Dave Portnoy buys back Barstool Sports from PENN Entertainment just five months after he relinquished control in $388MILLION deal
Barstool Sports founder Dave Portnoy has announced he’s bought back the sports media company he created from PENN Entertainment.
The Swampscott, Massachusetts native said in a video that PENN had decided to end its relationship with Barstool and divested the complete ownership of the company back to him.
Portnoy is back as the sole owner of the company for the first time in nearly a decade – after The Chernin Group bought a minority, then a majority stake in the company.
After PENN acquired the rest of Barstool in February of this year, Portnoy retained creative control over the content of the site.
According to him, PENN decided to go in a separate direction after agreeing to a deal with ESPN – who has had a frosty relationship with Barstool in the past.
Barstool Sports founder Dave Portnoy has brought back the entire company under his control
Portnoy founded Barstool Sports as a print publication back in greater Boston in 2003
‘PENN Entertainment and Barstool Sports have gone their separate ways. As of this moment – as you are watching this video – I have purchased back Barstool Sports from PENN,’ Portnoy began.
PENN had purchased a stake in Barstool for 36 percent of the company in January of 2020 – increasing their stake to about 50 percent by 2023.
Reports at the time of the initial PENN deal indicated that The Chernin Group would retain their 36 percent stake in the company. It’s unclear whether or not Chernin eventually sold their stake to PENN, or if they sold it to Portnoy in this deal.
As for how the deal came about, Portnoy said, ‘We did this deal about three years ago, and I think both parties were like “we’re gonna take this thing to the moon”.’
‘We underestimated just how tough it is for myself and Barstool to operate in a regulated world where gambling regulators, the New York Times, Business Insider hit pieces f–king with the stock price. 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 probably not the best place for Barstool Sports and the type of content we make.’
‘PENN was able to broker an unbelievable deal with ESPN. We wish them nothing but the best in their endeavors. It’s truly a win-win.’
Portnoy continued, assuring his army of fans that now Barstool was a private company, that their content would return to the raunchy, irreverent work they became infamous for.
For the first time since selling a stake to The Chernin Group, Portnoy now has full control
PENN CEO Jay Snowden thanked Barstool for their help in growing their sportsbook
‘More importantly, for us, for Barstool, for the first time in forever, we don’t have to watch what we say, how we talk, what we do. It’s back to the pirate ship.
‘By the way, I will never sell Barstool Sports [again], ever. I’ll hold it till I die.’
As Portnoy said, PENN announced via a press release that they were entering into a new deal with ESPN – which will see Barstool Sportsbook rebranded as ESPN Bet.
The release says the sale of all of Barstool’s stock to Portnoy was ‘in exchange for certain non-compete and other restrictive covenants.’ PENN also gets the right to half of the gross proceeds Portnoy gets in any subsequent sale or monetization of Barstool.
‘Barstool has been a great partner and we are thankful to Dave Portnoy, [Barstool CEO] Erika Ayers, Dan Katz, and their team for helping to rapidly scale our digital footprint across 16 jurisdictions in the US and introducing their audience to our retail and digital products,’ said PENN CEO Jay Snowden.
‘The divestiture allows Barstool to return to its roots of providing unique and authentic content to its loyal audience without the restrictions associated with a publicly traded, licensed gaming company.’
With Barstool’s public ownership came scrutiny from investors and the media.
In May, former host Ben Mintz was fired by PENN after reading rap lyrics which included the N-Word. despite his apology and Portnoy’s pleas to keep him.
Portnoy clashed with Penn executives over several issues, including Ben Mintz’s firing in May
ESPN chair Jimmy Pitaro said, ‘it was clear that [PENN is] the right long-term strategic partner’
PENN’s stock price fell as a result of his axing.
In that same PENN press release, ESPN Chairman Jimmy Pitaro celebrated the move – with ESPN agreeing to a deal which sees PENN pay them $1.5billion over a ten-year deal.
‘After meeting with Jay and the PENN team, it was clear that they were the right long-term strategic partner to build ESPN Bet into a leading US sports betting platform,’ Pitaro said.
‘We are confident that the combination of our unparalleled audience along with PENN’s operational expertise and state-of-the-art technology provides us with a tremendous opportunity to serve the ever-growing number of consumers interested in betting.