After weeks of speculations, Penn National Gaming finally confirmed Wednesday that it has found a sports media partner in the latest of a flurry of deals between casino companies and content publishers as sports betting continues to shape the US gambling landscape.
The Pennsylvania-headquartered operator of more than 40 gaming properties across the nation announced that it has acquired a 36% interest in Barstool Sports, Inc., a digital sports media company with a massive following.
Penn National will pay approximately $163 million in cash and convertible preferred stock. The deal, which is expected to close in the first quarter of the year, values Barstool Sports at around $450 million.
After three years, the casino operator will increase its ownership to around 50% with an incremental investment of approximately $62 million.
Barstool Sports came into being in the early 2000s as a black-and-white print publication that featured gambling ads and sports predictions and was distributed by founder Dave Portnoy in the Greater Boston area. It then launched on the Internet in 2007.
From its humble beginnings, Barstool Sports has evolved into a sports media behemoth with original content across blogs, podcasts, radio, video, and social. The major publisher has more than 66 million monthly unique visitors.
In 2016, the Chernin Group acquired Barstool Sports to further accelerate its ascension. The company will now own approximately 36% of the sports content publisher, while the remaining 28% will be held by Barstool Sports’ employees.
Exclusive Gaming Partner
Under the terms of the deal, Penn National will become Barstool Sports’ exclusive gaming partner for up to 40 years and will have the exclusive right to utilize the Barstool Sports brand across its online and retail sports betting and online casino products.
News about Penn National acquiring an interest in Barstool Sports emerge as Penn Interactive, the casino operator’s digital gambling arm, gears up preparations for the launch of its sports betting app. The product is anticipated to be rolled out in the third quarter of the year.
The transaction represents the latest tie-up involving a US-focused gambling company and a sports media business. Last year, FOX Sports and The Stars Group clinched a national media and sports betting partnership that paved the way for the rollout of the FOX Bet wagering app.
In a similar move, MGM and Yahoo Sports linked in a wide-ranging partnership that saw the integration of sports betting into Yahoo Sports’ digital sports platform.
Penn Interactive Head Jon Kaplowitz said that together with the Barstool Sports’ team, they will be working on ways to utilize the publisher’s content and key talent to “drive audiences to Penn National’s online gaming products and retail locations, as well as to special events and fan experiences.”
Penn National President and CEO Jay Snowden added that the partnership with Barstool Sports reflects his company’s strategy to continue to evolve from a leading regional casino operator to a provider of omni-channel gaming and sports betting experiences.
Barstool Sports CEO Erika Nardini commented that the opportunity to combine their content and fans with Penn National’s footprint, “and to develop a unique and compelling omni-channel approach together, was for us a no brainer.”
Mr. Portnoy noted that he believes the marriage of Barstool Sports and its “passionate audience” with Penn National’s leadership is an event that will change the industry.
In recent years, Barstool Sports and some portions of its content were engulfed in big controversies over somewhat insensitive takes on sensitive topics such as sexualization of children and normalization of rape culture.
Source: PENN NATIONAL GAMING AND BARSTOOL SPORTS ANNOUNCE EXCLUSIVE SPORTS BETTING AND ICASINO PARTNERSHIP
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