Penn National buys share of Barstool Sports
Penn National Gaming Inc. solidified its sports betting and digital gaming presence by acquiring a 36% share of Barstool Sports Inc. for $163 million.
The Wyomissing-based gaming company announced Wednesday morning that it will be Barstool Sports’ exclusive gaming partner for up to 40 years and have the sole right to utilize the Barstool Sports brand for all of the company’s online and retail sports betting and iCasino products. According to a statement, Penn National will increase its ownership to approximately 50% after three three years with an additional investment of $62 million. It will also reserve the right to take full ownership.
The deal is expected to close by the spring.
“This exciting new partnership with Barstool Sports reflects our strategy to continue evolving from the nation’s largest regional gaming operator, with 41 properties in 19 states, to a best-in-class omnichannel provider of retail and online gaming and sports betting entertainment,” Penn National President and CEO Jay Snowden said in the statement.
Snowden said the deal will help attract younger customers.
“In addition, with 66 million monthly unique visitors, we believe the significant reach of Barstool Sports and loyalty of its audience will lead to meaningful reductions in customer acquisition and promotional costs for our sports betting and online products, significantly enhancing profitability and driving value for our shareholders,” Snowden said.
Founded in 2003 by David Portnoy, New York-based Barstool Sports is a leading digital sports, entertainment and media platform that delivers original content across blogs, podcasts, radio, video and social, supported by about 70 employees. It benefits from approximately 66 million monthly unique visitors, including an estimated 48% of males and 44% of females in the millennial and Generation X generations across the United States.
In 2019, Barstool Sports grew by approximately 65%, delivering nearly $100 million in revenue from digital and audio advertising, ecommerce, events, licensing and subscription.
Barstool said the deal increases its value to $450 million.
The Chernin Group, a Los Angeles-based media holding company, had owned a majority stake in Barstool since 2016. Its share will fall to 36% with the remaining 28% to be held by Barstool employees, including Portnoy and CEO Erika Nardini.
Portnoy called the opportunity “a dream of mine and why I started Barstool Sports in the first place.”
“Barstool Sports has a deep sports and gaming history and from the moment we met Jay and the Penn National team we knew this could be an exciting and game changing partnership and we can’t wait to get started,” Portnoy said. “I think with our shared vision and goals, we are uniquely positioned to be a leader in this business.”
The acquisition is expected to boost Penn National’s sportsbook and digital gaming strategies. According to Jon Kapolowitz, head of Penn Interactive, the company is looking to launch a Barstoolbranded sportsbook app in the the third quarter of 2020.
“Our team is excited to begin collaborating with Barstool Sports on ways to utilize its key talent and leading content to drive audiences to Penn National’s online gaming products and retail locations, as well as to special events and fan experiences,” Kapolowitz said.