Barstool Sports in Talks for DraftKings Betting Deal
Barstool Sports Eyes Lucrative Betting Deal with DraftKings Amidst Ownership Shakeup
In a bold move that could reshape the sports betting landscape, Barstool Sports is reportedly in talks to secure a potentially lucrative partnership with industry giant DraftKings. This development comes on the heels of Dave Portnoy reclaiming control of the media company known for its brash and unfiltered approach to sports coverage.
The deal under negotiation is said to be valued in the low eight figures annually, signaling a significant revenue stream for Barstool Sports. However, any formal agreement will have to wait, as the company is currently bound by a lock-up arrangement preventing it from finalizing betting deals until after the Super Bowl.The Rise and Fall of Penn Entertainment's Stake in Barstool
This shakeup follows a dramatic turn of events involving Penn Entertainment, formerly known as Penn National Gaming. After initially purchasing a 36% stake in Barstool for $163 million, Penn later acquired the remaining 64% for an additional $388 million. Despite these investments, the strategy to leverage Barstool's brand to bolster their own sportsbook offerings fell short of expectations.
In a surprising twist, Penn sold their stake back to Portnoy for a nominal sum of $1. The sale came at a steep cost to Penn, which took an $850 million write-off following the acquisition. Penn has since shifted gears, partnering with ESPN to launch ESPN Bet, a new venture in the sports betting domain.Barstool's Future Prospects and Conditions of Sale
Despite relinquishing ownership, Penn retains a vested interest in Barstool's future success. Should Portnoy decide to sell the company, Penn stands to receive half of the gross proceeds from the sale.
Currently, Barstool is prohibited from entering the betting market until the conclusion of the ongoing NFL season. Nevertheless, the company is poised to reassert itself in the sports betting arena, with plans to expand through strategic partnerships.DraftKings' Financial Commitment to Marketing
DraftKings, a major player in the sports gambling industry, invested a staggering $1.19 billion in sales and marketing during fiscal year 2022. Notably, this marked the first decrease in marketing spend in over three years for the company. DraftKings also ended its marketing collaboration with ESPN, which has since joined forces with Penn for ESPN Bet.
Despite these changes, Barstool continues to provide gambling advice and picks to its audience, a testament to the brand's enduring commitment to the sports betting culture.Portnoy's Vision for Barstool's Betting Involvement
"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," stated Portnoy, emphasizing the ingrained nature of wagering within the company's ethos. He continued, "But I think you'll see, into next year, that we start to establish ourselves back in that space."
Portnoy's comments reflect a clear intent for Barstool Sports to make a strong comeback in the sports betting market. With the anticipated partnership with DraftKings and the freedom to pursue other alliances post-NFL season, Barstool seems well-positioned to capitalize on the growing sports gambling industry.
As these developments unfold, the sports betting community will be watching closely to see how Barstool Sports leverages its distinctive brand and loyal following to make a splash in the competitive world of sports wagering.