ESPN Bet will be on the market by the fall. What kind of market share will it be able to claim amongst mobile sports bettors? On Monday’s edition of The Dan Le Batard Show, Stugotz said it is irrelevant.
Producer Mike Ryan, who was in the host’s chair with Le Batard out, said that he was not so sure the $2 billion deal between the network and Penn Entertainment is a good one. Stugotz disagreed based on the numbers alone.
“I know it’s a gambling partner,” he said. “I know it could go a lot of ways, but on the surface, adding $1.5 billion to your company of revenue. Yeah, that’s a good day.”
Ryan acknowledged that the payday is undeniable. He said that ESPN had been looking at a number of sportsbooks and pitching the idea of a partnership. Penn Entertainment was just the first to agree to a deal. In an industry ripe for consolidation, there is no guarantee that ESPN Bet will be a book that survives long term.
Stugotz disagreed. Maybe Penn couldn’t survive, but ESPN Bet is a different animal.
“I think if you’re not one of those [top] two or three [sportsbooks] and you want to be one of those two or three, and I agree with you, they are going to be like two or three left standing when all of this is is said and done,” Stugotz said. “They’ll buy their competition. They’ll just buy them out of the market. But it’s a good deal for Penn because you’re spending a lot of money. Yes, obviously you have the money to spend. But if you want to become a big-time sportsbook, attaching yourself to those four letters is not a bad idea.”
Ryan disagreed. He said that if what was missing was brand recognition and star power, Penn had that with the book’s previous iteration, Barstool Sportsbook.
“I have great respect, I really do, for what Barstool has done in a short period of time. It’s not ESPN. This is ESPN. The games are on ESPN,” Stugotz said.
The biggest strength for ESPN in the deal, according to Stugotz, is that it already has an injection of revenue from the deal.
“I think they just took a sweetheart deal,” he said. “And you’re right, no one else really wanted to pay that much money. Someone did. They took the deal. They’re not as concerned as to whether whether or not this works out.”
