Barstool Sports Eyes DraftKings Betting Partnership
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In a surprising turn of events, Barstool Sports has entered negotiations with DraftKings to forge a potentially lucrative sports betting partnership. This development comes after Dave Portnoy, the company's founder, has taken back control of Barstool Sports. Sources close to the matter suggest that if this deal materializes, it could be worth low eight figures annually for Barstool.
However, fans and industry insiders will have to wait for any official announcement as Barstool is currently bound by a lock-up arrangement that prevents them from finalizing any betting deals until after the Super Bowl. This restriction is one of several outcomes following a series of notable transactions and strategic shifts involving Penn Entertainment and ESPN.Penn Entertainment Sells Stake in Barstool Back to Portnoy
In an unprecedented move, Penn Entertainment has sold their stake in Barstool back to Dave Portnoy for the nominal fee of $1. This decision came after Penn had initially acquired 36% of Barstool for $163 million, followed by the remaining 64% for $388 million. The strategy to leverage Barstool's brand to bolster Penn's sportsbook did not yield the expected results, leading to Penn taking an $850 million write-off from the acquisition.
Following the sale, Penn Entertainment has shifted its focus and formed a new alliance with ESPN to launch ESPN Bet, marking an end to its direct involvement with Barstool Sports.The Fallout and Future for Barstool Sports
Despite the change in ownership, Barstool remains committed to making a significant impact on the sports betting market. "I would still argue that [sports betting] is a huge part of what we do today. Our crew bets obsessively on games, we always have... But I think you'll see, into next year, that we start to establish ourselves back in that space," said a representative from Barstool.
While they are currently barred from entering the betting industry until the current NFL season concludes, the intention is clear—Barstool plans to re-establish itself as a key player in the sports betting arena.DraftKings Slows Down Marketing Spend
DraftKings, a potential partner for Barstool, has been making its own waves in the industry. The company invested a staggering $1.19 billion in sales and marketing during fiscal 2022. Notably, this marks the first time in over three years that DraftKings has reduced its marketing expenditure. This strategic pullback coincides with the termination of its marketing partnership with ESPN, which has since partnered with Penn for ESPN Bet.Barstool's Path Forward
Despite the challenges faced and the complex web of partnerships and acquisitions, Barstool continues to provide gambling advice and picks. The brand has built a reputation for being at the forefront of sports culture and betting advice, and its plans to expand its presence through strategic partnerships indicate a promising future.
It's important to note that should Portnoy decide to sell Barstool, under the terms of the sale, Penn Entertainment will be entitled to half of the gross proceeds. This clause underscores the value that both parties place on Barstool's potential within the sports betting landscape.
As the dust settles on these corporate maneuvers, the sports media and betting industries are keenly observing Barstool's next moves. With a potential DraftKings deal on the horizon and a renewed focus on establishing a strong presence in the betting market, Barstool Sports is poised to reclaim its position as a dominant force in the world of sports entertainment and gambling.