PENN Entertainment (PENN) and Walt Disney’s ESPN (DIS) have agreed to terminate their exclusive online sports betting agreement, effective December 1, both companies said on Thursday.
Under the terms of the agreement, which was announced in August 2023, ESPN agreed to provide PENN with media, marketing services and the exclusive right to ESPN BET brand in the U.S. in exchange for $150 million per year in cash payments to ESPN and warrants to purchase common stock of PENN.
The agreement had an initial term of 10 years, with both companies having the right to end it after the third year if specific needs were not met.
PENN Entertainment CEO Jay Snowden said both parties have “mutually and amicably agreed to wind down our collaboration.” He added that PENN Entertainment plans to realign its digital focus on its growing iCasino business.
All payments to ESPN will stop in the fourth quarter of this year, the companies said.