MW This sports betting company ended its ESPN deal early, and investors like it. Here's why.

By Tomi Kilgore

Penn Entertainment thinks it has grown enough to go it alone, as it ended its ESPN deal early, two years after it sold off Barstool Sports

Penn Entertainment is going it alone, ending an exclusive betting deal with ESPN some eight years early - and its stock is rallying.

Penn Entertainment Inc. is making a big bet on itself, as it ended on Thursday its exclusive sports-bet deal with ESPN much earlier than scheduled because it believes it has grown enough to go it alone.

The online betting deal with ESPN, announced in August 2023, was for an initial 10-period. That had marked a big step-up for Penn $(PENN)$, as it effectively ended its connection with Barstool Sports, and led to Penn's selling its entire stake in the media brand to Barstool founder David Portnoy. ESPN is a subsidiary of Walt Disney Co. $(DIS)$.

"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.

Investors appear to believe Penn can succeed on its own, without having to pay to use another brand name, as the shares surged 7.4% in premarket trading.

Penn said it will terminate all cash payments to ESPN after this year. When the deal was announced, Penn had agreed to pay ESPN $1.5 billion over the initial 10-year term.

While ESPN will retain all vested warrants to buy about 8 million shares of Penn, it will forfeit all unvested warrants. The initial agreement was for warrants to buy 31.8 million Penn shares, which would vest over 10 years.

Now that the deal has ended, Penn's online sports betting, or OSB, offering in the U.S. will no longer be called ESPN Bet, and is expected to revert to being called theScore Bet on Dec. 1.

"Our OSB offerings will continue to provide top of funnel acquisition and cross-sell opportunities for our Hollywood-branded iCasino, which will remain integrated into our OSB product in states where legal, in addition to serving as a standalone iCasino app," Snowden said.

He said the decision to stop making "fixed media" payments for brand names will free up funds to invest in marketing its own brand.

Separately, the company reported a third-quarter net loss that widened to $865.1 million from $37.5 million a year ago, primarily because of losses booked on the decline of value in assets. Excluding nonrecurring items, the adjusted per-share loss narrowed to 22 cents from 25 cents.

The average analyst estimate calculated by FactSet foresaw a loss of 7 cents per share.

Revenue grew 4.8% to $1.72 billion, which was roughly in line with the FactSet consensus. Gaming revenue was up 2.9% to $1.33 billion, while food, beverage, hotel and other revenue was up 11.6% to $392.1 million.

Penn's stock has dropped 17.5% in 2025 through Wednesday, while shares of rival DraftKings Inc. (DKNG) have slid 25% and the S&P 500 index SPX has advanced 15.6%.

-Tomi Kilgore

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November 06, 2025 08:36 ET (13:36 GMT)

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