ESPN, NFL Deal Could Be Boom or Bust for ESPN BET

• ESPN recently agreed to acquire NFL Network and other media assets from the NFL in exchange for 10% equity stake in ESPN
• ESPN and the NFL are now joined at the hip, which may pull more users into ESPN BET or hasten its exit
• PENN Interactive and ESPN will likely be able to opt out of their partnership in 2026

ESPN and the NFL announced a new media deal in which the worldwide leaders in sports will acquire the NFL Network and other media assets from the NFL in exchange for a 10% equity stake in ESPN.

ESPN and the NFL are now inexorably tied together, which could provide ESPN BET with a massively needed lifeline or may hasten the dissolution of the partnership between PENN Interactive and ESPN next year.

The new media partnership will provide ESPN BET with the tools it needs to succeed, but will the sports betting operator be able to take advantage of its unique position among other sports betting companies?

ESPN BET Will Have New NFL Sports Betting Integration Opportunities

ESPN is now the home of the NFL Network and the uber-popular NFL Red Zone programming. While games will be broadcast on other networks, the majority of media coverage will now come through ESPN and its upcoming direct-to-consumer service.

So where does this put ESPN BET? It’s no secret that ESPN BET has not lived up to expectations since launching in August 2023. PENN Entertainment CEO Jay Snowden said at the time of the agreement that he hoped ESPN BET would be able to compete with market leaders FanDuel and DraftKings, or at least be “on the podium” in terms of market share in the states it operated in.

That has not happened. Both companies set a goal of a 20% market share by the end of 2026, but ESPN BET has not come close to that figure. During the company’s Q4 earnings call earlier this year, PENN estimated that ESPN BET would have a 4.7% total market share in its live jurisdictions by the end of 2025. These figures did not include the operator’s New York business, but even its launch in the Empire State likely will not move their total market share needle by the end of the year.

So what does that mean? Well, both ESPN and PENN included an opt-out for their 10-year partnership in 2026 if ESPN BET does not achieve a 20% market share. The sports betting platform is likely not going to reach that threshold, which means the partnership could be dissolved next year.

But this new partnership between ESPN and the NFL should provide some valuable new integrations for ESPN BET and its users. Just this past week, ESPN BET announced it would be launching FanCenter for its users, which will integrate player props, game markets, and custom parlay offerings for users to find bets related to their favorite teams, athletes, and ESPN fantasy rosters.

What’s now stopping ESPN from integrating Red Zone content into its ESPN BET operating platform? Offering users live bets on what they are seeing on the Red Zone broadcast, for instance, and providing them with an easy way to make live bets during the NFL season?

It’s a unique element that now only ESPN BET can offer to its users, providing them with a remarkable offering that no other operator can proffer.

NFL Will Likely Require Results

But if the results are not realized, if the integration opportunities do not move the needle as much as can be expected, will the NFL then put additional pressure on ESPN to dissolve the partnership with PENN?

The NFL is now indirectly involved with a sports betting operation through its 10% equity stake with ESPN. Will the NFL put up with a faltering sports betting operator and potential questions about event integrity, or athletes who are suspended for gambling or sports betting related incidents?

The NFL has sponsorships with sports betting operators, but now also owns equity in an operator itself. That in itself brings up questions regarding the league’s role in sports betting and if it should be invested in such a company.

Certainly revenues can help smooth over any negative press, but if the results do not come, it is entirely possible the NFL may pressure ESPN to dissolve the union and be done with the ESPN BET experiment.