Did Penn Entertainment make a mistake selling Barstool Sports?
This is a difficult question to answer, because it depends on many different factors. Some people might think that Penn Entertainment made a mistake by selling Barstool Sports, because Barstool is a strong and influential media brand that could attract many customers for Penn. Barstool also has a loyal and enthusiastic fan community that could create a lot of content and interaction with Penn. Penn spent 388 million dollars to buy Barstool in 2020, and sold it back to the founder Dave Portnoy after only one year. This could mean losing a big opportunity to grow Penn’s business.
On the other hand, some people might think that Penn Entertainment made the right decision by selling Barstool Sports, because Barstool is a controversial brand that could cause a lot of trouble for Penn. Barstool has been criticized many times for its comments that disrespect women, people of color, LGBTQ+ people and other minority groups. Barstool could also face difficulties in operating in the tightly regulated gambling industry. Penn signed a deal worth 2 billion dollars with ESPN to create ESPN Bet, a new sports betting service that will be deeply integrated with ESPN’s products and programs. This could help Penn reach a larger customer base and increase its reputation.
In summary, there is no definite answer to this question, because it depends on the perspective and criteria of each person. What do you think about this issue? Do you like sports betting? 😊
David Portnoy, the outspoken founder of Barstool Sports, is once again the owner of his media brand, after buying it back from Penn Entertainment. The value of the deal, which was announced on Tuesday, was not immediately known. Barstool Sports was valued at $606 million in February, when Penn bought the rest of the company it didn’t already own. Penn became a minority owner in 2020.
Portnoy, who founded Barstool Sports in 2003, said in a post on Tuesday that Penn and Barstool had “gone our separate ways.” Penn said the divestiture was completed in exchange for “non-compete and other restrictive covenants.”
Penn sold Barstool at the same time that it announced an online sports-betting deal with Disney-owned ESPN. That disclosure sent Penn shares up more than 15% in after-hours trading.
Penn will have the right to 50% of the gross proceeds in the event that Portnoy sells or monetizes Barstool, the release said.
— CNBC’s Lilian Rizzo contributed to this report.
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