Wall Street doesn’t know yet what to make of Penn Entertainment’s accelerated divorce from ESPN. 

The initial hours following the early Thursday announcement from the two companies to shutter the ESPN Bet sportsbook brought a whirlwind of activity, but also left plenty of questions.

Initially, investors cheered the deal, with Penn Entertainment stock shooting up about 10% in premarket trading, and then by about 5% at the opening bell. Those gains, however, were quickly erased, as by mid-morning shares were in negative territory. Penn Entertainment stock ended the day down more than 10% to $14.65 per share. ESPN parent company Disney saw its shares fall by less than 1% while stock in DraftKings, reunited with ESPN in a multiyear deal based around content and marketing, rose marginally.

The demise of ESPN Bet is an acknowledgment of the clear and, for the two companies, painful reality: ESPN Bet was stuck at a low, single-digit percentage of market share in most key states with legal sports betting, and was never going to get anywhere near the intended 20% position by 2027 as the sports duopoly of FanDuel and DraftKings remains largely intact. 

Cutting ties now allows Penn Entertainment to save hundreds of millions of dollars in fees and stock warrants to ESPN, as well as in marketing costs. The 10-year, $2 billion deal, reached in August 2023, had called for $150 million in annual cash payments from Penn Entertainment to ESPN, as well as about $500 million in warrants.

Penn Entertainment will now rebrand its U.S. sportsbook to theScore, a brand it already works with in Ontario.

“We view the ESPN Bet termination as a significant positive for Penn,” JPMorgan analysts wrote Thursday in a research note. “ESPN Bet/Penn’s expensive [online sports betting] has been a distraction for investors and management for several years (going back to Barstool) and overshadowed a fairly solid land-based business that offered an attractive pipeline of growth projects.”

Company Path

Penn Entertainment said its brick-and-mortar casinos and racetracks will indeed be a key focus going forward. Third-quarter earnings, also released Thursday, however, revealed a net loss that soared from a prior $37.5 million to $865.1 million. Revenue grew 5% to $1.7 billion, but company executives said a heightened focus on profitability will be paramount in a post-ESPN era.

“We made these digital investments to make money, to deliver a return for our shareholders. We have not done that yet,” Penn Entertainment CEO and president Jay Snowden said Thursday in an earnings call. “That’s the focus in 2026, and moving forward, to deliver profitability for our shareholders, which will only grow over time.”

In the final termination agreement, ESPN will retain vested warrants to purchase 7.96 million shares of Penn Entertainment with a weighted strike price of $28.95, a figure much closer to the company’s stock value when the deal was originally made more than two years ago. Since then, Penn Entertainment shares have fallen by more than a third. 

All other unvested and performance-based warrants, potentially worth hundreds of millions of dollars, have been forfeited by ESPN.

Warner Bros. Discovery, already in the midst of corporate upheaval, continues to develop a new streaming home for TNT Sports. For WBD CEO David Zaslav, that shift probably can’t happen soon enough.

As WBD reported third-quarter earnings Thursday, the company reiterated its previously announced effort to develop a new streaming service for TNT Sports and its retooled portfolio of programming. That new platform is expected sometime next year, roughly coinciding with a planned split of the company. 

“The [development] team is making great progress, and that will put us in a position to have a compelling standalone offering, but also something that will allow us to partner and bundle with our own products and others in the market,” said WBD CFO Gunnar Wiedenfels, who will also lead the planned Discovery Global that will house most of the TNT Sports assets.

Thus far, TNT Sports content has been streamed on HBO Max, and previously, that was a major corporate priority for WBD. That positioning is not unlike how NBCUniversal has made live sports a focal point on Peacock, a key competitor in the general entertainment streaming space. 

Zaslav, however, said Thursday that sports on HBO Max has not made a significant impact on the service.

“Here in the U.S. … we were so robust in our storytelling that we did not find that these sports were providing enough value for us in terms of incremental subs. We did not get that many,” Zaslav said. “HBO Max is much stronger as being a motion picture and storytelling product, not dependent on rental sports.”

The executive has had a history of being somewhat dismissive toward sports. Most notably, he said in 2022 that WBD “didn’t have to have” a new deal with the NBA, and ultimately, the company lost its live rights to that league. 

Future Pathways

WBD, meanwhile, did not have much of a substantive update on its ongoing process to potentially sell itself. Since that was formalized last month, there have reportedly been multiple offers from CBS Sports parent company Paramount that have been rebuffed, while Netflix and NBC Sports parent company Comcast have taken more cautious stances toward potential WBD deals. 

“The team is hard at work, both on a separation transaction and following the board’s direction to evaluate strategic alternatives,” Zaslav said. “You’ve all seen media reports as to potential interested parties, and I won’t comment on anything specific. It is fair to say we have an active process underway.”

The WBD quarterly report also included a generally downbeat set of financial results, as revenue fell 6% to $9.05 billion, below Wall Street projections, and net income swung from a prior $135 million gain to a $148 million loss. Declines were felt in multiple areas, including advertising and linear TV subscribers.

The battle for the moniker of America’s Team is heating up—at least on TV.

Halfway through the NFL’s regular season, the Chiefs are responsible for the two most-watched games, but the Cowboys occupy a league-high five spots in the ten most-watched games through Week 9.

Here are the ten highest game audiences as the NFL enters Week 10, and crosses this season’s halfway point:

• Eagles-Chiefs (Week 2): 33.8 million on Fox
• Chiefs-Bills (Week 9): 30.9 million on CBS
• Cowboys-Eagles (Week 1): 28.3 million on NBC
• Lions-Chiefs (Week 6): 27.4 million on NBC
• 49ers-Buccaneers (Week 6): 26.9 million on CBS
• Packers-Cowboys (Week 4): 26.9 million on NBC
• Commanders-Cowboys (Week 7): 25.63 million on Fox
• Packers-Steelers (Week 8): 25.5 million on NBC
• Cowboys-Bears (Week 3): 25.47 million on Fox
• Cowboys-Broncos (Week 8): 25.33 million on CBS

Kansas City has played in three of the ten most-watched games this season (all inside the top 4), and its Week 3 Sunday Night Football matchup against the Giants narrowly missed the top-10 list, drawing 25.3 million viewers on NBC. That game came after an 0–2 start for the defending AFC champions.

While Dallas is struggling on the field with a 3-5-1 record, NFL fans have still tuned in for many of the team’s most visible games in prime time and late Sunday afternoon windows. 

The Chiefs and Cowboys are set to play each other on Thanksgiving Day, in what should likely be the most-watched game of the season, and even break records for NFL telecasts on the holiday.

Also of note on the top-10 list, the Eagles are the only other team to appear twice, perhaps not coincidentally, in games against the Chiefs and Cowboys.

Overall, NFL game broadcasts are averaging 17.8 million viewers across all networks through the first nine weeks of the season, up 7% from the same period in 2024, and the league’s highest mark since the 2015 season. The TV ratings boost coincides with the implementation of Nielsen’s new Big Data + Panel methodology being used to determine audience figures.