Penn National Purchases 36% Stake in Barstool Sports
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Photo: Chad B. Harmon
Barstool Sports founder Dave Portnoy at Del Mar in November 2017
Penn National Gaming Inc. announced Jan. 29 an agreement to acquire a 36% ownership interest in Barstool Sports Inc., a prominent digital sports media company, for approximately $163 million. Under the agreement, Penn National will be Barstool Sports' exclusive gaming partner for up to 40 years and have the exclusive right to utilize the Barstool Sports brand for Penn National's online and retail sports betting products.
Both companies have ties to the Thoroughbred horse racing industry. Among its vast gaming interests, Penn National owns or operates, either solely or in partnership, Hollywood Casino at Charles Town Races, Hollywood Gaming at Mahoning Valley Race Course, Penn National Race Course, Sam Houston Race Park and Zia Park. Barstool Sports covers horse racing on its website, and its founder, Dave Portnoy, is a horse owner and racing fan that has regularly attended major racing events.
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"With its leading digital content, well-known brand and deep roots in sports betting, Barstool Sports is the ideal partner for Penn National and will enable us to attract a new, younger demographic, which will nicely complement our existing customer database," Jay Snowden, president and CEO of Penn National, said in a release.
Barstool Sports provides reporting and commentary on digital platforms, including blogs, podcasts, video, and social media.
"Barstool Sports has a deep sports and gaming history and from the moment we met Jay and the Penn National team we knew this could be an exciting and game-changing partnership and we can't wait to get started," Portnoy said.
In a press release announcing the transaction, executives from both companies made no mention of collectively promoting racing.
Penn National's initial investment for 36% of the equity of Barstool Sports is comprised of approximately $135 million in cash and $28 million in shares of non-voting convertible preferred stock. After three years, Penn National will increase its ownership to approximately 50% with an incremental investment of approximately $62 million.
The sale is expected to close in the first quarter of 2020.