PENN Entertainment has completed its acquisition of 100% of Barstool Sports in a deal that totals $524m.
The second part of its transaction has seen PENN pay $388m for the remaining 64% of the sports media brand, which also lends its brand to PENN’s online sportsbook, Barstool Sportsbook.
Synergy between the two companies was first initiated in January 2020 when PENN and Barstool penned an exclusive sports betting and igaming partnership with the creation of Barstool Sportsbook. One month later PENN acquired 36% of Barstool for $163m with an established pathway for 100% ownership.
“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.”
The use of the Barstool brand across PENN’s sports betting and igaming offering has been the source of much controversy throughout the partnership, with the links to Barstool founder Dave Portnoy subject to scrutiny in the national press.
It has also put licenses at risk of not being awarded; PENN CEO Snowden was present in the firm’s attempts to gain a retail sports betting license in Massachusetts, which was temporarily awarded subject to an investigation of Barstool Sports.
Responding to the scrutiny of Barstool in the MGC meeting, Snowden wrote in a letter: “Incidentally, others in the gaming industry are also troubled by the New York Times’ one-sided take on sports betting, which was covered in three other articles that were published on the same day the PENN/Barstool story ran.
“The AGA has responded in a letter to the editor and there have been complaints by sources named in the articles of misrepresentations or outright fabrication of their quotes, such as a top executive from Spectrum Gaming Group who demanded a retraction in a strongly worded response.”
Successful results lead to full acquisition
Despite media and regulatory scrutiny, the partnership and merger between PENN and Barstool has been an indisputable success for both parties.
In the three years since the partnership was initiated, Barstool Sports has delivered 194% audience growth, received over 875,000 videos with over 128bn views, increased ad sales by 160%, and sold over five million units of merchandise.
Meanwhile, Barstool Sportsbook is proving to be a big player in the national sportsbook industry, being live in 15 states already and continuing its US retail sportsbook expansion.
“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.”
In the coming months, PENN hopes to roll out its proprietary sports betting platform across the Barstool Sportsbook portfolio after completing a similar process with theScore last year.
The company noted that it “will continue to innovate and collaborate” with Barstool to grow its audience ‘deliver compelling integrated gaming and entertainment experiences.’
“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.”