ESPN’s Penn Deal Included $500M of Equity. What’s It Worth Now?

ESPN’s Stock Warrants in Penn Entertainment Deal

ESPN's $500 million worth of Penn stock warrants significantly declined over two years before the end of the ESPN Bet partnership. When ESPN announced its 10-year agreement with Penn Entertainment in August 2023, it highlighted two main financial gains: $1.5 billion in cash paid in yearly installments and Penn stock options valued at $500 million at that time.

Changes After Deal Termination

With the deal's termination, the terms changed considerably. Penn agreed to a final $38.1 million payment to ESPN, likely increasing total cash received to about $380 million. In addition, the equity warrants held by ESPN were adjusted.

Details of the Stock Warrants

Current Status of Warrants

Following the separation agreement, ESPN retains only the options vesting by next February, which amounts to exactly one-quarter of the original shares—7.96 million. Exercising these would require $230.3 million.

"Equity warrants are valued in various ways—the Black-Scholes model being one of the most common—so it’s unclear exactly what math ESPN used to price the original options at $500 million."

Overall, ESPN's financial benefits from the Penn deal have diminished, reflecting significant adjustments in equity valuations after the partnership breakup.

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Sportico.com Sportico.com — 2025-11-06

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