Barstool Sports held further merger talks ahead of Penn National deal



Posted: Sep 20, 2021, 12:52 p.m.

Last update on: September 20, 2021, 03:48 a.m.

Barstool Sports held talks with DraftKings (NASDAQ: DKNG) and other gaming companies before they struck a deal last year with Penn National Gaming (NASDAQ: PENN). Barstool eventually struck a deal with Penn that paves the way for the casino operator to eventually own the sports media blog.

Penn bar stool
Barstool Sports founder David Portnoy, seen above, said his company has had merger talks with DraftKings, but no offer has been made. Penn National Gaming now owns a stake in the media company. (Picture: Star-Tribune)

Barstool founder David Portnoy revealed DraftKings at a Twitter Spaces event hosted by Roundhill Investments Last week. Roundhill, based in New York, is the issuer of the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ).

It is the first exchange-traded fund (ETF) focused on stocks of online casinos and sports betting ecosystems. The $ 406 million BETZ has an allocation of nearly four percent to Penn National.

Portnoy said he met DraftKings and other game companies, which he did not identify. He did not give details on the progress of talks with DraftKings, but he made it clear that Penn National CEO Jay Snowden was the only executive to present. Bar stool with a firm offer.

With the emergence of Barstool Sportsbook, Penn and therefore Barstool Sports are now in direct competition with DraftKings.

For the bar stool, things went well with Penn

After weeks of speculation, Penn announced in January 2020 that it was paying $ 163 million in cash and equity for a 36% stake in the Portnoy media company.

In three years, the operator of casinos under the Argosy and Hollywood brands, among others, will increase its stake in Barstool to 50% for another payment of $ 62 million. The regional casino giant may potentially own the media property for $ 450 million.

The two companies have a long-term relationship. Bar stool landed a 40-year exclusivity pact with Penn, and the former will promote the latter’s online and physical casinos on its web pages.

The Bar stool the investment pays for Penn in other ways. Shares of the games company have more than doubled since the deal was announced. This paves the way for entry into the S&P 500, and what was once a sleepy regional casino operator now has the means to capture shares among younger players. This is thanks to Barstool’s personality-driven approach, led by Portnoy.

Bar stool, Penn Touched Off Betting / Media Wave

Prior to the Barstool / Penn merger, there had been a few modest deals between gaming companies and media entities. But none in the nine-figure stadium.

In fact, it’s safe to say that the Barstool / Penn marriage sparked a wave of more extensive deals between media companies and game operators, including some acquisitions. In March, DraftKings revealed its purchase of Vegas Sports Information Network (VSiN), and the following month it entered into a content distribution deal with Meadowlark Media. Meadowlark Media is the owner of Dan Le Batard’s programming network.

These transactions were followed by purchases from Better Collective The action network for $ 240 million in cash and stock, Penn announced in August that it is acquiring Score Media and Gaming (NASDAQ: SCR) from Canada for $ 2 billion in cash and stock.


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