Penn Entertainment to Lay Off 100 Employees as it Focuses on Growth for ESPN Bet
Penn Entertainment, a leading media and gaming company, has announced plans to lay off around 100 employees as it shifts its focus towards growth for its ESPN Bet platform. The decision comes after the company’s acquisition of theScore, a Canadian media and gaming powerhouse, in 2021.
Background
Penn Entertainment, which employs around 20,000 people, has been working to enhance operational efficiencies following the acquisition of theScore. In an internal email, CEO Jay Snowden explained that the company has been focusing on building out its proprietary tech stack and migrating its sportsbook to theScore’s best-in-class platform.
New Phase of Growth
However, Penn Entertainment is now embarking on a new phase of growth in its interactive business, which includes ESPN Bet, a $2 billion branding partnership with Disney’s ESPN. Snowden stated that the company is planning to introduce product enhancements and deeper integration into ESPN’s ecosystem.
Investor Expectations
Investors have been impatient for Penn Entertainment to demonstrate its muscle with the rebranded sportsbook, and activist investor Donerail Group has called on the board to sell the casino company. Rumors have swirled about potential interest from other online gaming and brick-and-mortar casino companies.
Truist Gaming Analyst’s View
Truist gaming analyst Barry Jonas believes that a sale is unlikely in the near term due to the complexity of a transaction that would likely involve major divestitures. Jonas notes that the release of new ESPN Bet features this fall during football season should meaningfully improve the product, and a focus on costs indicates the company’s commitment to seeing its investment yield results.
Penn’s Financial Performance
Penn Entertainment’s shares have plummeted 25% year to date, and the company has missed earnings expectations the last two quarters and lowered guidance. Investors are eager to see what an ESPN Bet success could look like and how much more investment it will take to reach it.
Conclusion
Penn Entertainment’s decision to lay off 100 employees is a strategic move to focus on growth for its ESPN Bet platform. While investors are eager to see the company’s performance, it’s clear that Penn Entertainment is committed to enhancing its product and improving its financial performance.
FAQs
Q: Why is Penn Entertainment laying off 100 employees?
A: Penn Entertainment is laying off 100 employees as it shifts its focus towards growth for its ESPN Bet platform.
Q: What is the significance of the acquisition of theScore?
A: The acquisition of theScore has allowed Penn Entertainment to build out its proprietary tech stack and migrate its sportsbook to theScore’s best-in-class platform.
Q: What are the company’s plans for ESPN Bet?
A: Penn Entertainment plans to introduce product enhancements and deeper integration into ESPN’s ecosystem for ESPN Bet.
Q: What is the current financial performance of Penn Entertainment?
A: Penn Entertainment’s shares have plummeted 25% year to date, and the company has missed earnings expectations the last two quarters and lowered guidance.
Q: Is a sale of Penn Entertainment likely?
A: Truist gaming analyst Barry Jonas believes that a sale is unlikely in the near term due to the complexity of a transaction that would likely involve major divestitures.
Author: www.cnbc.com
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