VIDEO: Dave Portnoy Buys Back Barstool Sports For $1 as PENN Inks $2B Deal With ESPN
The $2 billion agreement with PENN Entertainment will see ESPN launch its new ESPN BET sportsbook in the United States.
For the first time in a decade, Dave Portnoy once again owns 100% of Barstool Sports, the digital media company he founded in 2003. After selling to PENN Entertainment (NASDAQ: PENN) for $551 million in a deal that was finalized earlier this year, Portnoy bought back Barstool for $1 yesterday amid PENN’s blockbuster $2 billion sports betting deal with ESPN.
Yesterday, PENN and ESPN announced the signing of a deal that will see ESPN operate ESPN BET-branded sportsbooks in the U.S. sports betting market.
The deal, which is slated to launch in the fall, will see PENN pay $1.5 billion over the next ten years to ESPN. PENN will also grant ESPN $500 million in warrants, allowing ESPN to buy 31.8 million shares of PENN stock over ten years.
PENN CEO Jay Snowden commented on the blockbuster agreement with ESPN on his company’s earnings call this morning, stating:
“With ESPN, you’re talking about a brand that everybody in the world knows about. It’s not an old brand. It’s not a young brand. It’s an everything brand. There’s a lot of affinity for that brand. And so we think that’s going to be extremely complementary to what we’ve built over the course of last three years.”
In a video posted online, Portnoy said:
“PENN Entertainment and Barstool Sports have gone our separate ways. So that is right, for the first time in a decade, I own 100% of Barstool Sports.”
As part of its new 10-year deal with ESPN, which will see its Barstool Sportsbook rebranded as ESPN BET, PENN and Barstool Sports have agreed to go their separate ways. The likely reason is that PENN’s relationship with Bartstool and its founder, Dave Portnoy, often caused PENN to draw stricter scrutiny from sports betting regulators and, in some cases, even to be denied licences.
In his video announcement, Portnoy added:
“Every time we did something, it was one step forward, two steps back. We got denied licenses because of me. You name it. So the regulated industry is probably not the best place for Barstool Sports and the type of content we make.”
According to PENN’s press release, along with a subsequent filing, it was disclosed that Portnoy bought 100% of Barstool Sports from PENN for $1. As part of the agreement, PENN will receive half of the gross proceeds from Portnoy should he sell the company again.
Shares of PENN Entertainment closed trading today at $27.10 per share, up 9.1% on the day. YTD, PENN stock is down 7.41%.
Video Source: Dave Portnoy YouTube
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