DraftKings has signed with the Disney unit to replace Penn

Disney ESPN is replacing its sports betting partner.

In separate releases on Thursday, the company said it had terminated its agreement with… Pennsylvania Entertainment Years ahead of schedule and signed an agreement with Kings Project To make it the exclusive official sportsbook and odds provider for ESPN.

Both changes take effect in December.

“Our betting approach has been focused on providing an integrated experience within our products,” ESPN Chariman Jimmy Pitaro said in a statement. “Working with DraftKings, an industry leader, will allow us to build on this foundation, continue to provide superior service to passionate sports fans and grow ESPN’s direct-to-consumer business.”

Under the partnership, DraftKings will power ESPN’s mobile betting tab.

“ESPN’s unparalleled vision in the world of sports makes this collaboration a natural fit,” Jason Robbins, CEO of DraftKings, said in a statement. “As an innovative leader in digital sports entertainment, DraftKings is uniquely positioned to combine our technology and products with ESPN’s iconic brand and the power of storytelling.”

ESPN signed its previous deal with Penn in 2023 after spending some time searching for a punt partner. Disney has made clear in the past that it will never accept bets directly, making the partnership the only viable path for ESPN to enter the booming online sports gambling industry.

Sports betting has become an integral part of ESPN’s direct-to-consumer streaming platform.

The ESPN and Penn partnership allowed ESPN to rename and relaunch Penn Sportsbook — then known as Barstool Sportsbook — as ESPN Bet.

The term of the agreement was 10 years but allowed ESPN or Penn to terminate the agreement after the third year “if specified market share performance thresholds were not met,” according to the press release.

On Thursday, Penn and ESPN announced they had agreed to end the partnership after just two years. Penn’s sportsbook will once again be rebranded as TheScore Bet.

“When we first announced our partnership with ESPN, both sides made it clear that we expected to compete for the podium in space,” Penn CEO Jay Snowden said in a press release.

“Although we have made significant progress in improving our product offering and building a cohesive ecosystem with ESPN, we have mutually and amicably agreed to end our collaboration,” he said.

Under the original deal, ESPN agreed to provide Penn with the exclusive right to its sportsbook brand, as well as media and marketing services. In exchange, Penn agreed to pay ESPN $1.5 billion in cash over a 10-year period and also granted ESPN approximately $500 million in warrants to purchase approximately 31.8 million common shares of Penn stock that will vest over the same period.

Ben’s $150 million in annual cash payments will cease in the fourth quarter, as will orders to purchase Ben’s common stock, the companies said Thursday.