As rumors continue to swirl following another disheartening quarter for PENN Entertainment, CEO Jay Snowden is looking to quell fears and push back on whispers of a sell-off.
During a quarterly earnings call for the American entertainment giant on Thursday, Snowden provided a particularly enlightening response to a question from JPMorgan analyst Joseph Greff regarding rumors of potential consolidation and selling individual assets.
“We don’t comment on market rumors and speculation. What I will say as a company and as a board, we’re always and always have, always will evaluate opportunities to enhance value,” Snowden said. “We’ll continue to take actions that we believe are in the best interest of the company and our shareholders.
“And I would say, don’t believe everything you read.”
The strong comments follow a May public letter from Donerail Group managing partner Will Wyatt, a major shareholder in PENN Entertainment, as the company continues to see major losses in the digital space.
“We question whether such credibility is beyond repair, as PENN’s shares are now down over 80% in the last three years because of such damage,” Wyatt said via the letter.
Takeover whispers were only further exacerbated by reports that rival Boyd Gaming had considered a bid in the range of $9 billion for the ESPN BET operator.
PENN has struggled mightily to gain a foothold in the digital space as a leading sportsbook, with giants such as DraftKings and FanDuel dominating with roughly 35% of the U.S. market share. That follows a 10-year, $1.5 billion partnership signed last year after PENN sold Barstool back to founder David Portnoy for just $1.
PENN, ESPN BET gear up for football season
In part, a major component of PENN’s unwillingness to back down comes as sports fans across the betting landscape gear up for football season, both college and NFL. During the earnings call, PENN explicitly laid out the importance of the upcoming seasons, pointing to major portions of the betting market almost exclusively betting on these seasons.
Major upgrade plans, as well as new product offers coming this fall, are also at the center of PENN's continued support behind ESPN BET, as well as impending expansion into New York, where PENN recently struck a deal with Wynn to enter the Empire State, and perhaps, more importantly, the U.S.’s most lucrative sports betting market.
“This is an important development that will bring ESPN BET to the largest regulated online sports wagering market in North America,” Snowden said earlier this year. “Together with ESPN, we’re building a brand that is synonymous with sports betting, and operating in the New York market is key as we grow ESPN BET across the U.S.”
Should things continue to go sideways, however, there’s no telling exactly what could be next for PENN’s continued struggles in the digital space. According to reports, ESPN parent Disney has a right under the PENN deal to end their affiliation well before the conclusion of the 10-year partnership, which would mark the second major brand loss in less than a decade for an online division still struggling to make headway.
