Back in January 2020, casino company Penn Entertainment purchased a minority stake (around 36 percent) in Barstool Sports for $135 million in cash and $28 million in stock. That deal came with a commitment for Penn to increase its stake to 50 percent in 2023, and with options for them to buy either control or full ownership at that time based on fair market value. A lot has changed since January 2020 in the media landscape, in the gambling landscape, and with Barstool itself, but Penn has now decided to take that full ownership route, paying $388 million to acquire the outstanding equity in Barstool. Here’s more on that from a release:
PENN Entertainment, Inc. (Nasdaq: PENN) (“PENN” or the “Company”) today completed its previously announced acquisition of Barstool Sports, Inc. (“Barstool Sports” or “Barstool”) after previously acquiring a 36% stake of Barstool Sports in February 2020. PENN has acquired the remaining interest in Barstool Sports for approximately $388 million.
…“We are extremely pleased to welcome Barstool Sports fully into the PENN Entertainment family,” said PENN Entertainment CEO and President, Jay Snowden. “Barstool is a proven, powerful media brand with an authentic voice and vast, loyal audience that provides us with a strong top of funnel for new customer acquisition and organic cross-selling opportunities across our growing interactive division. Barstool, combined with theScore’s reach and highly engaged user base, creates a massive digital footprint and ecosystem that will serve to propel Barstool Sportsbook and our uniquely integrated media and gaming business. Further, the Barstool Sportsbook will greatly benefit from the upcoming migration to our proprietary technology stack, a move that will significantly enhance the overall product offering and deliver meaningful upside.”
“Barstool Sports is bigger than ever and has become more than I ever dreamed of,” said Dave Portnoy, Founder of Barstool Sports. “I’m very thankful to the Barstool team and Stoolies who have been along for the ride. I’m looking forward to this next chapter with PENN.”
“This is a huge moment for Barstool Sports that was made possible by a lot of people and a lot of grit,” said Erika Ayers, CEO of Barstool Sports. “Our focus has always been to create relevant and entertaining content for our fans and to deliver strong results for our partners. It’s exciting to have that vision recognized and to be able to put it to work inside of PENN. We have the best fan base on the planet, and we look forward to doing even more for them with PENN’s support.”
This is just the latest development for Penn and Barstool. That 2020 minority stake deal came after lots of rumors of Barstool (which was then majority-owned by The Chernin Group) selling (and possibly selling full control) to either Penn or others, and it was an interesting way to resolve that. It gave Penn significant equity in Barstool, and a path to more at a particular price, but kept a market value provision there for control or full ownership. It gave Barstool significant funding at the cost of equity, but kept incentives for them to keep growing ahead of 2023.
