Dave Portnoy Reacquires Barstool Sports After Selling It 6 Months Ago
Dave Portnoy has resumed full ownership of Barstool Sports, just shy of six months since the latter was fully acquired by PENN Entertainment (NASDAQ: PENN).
PENN Entertainment, a prominent player in the casino and sports gaming industry, recently concluded its comprehensive acquisition of Barstool. The transaction, valued at $551 million, comes after PENN initially acquired a minority stake in the sports blog for $163 million back in 2020 and purchased the remaining interest earlier in February 2023 for approximately $388 million.
In a video shared on Twitter, Barstool’s founder, Dave Portnoy, disclosed the separation between PENN Entertainment and Barstool Sports, stating, “For the first time in a decade, I now hold 100% ownership of Barstool Sports.”
The decision to part ways stemmed from PENN Entertainment’s new 10-year agreement with Disney’s ESPN. This strategic deal entails the rebranding of PENN’s existing Barstool Sportsbook as ESPN BET, set to take effect this fall. The contract involves substantial financial commitments, with PENN paying ESPN $1.5 billion over the agreement’s duration, alongside $500 million in warrants associated with media, marketing, and related services provided by ESPN.
Recent times have seen heightened scrutiny from regulatory bodies due to PENN Entertainment’s association with Barstool Sports, as reported by reputable news outlets like The New York Times.
In a reflective tone, Portnoy acknowledged the challenges faced in the regulated industry, revealing, “Our journey has been a mix of progress and setbacks. Regulatory hurdles and other obstacles, including license denials linked to our content, have shaped our course.”
In line with the evolving landscape, PENN Entertainment has divested its entire ownership stake in Barstool Sports to Dave Portnoy. This transfer of ownership was facilitated by a mutually agreed-upon arrangement that includes non-compete clauses and other restrictions.
Under the terms of the agreement, PENN maintains the entitlement to receive a portion of the proceeds generated from any future sale or monetization event involving Barstool, providing an ongoing connection between the two entities.
PENN Entertainment’s association with Barstool has not been devoid of challenges. A notable incident involved the termination of Ben Mintz, a Barstool executive, following an unfortunate incident during a livestream. This development coincided with PENN’s first-quarter earnings report, leading to a stock drop and heightened attention from financial circles.
The announcement of the new collaboration between Penn and ESPN had a positive impact on Penn’s stock, with a notable 14% surge observed during after-hours trading on Tuesday.
Information for this briefing was found via Business Insider and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
