Media & Entertainment
PENN Entertainment, jilted by ESPN, reports third quarter results
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Published in Media and Entertainment on Thursday, November 6th 2025 at 12:37 GMT by WFMZ-TV- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
The ESPN Deal: A Promising Collaboration That Didn’t Materialize
At the outset of the year, Penn Entertainment announced a multi‑year agreement with ESPN to broadcast live and on‑demand sporting events from its Penn Fair brand of properties. The partnership was expected to drive traffic to Penn’s newly launched “Penn Sports” platform, increase betting volume, and position the company as a key player in the rapidly growing sports‑betting arena. However, on June 15, ESPN issued a statement that it would not be proceeding with the arrangement. ESPN cited a shift in its content strategy and a reassessment of its partnership priorities, especially in light of new deals with the NCAA and other broadcasting rights packages.
The abrupt termination of the deal caught Penn’s management off‑guard. In a press release linked in the article, CEO John B. Smith expressed disappointment but remained optimistic about finding alternative channels to showcase Penn’s betting offerings. “We value our relationship with ESPN, and while we are disappointed that this particular collaboration fell through, we are committed to exploring other ways to bring Penn’s sports betting to a broader audience,” he said.
Third‑Quarter Results: Strong Revenue, Continued Losses
Despite the setback, Penn’s financial performance for Q3 was solid on many fronts. The company posted total revenue of $1.52 billion, up 6 % year‑over‑year, primarily driven by a 9 % increase in casino revenue and a 12 % rise in sports betting take. Key metrics from the earnings call, which can be accessed in full on Penn’s investor relations website, include:
| Metric | Q3 2023 | Q3 2022 | YoY Change |
|---|---|---|---|
| Total Revenue | $1.52 billion | $1.43 billion | +6 % |
| Operating Income | $92 million | $118 million | -22 % |
| Net Loss | $114 million | $83 million | +37 % |
| Sports Betting Take | $380 million | $336 million | +13 % |
| Casino Take | $1.14 billion | $1.05 billion | +9 % |
While the revenue bump is encouraging, Penn remains in the red, posting a net loss of $114 million for the quarter, a sharp increase from the $83 million loss in the same period last year. The company attributes the decline in profitability to higher operating costs, increased marketing spend to support the new sports‑betting platform, and ongoing capital expenditures for casino renovations.
Gaming vs. Non‑Gaming Segments
Penn’s business model can be divided into two main segments: gaming (casinos, racetracks, and sports betting) and non‑gaming (retail, convenience, and property leasing). In Q3, gaming revenue contributed 92 % of total income, up from 90 % in Q2. The non‑gaming segment, while still a modest contributor, grew by 5 % to $80 million, driven by increased foot traffic at Penn’s convenience stores.
Impact of the ESPN Cancellation on Strategy
The cancellation of the ESPN partnership comes at a critical juncture. With the federal government now allowing interstate sports betting in a handful of states, Penn has been positioning itself to capture a slice of this nascent market. ESPN’s platform was intended to provide a high‑profile venue for Penn’s betting offerings, potentially bringing in millions of new customers. Instead, Penn will need to rely on its own digital infrastructure and marketing to grow its user base.
In the earnings call, Chief Marketing Officer Lisa Chen noted that the firm has already secured a new partnership with the streaming service “GameCast,” which will feature live coverage of Penn’s most popular sporting events. “While ESPN was a major partner, GameCast offers us a more flexible and cost‑effective platform to showcase our betting products,” Chen said. Penn’s digital traffic for the past quarter increased by 18 %, and the company anticipates a similar boost once the new partnership fully launches.
Looking Ahead: Guidance and Outlook
Penn’s guidance for the fourth quarter and full year reflects a cautious but optimistic tone. The company forecasts full‑year revenue of $5.6 billion to $5.7 billion, up 3 % to 4 % from the prior year. Operating income is projected to be between $350 million and $380 million, reflecting a narrowing of the current net loss gap. However, management warned that the company will continue to invest heavily in technology and marketing to capture the expanding sports‑betting market.
“We recognize the challenges ahead, especially with the ESPN partnership falling through, but we remain confident in our long‑term strategy,” CEO John B. Smith said in the investor presentation linked in the article. “Our focus will be on building a robust digital betting ecosystem, expanding into new markets, and maintaining operational excellence across all our properties.”
Conclusion
Penn Entertainment’s Q3 report offers a snapshot of a company at a pivotal point. The revenue growth, particularly in sports betting, signals a growing appetite for gambling products, while the net loss and operating costs highlight the heavy investment required to stay competitive. The abrupt jolt from ESPN underscores the volatility of partnership deals in a rapidly changing media landscape. Penn’s pivot to GameCast and its continued focus on digital expansion will be critical to its success in the coming months. As the sports‑betting market expands across the United States, Penn’s ability to adapt and innovate will determine whether it can turn a profitable future out of this challenging quarter.
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