PENN Leisure exercised its choice to totally personal Barstool Sports activities on Wednesday, bringing the valuation of Dave Portnoy’s upstart media outlet to $450 million and solidifying its controversial founder because the definitive face of PENN’s sports activities wagering platform, Barstool Sportsbook.
PENN made the announcement through an 8-Okay submitting with the Securities and Trade Fee. When generally known as Penn Nationwide Gaming in February 2020, it initially closed on a deal to buy 36% of Barstool Sports activities for $163 million. with an choice for eventual full possession. That deal lifted Portnoy from burgeoning nationwide sports activities media presence into the sports activities wagering mainstream as the important thing promoter of a significant sportsbook.
Per its quarterly report, filed with the SEC on Aug. 4, PENN had introduced its choice to buy $62 million price of Barstool Sports activities widespread inventory to lift its possession to 50% previous to Wednesday’s submitting.
PENN Leisure, Inc. (“PENN” or the “Firm”) has name rights with respect to the entire excellent shares of widespread inventory of Barstool Sports activities, Inc. (“Barstool”) not already owned by PENN. PENN has exercised these name rights to convey its possession of Barstool to 100%. The acquisition of the remaining Barstool shares is predicted to be accomplished in February 2023, after which Barstool can be a wholly-owned subsidiary of PENN.
The announcement that it’s going to full the acquisition in February comes barely multiple 12 months after PENN initiated buy of Rating and Media Gaming, headquartered in Toronto with its Canadian-based sportsbook generally known as theScore, for $2 billion. PENN is continuous theScore as its model for sports activities betting in Ontario, which launched legalized single-event wagering and iGaming in April, whereas utilizing the Barstool model for U.S. operations.
Barstool connotes success and controversy
Barstool Sportsbook is accessible for cellular sports activities wagering in 12 states and iGaming in 4 states. It enjoys various levels of success, although it was not among the many preliminary 9 cellular books in New York.
Its best-performing state when it comes to sports activities wagering deal with market share is arguably Michigan, the place Barstool’s tether to Greektown On line casino in Detroit helps put it on the prime of a second tier of operators behind trade leaders FanDuel, DraftKings, and BetMGM. It has additionally carved out definitive niches in top-five markets Pennsylvania and Illinois, clearing $1 billion in all-time deal with within the former this 12 months whereas on the verge of $50 million in income since launching in March 2021 within the latter.
Barstool Sports activities and Portnoy proceed to supply PENN a valued differentiator within the extremely aggressive sports activities wagering market — his potential to succeed in a target market through social media platforms with out the lavish conventional media promoting spend continues to be the ultimate. The draw back of that in depth attain has typically are available controversial vogue, normally revolving across the embrace of “bro tradition” that resonates with a big portion of the demographic Portnoy and Barstool have actively cultivated over time.
Portnoy filed a defamation lawsuit in February in opposition to Enterprise Insider following the publication of two tales detailing his sexual encounters with allegations of violence. The primary article, revealed in November 2021 and emphatically rebutted by Portnoy through video launched on Twitter, was launched at roughly the identical time of a poor quarterly earnings report for PENN, which noticed practically $2.7 billion of its market cap worn out on the time.
The inventory, which plummeted to $57.40 after that earnings report, was buying and selling at $35.50 as of 9:40 a.m. ET Thursday. That’s notably greater in comparison with its 52-week low of $26.46 in June however nicely off its 52-week excessive of $86.40 achieved final September.
PENN CEO Jay Snowden in public remarks has persistently defended Portnoy and lauded Barstool as an asset to the broad gaming firm, and he made clear on a second-quarter earnings name this month that PENN had each intention of going ahead with its full Barstool buy.