On Tuesday, Dave Portnoy announced that he bought back Barstool Sports in full from Penn National Gaming. Subsequently, Penn, who has been subject to all kinds of retribution for Barstool’s anti-establishment ethos and Portnoy’s own scandals, decided it would go the corporate route and befriend the likes of ESPN.
Penn is paying ESPN over $2 billion in cash over a ten-year term in exchange for ESPN’s rights for Penn to launch ESPN Bet. According to the terms of the deal, Penn will get the rights to the ESPN brand (for betting purposes) for ten years, with the option to extend for another ten years with mutual agreement. ESPN programs will promote the service, with some ESPN talent also involved. ESPN will also be able to designate a Penn board member after three years.
Penn, one of the biggest casinos in the country, bought Barstool for $388 million. Barstool, which (somewhat unreasonably) has been labeled as a controversial company, scared investors leading to Penn wiping their hands of the company and buying the rights to partner with ESPN for four times the amount they purchased Barstool for a handful of years ago.
After the dust settled on this and Portnoy made his announcement, everyone wondered how this deal affected Penn and how much Portnoy paid to own Barstool in full again. It was announced Wednesday that Penn sold Portnoy his business back for $1, which is kind of a steal for a company that gets 66 million unique visitors each month. Penn said Wednesday it will record a loss of up to $850 million on its Barstool investment.