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Read Full BioESPN believes a partnership with DraftKings will yield more success following the failed venture with Penn Entertainment. The ESPN Bet experiment is set to end next week, having failed to make the impact on the sports betting industry that the companies had hoped for.
Penn has been heavily criticized for its failures in sports betting, with investors understandably frustrated at the money the company has invested with little return. The company paid ESPN $150 million a year following a failed $550 million acquisition of Barstool Sports. It will now focus efforts on returning theScore to the US market.
ESPN VP of Betting and Fantasy Mike Morrison hinted that ESPN was also far from happy with Penn’s management of ESPN Bet. Following the end of the Penn partnership, ESPN moved quickly to make a deal with DraftKings, which will bring its sportsbook, daily fantasy products, and Pick6 to ESPN’s platforms.
The deal will commence on December 1 as ESPN Bet closes. Morrison said he expects DraftKings to be a much better fit, commenting, “This is absolutely the best next step for us in the betting space. We want to be with a partner that’s scaled, that puts an emphasis on innovation, that has similar ways of operating as ESPN does.”
After Penn switched its partner from Barstool to ESPN in 2023, the company projected ESPN Bet would have a 20% market share by 2027; instead, it has hovered around 5%. DraftKings, meanwhile, has around a 32% share of the sports betting market.
ESPN Set for Success in Sports Betting
Morrison believes the foundations have been laid for future success in integrating sports betting into its network. In comments to Front Office Sports, he added, “If I look at our efforts over the last several years, and certainly the last two, we began to really get all of the company—on the content side, the product side, technology, marketing, responsible gaming, sales—really aligned that this betting initiative is a really big thing.”
Last week, the company met with DraftKings CEO Jason Robins, who was impressed by the steps ESPN has taken.
Morrison stated, “We began to pull a lot of resources in the company and effort around storytelling and framing in ways that we hadn’t yet done… I think Jason and DraftKings saw that, and by their own admission, they were both impressed and at times surprised. They said, ‘We didn’t think you would develop everything that you did.’”
ESPN reached an agreement with the NFL ahead of the new season to purchase RedZone, NFL Network, the NFL’s fantasy football operations, as well as seven additional regular-season games.
The deal could not revive ESPN Bet’s fortunes, but it was a big attraction for DraftKings. Upon announcing the deal with ESPN, Robins commented, “ESPN’s unmatched visibility across the world of sports makes this collaboration a natural fit.”
NBA Targeted for Expansion Despite Betting Scandal
DraftKings has targeted the NBA as an area of expansion, despite the recent betting scandal engulfing the league.
Robins stated, “NBA is a sport that, relative to the NFL, we’ve had a lower share in. Part of it was that for years, our chief competitor [FanDuel] had the Turner deal, and we had nothing.”
In addition to signing a deal with ESPN, the company has also partnered with Amazon and NBC.
Asked whether ESPN personalities such as Stephen A. Smith and Mike Greenberg will appear in commercials for DraftKings as they did for ESPNBet, Morrison said, “It’s definitely something that DraftKings is very interested in, but we’re going to take our time there and figure out what makes sense.”
At the same time, DraftKings will launch into prediction markets. When announcing the move in the company’s Q3 earnings, Robins said, “This is the most bullish I have ever felt about the future of DraftKings.”
The company’s stock price has not responded to the optimism of its CEO. From a price of over $48 in August, it is now languishing at under $30. The coming months will reveal whether the gamble on prediction markets and deals with high-profile media companies is profitable.
