In a significant move, David Portnoy, the outspoken founder of Barstool Sports, has successfully reclaimed ownership of his media brand from Penn Entertainment. While the financial details of the transaction have not been disclosed, it’s worth noting that Barstool Sports had garnered a valuation of $606 million in February during Penn’s acquisition of the remaining shares it did not own. This acquisition followed Penn’s minority ownership stake taken up in 2020.
Portnoy, who originally established Barstool Sports in 2003, took to social media on Tuesday to announce the dissolution of ties between Barstool and Penn Entertainment. The separation entailed an exchange where Penn received “non-compete and other restrictive covenants.”
Interestingly, the sale of Barstool by Penn coincided with the revelation of a strategic online sports-betting partnership with ESPN, a subsidiary of Disney. This news proved to be a game-changer, triggering an impressive surge of over 15% in Penn’s shares during after-hours trading.
Notably, the agreement also includes a clause that grants Penn the entitlement to 50% of the gross proceeds in case Portnoy chooses to either sell or monetize Barstool in the future. This stipulation underscores Penn’s continued stake in the brand’s potential financial success.
The development signifies Portnoy’s successful reclaiming of his brainchild, Barstool Sports, from Penn Entertainment’s ownership. Simultaneously, it reflects Penn’s strategic redirection towards the lucrative realm of online sports betting. As both entities chart their individual trajectories, the world watches to see how Portnoy steers Barstool and how Penn leverages its evolving strategic landscape.