Barstool Sports founder Dave Portnoy has bought back his brash sports media company from Penn Entertainment (PENN) for a single dollar, months after selling it for more than $US550 million.
Portnoy paid $US1 to buy back his media brand just months after PENN – a casino and online gambling operator – spent $US551 million (more than $A840 million) to acquire 100 per cent control of it.
The sale comes after PENN announced a $US2 billion sports betting deal with ESPN, which included changing the name of PENNs online mobile sports book ‘Barstool Sportsbook’ to ESPN Bet.
According to a new securities filing, PENN and Portnoy entered a “stock purchase agreement” on August 8 whereby 100 per cent control was returned to the Barstool Sports founder for “a nominal cash consideration ($US1 dollar) and certain non-compete and other restrictive covenants.
The filing notes that the deal will result in a “pre-tax non-cash loss” of between $US800 million and $US850 Million for PENN – which includes $US705 million to $US720 million in goodwill and intangible assets write-offs – to be incurred in the third quarter of 2023.
Also etched into the deal were the rights for PENN to receive “50 per cent of the gross proceeds” received by Portnoy in any future sale or “other monetisation event” of Barstool Sports.
However Portnoy emphatically ruled out ever letting his brand change hands again, declaring in an “Emergency Press Conference” shared to X – formerly known as Twitter – that the deal had been struck and that he would own Barstool until the day he dies.
“While you were watching this video, I have purchased back Barstool Sports from PENN,” he said, explaining the reversed acquisition after the partnership struggled in the “regulated world”.
“We did this deal about three years ago and I think both parties were like we’re gonna take this thing to the moon; and we underestimated just how tough it is for myself and Barstool to operate in a regulated world,” he said.
“Every time we did something it was one step forward two steps back.”
Portnoy said the brands were “denied licenses because of me” and criticised the public scrutiny that came after Penn acquired Barstool, calling out media “hit pieces” for affecting its stock price.
“So the regulated industry, probably not the best place for Barstool Sports and the type of content we make.”
But Portnoy said he had nothing but respect for Penn National president and chief executive officer Jay Snowden, and wished the company well with the “unbelievable deal with ESPN”.
Under that deal, PENN will pay $US1.5 billion to ESPN over a 10-year term and grant ESPN approximately $US500 million in warrants to purchase 31.8 million Penn common shares that will vest over 10 years in exchange for media, marketing services, brand and other rights.
But Poytner, who owns 100 per cent of his company for the first time in a decade, declared: “It’s back on the pirate ship”.
“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,” he said.
“And, by the way, I am never going to sell Barstool Sports ever, I’ll hold it til I die.
“That’s right, I’m not going anywhere, Barstool Sports, the pirate ship, the canons, they will plunder from now for the next hundred years. So welcome back, back in control.”
Portnoy relinquished sole ownership of Barstool Sports in 2016, when The Chernin Group bought minority, then majority stake in the company for a rumoured $US10 million.
Then, in January 2020, PENN spent $US163 million (almost $A250 million) on a 36 per cent stake of the company. It bought the remainer of Barstool Sports for $US388 million (more than $A590 million) in February this year.
It is not clear whether or not Chernin sold its stake to PENN in their initial deals, or if they sold it to Portnoy in this deal.
Portnoy founded Barstool Sports in his hometown of Massachusetts in 2003, and took to the streets to distribute what was then a free four-page newsletter.
Since then, the brand went digital and has become a hugely popular, if polarising, sports and pop culture media outlet that is particularly popular with young men.