ESPN has signed a licensing deal with Penn Entertainment to create ESPN BET, a sportsbook for audiences in the United States. SPN cut a $2 billion deal with Penn to make this happen.
As part of the deal, Penn also gave Barstool Sports back to Dave Portnoy, something he has not had 100% ownership of in over ten years. As part of the deal, Penn is undoing its arrangement with Barstool in steps that were completed in February, for over $500 million, and selling that company back to founder Dave Portnoy “in exchange for certain non-compete and other restrictive covenants,” as well as an agreement that Penn gets half of any deals he makes to resell or monetize Barstool.
ESPN Bet will launch this fall in the 16 states where Penn has sports betting licenses. It will replace the Barstool Sportsbook.
Penn is paying ESPN $1.5 billion in cash over the 10-year term, with another $500 million in warrants that will vest over the term “in exchange for media, marketing services, brand and other rights provided by ESPN.”
A new report from Adam Ryan of Workweek mapped out why Penn had to make this move as they quickly realized their acquisition of Barstool Sports was not helping them capture the sports betting market at all.
Adam mapped out that fans of Barstool love the company’s attitude which is great for them, but sucks when it comes to regulators.
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In a video posted to social media, Portnoy confirmed that “for the first time in a decade,” he again owned 100 percent of Barstool.
According to Portnoy, “Every time we did something, it was one step forward, two steps back. We got denied licenses because of me. You name it.”
PENN added that if Portnoy sells Barstool, it “has the right to receive 50% of the gross proceeds.”
“By the way, I am never going to sell Barstool Sports ever. I’ll hold it till I die,” Portnoy said.
Where Barstool goes from here is anyone’s guess, but it appears they just might at least return back to what made them famous in the first place and their fan base couldn’t be happier.
