Penn National Gaming will acquire 50 percent of Barstool Sports within the next three years.

  • Penn National will purchase a 36% interest in Barstool Sports with the ability to purchase 50% after three years.
  • After all said and done, Barstool will have sold half of its company to Penn National for roughly $225 million.
  • Penn National’s goal is to reduce customer acquisition costs with the help of Barstool’s 66 million monthly customer base.

NEW YORK – After serious discussion regarding a potential buyout between Barstool Sports and Penn National Gaming earlier in January, the two have released their plans moving forward.

Penn National is expected to acquire a 36% interest in Barstool Sports in exchange for $163 million in cash and stock options. According to the data made public in the press release, Penn National will become the exclusive gaming partner of Barstool for up to 40 years.

The partnership will have Penn National increase its equity in Barstool over time, as the gaming company plans to incrementally invest another $62 million after the three-year mark. When it is all said and done, Penn National Gaming and Barstool Sports will be split down the middle.

“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 omni-channel provider of retail and online gaming and sports betting entertainment,” said Jay Snowden, the president and CEO of Penn National.

Per the details of the transaction, Penn National has the ability to include a third-party who could purchase a facet of their rights to Barstool Sports. As for The Cherin Group – who previously owned about 60% of Barstool Sports – will now own just over a third of the company.

The Benefits Of The Penn National And Barstool Sports Deal

Penn National is focused not only on expanding their sports betting media mindset but acquiring the “66 million monthly unique visitors” that Barstool actively reaches. Their belief is that this arrangement will reduce the costs of promotions and customer acquisition.

“Barstool Sports is a dynamic content company that has grown into a media juggernaut thanks to some of the best talent and fans in the world,” said Erika Nardini, the CEO of Barstool Sports. “The chance to combine our content and fans with Penn National’s massive footprint, and to develop a unique and compelling omni-channel approach together, was for us a no brainer.”

For Penn National, the ideas of growth and expansion from this Barstool deal were already flourishing in the minds of the executives.

“We look forward to introducing our 20 million mychoice customers to the Barstool Sportsbook brand through our retail sportsbooks and our interactive products,” said Jon Kaplowitz, the head of Penn Interactive.

“We plan to remain focused on our efforts to de-lever our balance sheet while building on our long-term progress in expanding operating margins at our regional casinos,” said Snowden.

Betting On The Barstool Owner

Despite the groups coming together, online sportsbooks must be assuming that the owner of Barstool Sports, Dave Portnoy, will take the news of the sale to party-town. Known for his antics, Portnoy now has odds of whether we will get kicked out on the Super Bowl or not.

Also known for placing large wagers on sporting events, Portnoy is favored to remain a civil spectator at the big game. However, if Portnoy were to be tossed, bettors would be able to increase their risk over six times their money.

As this Super Bowl LIV prop bet offers a wholehearted laugh during the sale of Barstool Sports to Penn National Gaming, the future of this deal is no laughing matter.

Upon the stock’s opening, Penn National (PENN) jumped up 8% to begin the trading morning. As 14 states offer a regulated land-based and/or online sportsbook in their district, the country is set to include another half-dozen or more by the end of the year. Only time will tell the ultimate benefits of this sale, but Penn National will certainly be able to improve their legal sports betting footprint.

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