Penn National Gaming Buys Minority Stake in Popular Sports Media Company Barstool Sports
Posted on 01/29/2020
Penn National Gaming, Inc. of Wyomissing acquired a 36% minority stake in Barstool Sports Inc., a sports media company founded by Dave Portnoy, for US$ 136 million via cash and convertible preferred stock. Penn National’s initial investment for 36% of the equity of Barstool Sports is comprised of approximately US$ 135 million in cash and US$ 28 million in shares of non-voting convertible preferred stock. This deal values Barstool Sports at around US$ 450 million.
In addition, Penn National in three years can increase its stake in Barstool Sports to around 50% for a payment of US$ 62 million. According to the press release, “Under the agreement, Penn National will be Barstool Sports’ exclusive gaming partner for up to 40 years and have the sole right to utilize the Barstool Sports brand for all of the Company’s online and retail sports betting and iCasino products.”
Following the close of the transaction, entities affiliated with The Chernin Group, which previously owned approximately 60% of Barstool Sports, will own 36% of Barstool Sports, and the remaining 28% will be held by Barstool Sports’ employees, including Dave Portnoy and Ms. Nardini.
In 2019, Barstool Sports grew by approximately 65%, generating nearly US$ 100 million in revenue from digital and audio advertising, ecommerce, events, licensing, and subscription.
Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities and video gaming terminal operations with a focus on slot machine entertainment. As of September 30, 2019, the company operates 41 facilities in 19 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, and West Virginia.
To keep things into perspective, Amazon CEO Jeff Bezos paid US$ 250 million from the Washington Post Company in October 2013.
