Penn Leisure Completes Acquisition Of Barstool Sports activities

Posted on: February 17, 2023, 03:32h. 

Final up to date on: February 17, 2023, 03:32h.

Penn Leisure (NASDAQ: PENN) accomplished its acquisition of Barstool Sports activities, buying the 64% of David Portnoy’s sports activities and leisure media outlet it didn’t beforehand personal for $388 million.

Penn Barstool
Barstool Sports activities founder David Portnoy. Penn Leisure formally owns 100% of the media property. (Picture: Sports activities Illustrated)

The on line casino operator put the ending touches on the transaction virtually precisely three years after it paid $163 million in money and inventory to buy a 36% curiosity in Portnoy’s firm. Underneath the phrases of the 2020 settlement, Penn had rights to, inside three years, take its stake in Barstool Sports activities to 50% for an additional $62 million. Penn additionally grew to become Barstool’s official gaming companion for 40 years as a part of the accord.

Final August, Penn exercised rights to purchase all of Barstool, making the media property a completely owned subsidiary of the gaming firm. In 2020, Penn was stated to be paying $450 million to personal Barstool  outright, however with right this moment’s information of a $388 million fee coupled with the unique $163 million, that works out to $551 million.

Along with Portnoy and another early Barstool staffers, some skilled traders gained huge on the Penn deal. For instance, he Chernin Group (TCG), a California-based funding agency specializing in media firms, made a $25 million funding in Barstool in 2016 and 2018, valuing the media property at $10 million to $15 million after which at $100 million.

Barstool Benefiting From Penn Relationship

On the time the deal was introduced, it was seen as one of the overt intersections of media and betting in each industries’ histories — a standing that continues to be correct right this moment.

Three years in the past, there have been considerations amongst analysts that Penn was overpaying to convey Barstool into the fold. Others argued it was a shrewd transfer by the regional on line casino operator to extend its publicity to youthful demographics. There have been bumps alongside the way in which, notably stemming from Portnoy’s penchant for controversy.

For instance, final June, he took to social media to lash out on the Supreme Courtroom relating to its determination to overturn Roe v. Wade. A number of months prior, the monetary publication Insider ran a sequence of articles detailing a few of Portnoy’s sexual proclivities. No legal fees had been filed in opposition to the Barstool founder, however he dubbed the articles “hit items” and proceeded to sue the publication. Nonetheless, information affirm Barstool is benefiting from its relationship with Penn.

Previously three years since PENN first invested within the firm, Barstool Sports activities has grown its viewers 194% and recorded whole podcast downloads of 1.6 billion, delivered over 875K movies throughout social media totaling over 128 billion video views (and) elevated advert gross sales by 160%,” in response to Penn.

Barstool has additionally offered greater than 5 million items of attire since beginning its relationship with Penn whereas changing into the official sponsor of a faculty basketball match and the Arizona Bowl, a mid-tier school soccer bowl recreation.

Is Penn Benefiting From Barstool?

At this time, Penn’s on-line and retail sportsbooks bear the Barstool identify and that relationship has been helpful in that the mum or dad firm leveraged the Barstool model and its personalities, together with Portnoy, to enter the sports activities wagering house with out heavy promotional spending.

Within the fourth quarter, Barstool Sportsbook notched a small revenue and Penn CEO Jay Snowden stated the on line casino operator is gaining notable momentum with the 21-44 demographic — loads of whom are seemingly Barstool followers.

That stated, Penn inventory has struggled to reclaim the go-go days of mid-2020 to early 2021. In March 2021, the shares touched a report excessive of $142. At this time, the gaming fairness closed at $32.33.

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