Cheddar News to discuss why the PGA had to go this route. This is a threat to the future of golf for them, and there's been many contentions about them not being fair and that this is vindictive," she said. "Don't forget, of course, they represent sort of a monopoly in the history of golf. So you've got two sides to this story. You've got those the purists, those that feel that golf should only be a certain way and that there are only these limited events that the PGA puts on. And then you've got other people who are saying … this is all about money"
Sports merchandising company Fanatics announced it will be making trading cards featuring college athletes, a deal made possible by the NCAA's change to NIL rules for its players. Anchors Kristen Scholer and Ken Buffa break down the deal for Cheddar.
Survivors of Larry Nassar, including Olympian Simone Biles, are seeking $1 billion in damages from the FBI due to its failure to investigate the former gymnastics team doctor convicted of committing years of serial sexual abuse of minors. Jack Queen, a senior reporter at Law360, joined Cheddar News to break down the legal grounds of this case. "This is one of the biggest black eyes that the Bureau has faced in generations, quite frankly, and the FBI has taken full responsibility and admitted that it completely botched this investigation," he said. "So, there's a lot of pressure to settle."
The victims from the USA gymnastics sexual abuse scandal continue to seek justice. Survivors of Larry Nassar are seeking more than one-billion dollars from the FBI for failing to stop the convicted sports doctor when the agency first received allegations. According to a report released by the Justice Department's Inspector General, FBI agents knew
in July of 2015 that Nassar was accused of abusing gymnasts; however, Nassar wasn't arrested until December of 2016. The group that filed the claim includes Olympic medalist Simone Biles and around 90 other women. Louise Radnofsky, sports reporter at The Wall Street Journal, joins Cheddar News' Closing Bell to discuss.
A controversial professional golf tour backed by Saudi Arabia tees off on Thursday. Today, two-time Major winner Dustin Johnson announced he's resigned from the PGA Tour ahead of headlining the Saudi-backed tour, called the LIV Golf Invitation Series. The announcement comes as the PGA tour has threatened disciplinary action for its golfers who take part in the Saudi golf league event, which will also feature notable golf stars like Phil Mickelson and Sergio Garcia; however, LIV Golf's CEO, Greg Norman, told The Washington Post that Tiger Woods rejected a contract worth 'high nine digits' to play in the tour. Chris Bumbaca, reporter for USA Today Sports, joins Cheddar News' Closing Bell to discuss.
Marques Ogden, former NFL offensive lineman turned author and celebrity success coach, joins Cheddar to discuss his career transition after his NFL playing days and how he overcame a low point to prioritize family and re-shape his life as a success coach.
Abe Stein, Head of Innovation at Sports Innovation Lab, joins Cheddar News' Closing Bell, where he explains why the top four spots on his company's 2022 list are European soccer clubs and discusses Sports Innovation Lab's plan to publish data on women's pro sports teams in the not-too-distant future.
San Francisco 49ers defensive lineman Alex Barrett discusses why he believes taking his salary in crypto is the best financial decision for him, while Bitwage CEO Jonathan Chester breaks down how Barrett and other crypto investors can best utilize his platform.
