Its creator once again owns Barstool Sports, as Dave Portnoy has reacquired 100% of the brand from PENN Entertainment. Most are familiar with the brand Barstool, with virtually everyone having a strong opinion one way or another. Founded in 2003, Barstool Sports started as a print publication before evolving into the media and content juggernaut it is today.
Although they aren’t considered experts in the field of sports by many, much of their content is centered around it. Their roots are in fantasy sports projections, with gambling advertisements being there at the beginning. That history led to PENN Entertainment buying Barstool Sports in 2020 for $500 million.
PENN’s goal was for the rabid Barstool audience to help grow their market share in sports betting. With FandDuel and DraftKings combing for 74% of that market, there isn’t much room for error. The gamble didn’t pay off as the things that made Barstool popular also made them difficult to partner with in a regulated space.
Barstool Sports Back Under Old Ownership After ESPN Bet Deal
PENN Shifting Focus
Depending on what part of the country you live in, you may have noticed Barstool Sportsbooks popping up in casinos in your area. With legalized sports betting becoming more widespread, their goal was to create the Las Vegas atmosphere in areas new to sports betting.
Although that goal was somewhat accomplished, both PENN Entertainment and Barstool quickly found out that without a busy sports betting app, the physical locations don’t matter. Fanduel and DraftKings dominate digitally, which forced PENN to change their game plan.
The change will come in the form of a new partner. With Barstool Sports out, ESPN will enter. Together, they will create ESPN BET. With ESPN getting close to 15x the number of unique visitors per month compared to Barstool, the switch makes sense.
PENN moves on from a brand consistently surrounded by controversy to ESPN, which Disney owns. This a drastic change from a 2020 decision that made sense at the time. You can check out the ESPN press release about the news here.
Most probably see this deal as a win for PENN, and rightfully so. However, Barstool Sports, and more specifically Dave Portnoy, wins as well. After being purchased for $500 million three years ago, full ownership is back with Portnoy without paying hardly anything.
What Barstool did pay were conditions. For starters, they aren’t allowed to advertise in any sportsbook moving forward. They also aren’t allowed to start their own. Finally, if Barstool is ever sold in the future, PENN gets 50% of the revenue from the sale.
This may seem like Barstool is pigeonholing themselves a bit, but in reality, this just allows them to be Barstool again. Love them to hate them; they’ve built something huge that a lot of people love. They are unique and brutally honest at times. That combination doesn’t work well in the regulated world of sports gambling but does work in the world of content creation.
This deal allows Barstool to focus on what they are good at. The handcuffs are off, although they never truly censored themselves. Barstool is a divisive brand that won’t stop trying to grow. Sports betting wasn’t a win for them in the long run but paid off short term in a big way.
PENN Entertainment will now see if partnering with a massive brand like ESPN will help them grow in the market like they wanted to with Barstool. The partnership makes sense for ESPN, too, as it seems like people viewed them as a dinosaur in the space and not the leader in sports.
Time will tell how this deal will work out for everyone, but at face value, it seems like every party got what they wanted.
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