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Penn Entertainment reported a substantial net loss of $358.8 million in the fourth quarter of 2023, coinciding with the launch of its ESPN Bet sportsbook. This new venture, part of a $1.5 billion deal with Disney-owned ESPN, made its debut across 17 states on November 15.
The Interactive segment of Penn, covering ESPN Bet, brought in revenues of $31.5 million during this quarter but faced an adjusted EBITDA loss of $333.8 million. Overall, the company saw its revenue decrease by 12.5% year-on-year in the fourth quarter, moving from $1.6 billion to $1.4 billion. Furthermore, adjusted EBITDAR saw a dramatic fall from $468.3 million to $112.5 million compared to the same period last year.
Revenue contributions from Penn’s northeast segment, which includes 17 properties, amounted to $662.9 million of the quarter’s total. The earnings per share shifted from a gain to a loss, moving from $0.13 to a loss of $2.37. The company’s total liquidity fell to $2.1 billion from $2.6 billion in 2022, with net debt standing at $1.6 billion at the quarter’s close.
For the full year, Penn’s revenue was slightly down, totaling $6.36 billion compared to $6.4 billion in 2022. The year’s adjusted EBITDAR dropped to $1.51 billion from the previous year’s $1.94 billion, with the margin decreasing from 30.3% to 23.8%.
The year concluded with a net loss of $491.4 million for Penn, contrasting sharply with the net income of $221.7 million reported in the previous year. A significant part of the year’s financial downturn was due to the $923.2 million loss from selling the Barstool brand back to its founder Dave Portnoy for $1 in August.
Despite these financial challenges, Penn saw a positive start from ESPN Bet, indicating potential for future growth. This phase was characterized by strong promotional activities aimed at drawing in new users.
With $2.1 billion in liquidity at year-end, including $1.1 billion in cash and equivalents, Penn positions itself for potential recovery and future endeavors.