After a few weeks of rumors, Barstool has a new corporate stakeholder.
According to a Wall Street Journal report, casino company Penn National will purchase a minority share in Barstool for $135 million in cash and $28 million in stock in a deal that values Barstool at $45o million.
Via Katherine Sayre and Benjamin Mullin at WSJ:
The deal, to be announced Wednesday, would give Penn National exclusive rights to use the Barstool brand in its sports-betting products. Penn National would pay $135 million in cash and $28 million of its stock in a deal that values Barstool Sports at $450 million.
In three years, Penn National, with a market value of roughly $3 billion, will increase its stake to around 50% for a payment of $62 million. Penn National and Barstool have options that kick in then that would increase the casino company’s stake to control or full ownership, based on fair market value at the time, the people said.
Barstool is no stranger to the gambling space, having launched their own Barstool Bets platform in 2019 in an effort to surf the wave of legalized sports gambling in the United States. For Penn National, the move is clearly borne out of a desire for synergy; Barstool’s cult following has to be attractive for a casino company, for obvious reasons.
With the Barstool staff expected to remain in place, this deal might not change much going forward; after all, why buy into Barstool if you have an interest in changing them? It is likely a welcome headline considering the recent fallout from Barstool chief Dave Portnoy’s ill-advised anti-union sentiments, which resulted in a slap on the wrist from the NLRB. It’s also a sign that in 2020, despite plenty of media brands either going under or consolidating, if you have a devoted audience you’re still an attractive asset.